Of legislative affairs, and winning over india, u. S. Tech giants move into the country with more than half a billion internet users. We will explore why not everyone is happy. But first, to our top story. It is finally here. After three years in the making, the u. S. And china have signed phase one of their trade deal. President trump and the chinese vice premier puttingpen putting pen to paper. Mp china has made substantial and enforceable commitments regarding protection of american ideas, trade secrets, patents, and trademarks. China has also pledged firm action to deal with pirated and counterfeit goods, which is a big problem for many in the room. Taylor those people in the room, executives from qualcomm and ebay and others. A director of cyberspace policy at the council on foreign relations, and in washington, bloombergs peggy collins. Peggy, let me start with you. What did we learn from the signing today . Peggy with the signing, what we have learned is that the u. S. And china have taken the first steps to negotiate some big imports into the u. S. In terms tochina promising to commit buying of more u. S. Products, as well as some concessions in terms of enforcement around intellectual Property Protection and patents, as you mentioned, so, essentially, china is saying we are committing to about 200 billion in additional product purchases from the u. S. In exchange for those reductions of tariffs, which we saw announced in december, where the u. S. Did not go through with the december tariffs that were threatened, as well as it did a reduction of some tariffs that were put on in september, but some of the stickiest issues are still out there and awaiting a phase two deal that the Administration Says they are going to start on soon but could take a long time to finalize. I want to show you a chart that i have inside my terminal, which has been a fundamental issue, which is u. S. Imports from china growing, growing, and growing, and that the tariffs will remain for the foreseeable future going into phase two. In your opinion, while they are still tariffs outstanding, did the signing today represent at least some sort of business confidence, some sort of resolution, removing some of the uncertainty that broadly can help businesses move forward . Very little bit of uncertainty. I think u. S. Businesses are going to be very skeptical that china is going to follow through i. T. E enforcement of protections and their requirements to no longer force technology transfers. I think they are going to be skeptical on how open the chinese economy is going to become, because phase two is really going to address a lot of the industrial policy issues, support for state owned enterprises, really a lot of the tricky knots in this relationship, so i think people are going to be glad that this first phase is done. It is signed, but there are a lot of heart issues that still are waiting for us in the future. Now,r peggy, at least for our companies happy about some of the stuff we were able to agree on . Peggy well, it is interesting, because one of the astounding things about this deal signing today is that it was over an hour in terms of the Trump Administration, and President Trump, hailing the agreement, and he called out a lot of ceos and ceos in the room, including in the tech industry, who he said should be happy with the deal, but there was also huawei, who is not a part of the deal but is a source of tension between the nations and of great consequenceor t technogy companies out there, like macron and qualcomm, as well. Adam, what about some the issues surrounding i. T. Theft . Chinese agreed not to force technology through formal or informal methods, but the problem is the chinese has always said it had enforced technology transfers. It is just the state of the market that u. S. And Foreign Companies have chosen to move manufacturing or r d centers or shift joint ventures, so the chinese come in many ways, are agreeing to do something they have said they have never done before. This this is in the direction that china itself wants to move. They have been increasing their ability to enforce i. P. Laws. Protect chinese firms that produce it. The proof is really going to be in the pudding. Taylor adam, what would you like to see in terms of the execution around those two issues . Adam i think we will have to see some really high cases of china penalizing firms, the ones which u. S. Firms say have stolen or other illegal forms to get u. S. Trade secrets. I think were going to have to see more cases brought. There has been success, but more of those cases. And, in particular, were going to have to see firms saying, look, we do not need to joint venture any longer. We do not need to have higher tech manufacturing. But those are all things that are going to take a much longer time. Taylor peggy, you smartly theght up huawei earlier in conversation, and Steve Mnuchin has made it clear that huawei will be treated as a National Security issue and will not be treated as a broader pond in the trade fight between the u. S. And china. Will not be treated as a broader pawn. Peggy secretary mnuchin came out and said those two rails are separate, so essentially what we are watching in terms of huawei, any moves by the Commerce Department to potentially close some loopholes around licenses that it has granted to ,echnology companies, to huawei and if there are any National Security measures or concerns further addressed, because certainly this has been a key tension point between the two countries, but, again, as you said, they are treating it as separate from the u. S. China trade to that was announced today, and any potential phase two seems to be separate from the discussions about huawei. Adam, your thoughts on huawei. We saw a lot of reporting today, as peggy said, that the Commerce Department is looking to close loopholes that allows u. S. Companies to continue to sell to huawei from their foreign productions. In addition to huawei, we