Transcripts For BLOOMBERG Bloomberg Technology 20170722

Living up to its side of the nuclear agreement. The u. S. Announced new sanctions this week and warned tehran would face consequences for breaching the spirit of the deal. It is official. The u. S. Government is banning americans from traveling to north korea. This comes after Otto Warmbier died after being in prison there. He was in a coma when he was flown back to the u. S. Where he died. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am Alisa Parenti. This is bloomberg. Bloomberg technology is next. Emily i am emily chang. This is bloomberg technology. Coming up sean spicer steps down , as White House Press secretary just after Anthony Scaramucci is named president Trumps Communications director. We have the latest on todays big white house shakeup. Plus, chinas master plan to lead the world in Artificial Intelligence. We dig into beijings new ambition and how it plans to invest 59 billion. Generate 59 billion in output by 2025. Rolls the dice on its own Self Driving Technology is it , too far behind for the race . We will compare their strategy to ubers. The lead, a staffing shakeup at the white house. White House Press Secretary sean spicer announced his resignation after President Trump hired financier Anthony Scaramucci as his Communications Director. Sarah Huckabee Sanders will become the White House Press secretary. Scaramucci is the founder of Skybridge Capital and a Campaign Fundraiser for trump. He joins the Communications Team amid intensifying investigation for the Trump Campaign and its ties to russia. With President Trump Senior Adviser and soninlaw Jared Kushner set to speak with Senate Investigators next week, President Trumps eldest son and Paul Manafort are both scheduled to appear before the same senate committee. Joining us from new york are Kevin Cirilli and my guest cohost for the hour, David Kirkpatrick. Kevin, you have been on television all day talking about this. First of all, Anthony Scaramucci said there is more palace intrigue, yet the whole press conference was about personalities and relationships. What is the back story from your perspective . Reporter i have spoken with several sources on everything that went down in the past 24 hours. What i am hearing is this is a political victory for what they are calling the originals, the original staffers who back then candidate donald trump a time when many in the political universe did not. That said, he has aligned himself with the old guard, the original guard of the trump world. But people like sean spicer who will stay on board through august are not going to disappear. Hes aligned carefully with reince priebus, who is still involved in the white house. It comes at a time when they are trying to turn the page with so many questions surrounding next week in particular with the hearings set to continue with regards to russia. Emily why is scaramucci, given he does not have Traditional Communications experience, he is a businessman, but what else . Reporter this was a top fundraiser for the trump political campaign. He is a financier, very familiar to wall street, but not familiar to washington. I think that washington and how he meshes with the inside the beltway crowd remains to be seen. We should note today he faced largely few questions regarding political policy as well as the russia questions. We should also note sarah Huckabee Sanders has been promoted to press secretary. This is a big promotion for her. She is well respected by more traditional political circles inside the beltway and is a familiar and known entity. Emily they both deflected questions today about russia. David, im curious. The noise around the administration is getting louder. There is so much uncertainty about its future. At what point is this a big Business Risk for businesses, for Silicon Valley . David for Silicon Valley and business generally, it is already a big Business Risk. We are at a precarious point in American History where it is extremely hard to see this will not get worse from here. If we have a president who will not allow the investigators to investigate him, he continues to send signals he thinks he is guilty, which leads ordinary people like myself to assume, and ive heard other people saying the same thing, that he has got to be trying to hide something. Even if it is not true, it is what we think is true. It has to make all Business Leaders very nervous about what that could mean for the economy, for foreign affairs, for the breakdown of policy. I think it is a scary moment for the American People and american business. Silicon valley included. Emily kevin, looking ahead to next week, Jared Kushner is set to speak with Senate Investigators. What do we expect from that conversation . Reporter a very busy week next week. Jared kushner is set to meet behind closed doors with the Senate Intelligence committee. I spoke with a democratic member of the Committee Earlier today. Senator ron wyden. They are pressing for more information about finances. Within kushner world and the trump world. Bloomberg breaking the exclusive this week. On wednesday, donald trump, jr. , and Paul Manafort have been invited to testify. Very much unclear whether they will accept the invitation. They were supposed to reply to the deadline by the end of the day. They have a couple more hours. In terms of policy, we can talk about that on tuesday. The Health Care Vote is likely not going to pass. The conversations regarding tax reform as well as