Pyongyang. Global news 24 hours a day. Parenti. A this is bloomberg. Bloomberg technology is next. Cory i am cory johnson in for emily chang and this is bloomberg technology. Surge coming to a painful end amid growing warnings of eight market bubble. Silicon valleys waning political capital. In scandal the latest setbacks. Accessrgs unprecedented into chinas Biggest Online commerce company. Our exclusive interview with alibaba founder, jack ma. Summer ismagical coming to a crashing halt. The cryptocurrency has dropped more than 26 since hitting an alltime high of nearly 5,000 on september 1. The drop is due to the moves by chinas policymakers restricting the trading of bitcoin and outlawing the initial coin offering. Prices have been recovering somewhat. The market as a whole has taken a hit over the past couple of weeks knocking about 50 billion off the total of cryptocurrencies. Jamie dimon shared his thoughts about the state of the cryptocurrency market. For bitcoin, my view is you can create a significant number of cryptocurrencies with the central bank behind it. It is probably going to become ubiquitous. Darling barred grilling house and sonny singh. China has backed up everything you have been telling me for the past three to four years. Then we saw a big selloff. You might have expected a selloff at some point. It has been dramatic. Bitcoins know about influence in china . China is important to bitcoin. It is one of the four Largest Companies with bitcoin trading. It changes a lot. Definitely very important. Two of the top 10 largest exchanges are in china. Ede government of china bann initial coin offerings. Frenzy inting to a china so the government shut it down versus regulating it. Now the rumor is they have given the ordern exchanges they have to shut down as well. This is where you see the selling happened. This has happened before. They start regulating more, adding more restrictions and rules, and then they bring them back live again. Ripple deals with bitcoin. What does it mean for countries, places like china . To use these cryptocurrencies as a way to move money and solve problems . That is at the core. When you see realworld use cases, you can use cryptocurrency to solve realworld problems and make payments more efficient. You can make security salmon settlement more efficient. There is real Value Investor can, in real value in those tokens, in bitcoin. I believe it is not just speculation. Theink bitcoin has become store of value. Gold historically has been a store of value. That is a 9 trillion asset. Bitcoin is a store of value, the Digital Store of value. Today, 65 billion asset. There are other Digital Assets. One of them is the one ripple uses, excerpt he xrp. Utility youe more drive, the more demand you will drive. Increasing demand will drive the price up. Cory they are being put to use more as speculative instruments. People dont really understand what bitcoin is so they compare to some other currency. Then this price rise in bitcoin over the last year, it looks like things we have seen before. We have created a chart that shows this where you can look at in thee, the bubble nasdaq in the early 2000s. We have seen that before. Since i dont understand what it is, it is the dotcom bubble. We have seen a movie like this before. Convince our viewers this is different. I think most people know about bitcoin because the price rises, they buy it and hold it, and their speculation. At bitpay, we will process over 1 billion this year in payments. Businesses where it is cheaper and quicker than a wire. In one day for a 1 fee. We are the largest processor of bitcoin in the world. Them into fiator currency. Large Global Brands have their suppliers and pay them in bitcoin. Cory last time we talked on , check us out on it some serious xm sirius radio. Totalked about the necessity change it but they were not going to accept it, the Bitcoin Community has accepted it. The Bitcoin Community has accepted a fork today. There are rumors of another fork in the future. Bitcoin is not going to be the panacea to solve all transactions. Payments is something we think about a lot at ripple. It bitcoin transaction takes on average four hours. That is a pretty long time. It is faster than a wire transfer. It is slower than using your visa. Xrp can process transactions in three to four seconds. Comparing the bubble, i think there are things we can point to, to say this market has been volatile, a lot of things can change. I think it is very different. We both have been following this a long time. Newsweek had a cover story about half the internet was going to fail. Jamie dimon saying that bitcoin is a fraud is like the newsweek cover. I dont think newsweek understood. Aspectsthere are happening in Digital Assets and blockchain that will permeate our lives more broadly than people can embrace. Level iscoin at some in competition with the business jamie dimon has, recording transactions, being a middleman. Cryptocurrency takes a lot of that business away. If you are jamie dimon you might be concerned about cryptocurrencies being accepted in the markets. I think there is a lot of truth to that. For jamie dimon to talk about that, if i were a shareholder in j. P. Morgan i would be glad he is doing that because it is in his best interest to protect the establishment. He sits on top of the oligopoly in terms of how payments work today. Most banks do not want to see that happen. You see very innovative banks leaning and aggressively. Banks nota lot of putting their heads in the sand and i think they will be served well. Blockbuster put their heads in the sand. They could have been netflix. They have the relationships with customers, the movie studios. But they put their heads in the sand about what the future of the internet would enable. They are gone and netflix is a valuable company. You see all of the banks wanting to partner up. Even though jamie is saying those things, is internal team is trying to figure out how to leverage the technology. Cory it does seem like he knows on one level what he is talking about. So good to see you. Always a pleasure. Thank you very much. Pitch toe making a convince amazon to build a Second Headquarters in their city. The city is highlighting the example of google with 5000 employees for the big apple. Amazon solicited proposals are a second location that could mean 50,000 jobs and could last 15 to 17 years. Washington is in competition with other big cities including boston and chicago. Its firstpening Artificial Intelligence research lab in canada. The social media giant investing more than 5. 