Necessary to do her job, and she has never leads nothing to nobody. 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 this is Bloomberg Technology. Jpmorgan ceo weighs in on the debate of automation versus skilled workers. Plus Indian Outsourcing Company says india is still a bet for u. S. Tech giants. We explain why. To the list of growing pains. We look at the chinese tech conglomerates long list of problems. The concerns continue over the visas guidelines. Jpmorgan ceo weighed in on the debate of keeping highly skilled workers in the United States. He explained that it is alarming that foreigners who obtain advanced agrees here advanced degrees here cannot stay stateside. He says we are sending talent away by not allowing them to stay here. Here. Say it allowsrump outsourcing companies to bring in lower paid foreign workers. But these changes might just hate might just help u. S. Tech giants. We have an extensive researcher into the program. Corey, first you. We should remind ourselves why there is so much kickback against h1b visas. Guest the perception is, if you want to have american employment, its terrible. On the other hand, it is providing u. S. Companies with workers they just cant find anywhere else. The knees have to demonstrate that in order to get workers. These arent new conditions the Trump Administration is adding. American companies have always had to show that the people they bringing into the country they try to find American Workers, posted the jobs, and the pay is better than or similar to one that American Worker would get. Anchor it seems as though share prices reacted on the back of this. Infosys fallis today. They are already in a world of pain, because as of 2016, weve gone down about 10 in terms of share price. Futures in open interest have been spiking ahead of their earnings. This is showing significant bearish sentiment. I want to bring in an associate professor at howard university. You have written long and at length with expertise about the outsourcing question. These moves that have been made to the h1b visa, are they making it slightly tougher for the outsourcing companies in particular . Or does it make it harder to make it to bring in the talent to the u. S. Quest mark u. S. . Anchor its focused guest is focused on enforcement. If they are violating the laws and the rules and regulations, they may be in trouble. If they are not, this is just an enforcement mechanism or measure. Unfortunately i would disagree with Cory Johnsons characterization. You do not have to show there is a shortage of American Workers. You do not have to group recruit American Workers. Overan prefer h1b American Workers and legally paid and much less than a u. S. Worker, as much as 40 less. We have documented cases of this. Reporter i will agree that is where the abuses have happened. A lot of outsourcing companies have been accused of this. When you look at the list of the companies that use of the most, infosys, butand you also see Companies Using this to bring workers into the u. S. Anchor at a cheaper price lower we have seeing a price point being offered. What would you propose could be done to change the h1b that would mean u. S. Companies and whoever needs the tech talent most in the u. S. And are willing to pay for it can get their hands on the right talent they need, even if it is necessary from abroad . Guest the intent of the h1b program is a good one, to fill skill gaps when it is hard to find u. S. Workers, and to bring in and keep the best and brightest. The problem is right now, the rules are so loosely written that is extraordinarily easy to bring in workers at much lower wages, and profitable. Systeme firms gaming the that have built their Business Model around cheaper h1b workers. It is quite easy to fix this. We know how to do it. We know what the problem is. We have to raise wage floors so that workers are brought in because they are cheaper, but because they are truly the best and brightest with skills that u. S. Workers dont have. But canut anchor every entrylevel programmer from the United States really vindicate more than 100,000 . Guest what hundred thousand dollars is sort of misreported about what those salaries are. It is based on the geographic location, the occupation, and the skill level. No one is talking about a minimum wage of 100,000. What we are talking about is allocating the visas based on the highest wages. That would be one way to do it. If you want the best and brightest, they should be paid like the best and brightest. And if you want to allocate 85,000 vias, those should fund the highest salaries. It would help the american , bring you the best and brightest, and be a fairer system in a lot of ways. Thatter it seems to me the really is a bifurcation in the ways used. It asof Companies Using body shops, almost. Did you have companies who use it much less intel and microsoft and apple and facebook who really seem to be looking for best and brightest. Is that a fair characterization . Guest im not sure i would characterize the best way. They all have the same kind of Business Model. They are selling to jpmorgan, so its a little disingenuous for jamie dimon to be talking about this when he knows he is hiring these firms to undercut the u. S. Market. But certainly some of the best and brightest are being brought in and paid fair wages. The question is, how do we monitor that and make sure all firms are doing it that way . Targeting just outsourcing firms is the wrong way of making policy. Users make it you should make it that no firm can pay cheap labor. See if making it more stringent when it easier for the likes of intel and microsoft to get the hands on the right sort of people going forward. Associate professor at howard university, thank you for your time. Cory johnson valued here as always. As we mentioned, jpmorgan ceo said Ceo Jamie Dimon they spent with a 95 million on Technology Last year. 9. 