are likely to see new export controls on foundational or emerging technologies, things like Artificial Intelligence, machine learning, and quantum, inc. s where the Trump Administration is really concerned about the National Security. Finally, what are you looking for for phase two . Adam addressing some of the tech issues, like the cybersecurity law, Cloud Security provisions, and, basically, the broad set of policies that we know was subsidies helping Chinese Companies move up the value chain. Taylor adam, from the council on foreign relations, and bloombergs peggy collins, thank you both. Later this hour, we will hear from huaweis perspective when we talk to their director of legislative affairs. That is ahead here on bloomberg technology, and coming up, look at some of the tech trends for 2020 and beyond. We break down some things coming down the assembly line. That is next. And if you like bloomberg news, you can check us out on our app and on sirius xm. This is bloomberg. Techr a new year, new trends, and deloitte has released their look at what is going to define the sector in the future. They see technology being the number one differentiator that includes Ethical Technology and trust as well as emotional ai. To tell us is bill, in new york. Bill, the top trends of 2020. What stood out to me, highlighting digital twins. How do you see bridging the gap between the digital and physical aspects of technology . For having me. You hit on it. It will be product facing, market facing, customer facing, and what i love about it is it puts front and center the importance of the back office, rings like the supply chain, and then Broader Industries hide industrial manufacturing. Digital twins have had a great run. It is being applied to Different Industries now. Taylor where do you see the future industry . What industries . Bill we are applying it in health systems, hospital networks, how they run, physical health itself, broad treatment, which is not traditionally where we thought digital twins would apply. Airport operations, government services, how we think about broad utilities and mission. You really can say across every industry served, which is all. Yes, bill, it is interesting. You mentioned health care being one of the industries. I was speaking and doing interviews at the j. P. Morgan health care conference, and that is one of the industries merging with technology. I wonder what is driving that. Is it coming from the industry side or coming from the Technology Side . Bill well, it is both, and the broader pattern we have seen is technology is elevated to be the driver strategy. Every company is a technology company. We see that play out in health care, not that technology wasnt always a place, but thinking about mission and service and the future. 11 years ago, we started this report. The primary audience was the cio, the tech exec, and now it is pretty much also the ceo or the board, and health care is a great example of that playing out. Taylor bill, another one on your list that certainly caught my eye. Ethical technology and trust. I would argue that trust is at an alltime low. How do we regain ethical and trust . Bill this has been front and center, and for years, that meant security and privacy and how we navigate through. This pushes out how to think of the ethics, the morality, of what we are doing does not make it a compliancebased activity for something that happens very late in thinking. It is actually a shaping strategy, how do we want to be affect whatoes it we provide to our customers, and trust is implied in that, and also, batch enterprise again, how we are thinking about the future of their work back to enterprise again, how we are thinking about the future of their work. Ethical review boards, investment roadmap planning. How do you think about with a. I. , algorithms, control points after the facts. It really is the prescription to do something about embracing Ethical Technology and instilling trust. Taylor another one on the list here is talking about finance and the future of i. T. , and it is interesting, this week alone, got a lot of Bank Earnings increasingly saying they are whatg more of their about the finance side of things and tech . Bill this might be a surprise, but when we started years ago, front and center seeing what delight was doing with technology trends, but seeing what deloitte was doing with technology trends. Moving to agile models, we have to have a different approach to budgeting, financial management, broader philosophy, capital management, so this is basically a way to bring finance into the fold. How do we fund it, and how do we make sure the investments that matter tomorrow and not just today . Taylor do you have numbers that you expect, given the investment that all of these industries have to make in improving their technology . Bill the biggest thing is the shift from saying, how do we try to control the spent in technology . Historically, it was what percentage to spend and how do we make that contained, how to maximize efficiency, efficacy, of that investment. Return onng to capital deployed. It might make a lot of sense to increase that spend, and that is something we have not seen until recently. Taylor lastly, i wanted to end on something called the Human Experience platform. A big trend that you expect to see. We have been talking about Emotional Intelligence and a. I. E cannot get enough of a. I on this program. Bill we have had a trend of how we have moved to contextualize the dynamic experiences for customers and employees, and this is really adding the Emotional Intelligence lends. If we understand from your facial expressions, from some centaurs, to put it in some rs, to put it in context, how do we maximize that interaction with you, and it is early days, because we have not had that as a design principle in the past. We could not. It goes back to the technology. How do we deploy it . How do we transparent about it . But it is exciting. We can