deregulatory financial policies still ongoing as well. I expect a potential budget vote in the house next week setting the stage for tax reform. Lawmakers trying to turn the page and bracing for a failure on health care policy. And the fed has a big meeting on wednesday next week. Emily not much at all. [laughter] what about the interview President Trump did with the New York Times where the idea of firing bob mueller came up . The special investigation has moved into covering his business interests. What do we know about a scenario in which that could be possible . Reporter bombshell bloomberg report yesterday. Special Counsel Robert Mueller is reportedly expanding the scope into President Trumps business dealings. The guardian had an exclusive this week suggesting there has been communication between the investigators and Deutsche Bank , which has deep financial ties to the trump world and kushner world. And lastly the New York Times , reporting about the debt obligations of Paul Manafort to russian and ukrainian influences. All of that suggesting this is headed to a faction and realm of the investigation into the financing and not just into the cyber sphere. I have spoken to several sources that suggest they are very much looking at the data of both political entities in trump world and democrats as well. Emily the picture is only getting more complicated. David if you are a c. E. O. , are , you preparing for something . David i think it is hard to prepare for this regardless of what you do in the american system. I think we are all watching like deer in the headlights. We have never seen anything like this before. It is reassuring to Business Leaders that markets and the economy still seem to be doing great. Trump continues to point to that as a sign people should not be worried about anything because that proves he must be doing a great job. Its hard not to say there is an element of reassurance in that. But i think there is real risk. As i mentioned before, things could happen that could throw markets and the economy into a new position. We just dont know. There are so many things we dont know because we have never been in a place remotely like this before. Emily techonomy c. E. O. David kirkpatrick, you are sticking with me. Our chief washington correspondent Kevin Cirilli, you will keep covering this for us. Thank you so much. I hope you get some sleep. Sticking with news, the Washington Post is reporting google spent nearly 6 million on lobbying in the Second Quarter of this year citing disclosure forms. That is a 40 jump from a year ago. Some of the issues included responses to the travel ban, education, and privacy regulations. Coming up, we will explore the latest in the volatile world of cryptocurrencies. Is the hype around initial coin offerings about to blow up . This is bloomberg. Emily checking in on bitcoin, the cryptocurrency rallied this week. Accor celebrated as the Developer Community embraced a to make itsm aimed scale. The group was previously split on how to make it more manageable. There is still a ton of interest in the crypto coin market with a flurry of initial offerings that can offer high risk for high reward. High risk or high reward. For more, lets bring in Caroline Hyde in london. Caroline thank you. I am now joined by a man with the Founding Team of ethereum. Its on the secondmost popular crypto currency after bitcoin. He has now founded another cryptocurrency startup, iohk. Wonderful to have you passing through london. Today, the news is bitcoin rallied yesterday. It looks like the developers are backing the development. Is it good that its not going to split . Its great. It shows the resilience of things. We took it down to the wire, but it looks like it is healthy and its future is bright. Caroline the future is bright for bitcoin. Talk about the landscape. Initial coin offerings going through the roof. Numbers are phenomenal. 700 to 800 cryptocurrencies exist. Than in 2013, now more 800. Icos are up six times in the last year. You say this is a ticking time bomb. Why . The fundamental problem with ipos is they are magical because they create liquidity and allow people who have never been able to raise capital before to do so, they have caused some people to forget the basic business principles of Due Diligence do not go away because we have technology. It reminds me of the dotcom boom and bust. It is a new technology and paradigm, so we dont really need to make profit or care about governance. I see a lot of similarities in this respect and get worried people are raising too much, too quickly, and have not thought about the implications. Caroline implications being eventually regulators catch on . That is one. The other is too much money can be as bad as having too little money. You dont execute faster but have stronger expectations and a more Aggressive Group of investors. The other side is salaries go up. Negotiation leverage goes down. Everybody knows you have 200 million. Maybe i get my 5,000 a month or Something Like that. As for regulators, it is a concern. 