Health and Human Services secretary setting the stage for , him to play a leading role in dismantling obamacare. Vice president mike pence administered the oath to price just hours after he won the senate confirmation. Protestors gathered outside a Public School in d. C. Where betsy devos planned to pay her first visit as education secretary. She was blocked by protestors from entering the school. Devos has been promoting Charter Schools and voucher programs which critics say would hurt Public Schools. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. Im alisa parenti. This is bloomberg. Bloomberg technology is next. Caroline welcome. Im caroline hyde. This is bloomberg technology. Welcome to this friday. First, key headline coming up, a trump business tax bump. We look into how investors are weighing the impact of u. S. Politics on tech. A tale of two ceos. While ubers chief is getting vilified for his connection to trump, elon musk seems unscathed. Well explain. From mobilizing against the travel ban to twitters lackluster fourth quarter, we will break down the week that was in tech. First to our lead. U. S. Stocks pushed higher in friday trading adding to records for all three of the major indices. Part of the enthusiasm appears to be driven by President Trump pledge to overhaul business taxes. But, of course, this comes amid a week of legal drama over the president s executive order on immigration, which remains on hold. Tech companies largely oppose the travel ban and 100 firms got together in a legal brief voicing their concerns at the start of this week. So, how are investors wayne impact of u. S. Politics on tech stocks . Joining us is cathie woods from new york, and with us in the studio is our editor at large cory johnson. Trump says new action today, promises new action regarding immigration. He says the tech we heard technology has been against this travel ban. 120 companies signing that legal document. Cathie as we look at the technology sector, were actually, believe it or not, somewhat encouraged by some of the behindthescenes activity. We think that h1b visas are going to go up 30 per year. I think that first roundtable that President Trump had with Technology Leaders started to seep in. They are talking about needing a high end talent, and theyre going to allocate the h1b visas towards the higher end. So, we think President Trump believe it or not is listening to some of what they said. Caroline wow, an optimistic cathie woods. Cory she gave it like a believe it or not. I was really struck by the decision by the ninth District Court in San Francisco. When, i happened to be here when it happened. When i read the decision, it was interesting. Because one of the things the judges said was that the white houses current interpretation of its own order was different than its original interpretation. The court, therefore, was not certain that tomorrow or next week there would be yet another interpretation of this ban on immigration. I think it applies to business. It applies to tax breaks. It applies to the repatriation of cash. It applies to economic stimulus. The 140 character nature of this presidency thus far suggests to us that the devil is in the details. When we try to find out what these policies look like, we dont know. The stock market has reacted as if it will all be positive, no negatives, and that they will be clear. What we have seen so far from this presidency is that there are some negatives. There are always some negatives, some giveandtake. Also that maybe things will not be that clear in the interpretation will not declare. The market does not think so yet, but the market is a little bit of a leading indicator as to optimism. Caroline are you thinking the tax limits, the promises we had dangled in front of us this friday could help . Cathie very much so. I think tax reform, the market has been crying out for it. We have not had Capital Spending growth and many, many years, and i think that is one thing that President Trump is going to encourage. I think we are going to see huge productivity growth. I think what is misunderstood his President Trump is really focused on the u. S. As an innovator. His first roundtable was a tech roundtable. Elon musk was there. Second was a manufacturing roundtable. Elon musk was there. Third was an auto roundtable. Elon musk was not there. I think he is focused on innovation which is all that ark does. Were very focused on what he is doing there. Caroline you talked about the tesla founder several times. You are bullish on tesla and have been in the past. I am sitting at the table with a man who tends not to be. How are you still feeling about tesla as we head into the earnings in a couple of weeks . Cathie we have a longerterm focus, and we just published a paper, a white paper, called mobility as a service self driving cars could change everything. Our analyst authored it. And its on our website. We believe that mobility as a service is a huge opportunity. The Global Mobility market right now is a 10 trillion market and we think between electric vehicles and autonomous taxi networks, that that 10 trillion market is going to be disrupted severely. We think tesla has its eyes on the autonomous taxi market and we know it is leading the charge in electric cars. Cory why wouldnt