7 million for ai research. It chose montreal because of students and professors surrounding the area with the universities and strong startup culture and favorable government policies. It will start with 10 researchers and aim to grow to 30 in the coming year. Coming up, the political backlash against Silicon Valley heating up. Can tech giants turn the tide . We will discuss next. Bloomberg technology is Live Streaming on twitter right now. Check it out weekdays at 5 00 in new york, 2 00 on the west coast. This is bloomberg. Cory the company has a new executive chairman as the interim c. E. O. The move comes after the cofounder stepped down at the fintech startup amid allegations of sexual harassment. He has been said to engage in at least one inappropriate relationship. The suit is the latest in a string of high profile unethical behavior across Silicon Valley. News, theof fake issue of dodging taxes, companies drawing criticism from liberals and conservatives. Today, facebook said it will no longer allow advertisers to target based on how they describe their education or employer. At least for a while, after t advertisers were targeting users who expressed interest in finding antisemites. Joining me now, sarah frier. I will have you paraphrase that story. Brilliant reporting again. They did a great job. Peopleery easy to target by anyway you can imagine of describing themselves. Facebook, youe on might say your employer is education or your prior life was in hedge funds or whatever it was. Some people mix stuff up and say ingir education is jewhat and their employer is the nazi army or whatever. What people were able to do is target ads to those selfreported categories. When the ad was out, the facebook system approved it automatically, and they were off to the races. Cory one could target information to antisemites, for example. They were able to see this duplicated on google and twitter. These categories are populated automatically by how people describe themselves on google based on the search terms people use. It is a system that facebook has not touched. Cory they said they were going to stop it, for now. Until they solve the problem, they are shutting down all targeting by interest and education. You cannot target Ivy League Grads who have jobs and consulting, which somebody might want to do. Cory will this hurt facebook revenue . It could. It is a popular way of targeting. In a College Student community, you want to target students to come to your store. They have got to figure it out because this effort by per ropublica has exposed the problems with these selfservice advertising systems. Ofy it comes on the heels the revolution facebook said some secret fake russian groups used us and pumped our consumers by giving them probably fake news. Something people do not understand about the russian effort is they could have done and goneh facebook through sophisticated sales channels, but probably not. Probably, they used a selfservice targeting platform just like propublica did in this story. It shows how easy it is to use facebook to target in very specific ways, in specific regions, specific interests. You would not have to have that much extra access to facebook to pull it off. Societye injury to our is important. I readhe last election, a terrific piece in the atlantic talking about the role of racism in the election of the notion people could have been targeted to bring out the worst demons. To doely motivated something, and facebook helping them to do that is a damming notion of what the technology of facebook can do. This is a moment of reckoning for these Tech Companies. Previously, they might have said we are a reflection of what happens in the world. 2ere are all sorts of people, billion people plus who use facebook. And some of them are good people, some are bad people. Bad things will happen. Now we are getting to the point where we are questioning, what is the responsibility of these Tech Companies to try to think about the best cases for how their platforms may be used in ways that might hurt democracy, in ways that might manipulate plate people, in ways that may be untraceable in a campaign situation. If you are a tv station, you have to report to the government all of the electionrelated ads. If you are facebook, you do not. This is a trying time for these companies to try to explain themselves as neutral platforms where everything is populated by the community and policed by the community, to now saying we do have a responsibility here. We need to take some action above and beyond to stop this. Cory if they want to. Whether or not they want to, this is a moment where they could be regulated. Cory sarah frier, thank you very much. Coming up, the electric car industry getting a supercharge from china. That is next. This is bloomberg. Cory this week is electric future week at bloomberg. A lot of news in the electric car industry this week. Lithium etfs are feeling the general as the third best traded fund. It is up as much as 10 this week. Maybe because china said it will set a deadline for automakers to end sales of fossil fuel vehicles. That would be most vehicles. Joining us to talk about the industry, mark wakefield. The conversation tends to be all about tesla. Wherebout competitively will be in 24 months. Who will be out there making electric cars . The talk is often about tesla. The chinese news was big. It is