25,000 a month or Something Like that. As for regulators, it is a concern. Every one of them have an opinion about what these things ought to be. At some point, it has to make that opinion public and force actions in some respect. Caroline the ipos we have seen come out, if regulation does come in, who does that affect . The Investor Base or the company that raised the money . Both. From the Investor Base side, they lose liquidity on the tokens. They lose the value on trading. They become difficult to sell. On the business side, they may lose their bank accounts. They may face some sort of criminal or civil issue. It depends on what representations were made, how much capital they raised. It is a snowflake situation. Caroline people they raised the capital from, who are the investors . With blockchain, you cannot tell. Is it generally goes who have won out with early bitcoin successes . Thats one of the problems. These people who are or where the money is coming from. I would speculate a lot of the people are people that got lucky with the coin and ethereum so they put some money in. They wake up and are millionaires. They say let me see if i can do , it again. It is fast money chasing even faster money in that respect. Caroline is it real money . How liquid is it if you own bitcoin, ethereum, or the other cryptocurrencies . It is tremendously easy compared to where it was a few years ago. You can sell billions of dollars. You can use eat 8 00 p. M. s. There is something where you can put bitcoin on it as a card and spend it. Liquidity has improved over the last few years. There was a recent ico where they liquidated the vast majority they raised as a hedging strategy. It was more like a value transfer mechanism. They have a fiduciary responsibility to be conservative about currency speculators. Caroline the time bomb. What happens to this ecosystem up to 2020 . Do we see selloffs, implosions, rising from the ashes . Where does this go . Just like the. Com boom some , people go away, some stay. It is hard times for a little while. The regulatory landscape changes. The bad actors tend to face some recourse, and we move on. This does not stop a completely new way of looking at reputation and value and trust and the ability to move money anywhere in the world simultaneously, which is something we have not had ever in the entire history of the human race. Caroline what is the end goal . How do you see this affecting real people . I cant get my head around what bitcoin is. How will it affect me in my real life . If it works in the western world, it should not impact you explicitly. It is kind of like voip. Everybody said one day we will talk to each other on video calls, and it was the future. Then skype came around and organically creeped up, and now it is in everything. From the western world, it will be settlement and clearing gets faster. The Wire Transfer takes 15 seconds. Transaction costs go down. When you buy something abroad and spend dollars, they get euros. The cost of the transactions goes down tremendously. You will see iterative improvement, which will have lower cost. In the developing world, it is a completely new financial system. Something that runs on a cell phone, something that runs parallel to the banking system. For the First Time Ever it opens , up microcredit and a litany of other things that are tremendously beneficial that allow them to build real wealth. It also can be taken by bad jurisdictions. Caroline fascinating picture you have painted so eloquently for us. Thank you iohk c. E. O. , wonderful , to have him joining us. Back to you. Caroline hyde in london, thank you. China is taking aim at the ai industry. Why Artificial Intelligence has become the new focus of international competition, next. This is bloomberg. Emily Louis Vuitton has started selling online in china. It will cover 12 cities. The Parent Company is trying to capitalize on the luxury rebound in china following a downturn in recent years. Lvmh has been revamping its broader digital strategy. Meantime china is making a push , in Artificial Intelligence, aiming to make the ai industry an important driver of economic expansion by 2020. This, according to a Development Plan issued by the state cancel. Chinese ai related tech stocks rose on the announcement by as much as 9. 2 . Shenzhen popped as much as 7. 3 . Joining us from new york, selina wang. Still with us, my guest host, David Kirkpatrick, c. E. O. Of techonomy. What is your take on the Chinese Government publicly ramping up its efforts in ai . Reporter this is a clear directive coming from the top ranks of the Chinese Government saying we want to be the Global Leader in this area. We no longer want to be a follower of western technology. We saw western companies become the dominant players in software and chips. They are saying ai is emerging technology and we have room and time to beat out the competition. The experts say china is only a step behind many of its western competitors. The Chinese Government clearly thinks with the partnership plans and the investment capital, they still have a chance. These are very bold ambitions. They are saying by 2030, china will become the worlds premier Artificial Intelligence center in the world. Emily they specifically say this is to give china a competitive advantage, in part because of National Security concerns. Does this raise alarm bells for the u. S. Government . Reporter there are reports the u. S. Government is watching closely Chinese Investment in u. S. Companies developing Artificial Intelligence. They have seemed to tighten controls as well as delay some approvals of the deals. The u. S. Government is going to be watching how they plan to use ai for military technology. Not to mention the fact that as china is bolstering its investment in ai with a bold claim, at the same time the u. S. Has been cutting back funding to science research. Emily david, ai seems to be the next big thing from almost