you buy ford . It is only 14 more expensive and you get about 100 times the production and also a focus on selfdriving. More Autonomous Vehicles are certainly in development weve seen it every year for the last 20. But it seems to me from a valuation standpoint, if tesla is a certain valuation, based on what they might someday do, ford is already doing it. Cathie if i could answer quickly. Tesla, we do not believe, is just an auto company. It is a technology company, battery company, an internet of things company. We dont think you can put it in the same category as ford. Ford has to overcome the internal Combustion Engine shifting over to electric vehicles. That is one big transition. Then on top of that, they will have to try and face this autonomous taxi network which we think we think could create local monopolies or even country monopolies. I think tesla or google would have the lead here. Perhaps toyota in japan. We do not know who in europe. Maybe volkswagen they certainly have to change the subject. We are very focused on who is leading the charge into this new age of electric vehicles and autonomous taxi networks. Caroline a little bit of a debate on this program. We thank you very much, indeed. Ark invest Ceo Cathie Wood in new york. And our editor at large cory johnson. Staying with tech company sentiment, expedia posted mixed earnings in the latest report after the bell thursday. Sales rose 23 but spending rose as the company hired more people to work on the integration of residential unit home away. Expedia said on the Earnings Call that the election of President Trump has had no real effect on the business yet. But it has stood with many tech leaders whod criticized trumps travel ban. We spoke exclusively to the ceo on how the company is bracing for impact from the ban. I think it is a real risk. At the time of the travel ban, we did see some volatility. We had about 1000 customers who had passports from the seven countries impacted that were really in a state of chaos. To the extent that the brand of the u. S. A. That stands for openness, tolerance, freedom is damaged by these travel bans, it could in fact impact our Tourism Industry and that is something we would be very concerned about. Caroline the expedia cfo speaking to us earlier. Now, coming up, rising cloud and content expenses challenging snaps road to profitability. We will take a closer look and both amazon and google on data storage space. This is bloomberg. Caroline a story we are watching. Facebook is promising better transparency Going Forward and has committed to audits by an media watchdog. The move could appease advertising executives who are growing skeptical of the social networks metrics. Facebook admitted recently to mistakes to reporting metrics to partners and advertisers. And will provide more data showing how long users viewed an ad, and how much of it was visible on screen. Now snap has a deal to pay amazon at least 1 billion in Internet Services over the next five years. This in addition to the 2 billion agreement already it has with google. Details of the deal were released in an update to snaps official Public Offering document which states that snap could build its own infrastructure but for now splitting it between google and amazon decreases the companies are lines on a single company. Joining us is an analyst who leads investments and Cloud Companies. Just the man to talk to us about this sort of diversification. You have put out a report. I was digging into it. Im fascinated to see, really, companies should optimize their cloud that is what youre calling for. What snaps doing, optimizing it . Or delaying . A little bit of both. Its the popular emerging conventional wisdom. Public cloud is faster, and cheaper than building it yourself, in the vast majority of use cases. We are seeing that across the board. The art becomes optimizing for scale. At their scott their cost structure, they are starting to do the manufacturing and that matters. Caroline so, the diversification Going Forward at snap. What about some of the companies in your portfolio, the the entrepreneurs. What is the sweet spot . This tradeoff of growth versus burn. Over the couples of years we have seen the sensitivity to efficient growth. What you see is the best private companies can manage about a 70 efficiency score, meaning if they grow at 100 , they are burning 30 . If they get to scale on the public markets, that trends down to 50 , the famous role of 40 and 30 . Several years into their public life into their public life. Caroline it is amazing how quickly almost the halflife is now of getting to. We saw dropbox announce they had hit 1 billion in terms of average revenue. The bar keeps being raise. Part of the public cloud advantage is that you can go straight to Product Innovation instead of back end leverage. That creates huge collectibility and they also have infinite scale. You have these resources on demand. There are not bottlenecks anymore. It is all about building a product that gets in customers hands. Twilio dropbox is the new standard. Caroline were talking Cloud Companies you are investing in. You mentioned the bottleneck. There was a bit of a bottleneck when it came to ipos. It was a tough last several years. 