Than 120 countries. Im jessica summers. This is bloomberg. Bloomberg technology is next. Emily im emily chang, and this is . Bloomberg technology. Is bloomberg technology. Titans hope to find common ground, despite the growing divide between washington and silicon valley. Plus, Sheryl Sandberg opens up in a bloomberg exclusive. The facebook coo gives us her take on Small Business, big branding, and cashing in off advertising. And blue apron prepares to go public under the shadow of the amazon whole foods deal. We are looking at how last weeks megamerger news could rattle plans and an industry food fight that is starting to get messy. First, tech executives are currently at the white house for the first meeting of the American Technology council. Among the attendees, apples ceo tim cook, microsoft ceo satya the della, and amazon ceo ceo and amazon ceo jeff bezos. We began by analyzing and auditing our current infrastructure. It turns out that federal agencies collectively operate 6100 data centers, the vast majority of which can be consolidated and migrated to the cloud, something a lot of you know a lot about. Emily we are also expecting President Trump to join the meeting at any moment. For the very latest, we are joined from washington. What has happened so far . This has now been going on for a few hours. Weve seen several Technology Ceos meeting wit ceos meeting with some of the top advisers, including the vice president. Theyve been talking about how to modernize government. Theyve been talking about new ways to bring the expertise of the private sector and try to translate it into government, something previous of ministrations have tried to previousbeen administrations have tried to do, but has been incredibly difficult. They have also talked about things like the h1b visit program visa program and some areas of concern that the private sector and the Technology Ceos have with what President Trump has done, everything from immigration to climate to the visa issue. Its been long a long and wide ranging discussion. It will be capped with President Trump speaking to some of these ceos facetoface. Emily a number of these ceos are there as part of a oneoff working session. Tim cook, for example, strongly disagreed with the president on issues like planet change. Is President Trump really going to be receptive to what they have to say . A lot of these ceos wanted to have a seat at the table. This is not something they are using as a reason to be part of the president s council. They are just coming to the table to talk to the president and try to have his ear. It doesnt costs them very much to come and try to get the president to move towards their position on a number of different issues, but there are some ceos, including tesla ceo in London Mosque ceo elon musk, who decided not to participate in the council because of disagreements over things like climate change. They want to show they have an open mind towards meeting with the president. A lot of them were saying that they were grateful to have the opportunity to talk to people like jared kushner, who has the trust of the president and who may be a little bit more open towards their positions on things like climate change. Emily thanks so much for that update as we wait for President Trump. After this meeting concludes, what does it mean for the relationship the between tech and washington the relationship between tech and washington . Alex webb joins us now. A strong showing for a group of leaders, many of whom are quite vocal in their opposition to President Trump during the election. As toluse raised, its important for them to have a dialogue with the president. There are issues that are very important to their businesses. For some, its the immigration question. For some, its the offshore ability to recapture it money at a lower tax rate to repatriate money at a lower tax rate. When these issues come to the table, they hope they can steer it in an amenable direction for their business. Emily i spoke to tim cook a couple weeks ago about why he didnt join the council officially. Take a listen to what he had to say. Tim i dont find these councils, in general, and committees to be terribly productive. But it wasnt about not wanting to advise on something where i thought that, you know, we could help or we had a point of view that should be heard. So, im doing the latter. I cant imagine a situation where i wouldnt do the latter, because i think its in the best interest of america to do it. I am first and foremost an american. Emily he is there today as part of a oneoff. Why . He justr the reasons said. He wants to advise on the issues he thinks are important. We mentioned repatriation. There are a number of other issues. The agenda today wasnt so much to do with tech policy, as such. How decisions being made in government will affect the Way Companies are run. Its the other way around, how Tech Companies can help government run. Granular things like cloud computing, access to databases for the public, those kinds of ideas. Do you really need top ceos coming once a month or four times a year to advise on these issues . Thats open to debate. He got a chance to meet a bunch of other top layers within the White House Administration top players within the White House Administration. Emily veteran affairs, human rights, cybersecurity. Its interesting who isnt there at the meeting today. Alex Mark Zuckerberg is not there. We heard already about elon musk. There were a lot of other executives who did make it. It was interesting to see who the attendees were. There were people from tercard, we wouldnt take who we wouldnt typically think of as being a technology company. Outspoken of trumps comments about germany, its interesting that some of these people