everyones perspective. To some extent, it is not surprising the Chinese Government would want to focus on it. The fact that they are doing it so publicly, what is your take . David its a pretty stark contrast with our own government , which really isnt doing much at all to push the progress forward of this technology, except perhaps to the degree they are doing so secretly in the military. Im sure theres a lot of work behind closed doors. When we think about the fact that our government invented the internet and that kind of project has been our history, we have a president i dont believe who has ever uttered the phrase Artificial Intelligence. If he has, i doubt he would be able to explain what it is. Not that it is easy to explain, by the way. Here we have it the highest levels of Chinese Government, a major commitment. It is a stark contrast that is scary. Luckily, we are still ahead. Google, facebook, amazon, ibm. A number of our Big Companies are putting resources into it. The same is true in china with alibaba and tencent. They have the ways and people to advance it. I have sure they will be working closely with the Chinese Government. It is worrisome. We are still ahead. We cannot assume that will remain the case. Emily what does it mean for those Chinese Companies that david mentioned, the biggest Chinese Companies already working on ai . Reporter baidu, alibaba, and tencent a rapidly trying to catch up to google, facebook, and amazon. With the help of the government, this is probably just going to accelerate the closing of the gap. Baidu has done significant work in voicerecognition technology, and driverless cars. They have a big Research Center in Silicon Valley as well as one in china with the cooperation of beijing. We are seeing tencent pour as well as alibaba. We are seeing them invest in driverless technology. This is going to be fuel to continue to push ahead and be the leader in this field. Emily selina wang, thank you so much for that report. David kirkpatrick, you are sticking with me. Coming up, from netflixs International Search to google surge to google results, we will break down earnings and look ahead to the onslaught. This is bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Alisa i am Alisa Parenti in washington and you are watching bloomberg technology. Lets start with a check of your first word news. President trump has hired financier Anthony Scaramucci as his Communications Director. He was a fundraiser for the Trump Campaign and his name has been floated for several jobs in the administration. He spoke to reporters at a press conference to announce that appointment. This is an opportunity for me to serve the country. I love the president. I obviously love the country. Look at my Life Experience here in the country. It is an honor. Alisa scaramucci is reportedly at least the third person offered the job of White House Communications director since trump was elected president last year. White House Press Secretary sean spicer resigned shortly after the announcement. Meantime, President Trump informally endorsed scaramucci after the new Communications Director wrapped up the press conference. He spoke during a visit by the last survivors of the uss arizona to the office. President trump he is a terrific guy. He did of the job. Alisa the president praised the uss arizona survivors as living examples of courage and patriotism. The russian lawyer who met with donald trump, jr. , during the 2016 campaign represented a military unit operated by russias intelligence agency. That is according to the associated press. Trump jr. Met with her in june of 2016 after being told she could provide potentially incriminating information about hillary clinton. Around 1000 people gathered tonight in front of the polish Supreme Court building in warsaw to protest the new law that would give politicians substantial influence over that countrys Supreme Court. Critics say the move would defy the principles of the european union. Moroccan demonstrators frustrated over corruption clashed with police at an unauthorized protest today. Probably held running battles with protesters who scattered. The philippine president says he will never visit the United States while he is in office , adding he has seen america, and it is lousy. That is after you was asked for his reaction to a threat from a u. S. Number of congress to lead a protest if he accepted President Trumps alleged invitation to the white house. Saudi arabias king has stripped the interior ministry of power. Those powers have been transferred to a newly created body overseen by the king. This move comes after he appointed his son as crown prince last month. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am Alisa Parenti and this is bloomberg. Emily welcome back to bloomberg technology. I am emily chang. Netflix is a standout this week with shares hovering at a record high after the stock jumped on tuesday on secondquarter Earnings Results that surpassed already high expectations. Earnings season will continue in full swing next week. Among the names reporting, alphabet, facebook, twitter, amazon. Techonomy ceo David Kirkpatrick back with me. I want to start with netflix. Subscriber numbers increasing. They are saying they are still going to spend a lot of money on original content that only seems to get better. What is your take . David the story gets better in terms of the stock and momentum. I personally find this to be an extraordinarily overvalued company that does not have a lot