2016, the fewest ipos since the financial crisis of 2008. We were fortunate to be part of five of those so we had a front row seat, but it was a horrifically slow year where only the very best Companies Got out. That has created a backlog now of hundreds of high quality companies. The next 100 private are valued at well over 100 billion collectively. That is the crop of shadow ip eight candidates that we see cued up. Caroline how big is Cloud Company market cap, if youre looking globally, publicprivate. If you go across the pure play publicprivate companies, about 300 billion. But 40 of that has been acquired in the last several years. So, the market took a crack last year, pulled back dramatically. Its a technical term. That created 30 down in cloud. That created the window of opportunity, buying opportunity. 60 billion of cloud, m a activity happened last year, four times the next highest average. Linkedin was the largest deal by a wide multiple in history. If you take them out, it would have been a record here by 2x. There is this backlog now of great high quality private Cloud Companies waiting to go public that will reveal themselves in the coming quarters. Caroline so, 2017 you think will be much bigger than 2016. Could it be bigger than 2015 and 2016 . We are going to start a seat in the end of the Second Quarter to the back half of the year. The app dynamics deal wouldve been one of the first. Cisco had other plans and credit to both of them, that was a fantastic deal. We absolutely believe in the latter half of the Second Quarter through to september through november, that window, we will see some Great Companies tap the markets. Caroline we will have to get you back on to talk about when they start coming out of the box. Meanwhile, key is staying with us. A story we have been following. President trump says he is considering signing a new executive order on immigration. This according to ap. The one he has already signed which bars citizens from seven muslim countries remains on hold and held up in the courts. Trump told reporters aboard air force one on his way to florida that he is confident he will win his court battle so that other options including a brandnew executive order are also on the table. We will bring a more on the story as we get details. Coming up, now the man that helped create the roomba vacuum is developing a new line of robots. We will take a look inside rethink robotics next. This is bloomberg. Caroline ford is making a 1 million bet on Autonomous Cars allocated that much over the next five years to its new start up argo a. I. Base in pittsburgh, pennsylvania for the firm was cofounded a few months ago by google car project veteran brian President Trump has made American Manufacturing signature issues on the campaign trail and in the white house. President trump were going to create jobs. I said that i will be the greatest jobs producer that god ever created, and i mean that, i really, im going to work very hard on that. Caroline but automation could be the asterisk to that statement. Companies are investing in robotics and software instead of human labor to boost productivity. Rethink robotics is looking to find a balance. An industrial robot designed to work alongside people. Our robots have a lot of sensors, they have vision and four sensors. Reporter rodney brooks, the founder of rethink robotics, is changing the way we think about robots in the workplace. Actually, it is our first robot, two arms, large. Sawyer we learned from. We made it smaller. Reporter with cameras and sensors, sawyer is a Collaborative Robot designed to work safely alongside humans. We have run out of lowcost labor in the world to do manufacturing. So, it has to be through tools that help workers be more productive. Reporter at 29,000 a unit, sawyer helps package products or check Quality Control to the idea started more than a decade ago. I was in china a lot, doing the manufacturing for the roomba. Reporter that is the robotic vacuum made by irobot, a company he cofounded. I was sad to see labor was getting shorter and shorter in 2004, 2005. Reporter rethink robotics has raised 130 million in funding and is using its latest investment to expand globally. Europe has become a major market very quickly. As has china. I think there is incredible potential to grow the cobot market. Reporter it could go from just over 100 million last year to 3 billion by 2020. I am out to make manufacturing more real everywhere. I think manufacturing has been undervalued in Silicon Valley. It has been about the next app, the next social interaction, but we have sort of neglected technology for manufacturing for the last 30 years. Reporter while sawyer is designed to work alongside people, there is fear robots will limited jobs. According to mckinsey, about half of the work tasks globally could be automated with currently demonstrated technology but only 5 of jobs can be fully automated. According to an mit professor, the economy now needs to adapt. What we need to be looking now is more fundamental restructuring of the economy. As robots and other technologies come online, there are some big tectonic changes in a kind of skills that are needed in the labor force, the types of organizations, the types of regulations are technology is a tool that can be used to create more job losses and Many Companies