are in attendance. Emily are we seeing a change, do you think, in the approach of these tech ceos to washington, despite the vehement opposition initially . Alex theres a certain dichotomy. If you look at social issues and things like immigration, they are stringently strictly opposed to what the administration has done. On the other hand, things like deregulation is in a lot of their interests. Thats not something the Obama Administration was able to deliver on to the extent some of these Companies Might have wished. They might not have entire correlation between what they say in private to the president and his people. Emily alex webb of bloomberg t ech. Following, there federal trade commission is challenging the proposed merger between draft things and draftkings and fan duel. It would deprive customers of the benefits of direct competition between the two companies. The ceo of both companiess said in a joint statement that they are disappointed by the decision and considering their options. Coming up, our exquisite interview with facebook coo Sheryl Sandberg. You will hear what she had to say about advertising, facebooks push into video, and its online site fight against inappropriate content linked to hate and terrorism. First, the increasing impact of tech on jobs. This is bloomberg. Technology is changing the economy. Technology is replacing jobs. Technology can also be used to grow jobs. Its our responsibility to help small and Large Businesses all around the world use technology to grow their businesses so that they can create jobs. Berlinbased Food Delivery Company delivery hero is planning an ipo, valuing the company at nearly 5 billion. The startup is backed by a german incubator which owns about 35 of the stock. We spoke to delivery hero in september and asked about the growing competition. Amazon would be that the the second or third leg. We can be very targeted in what we are doing and specialize in actually delivering food. Emily sticking with ipo news, blue apron said today it is targeting a 3. 2 billion valuation in a u. S. Offering. The Company Hopes to sell 30 million shares for 15 to 17 a piece, and it is scheduled to price its shares next wednesday, according to data compiled by bloomberg. Tech giantafter amazon aggressively pushed into the grocery sector on friday with the announcement of its intent to buy whole foods. Our bloomberg editor at large, cory johnson, joins us with our bloomberg lets start with blue apron. The timing interesting. A lot has changed in the last few days. What does that mean for blue apron . Its going to be another challenge they will have to justify on this roadshow, which launched today. This is a company that operates in a space we know that food delivery is fueled by competition. Market operateve in. Its a land grab for wallet share, for customers. This is tricky for blue apron, in that whole foods will now potentially have the logistical empire that is amazon, and amazon customers will have more access to whole foods. Why is that important . Those are the kind of high earner customers, the top 10 of u. S. Households, were willing to spend a little bit more who are willing to spend a little bit more to get the quality whole foods promises. That happens to be the same group that blue apron is targeting. I spoke to an analyst earlier today who said, look, they are all fighting for the same wallet share of these highspending customers. It will be hard for blue apron to fight down the value chain. Folks are not willing to spend 11, 12 a plate for a box of fresh food, granted, but that might spoil. When you think about where blue aprons growth is going to be, they are going to have to figure out how to make sure that they are the ones nabbing those dollars from the highend consumers, and not whole foods via amazon. Emily and yet blue apron is a very different business from whole foods amazon. How does that really change the competitive look . Cory yes, they serve food to consumers, but thats where the similarities end. What you see blue apron doing is trying to market really aggressively, because this is a new kind of idea, sending people just the amount of food they need to make for a certain meal with that recipe and delivering on a regular basis. They are spending vast fortunes to do it. Alex mentioned their marketing costs. They spent 60 million just last 16 million just last quarter. It was 25 of revenues last quarter. This is an extraordinary amount of money to be spending on marketing. That certainly will help with their ipo, because the name is better, but they are spending like crazy, like drunken sailors, to try to get people into their service. The goal is not just to get the man, but to keep them, and they have yet to show that ability. Emily almost every analyst we speak to says to expect more and more consolidation in this space. Good blue apron reconsider could blue apron reconsider . Alex this deal is scheduled to price next week. Frankly, given where it is in the cycle of this deal, if Something Like that was going to happen, it probably would have already. A person familiar with the deal spoke to me and told me that management is focusing on refining its ipo pitch. They are really pushing this lifestyle idea that cory was talking about, how it is different, the fact that it is recipes and prepackaged ingredients, and that that is so different from what a grocery Delivery Company does. They will be pushing toward addressable markets. Only about 1 of all Grocery Shopping actually happens online. Frankly, areas that, amazon whole foods could help, if people get more used to buying their food off the internet. For sures to be an ipo at this point, but i will definitely be keeping an eye on it. Emily weve got new reporting out about how this