of the qualities of companies it is compared to like facebook, google, and amazon. The thing that amazes me is the day they announced earning, even though they compete with hbo, hbo is part of time warner. After they reported their earnings, their market cap surged past the total market cap of all of time warner. I think that is a very strong vote of confidence on the market in terms of what this company can do longterm. I am not saying the momentum is going to slow in terms of execution, which is superb, but i think the price is extremely high. Emily they are spending billions on original content. It remains to be seen how that will pay off. Lets pivot to google and facebook, dominating the ad market, online ad market more than ever. Where do you see chink in the best chinks in the armor . David i do not know if it is fortunate for unfortunate. I dont see a lot of chinks in the armor for either company. I dont think snap is a serious enough problem for facebook. I dont think it would significantly be a concern for investors. Googles dominance globally continues to be consolidated. In the case of google, the fact they have had to pay a 2. 7 billion fine in europe because of their practices in terms of how they pointed traffic to their own products is worrisome. That is going to hit their earnings this quarter. It will not have a hugely negative impact because they are such a profitable company. But i would say that is the concern longterm. But it is longterm for all these companies. Regulatory pushback as their dominance and monopoly behavior becomes more a matter of concern to governments all over the world. From the standpoint of their earnings and ability to make money, i dont see a lot of concern. Emily what about when it comes to fake news and Online Harassment . Facebook has added 3000 people to deal with it. Instagram has added what the c. E. O. Calls kindness to kindness technology to combat that. How big of a challenge is that Going Forward . David she takes these things very seriously. Facebook has done an amazing job in my opinion of pivoting. Zuckerberg said last year it is crazy this is a problem on facebook to now saying yes it is a problem. We have a responsibility to the Global Community to do something about it. I think they are trying super hard to take steps that are positive. It is an extremely tough challenge. I think it is to their tremendous credit they have pivoted to taking this seriously. Zuckerberg himself in the case of facebook and instagram saying we take it seriously, we are going to do something about it. I dont think it is going to be a short battle. It is a battle that will be endless. Like everything else, it is an arms race. People aiming to deceive will continue to improve their techniques even as the Internet Companies and facebook in particular improve their own techniques to identify and suppress things that are not accurate. Emily what about twitter . Last few years, we have been talking about the business of twitter. So many management shakeups. Jack dorsey coming back at c. E. O. This is a place where President Trump is getting his message out. And yet we have not been talking , much about the business of twitter of late. Last quarter looks pretty good. Do you think things are Getting Better longterm . David i think twitter has at worst stabilized, and may actually be taking a step forward. That is quite positive. If they cannot capitalize on the moment we are in where they are all day long lips it would be ridiculous. , it seems like they have implemented around video. They have taken very seriously some of the challenges to maybe not be as ambitious about becoming a real competitor to facebook because they are never going to be that, but to say we have a reasonably Good Business that has upon of traffic and a lot of eyeballs, so lets come up with practical, pragmatic ad formats people are not going to be annoyed by. Marketers are buying them and they are selling them. I think that is really promising. I think twitter is slowly Getting Better. As you will recall over the years, i have been kind of negative about twitter as a company, as a stock. They are still valued highly for what they can do. But i think twitter is definitely turning a corner. Emily lastly, we have to talk about amazon. If any of these companies has the wind at its back, it may be amazon with so many new bets with so much potential growth. Obviously the Company Buying , whole foods, amazon spark. What are you looking for when it comes to amazon next week . David i think the wind is at the back of amazon, facebook, and google like no companies have ever had the wind at their back. Amazon is not that different from the other two except its valuation is much higher and its profits are much lower. That is because they have had this astonishing attitude towards growth for decades that continues to work for them. Buying whole foods was a stunning move that i think goes to say a lot about their incredible ambition that just never ceases. Bezos is an astonishing business leader. In cases like this in most companies, i would say the valuation is out of whack. In the case of amazon, i do think they have the ability to own more and more markets across the economy, which i think will eventually attract the concern of regulators and policymakers in many countries. But that is not really happening now. Therefore, from an earnings and investment point of view, they are still heading to the moon. Emily it will be a big week next week. We will be all