are doing that. It can be used to create new jobs. The way we respond is going to make all the difference. Our manufacturing, worker population is aging. By giving them tools, it lets them stay longer in their jobs. Maybe it also attracts younger workers because the jobs become less repetitive, a a little more cognitive, a little more interesting. Caroline a revolving door update. As the fallout of an accounting scandal continues at b. T. Group, the u. K. Based Telecom Giant Continental Europe chief has resigned after spending more than a decade at the company. His departure follows the disclosure of a deeper accounting debacle in italy last month. Prosecutors in milan have opened a criminal probe into allegations of false accounting and embezzlement. Now another tech revolving door, shares of the u. K. s largest restaurant takeaway have fallen after the companys ceo is stepping down to family members. The chairman john hughes will step into the role as the board searches for a permanent ceo. Stock more than doubled in value. However, food orders slowed amid rising competition. Coming up, as the President Trumps travel ban continues to be fought out in court, tech leaders have come together to speak out against the present immigration policy. We will discuss where things stand as we wrap up the week in tech. And if you like bloomberg news, check us out on the radio. You can now listen on the uber radio app on the Bloomberg Radio app and in the u. S. On sirius x. M. This is bloomberg. Planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. Im alisa parenti, and you are watching bloomberg technology. Lets start with a check of your first word news. President trump and japanese Prime Minister shinzo abe started two days of talks. Abe, speaking through a translator, called the relationship mutually beneficial. The japanese have gained in business and wealth. Truly a winwin relationship. Trump hosted abe in his first meeting with a foreign leader right after he became president. Germanys defense minister said she had no differences of opinion with u. S. Secretary of Defense James Mattis in their first meeting. She also says eu lawmakers are aware u. S. Lawmakers expected germany and europe to take on more responsibility. Former u. K. Prime minister nick clegg says there are similarities between exit and between brexit and the election of donald trump. Many of the people who claimed they are the voice of the people are often people from the elite. Nigel farage with a publicschool educated chap who spent his time being paid to live it up in strasburg. Francois fillions efforts to get back into the election race. French Officials Say they prevented a terrorist attack after arresting four people including a 16yearold girl. Police raided a home in Southern France were they uncovered a makeshift lab with live explosives and bomb making ingredients. Police say the teen had pledged loyalty to Islamic State and one of the suspects had been planning an attack. A chinese aircraft and a u. S. Navy patrol plane had an unsafe encounter in the south china sea. This is the first known incident to have taken place under the Trump Administration. Pacific command said it took place in international space. The russian runner was also banned for four years of the court of arbitration after footage appeared to show her using a banned substance. Local news 24 hours a day powered by over 2600 journalists and analysts in over 120 countries. This is bloomberg. Caroline this is bloomberg technology. As we discussed, u. S. Stocks ended to an alltime high as investors reacted from two new details from the Trump Administration on cutting taxes. Tech Companies Continue to shift how they operate. After that helped lead the charge against the executive order on immigration. Our correspondents join me to discuss the top tech stories of the week. This legal battle is far from over. We saw Donald Trumps all caps tweet on twitter. He is taking this into the next court and these companies are still going to be very involved in the fight. We saw google taking the lead on negotiation with the lawyers. Everyone is going to pay them back when it is all done. Caroline from a financial perspective, how are companies feeling ramifications . We are hearing that Tech Companies are postponing hiring. We are hearing the companies are getting in touch with people who are abroad and traveling and affected by the seven country ban. They are offering legal advice. That is the first level. It could affect hiring and recruitment and how much do foreigners want to come and work for a u. S. Firm. These companies have been built on innovation on the part of immigrants in many cases. Immigrants are leading the Biggest Companies in this country. It is fundamental to the whole tech ecosystem that we bring in immigrants, that we have people who have the qualifications who are engineers from overseas. Caroline we see technology facing off against. Intel coming up, a 7 million splash they will be putting into a arizonabased technology manufacturer. This is a plant intel had been planning and spending on this for many years. Interestingly, obama made an announcement about this. This is not the first president to want to benefit with association with manufacturers in the u. S. Intel has plants throughout the u. S. And does employ thousands of people. They will employ 3000 people and they say there will be an added 7000 indirectly as a result of this. The question is, is there new spending . They told us there is no changes to their cap x projections. There is some ability for them to tweak things based on demand. Caroline perhaps a little bit of pr smoke and mirrors there. You saw clearly the reaction to twitters earnings. 