not new news in one sense because china has been pushing all of their automakers to move heavily toward electric cars. What we have seen in our electrification index where we look at not just how many vehicles produced at how much range is being sold, a better weighting of electric cars, we saw a number of chinese vehicles pushing hard and having about half of the amount of launches between here and 2020, half of the launches will be from chinese automakers. Cory what do you mean . How many launches are we talking about . Give us a sense of the Global Automobile history and how it compares. Right now, it is very small for the global industry. About 1 of the overall industry. Still a small percentage. China is probably going to be the one that takes electrification faster, sooner. Europe is what we believe to be next. North america next. You will have different penetration rates in each of those. 49 of thewe see Platform Launches that could have multiple vehicles on it. Being 103 platforms electrified between now and 2020, 49 are from chinese oems. Cory what about europe . What is happening in europe without a, volkswagen, jaguar, b. M. W. , mercedes . Europe is number two. Very big differences between one country and another. France has a lot of longerrange electrification. It is taking it quite seriously. You have small, fairly wealthy countries. Norway is a prime example having almost 11 electric cars at the moment. You are seeing your take it quite seriously, particularly in city cars and small range cars outside of france. Interesting. I dont have a sense of where the automakers are in terms of what their plans are to release vehicles. Youre talking about the market underlying that. I wonder who the winners and losers might be. People are nervous about going too fast, too soon because it is costly at the moment. An electric vehicle does not cost the same as an internal combustion vehicle at the moment. It depends on the use case. Some delivery trucks, some small cars might get cost neutral in the next decade. Some other cars in the later part of the next decade. It depends on the Battery Price for dominantly coming down. At the moment, they are much more expensive. Automakers are a bit nervous about it. Some are taking a longer term back and going heavily into it. Some are taking more of a wait and see. Cory mark wakefield, thank you very much. Coming up, exclusive access to talk executives, including jack ma, who is dancing like a crazy rich fool selling billions of dollars in stock. You would be dancing, too. See 100 great when you orders. Then you realize i have 100 orders that i have to ship. 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. Welcome to china, the birthplace of alibaba. The past 18 years have been transformative for alibaba, china, and the Global Internet economy as a whole. We were here for the 18th birthday bash. Packed in with 40,000 employees into an outdoor stadium. Withoke exclusively executive chairman jack ma. The cofounder. C. E. O. Group everybody has a big chance to go digital. But people need to change. Three liters driving alibaba, the global disruptor. It was a humble beginning for jack ma as he cofounded alibaba. Few chinese were even connected to the web. Enthusiasm for dotcoms bubbled abroad and alibaba wanted in. When the bubble burst, many plans were put on hold. When an employee was suspected of contracting sars, the executives were quarantined. They then joseph if a out of china and led to the phenomenal success of the singleday shopping extravaganza and the launch of many new businesses, including have financial. No rise of alibaba has been small feat. Moreext steps may be even demanding. I think the challenge is getting bigger, much bigger than the early days. The early days to me were like [indiscernible] we competed with ebay. We saw sars. There are a lot of things we can learn from other companies. Today, the things we are doing, there is nothing to learn from. Everything, we are the pioneer, we are the leader of this industry. The thing that drives you is the mission. There is not a textbook you can read. I dont think anybody could have imagined the kind of scale we have reached today. I think we are very lucky to have participated in the confluence of chinas Economic Growth and also the rise of technology. This is the best reflection of the landscape change, even the landscape change in china and the consumer lifestyle change in china. 500 million customers in china. Today, even more. More and more overseas customers joining the event. When i started with alibaba, the gdp per capita of china was 870. Today, it is over 8,000. It is a tenant increase 10x increase. We have been very fortunate to be in this environment and road that wave. Your smallto enable business, young people, and enable globalization. That is our direction. On the way there, we have more product. Today if you look at the volume of the package on our platform, it is about 55 million a day. We strongly believe this will go to one billion some years later. A day. Im telling my team it is like the way you climb mountains. When you are only 1000 meters high, you enjoy it. It is fun. New goal across 4000 meters, you dont have enough a year. You dont have a lot of people working together with you. You dont have anyone to share your thoughts and worries. Are probably like 5000 or 6000 meters high. We are getting lonely. Without a strong mind and for it, it is difficult to continue to work. Resistance in china for what you are doing. I recently interviewed him. We all know about his comments of the internet economy destroying manufacturing. Do you think there is an old guard in china that does not understand the new economy . That they will have to adapt . This course, we have had kind of resistance in the past 18 years almost every day. We see people like him a lot. Theyou know, this is evolution, revolution of technology. People like the older tycoons of the old economy, in the early days, they destroyed a lot of