5 billion on technology. Reporter i want to bring up my notes for you. He did give is a breakdown on that 9. 5 billion spent in 2016. He said something around 300 million for cap initiatives that techte with startups initiatives that compete with startups. Its such a change over the last two years. If you go to 2014, he was saying that we should be worried about Silicon Valley, but they are coming for the financial industry. Last year he had a different tone, much more optimistic. This year part of his letter is spent touting the initiatives that the bank has going on the tech front. Fascinating, and ventures with them going forward. Is there any idea how long this will be continued . In previous years he said that cap is coming for the financial giant. Going tol of spending be continued . He didnt give any projections as to what he will be spending next year, but he said the bank needs to be continuing to invest. Is they dont have that investment, they were not the growing as quickly in the future. He considers the company to be in part a tech corporation. From that perspective, he couldnt possibly stop spending on financial on technical ventures. To draw ourwant viewers attentions to the t live go function. Brilliant analysis, and we get reports such as this, you can dig into jamie dimon letter to , as well as the updated numbers we got. Thank you for your time today. Coming up, we give you a peek at a new index that could get startups thinking funding and upper hand. All episodes of Bloomberg Technology are streaming on five 5 00 p. M. In new york. This is bloomberg. Announcer Bloomberg Technology is brought to you by his cox. Caroline when is the best time to fund raise . It is a major question almost every startup faces. One new index wants to help answer. It aims to help consumer orientated founders that are understanding Venture Capital fundraising environment. Is created by good water capital in hopes of shedding light on investments. Joining us is the cofounder and managing partner of good water capital. Wonderful to have you here. Spread a little light on this area of funding. This is a datadriven approach. What data points are you using to fill this index . Guest we looked at a variety of public and private data sources and back sourced them against 20 years of history to see which ones are most productive of fundraising sentiment. Once we ended up with our ipo, activity, and the pe at which public companys are trading. You end up with an index that is highly correlated with it. Showing thatis things are a lot better than they were 2012, 2013 but perhaps not at the we saw back in july 2015 or earlier at the end of 2016. Are your funding statistics and barometer and index you have built at goodwater showing similar themes . Showing thewe are market. 2014 and continued in 2015, and 2016it did to the end of oftook a big dip to the end 2016. In one dayopping 43 lead to a chill in the startup market. What also fascinated me is this is aimed at consumer oriented startups. Does this have no relevance to the enterprise startups out there . Guest we focused on consumer because we are Consumer Tech investors, but we think it is generally indicative of the overall startup funding market as it is those same partnerships funding Consumer Companies and enterprise companys, and many ceases many cases. Caroline you help bring recommendations when it comes to actually going out there and doing your startup funding, when it comes to terms, due diligence. Hands of thethe vcs or the startups . Guest we think right now it is balanced. Andave a four level scale, right now it is at go for it. The market is balanced. Companies that had raised money in 2014 or 2015 thought it was so easy to raise money, no problem. 