over it. Facebook, twitter, google, amazon. David kirkpatrick, youre sticking with me. In todays revolving door, the cto of dropbox will be leaving the company. He announced his departure in a facebook post. He held the c. T. O. Role for about nine months. He was previously vp of engineering. He came to dropbox from the acquisition of cove in 2012. Coming up some of the most , buzzed about ipos have left investors underwhelmed. We will hear from the global head of listings at the New York Stock Exchange. This weekend we bring you our , best interviews from the week, including retired general keith alexander. He is now at the helm of a cybernet cybersecurity company. We discussed the risk of cyberattacks globally. Tune in this saturday for the best of bloomberg technology. This is bloomberg. Emily the online Financial Advisor betterment has secured in fresh funding. 70 million values the company at 800 million. That is up from the 2016 valuation of 700 million. The influx of cash games betterment more clout to compete with rivals in an intensifying market. Competitive threats include vanguard and social finance , which have launched automated advisers or hybrid versions. For u. S. Ipos, 2017 has been the year of the flop. Blue apron tanked since it started trading last month. Less than 15 i apiece, the lowest since its debut in march. The New York Stock Exchange says it is expecting an avalanche of ipos in these market conditions. I spoke with john tuttle in aspen earlier this week. The ipo pipeline is strong. I think it will be helpful to look at where we were last year at this time. I think we had zero ipos in the first quarter. It was the worst year for Capital Raising in a decade. This year, we have come out a lot stronger. We have had 49 ipos. Some of them, like snap and blue apron, have not had a result they would like in the first few weeks. But these are companies that are being managed for the longterm. Markets are going to go up and down. It is an everchanging competitive landscape. They are trying to manage in this environment. In light of that the companies , that have gone public, many have performed well in the weeks, months, and quarters following listing. Emily what about Companies Like uber, airbnb, and pinterest . Companies staying private longer and this mentality it is safer to stay private . I think that option is only available for a handful of companies that have truly Sustainable Business models or the ability to scale and be profitable quickly. I think their biggest challenge is liquidity. They are wellcapitalized. But they have employees that joined the company 10 years ago. They lived in a one bedroom apartment. Now they are looking for liquidity. I think we could see these Companies Come to the Public Markets in the next 12 to 24 months. Emily what do you think about the valuation disconnect between private and Public Markets . Is it coming up the pipeline gumming up the pipeline . It is slowing down the pace at which companies are becoming outlook. It has at times and at first impact on them because it requires you to be well disciplined. A lot of times, the quicker they get out the more return for shareholders. Market conditions staying as they are, interest rates, the vix low and stable. We have a strong pipeline of Companies Set to come out from across sectors. We are expecting an avalanche of ipos. Appropriate in aspen. They are from not only different sectors, but different geographies. We are seeing a lot of action out of asia, south america, and europe. Emily what about the uncertainty around the administration . Is that giving people pause . There is always gridlock in washington. Emily not quite like this. True. From our standpoint, helping companies to raise capital, we are focused on the positive developments taking place. We have a chairman at the sec who has made a pillar of this platform, Capital Raising, and making life easier for public companies. There are a lot of requirements. A lot of work that goes along with it. Emily talk to me about anticipation around upcoming companies. Dropbox for example. I cannot comment on any in particular. It is safe to assume that the company is considering the capital markets, we are talking to and will be ready for them. Emily how do you prevent a drop drought like last year . There are Macro Economic conditions out of our control. Last year, it seemed like the aftereffects of the valuation in caused volatility that 2015 rippled across all asset classes. A lot of it is out of the stock exchanges control. We want to make sure when conditions are right, we are ready to receive these companies. Emily john tuttle, global head of listings at the New York Stock Exchange in aspen. We will discuss how the company lyft jumps into the crowded space of autonomous driving. We will discuss how the company can get ahead in the world of Self Driving Technology. A feature i want to bring to your attention. Our new, interactive tv function at tv on the bloomberg. You can watch us live. You can go back to an old interview. You can send our producers a message. Play along with the charts we bring you on air this is for bloomberg subscribers only. Check it out at tv on bloomberg. Emily Silicon Valley Startup Accelerator y, nader is raising up to 1 billion for its new Venture Capital fund according to axios. It comes after the closure of the growth fund. The accelerator is one of the most influential startup entities in Silicon Valley. They incubated Companies Like airbnb, dropbox. Lyft is