imagine the difference tomorrow then how we had done. Briggs, with deloitte. Coming up, checking aircraft readiness. Artificial intelligence. We will talk to aco about all of that, next we will talk to a ceo about all of that next. This is bloomberg. Toyota is taking to the skies. The car manufacturer is investing nearly 400 million in flying taxi startup, making toyota the leading investor in their ipo. In they are looking to make flying taxis a reality. Aircraft and Artificial Intelligence is the subject of a department of defense contract just awarded to c3. Ai, intended to improve aircraft readiness across the federal government, using a. I. To discuss, we are joined with c3. Ai ceo tom siebel. Talk to us about how you are bringing a. I. To aircraft. For the c5 galaxy, the f18 , and other fighters, and we have demonstrated that we can increase the readiness of these 80 ,s by, say, from 50 to which is really quite substantial. Dod wide award now is and roughly a 100 million award to be able to bring this a. I. Dod, technology to all of the air force, army, navy, and marines. Taylor tom, this is really about predictive maintenance. Do we still need, given how advanced technology is, a human backstop, or are we confident enough in a. I. To correctly or accurately predict the maintenance needed . A. I. Systems,ese we need a human in the loop. While we can get very high levels of position and recall with precision and recall, as we navigate the to limit tree, we can predict system failure, say, fly controls or whatever it can be, 50 or 100 flight hours in advance, it is critical that when we use these a. I. Systems that the results be explainable and that we be informing a human being, an analyst, who makes the decision. This is a very scary idea. I. Also tom, we use a. Ward off potential cyberattacks. Cyber. Iran, thely, with killing of qasem soleimani. For ae been waiting cyberattack. How are you implementing this . Tom we are very active with some of the leading corporations, royal dutch shell, bank of america, Standard Chartered bank, 3m, others, to improve their business processes to lower the cost of production, deliver safer, cleaner, lower environmental impact. One of the primary focus of all of these efforts is on increasing the security of the systems and increasing the security of the data. I mean, it is a well documented fact that you have talked about and many in the media have talked about, that these systems, financial systems, prickle infrastructure, power grid systems, are being criticald infrastructure, power grid systems, are being penetrated by bad actors, and we are helping to secure the systems from cyberattacks. Pressure, we saw they try to hack into a Ukrainian Gas Company tied to the impeachment process related to president donald trump. Were seeing similar tax in 2016, dnc attacks, that we are likely to see we are we were seeing similar attacks in 2016. Tom you are talking at the weaponization of social media. This is very troubling, and i think it is incumbent on the social Media Companies to be much, much more vigilant. It cannot just be about making money, ok, and looking the other way when, in fact, they know this is taking place, so when these systems are being weaponized by bad actors, they need to take action, place where government needs to get involved, and government needs to regulate, because if they do not get involved, this cuts to our foundation of our ability to carry on a democratic state. Quickly here. You spent a lot of time at oracle back in the 1980s. We only have about 30 seconds. What you make about the leadership transfer . Your thoughts . Veryi do not track it closely today, but i know Larry Ellison well. He has built one of the worlds great companies, and you just never can count this guy out, so that is all i can say about larry and oracle. Taylor ok, perfect. Totally respect that. C3. Ai. Bel from one of the companies in the spotlight with huawei and the trade deal. All of that next. This is bloomberg. Taylor this is bloomberg. Chnology lets take a look at a global tech stories of the day. At france putting pressure on netflix as part of the push for cultural sovereignty. French lawmakers are finalizing a bill to force videoondemand of revenue put 25 into local productions. Netflix has made several french original series. Goldman sachs has sold a stake after a disappointing initial Public Offering in 2019. Oldman owns 10 million shares of uber, the time of the ipo turning a 5 million wager in its own money into thousand 11 into a major windfall. 2011 bloomberg has learned the companies are negotiating a longterm contract. A deal would help tesla avoid a squeeze on a key battery metal. N. Would be a win for back to wednesdays top story, the u. S. And china signed what they are billing as the first phase of a broader trade pact, but it avoids dealing with issues over huawei. Earlier, treasury secretary Steven Mnuchin said he does not see huawei as a chess piece in the trade fight. Director of congressional affairs, great to have you. Tell me your thoughts on phase one. In a fairly broad agreement, opinions are mixed in terms of how broad the expectations were, but it is a good sign in terms of the sovereign space coming to an agreement in phase one. Taylor what you want to see from phase two . Huawei is a Global Company, but it is also a private employee. The trade deal between the hastries are not huawei no input. Like any Global Company, we look for trade ability and open markets, and we have preached that and we hope that as a result down the road as we get to phase two. Islor you mentioned huawei a Global Company, how has the impact been from the trade tension . Like any Global Company and you have issues of supply mixed into politics, there is always tension. Huawei always has Business Continuity plans in place. Effects have not been that drastic, but like any company you are looking for stability and free market. It was interesting, we heard from treasury