30 . He market dropped by if you are a Public Market investor, if the dow dropped by 30 come you would have your hair on fire. It would be a completely different ballgame for investing. That is what we are trying to educate entrepreneurs on. And a shifting market, the terms and timing are going to change a lot. Caroline andy players. We have seen more entrance wanted to come into later stage the be institutional players. How does that change the landscape. In 2014 14 and 2015 you saw hedge funds, foreign market investors. In 2016, they cycled outcome of which lead to a cooling trend and a lot of challenging financing, some of which were rightly reported. Widely reported. Caroline if im looking at your funding index, would i also be engaging in a Global Sentiment . We are seeing companies go to chinese investors and european investors. Yours is very much u. S. Based. Guest our data is u. S. Based. If you were to look at the world and china, we think it is highly correlated to that sentiment. A lot of Global Companies come to Silicon Valley to get invested. China has a very healthy funding venturem, a vibrant capital market, and those trends dont necessarily correlate highly with what is going on in the u. S. Caroline so i am a startup coming to you at goodwater. , whatanted money from you would i be saying to you right here, right now . What would you think bvc market wants to see out of the Startup Community . Discipline . E, cost guest we have a specific recommendation. You want good growth, but a reasonable Business Model. Where things time were going quickly with no Business Model, that has cooled. Investors now are looking for some sort of proof that a company can make money at scale. Wonderful to have you here. Thank you so much for talking us through it. Im sure many people will be getting their teeth into this particular index. Goodwater founder. In tight trading range, but there are some standouts making big moves in the tech sector. We have the details next. And a feature we like to bring to your intention is our interactive tv function. You can find it at tv on the bloomberg. You can see previous interviews and googler coverage and bloomberg coverage from around the globe. This is for bloomberg subscribers at tv. This is bloomberg. Caroline a federal judge has blocked a seattle law that allows uber and let drivers to unionize. The u. S. Chamber of commerce had asked the judge to block the ordnance before it goes into effect, arguing the rule him properly treats independent contractor driving. Saysity of seattle collectivebargaining would create a safer, more reliable industry. Tuesday was a pretty tight trading session in the United States. There are some standouts in the session. Lets get into them with stops reporter abigail doolittle. Give us a sense of what really moved. Reporter it was a very quiet day overall for the major averages. Dow, s p 500, and nasdaq oftenest fractionally higher after very small gains and losses on the day. One of the smallest ranges on the year. Lets happen to the bloomberg and take a look at btv 7467. Each of these bars represents the full trading range on the day for the nasdaq. Todays range is below that pink line, one of the 10 smallest ranges this year. Investors really dont have a lot of conviction today after some of the volatility we have seen in some of the other sessions represented by those bigger bars. Where we did see some action, h amazon and out of that and alphabet. A vote cut out the back they say they see headwinds for alphabet from amazon relative to advertising growth. Amazon is his top pick in that they internet space. It is absolutely on fire this year. Lets hop back into the bloomberg and take a look at g btv 67642. Of these stocks are facebook, amazon, netflix, and alphabet. Up top in yellow is facebook, in blue is amazon, up 20 , netflix of about 7. 5 , and alphabet of about 7. 8 come but still outpacing the s p 500. With its cut and the ad issues alphabet has had more recently, those shares are still outpacing the s p 500 on the year. Caroline we will have to keep give us a sense of monday taking it back. It was a big story that the apple suppliers were under pressure after he saw a huge move for Imagination Technology in the u. K. It we get a feel any of that was still being run out of it . Reporter it pretty much went away. We did see an upgrade over Pacific Crest that help for both sears logic and sky works, two of those apple suppliers that did fall on mondays session after Imagination Technology plunged 60 on the news apple would be cutting them off for the next two years. The analysts at Pacific Crest saying that they show accelerating growth. ,n the same day, Pacific Crest another analyst said they cut the shares of nvidia. That stock down sharply on the day about 7 . Lots of movement for the chip stocks. Overall that Semi Conductor index is down about. 5 , thancing the bigger move the small gains for the nasdaq. Caroline great roundup of all u. S. Stocks. Thank you very much. Coming up, u. S. Tech giants are looking to gain ground in india. Is it too little too late . We continue our coverage of the tech landscape in the country next. This is bloomberg. [ engine revs ] [ screams ] [ shouting ] brace yourself this is crazy [ tires screeching ] whoo boom baby rated pg13. [ screams ] [ [ screams ] ] [ shouting ] brace yourself this is crazy [ tires screeching ] whoo boom baby rated pg13. [ screams ] i alisa parenti. You are watching Bloomberg Technology. Will ite pen supporters take black on as their second choice, even though both have clashed on major issues. That is according to a French Public opinion poll. 27 take macron as their candidate. The incumbent Party Candidate has won the countrys type president ial tight president ial election. The ap reports russian investigators believe a 22yearold suicide bomber born in the former soviet republic of cars extent was behind courage to stand was behind the bombing. Theresa may wants to increase trade and security ties with saudi arabia. She is on a threeday trip to jordan and then the saudi capital. May rushed aside calls from lawmakers. U. S. Homeland security chief john kelly says the arrest of people illegally entering the u. S. Across the Mexican Border plummeted last month. Many were caught, compared with more than 58,000 detained in february. That is the lowest monthly figure in at least 17 years. 