amazon whole foods deal will actually work. Job cuts at whole foods, price cuts at whole foods. What can you tell us . Cory amazon denies the job cuts, blue we have or the have other sources but we have other sources saying that will happen. Whole foods is about a 5 operating margin. Kroger has about a 2 operating margin. Amazon is even worse. The focus for amazon in most of its business lines is very different. Amazons overall Profit Margins are below 2 . They want lots of cash flow and to use that cash flow to reinvest in their business. They are not looking for the very things that whole foods activist shareholders are looking for. Emily can amazon dropped the price is sustainably can amazon drop the prices sustainably . Cory i think they can. They could run this business just for the cash flow, use that cash flow to expand all of their businesses, the 15 billion a year topline business. The cash flow generated would be about 14 return. Thats a pretty sizable return for them to reinvest that business. Thats the way they seem to look at cash flow. They dont need a lot of profitability. The market has not punished them for lack of profitability in the past. Emily what company could amazon possibly acquire next . Really hard. Is theres a high possibility amazon could completely screw this up. Theyve screwed up prior acquisitions in the past. Theyve opened up a lot of products theyve had to shut down in the past. This is a very difficult industry. Are they going to be very ambitious and do the things we have been talking about with launching grocery delivery, ordering things online, placing them into the cart . Theres lots of things they could do with this business, but i wouldnt be surprised if they make whole foods work, grow that business, use the cash flow on their Balance Sheet for all the other things they want to do, and expand into other areas when the time is right. Emily we will be watching. Cory johnson and alex barinka, thank you both. Coming up, our exclusive interview with facebook coo Sheryl Sandberg. We will discuss how businesses can use facebook products to grow their brands and create jobs in the modern economy. And some news coming from tesla. The company said to be close to an agreement to produce vehicles in china for the very first time. The agreement is said to be with the city of shanghai and would allow tesla to build facilities in one of its development zones. The actual agreement could come as soon as this week. More details later this hour. This is bloomberg. A Subscription Service for fitness classes in gyms has announced the close of a 70 million funding round. Existing investors include crv. It has doubled its member base in the last year and has now grown to 35 million reservations today to date. Global ad executives are convening in cannes, france, this week to talk about how brands can take advantage of new technology. Its happening at the annual innovation festival. Sandbergberg sheryl is one of the most featured exclusive featured guests. Caroline hyde joins us with more. Whats the main message from sandberg this year . Caroline the key message is about the power of the small screen, the power of targeting. She spoke particularly passionately about facebook and how it can help businesses grow, helping small and Big Companies just access new customers and build communities around their brands. Take a listen. Sheryl what we are seeing is more adoption of the mobile platforms. There are 70 million Small Businesses that are using facebook on a monthly basis. Thats our free product. 5 million advertisers. Have 8 millione instagram business profiles, of which one Million People are advertisers. From the very Smallest Company to the largest, they are investing in mobile, because thats where people are spending their time. Caroline do you feel optimistic about what these undercurrents show you about the u. S. Economy, about the Global Economy in general are we seeing in general . Are we seeing jobs being created . Can you give us a gauge as to what you see out there . Sheryl our goal is to make sure businesses spend money and get a return, so what matters for marketers is when they spend on marketing, it rings the Cash Register both online and off. Thats something we are working on. We see Small Business as playing a very Important Role in the Global Economy. The majority of job creation in smallrld is in businesses. Even the most offline Small Business can use the power of technology. When i was last in europe, i went to berlin. I got to visit a company, a furniture manufacturer, manufacturing wooden furniture. Its a very traditional business. The son came into the business and did not change anything about manufacturing, but started marketing on facebook and facebook mobile. They have grown their business and open five more locations, including outside of germany, creating jobs, growing their business. Technology can power innovation, both in the core of the business, but also can support any business out there. Caroline and so, when people worry about tech eroding jobs out there, are you seeing the other point of view . Sheryl technology is changing the economy. Technology is certainly replacing jobs. Technology can also be used to grow jobs. Its our responsibility to help Small Businesses and Large Businesses all around the world use technology to grow their businesses so that they can grow jobs. Caroline interestingly, when we are seeing, perhaps, a drive towards job growth, we are also seeing valuations, for example, of Technology Companies go through volatile times. Does that ever affect you . Does that affect the way in which you look at the world . Sheryl my job every day is to work on growing facebook, helping more people use facebook and instagram and messenger a