1. 4 billion was the twitter valuation. And lots of it was at the expectation that twitter might ride some bump from President Trumps use of the platform. The tweets that get twitter in the media every day. That has done nothing for their user base. Their user base grew 2 million in the quarter. Facebooks grew 72 million. The bright spot is there daily active users growth which grew 11 . They do not tell us from what to what. How does that compare to snapchat . We have no idea. They gave earnings projections for the Current Quarter saying they will be far short of estimates. It is not looking easy for this company to crawl itself out of a hole of slowing user growth and now slowing revenue growth. Caroline there are new headlines crossing the bloomberg. President trump is said to be considering a new executive order on immigration. The current one is being held up in court. A white house aide said the administration will not take a temporary travel ban hold to the supreme court. Looking at the capital letter tweet we got from President Trump yesterday seemed he was going to court. Guarantee this one is going to go right before the court again. I dont think the court is going to be too fond of having put a hold on this thing and the president coming up with another negative order. It became clear it was vague and changing and its grand legal green cardholders. The white house over the course of the weekend said they didnt mean the green card people. The judge in the Appeals Court in San Francisco said which policy is it . Is it the interpretation by the white House Counsel which it does not seem to us to have the power to supersede what the president said himself. This one might be more clearly written but that does not mean it will protect it from going right back before the court and getting the same sort of protest that people across america engendered. Caroline whether or not this is unnecessarily and unconstitutionally against a religion, that was one of the interpretations of it the court did not like. They seemed to be unclear on their interpretation. They cited it was ok to look back not just at the order but the comments of that led to the order. President trump candidate trump saying im going to have a muslim ban and saying it over and over again. And the advisor to trump Rudy Giuliani saying trump asked him to craft a muslim ban. He previously promised he would enact a muslim ban and asked Rudy Giuliani to come up with a muslim ban. That could be part of the next court case if there is indeed another order to follow. Caroline she actually seemed relatively optimistic that we would see trump land in florida she said maybe he is listening. She is a much more positive person that i am. I think that shows he is not listening to protesters. It is notable that he is going to try to do another round in court. There is a segment of the white house who really likes of this argument. They preferred that there are protesters out there. They preferred there is a fight. They take on the media and the White House Press corps by saying completely untrue facts and i think some of the people like the battle with the press because they want to say to their core supporters, see, the press is always against us. They want to point out that they are fighting against the people, so they are getting the fight that they want. Caroline brace yourself at the airports. Thank you, cory johnson. Coming up, uber and tesla get different reactions about supporting President Trump. We will break down the backlash. And this week on bloomberg television, we bring you our best interviews from this week in tech. Including aol cofounder steve case. He discussed some of the other changes we need to see within the u. S. Regardless of any change in policy. Tune in the saturday for the best of bloomberg technology. This is bloomberg. Caroline now while many ceos have joined trumps Business Advisory council, there is one notable tech standout. Tesla ceo elon musk. I caught up with musk biographer ashlee vance to talk about how it is a strange turn of events. If you look at his personality and where he will fall on the political spectrum, trump is not the first person you would assume he would be united with. Peter thiel has been this big supporter of trump. He sees himself as the voice of reason. Someone who can offer a big perspective on things like Global Warming, manufacturing and he is very opportunistic. He seems to be taking this moment to seize it. Caroline have you see the balancing act he plays on twitter at times trying to castigate the president and trying to back him up . He is getting intense pushback from his customers. A lot of the tesla customers in particular tend to be liberal and green thinkers and trump has shown no interest on that line of thought. Ultimately elon musk is just a logical guy. That is the core of who he is. I dont think it