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. It is just after 5 30 p. M. Tuesday in new york, 7 30 a. M. Wednesday morning in sydney. I am joined by paul allen was a look at the markets. Reporter good morning. We are a little under two and a half hours away from the open on the afx. Futures are pointing up. Slipped a dollar has little on tuesday. This is after the reserve bank of australia issued a statement that it held the countrys cash rate at a record low, 1. 5 . In japan, nikkei futures are looking mixed. Aina southern is Holding Press Conference today. We are learning a little more about the American Airlines at ofke and also the earnings the china China Southern reported last week. Find paul allen in sydney. More from Bloomberg Technology, next. Caroline this is Bloomberg Technology. I am caroline hyde. Fallout from new guidelines to the u. S. About the visa program. One example consulting is down 1 on concerns changes in the impact the hiring costs. While some of the Biggest Indian Tech Companies are under pressure, u. S. Tech companies are easier to get into the market. Joining us is a partner at lead edge capital. They manage over 1 billion in assets. I want to get your take on some of the bigger tech giants we have seen. All trying to get into india with varying degrees of success. Who has the right tactic . There are a lot of companies trying to make their way into india. Over the last couple of years, we have seen a little decline in the Venture Capital market in india, meaning a lot of the financial players are pulling back slightly because of things like cash burn. That being said, some of the larger players that are larger Global Companies like apple and amazon are making their way into india. They can do that because their time frames are long. A lot of these companies do not have a fiveyear timeframe. They had a 10 or 20 year, multidecade type timeframe. In those second circumstances, they can actually go there. The smart phone market is difficult because a lot of people in india dont have as much money to spend. Apple phone is much more expensive than some of the lesser priced android units, but they are trying to make their way there. Amazon for sure has spent a lot of money building up their practice in india. The one inbeen retail that has taken the lead with massive spend. About three or four years ago, they pledged to spend 2 billion in the region. Last year, theyre worried news reports that said there were news reports that they spent 2 billion and pledged another 3 billion. India is one of the last great frontiers out there. Some of these companies lost out in china and a field growth is tapped out in north america. They see india as a population with 1. 3 billion people as a way to bolster growth and make a profit. Caroline amazon may be felt it lost out in china to alibaba. How much do you think alibaba will directly and pat enter india or will it mean, remain an investor . Thats a good question. I think so far they have spent their time and capital becoming an investor there. They made an investment of couple years ago in snap, which is one of the main competitors. They also made an investment in a payments platform. Rumored to be getting into ecommerce. I think from our perspective, most likely they are moving in as an investor. As the market continues to mature, i think potentially they can move in as a separate entity. It is unclear at this point a would be anything more than just an investor, given that is what they have played so far. Caroline you mentioned uber before, and other company you play heavily with as well. Have they been taking the right tactics in india . Bend some of your rules to be able to make things work in india . I think the market is incredibly different. If you look at the wealth of the people there and how they pay for things, and what the Logistics Systems are like, it is very different than what we know in the United States or western europe, which is that so much is done with a cashbased society. A lot of people there, they have 1. 2 billion people, many of them must have credit cards, but thats not the case. Uber needs to adapt to the local geography. India is one of them. Look, maybe wey, have to deviate a little bit from the typical playbook, but thats ok because the prize at the end is large enough. What they are doing there seems to make a lot of sense. Caroline but the prize for you in india, you have Portfolio Companies that have exposure to it, but you have not actually delved into the indian market, unlike sequoia or nexus. Why not . We spend a lot of time and you and have traveled there in india and have traveled there extensively. We have made Global Investments quite a bit. We invested in asia, alibaba is the largest investment we have ever made. We invested in south america and throughout europe. Our concern about india was twofold. Number one, the dispersion of wealth. You see a lot of businesses like i. T. Outsourcing businesses. Some of these are very large and serve the rest of the world but when you look inward. India and Company Serving their constituents, you have to say, what is the wealth effect . How wealthy are the people that will actually be buying goods and services in india . When you look at that, it is a little misleading. In some circumstances, you think, there are 1. 