secretary Steve Mnuchin, he said clearly huawei is not a chess piece in the trade fight, and he wants it to remain a clear National Security issue separate from trade. Do you agree that is how it should be treated . s mission is to connect the world. The issues enumerated by the u. S. Government in the past basichuawei get the issues of trust and security. And the u. S. Huawei government is the same, we provide robust secure networks. We share the same goal. The dialogue needs to center on that to the benefit of global consumers, specifically consumers in the United States. Doing tohat is huawei make sure our data is protected . Is one of the first an endes to put together and cybersecurity program. Cybersecurity is not bolted on, it is a process that goes through every process in the company. We go the extra mile globally which no other vendor has done and opened a Cybersecurity Center in england, and in brussels as well. When testifying before the parliament, it was said that huawei stands naked before you. We are the most respected vendor. Taylor can you definitively tell us that beijing that no data has been turned over to beijing . Absolutely not, the head of the a request from beijing or any other government to turn over data. If you look at how huawei handles its relationship with the operators to whom it sells, huawei is in the top 50 broadband providers and has a long track record. Not a single major cybersecurity event has gone past huaweis equipment. Huawei takes security seriously. We do not have access to network data unless given specific permission by the broadband provider who controls that data. If you look at our customers in the United States, any invitation from huawei to work with its equipment in a network comes from a specific invitation. There are special laptops were every keystroke is monitored. There is no chance to access data we do not have. Taylor you are the director of congressional affairs, how have conversations been going with the u. S. Congress . Slowly, but we are trying to build an education process in these areas. If you look at legislation passed in the last 18 months, congress did a good job putting together a supply chain bill for the federal government. That is a good model to ensure supply chains for all the equipment that goes to every network. What we are saying to congress is all networks are insecure. We have to work with vendors are partnersi who with operators, and the customers of the network to provide the most robust security. Every vendor should be gone through a Risk Mitigation process, that ensures the most secure network. That is a communication process we are trying to get through to congress. Taylor how concerned are you about this spreading to other countries . U. K. Says they are vowing to keep huawei at a key security areas. The you worry about pressure the u. S. Is putting on other allies . Don there has been a dedicated Diplomatic Campaign with regards to europe from the u. S. Government, but what you are seeing in those countries, in the british case, huawei is a strategic supplier. We put a Cybersecurity Center there, where the government and customers and academics have insight to any hardware deployed to that customer. That is going a step further to you and any other vendor. The decision by the British Government is status quo in terms of where huawei operates. In the european governments you see developments in brussels and germany where they are looking standards that all vendors have to meet, setting up a testing regime and verification process that all vendors have to have, and we think that is the right approach to get the most robust and secure network. Taylor if we get five g in the u. S. In 2020 with American TelecomCompanies Providing that, what is the impact on huawei getting market share in the u. S. Down the road . Is on a continuous basis. If you look at 4g and 5g, the coming 5g will be an overlay on current 4g networks. Huawei concern in the United States are moves the government in made to prohibit huawei rural areas. The are the most underserved areas in the country. Our concern is with policy decisions that are in the making will leave those consumers in those areas high and dry. The current operators, frontier operators do their best to provide service to the least served areas need support. Huawei has been good putting equipment and helping those vendors with their mission connected most of the unserved people. Our concern is you could leave that part of the population high high andwhat dry. Taylor thank you for joining us. Much more ahead. Stick with us. This is bloomberg. Taylor u. S. Big Tech Companies are starting the push into india, but not everyone is welcome. On his trip to new delhi, jeff bezos faced large protests across the country. To discuss how india is reacting to an influx of foreign tech firms, i want to bring in distinguished fellow at harvard law school. You spent a lot of time in india, returning from a two week sting. T. Your broad thoughts of u. S. Companies trying to get in . They are typically big fans of u. S. Tech companies, and amazon was greeted with open arms for a long time, but if you look at what amazon does, it eats entire industries. Ndia is worried about that what they are doing trying to restrict amazon is sensible. I agree with some of the indian policies trying to hold amazon back. It is building a monopoly over here. That is what they are trying to prevent. Policies primee minister modi has done to control the influx . With amazon, the reason jeff bezos has a negative reaction is there are laws that say if you have an open platform, you cannot sell against merchants on the platform. That is exactly what amazon does here. Anything successful shows up in Amazon Basics, and the merchants go out of business. What indias trying to prevent is this type of monolithic behavior monopolistic behavior. Primus to modi is rolling out the red carpet for apple and samsung to manufacture phones. Is a has realized