driving into autonomous vehicles. The ridesharing startup is opening a selfdriving Car Development facility in palo alto, california, called level five. Until now, lyft has focused on partnerships with the likes of g. M. And alphabet. Still with us, c. E. O. Techonomy, David Kirkpatrick. And our bloomberg tech reporter Eric Newcomer who covers uber and lyft. What is lyft doing here . After years of saying we are taking a Partnership First approach, we are focused on human drivers, lyft is saying , ok, we are going to do work on selfdriving cars ourselves. We will build this office in palo alto. By the end of 2018, we will have hundreds of employees working there, trying to play catchup, and still partner heavily with automakers and other companies. Emily which is the way uber handled it. Reporter right. Uber blew it out. First, they hired Carnegie Mellon researchers. Bought otto, which has created a scandal in its legal fight with waymo. Uber has been investing since 2015. Lyft is starting in earnest to do it itself. Emily there are people who still dont think self driving cars will hit the road anytime soon. Ubers, bill gurley, former board member thinks it is , decades out. What is the significance of this . David i think it is dependent on what kind of geography you are talking about. In the urban centers where they get most of the business, it is quite possible selfdriving cars could come much sooner than they would for all of us to replace our cars with the selfdriving car we take wherever we go. I think it is absolutely prudent for all of these companies to take this seriously. And also there may be an , interesting hybrid period where we will stop Something Like a driver, but the car will be safer because it has more software steering it. I have a little trouble understanding exactly what lyft is doing here. Eric wrote an interesting piece. But there seems to be disagreement among some of the people covering it whether this is making lyft more like uber which has taken a we want to do it ourselves approach or if it is giving lyft an opportunity to work with a broader range of partners, which could give it more flexibility down the road while still keeping it in the game. Emily i want you to clarify exactly what you believe is happening. Also, im curious if ubers efforts have slowed down as a result of the lawsuit and travis leaving. Is anything changing at uber . Reporter i dont think uber truly wants to go it alone strategy. It would be a mixture of building their own and letting other People Partner with them. I dont think it is a truly going alone. I think the Carnegie Mellon folks are still hard at it. There are plenty of otto people there. On the lyft side, partnering is key to the strategy. I wrote in my newsletter they could potentially bring in other companies to help finance and do the research. I think it is a collaborative approach. The goal is to do everything they can to make autonomous work. They dont necessarily need to own it themselves. They just dont want anyone else to have a lot of leverage over them. They do not want waymo to be the only one with Self Driving Technology. They want to make sure other players are capable of providing selfdriving cars when the technology is ready. Emily new names keep getting thrown out for the uber c. E. O. Search. What do you know . Im going to ask you every time. [laughter] reporter every time you ask me, i will say they are not the ceo. It seems like there are still some infighting and disagreements. I think people are going to have to come together. I will not name names. There is still a process to look for the ceo, so theres nothing i can chariot. Emily and nothing in the near term . Reporter never say never. Emily david, thoughts . David one name surfaced, the vice chairman of bank of america might be a contender. It is sort of informal whatever discussions have happened so far. I thought it was interesting the idea of someone from that big of a company could go to uber. Uber is a big startup but still has a startup mentality. I think having a woman as c. E. O. Of uber would be a practical , and symbolic benefit to the company if it was the right person, i find it weird to think somebody from bank of americas going to be the right c. E. O. For uber. Emily that name was mentioned in a report from axios. We have not reported it. Reporter i trust dan. Maybe somebody talked to her. I believe that. I believe it could be a big company, personally. I think big, Global Industries are what some set of the board thinks is the right idea. They will need a tech visionary. Is travis going to stick around and be that visionary . Is it going to be somebody else . There are many positions available. They need some configuration of Global Operations expertise, a statesman, and tech visionary type person. They need to bring those people together. Emily im expecting new information about this next week. Eric newcomer and David Kirkpatrick, thanks so much for joining us. Have a wonderful weekend, everybody. That does it for this edition of bloomberg technology. Next week, we will bring you full coverage and analysis as tech giants report earnings. You will see it all here. Announcer the following is a paid advertisement for time life. Who are you . [laughter] what are these people doing in my living room . [laughter] announcer he was americas clown prince. [indiscernible] [laughter] announcer his heart was pure gold. If i knew you better, id just give you a real big kiss. Im george. Im alice. [laughter]