2 billion people 1. 2 billion people. On the other hand, you take the total income and divided by the number of people, the average income is Something Like 1500 in india. The average in the United States is about 54,000. Is arounde in china 8,000. If you look at those numbers, you say, how is there material spending capacity for all these people . It is a concern the market might not be there quite yet. Over time, it can grow, but right now thats how we feel. The other thing is cash burn. The businesses have been spending a lot of cash on building and often Times Economics dont work at this juncture. Expertise onat india. We thank you for your time today. Coming up, the aol t aol ceo company will look like once the merger is finalized. This is bloomberg. Caroline verizon will introduce a new division called oath this summer. It coincides with the merger with aol. Tim armstrong announced this on twitter, saying the new unit will oversee more than 20 brands. He counted the launch on bloomberg in the morning. We have a b2b brand in oath, which is a valuebased brand. It can really promote yahoo , techcrunch, and huffington post. Some of the reaction you see to the brand is very shortterm thinking and we are a longterm company. We are big believers in brands and huge believers in longterm commitments of talent, which is what oath is about. You are also great at marketing. People have been saying, how much did they spend on this . We developed the brand inhouse. The last 24 hours we probably have gotten 50 million worth of brand marketing. We will be free and clear when we launch. It has turned out to be a huge benefit. Apart from the branding, how is it going . How is the merger going to work . The main question i always ask, can you run up againstyearold shop of google and facebook . Someone has to take them out at some point. First, let me start with verizon. They have a longterm strategy in the media space. We were the first acquisition they did. Yahoo is the next one. We will touch over one billion consumers. We are in a very good position to launch the largest house of trusted friends in the digital space. Google, facebook, and amazon are partners of ours. We are focused on a Business Model of advertising. For 20 years. Ing i see an open lane in space in the brand, and thats where we are going. Is Marissa Mayer going with you . Right now, the executive team is marissa, plus me, planning the executive outcomes in terms of leadership, which we will announce. I will repeat what she said and what ive said before, which is that marissa will stay through the next phase. The next phase will be a mixture of the executive teams together. I will look for more information about caroline that. That was the aol ceo tim armstrong. Sticking with the web, President Trump has rescinded able that requires Internet Service providers to ask for subscribers permissions before using their web browser history. I spoke with the founder of the World Wide Web, and also what his thoughts were on the finding of the founding of the new build. I think this is a step in a bad direction. This suggests a lack of appreciation of the core values. This is a bizarre way to go. It is just a step, an indication of this direction. Caroline some of the reaction to this was that the Internet Service providers are being perhaps unfairly treated when an internet juggernaut like google is allowed to use our data without getting us to completely sina weibo agreement. Do you think the internet giants should have to go through more rigorous . Treatment . Fores, it is a good idea these internet giants to be subjected to serious constraints overuse of privacy and user data. Are thesnt mean they same as at t or comcast. At t and Comcast Caroline when you see the unfoldings of fake news, is this something you ever felt the World Wide Web would be in the state of at the moment . Is this being reacted to in the right way . I have to say, 2016 really changed my attitude. For 25 years since the web started, i assumed that those of us who do things for the web are just try to make sure that the internet is an open platform. The web is another platform built on top of that. It should be solid, it should be neutral, and if you good few give humanity a good, solid, nondiscriminatory platform, then humanity will do good things. Innovation. Ts of weve got wikipedia. We have open street map. All kinds of great things. It isen in 2016, i think not sufficient to just leave it open and let whatever happens on social networks happen. Now we have to look at social networks and people who have them, and think about the effect they