is bs. When he says i want to have a line directly to the president to try to convince him on things like Global Warming or carbon tax, no, i think he means that sincerely. There will be a cost to pay for that. Caroline in some ways, what he is built with tesla is something donald trump has been talking about made in america, u. S. Jobs. You could not find a better person than elon musk for the things trump has talked about. He built his cars in Silicon Valley and his rockets in los angeles. He has factories in new york, nevada, texas. He has created 35,000 jobs over the last 10 years and modernize industries that had grown stagnant. This is exactly the model you want to put. Not only can we build things in america but we can do it in expensive cities if you put your mind to it. From that standpoint it is mutually beneficial. Tesla and solarcity need a lot of help. They have been underdogs in congress the companys they are competing against tend to be the big donors to congressional leaders and now elon musk has a direct view to the president. It gives him an edge. Caroline do you think he is putting money behind his relationship . If he lobbying or looking at tax help . Historically he has fun to just about everybody. Because of the nature of his company, particularly spacex, which does a lot of government business, he has given to democrats and republicans. He is very logical and opportunistic about these things. With stuff like Global Warming in particular, elon musk has dedicated his whole life to fixing this problem. If he really thinks he can convince trump about some policies to curb Global Warming, he is going to take advantage of that. Caroline that was bloomberg businessweeks ashlee vance. While elon musk is facing minimal backlash from his letter to President Trump, there has been another tech titan not so lucky. Ubers ceo. Uber became a mockery on social media, leading him to quit the president ial advisory board. Eric, you have a great story. Uber feels there is a double standard. He knocked off and keeps moving and meanwhile uber has delete uber trending on social media. They felt a lot of pain. He ultimately left the Advisory Panel because of strong user backlash. Caroline at an event yesterday sequoia and benchmark capital were saying this was unfair. Uber was trying to you think it was right or wrong for travelers to step away for him to step away from a advisory position . I think it is hard to claim that you want to be a household name and yet you are above reproach for your actions. At the end of the day, you have to have a persona and you have to accept the public backlash. Caroline this is not the first time uber feels outdone by tesla. Uses are saying tesla does not have to register, why do we . Caroline you were quite an outspoken critic. You are a tesla user. You have the model s and you felt perhaps safety was not front and center. Indeed, but i would qualify that by saying i am a geek at heart. I was speaking about the issues. Software glitches were amusing and in some cases annoying but i love the incremental software advances. I love what they are doing and i am a big fan. The safety issues are real. I think theyre going through the exact right steps in terms of how they are pushing hardware and software update. Im a big fan of what they are doing. I was commenting on the User Experience throughout. Caroline elon musk writes to the Business Advisory council. He has built up trust and support. The fact is he is clearly a Mission Driven ceo and travis has not established the same public persona and history. At the end of the day elon musk will benefit financially, but he is not trying to be an application on aeveryones phone. People can opt in and out as they choose to. Travis is reacting to people deleting the application which is an active move by thousands. Caroline thank you for joining us. Coming up, spotify is adding music from a big artist just in time for the grammys. We will tell you about the royal deal next. This is bloomberg. Caroline as we wrap up this edition of bloomberg technology. Whatsapp has announced it will roll out a twostep verification for all of its users. It will allow users to protect their account with a six digit passcode. Once enabled, it will provide an additional layer of security. Netflix followed by disney are named as the two biggest acquisition targets for apple. The report goes on to say that while deals are possible, and acquisition is unlikely. Why does tesla rank at the top of the list . A recent Consumer Survey said 20 of the respondents wanted to see apple developed a car. And a royal addition to spotify. The streaming service will include music from princes warner bros. Catalog. Companies representing his rights have been working to get songs like purple rain online in time for the grammys. The show will feature a tribute to the late musician. That does it for this edition of bloomberg technology. Next week we will be at Goldman Sachs technology conference. You do not want to miss our amazing lineup of guest. All episodes are lifethreatening on twitter. Are now Live Streaming on twitter. Check us out weekdays 5 p. M. In new york and 2 p. M. In San Francisco. That is all for now. This is bloomberg. Have a great weekend. 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