there lot of pressure to move manufacturing out of china. We are saying come over here, we will give you the facilities you want, and we have a large market that will welcome you. Taylor lets start with amazon, . Ow do you make inroads you do not break laws, this antitrust investigation, amazon has been playing games. They have thirdparty companies and cannot sell their Amazon Basics there. They put it under the guise of a different company. It is behavior they do in the United States, they should not do that. Neutraling to be a marketplace, it is a neutral marketplace, so it needs to obey the laws and do what is right. Europe is imposing restrictions on amazon. This is why there are protests. To depend onant amazon for their livelihood. They worry amazon is undercutting them and putting so many people out of business. Amazon,it is not just but microsoft, their ceo has been critical of india. You were talking about how he is isolating himself from working with india by making comments on the religiousbased citizenship laws. How do you work with india but also not comment on things you do not agree with . Microsoft is very well respected. He made a mistake commenting on this new immigration policy minoritieswe welcome from neighboring countries, except if they are muslims. That is a contentious issue. Comments were made that were inaccurate, and there was a lot of trouble for it. There is no other issue with microsoft being open there. What about the United States . We have muslim bans here as well. Texas will not accept refugees. We discriminate against africanamericans. Why dont we clean up our own house first . Microsoft have robins here, but also microsoft has done wonders in india. All bad news,not you smiley pointed out that le and samsung have had haveare more welcomed and subsidies to gain inroads. What is the difference in tactics between companies that are received well, and companies that are not . Microsoft, theof company is doing well and is well respected. There is no issue. Amazon is a big problem. The problem is amazon itself. Ways thatonopolistic we should not tolerate. Taylor what about apple and the samsung . They are doing very well and encouraged to move manufacturing. India has not been buying highend apple phones because they are so expensive. There is not an issue with those companies. Would youat advice give to ceos in this case . When we talk about apple and tim cook, he has had a great relationship with President Trump relative to other big Tech Companies. He is having a better relationship there. What is the difference . Does it come down to the ceo . Comments a mistake to is adias laws, but that minor glitch. That will be forgotten and microsoft will be fine. Amazon is not understanding the complaints. Not being so greedy and monopolistic. They also understand they will not get the free reign they have had in the u. S. In the rest of the world the laws are tighter. You cannot go to buy the politicians to get you to support them, that is more difficult to hand in the United States. They have to realize the politics and the social impact of what they do. If amazon starts building the platform like in the United States and putting hundreds of thousands of people out of business, it will create massive unemployment. Bezos has to understand that. Taylor great talk, thank you for joining us. Still ahead, we will hear from horowitz ben horowitz. This is bloomberg. Taylor how do todays entrepreneurs and ceos build a Workplace Culture that can weather good and bad times . In the interview on studio 1. 0, they discussed his new book. Take a listen. When you think about culture, it is really complex, a complex topic. From my ownyou , how doces where i was i be a good ceo . What you focus on. Pay attention to culture. I said got it, how do i do that . It got very vague and i wondered, how do you do it . All these things your employees ask themselves, what should i stay until 5 00 or return the phone call today or tomorrow . Dictated by your mission statement. Often a company will have a website and have principles on the wall. That is what you believe, that is not what you do. What you do is who you are, and that is what soap key that is what is so key. Not every culture works for every company. Every company is trying to do what it is trying to do and need the culture to support that. Apple does not need the amazon culture. Apple is probably flying first class. They have 5,000 doorknobs because everything has to be about design, whereas amazon is about lowcost. , in order tonto write this book, i have to culturald who solved problems, and make examples from Different Things so you open your mind up. About peoplehink with principles when they walk in. You have to be harsh sometimes. Dvd executivesng to meetings. The most coveted meeting. I am sure they are not happy about that. To what extent the ceos need to be tough or even cruel for a good culture . Sometimes it is necessary, and you have to be careful. Cruelness to be sadistic or demonstrate the priority. Fine people 10 a minute for being late to a meeting . That person had to go to the bathroom. But it is the cultural point, we spend onlue they companies, so we plan to do everything to finish our phone calls and use the bathroom and we are on time. It is unfair that particular fine for that person. Be sure to catch the full episode of bloomberg studio eastern. P. M. That does it for this edition of bloomberg technology. Ology andout techn follower global breaking news on quick take on twitter. This is bloomberg. The following is a paid program. The opinions and views expressed do not reflect bloomberg or its affiliates or employees. The following is a paid presentation brought to you by rare collectibles tv. Our country was founded on life, liberty, and the pursuit of happiness. Representing this idealism is our american eagle. The bald eagle was chosen in 1782 to represent the United States because of its long life, majestic looks, and great