are having. Caroline where does the World Wide Web go from here now with the rise of Artificial Intelligence . We are now using devices at home , talking and using voice search. Where do you think we can see the web progress to . Ive always said the next , weg around the corner cant even imagine whats going to come. Thats the case with Artificial Intelligence. There are some things like Driverless Cars that will be really valuable. Safer,ent they become then that will have a massive effect. Wendy ai starts to become the judge, when it inside a social network and deciding what is a good news story for you to read, it already has a lot of power. When that sort of thing starts that will by ai, then lead to a lot more serious questions about what is happening to society and that tt extent human beings are in control of it. I think the question is for people like elon musk and bill asking about what happens if the ai gets smarter than us. Thats a good question to ask. Caroline we will have the founder of the World Wide Web and newly announced winner of the nobel prize of computing. Up next, a chinese conglomerate plans to be the next tesla, netflix, and apple all in one, but is facing a serious cash problem. This is bloomberg. Caroline mercedesbenz Parent Company are teaming up with the Worlds Largest luxury carmaker and the biggest auto computing company, putting driverless taxis on the streets of the u. S. And germany. This is a powerful counterweight to ride hailing giants uber and didi. People familiar with the chinese company, they delayed paying u. S. Employees this month. It is the latest sign that the billionaire may have over each in his plan to create a u. S. Foothold for the internet media empire. Selina wang was first to report the story and joins us now. Go to bloomberg. Com and read it. This is a billionaire who wanted a media and internet empire to baidu and alibaba, but hes having problems. Reporter this is a really fascinating company to track. I attended their grand unveiling in october about their u. S. Strategy. They bought this enormous plot of land in Silicon Valley and said they would hire more than 10,000 employees. And now this, month after month, a severe cash crunch. We have seen suppliers allege y missed claimants payments. This is the story of a company that went too far, too fast. Sources have been telling me this has stoked a lot of frustration with the u. S. Employees. There were a lot of promises that were given, and delaying payroll for employees is always sign. Bad although the company told employees this was due to troubles getting money out of china, a lot of sources tell me they believe there are a lot of other issues involved as well. Caroline the company has responded saying actually the payment wasnt missed, but you know differently. What do we think in terms of the highlevel employees . They were lured over from big tech giants, and now they seem to be looking for the exit. Reporter they hired a number of highprofile executives from qualcomm, samsung, and two of the four have left within the span of a year. Theres another big venture in electric vehicles. That part of the company has seen significant turnover, especially in the u. S. Finance team. Most of them left at the end of last year. They started to rehire folks from that team, but sources tell me it was set very frustrating, because they told the ceo that they cant keep spending. He said to keep on going and the money will keep coming. Obviously, it didnt. That also stoked a lot of frustration, which caused turnover. Caroline they seem to be claiming they are beefing the team back up. What can we actually begin to believe here . Should we be looking also at the money they have managed to bring in . They did try to get cash. Yt, he is very good at money. Sing he has been able to continually raise money. He recently got this over 2 billion lifeline from soon iraq sunac. That is supposed to alleviate problems. Most of the money is coming from china. In order for u. S. Investors to feel comfortable investing in the company, they need to start cleaning up the situation, getting clash cash flow. As far as we know, the only profitable entity is the main publicly listed one in china. Cfo is ablehe new to bring in a new team to fix some of the problems, but they dont really have a new product out yet, so theres not much to go off of at this point. Caroline we will wait for your next installment. Fascinating reporting from selina wang. That does it for this edition of Bloomberg Technology. Wednesday, we speak to partner at tpg capital for an exclusive interview about intels Privacy Security vendor, mcafee. That is all for now. This is bloomberg. Announcer from our studios in new york city, this is charlie rose. Charlie we begin with politics. President trump will meet with chinese president xi jinping at the maralago resort this thursday and friday. It is their first meeting and a crucial diplomatic test for the meeting of the world to largest economies. On sunday, the financial an articlelished about the willingness of the white house to act unilaterally against north korea. Joining me is gillian tett, the u. S. Managing editor of the financial times, and o