Transcripts For BLOOMBERG Bloomberg Technology 20170712 : co

The top 1 could see gains of up to 18 . Other americans will see an average 3. 3 gain. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti. This is bloomberg. Bloomberg technology is next. Emily this is Bloomberg Technology. Coming up, Silicon Valley mobilizes against the fcc with its army of tens of thousands of Tech Companies. Redick cofounder Alexis Ohanian reddit cofounder Alexis Ohanian joins us with his take on the fight for Net Neutrality. Activision blizzard announces the sale of the first franchises. The new England Patriots owner went allin. We are live in sun valley, idaho, with one of Silicon Valleys most influential voices. Sam altman joins us to discuss why he is leading the charge to find the next governor of california. First, the fight over Net Neutrality, a host of internet giants from amazon to facebook joining forces to protest the rollback of Net Neutrality rules. Earlier this year, the fcc voted to start unwinding Net Neutrality rules put in place by the obama administration. On one side, Internet Service providers like at t, verizon, and comcast were largely in favor of less regulation. On the other, facebook, google, netflix, and other tech giants, who could be hurt if the government starts interfering with the internet. Ajit pai has been pushing the proposal since his very first day in office under President Trump. Joining us now to discuss, reddit cofounder Alexis Ohanian, among the websites protesting the rollback of Net Neutrality. Why join in . Alexis read it has always reddit has always been at the forefront of fighting for an open internet. This is something we believe in deeply. Later, we have built something that is the fourth most trafficked site on the internet. The neutrality made that possible. Net neutrality made that possible. Emily companies are telling users to take action. Google, for example, saying todays open internet ensures companies have the ability to reach users on an equal Playing Field. D think this protest will make a difference do you think this protest will make a difference . Alexis yes. A lot of folks remember sites like reddit and wikipedia protesting sopapipa. Because platforms and consumers basically had their voices heard, made phone calls. It seems very anachronistic. Calling your senators or your representative is still one of the best ways to get your voice heard. We now have an audience of hundreds of millions of people across these platforms, who are now informed and now going to be pushed to action. While the fcc is not beholden to voters, because they are appointed by the president , our representatives, are congresspeople, our legislature is. If we can show this is an issue that is as bipartisan as we know it is, we can actually get those votes to quit along to crystallize some good legislation around this. Emily we did speak to the fcc commissioner a few months ago, ajit pai. Take a listen to what he had to say about why he thinks this is important. Told 22 Small Businesses us this hangs over their businesses like a black cloud. Thats the kind of regulatory uncertainty and overreach we want to remove, because every american deserves better, cheaper, faster internet, and im committed to delivering it to them. The argumentes that less regulation means more innovation, the future facebooks, googles, and netflixes of the world can develop. How do you respond to that argument . Alexis i only know it from the perspective of the entrepreneur. That level Playing Field and that neutrality guarantees innovation can thrive. At the end of the day, what we want is for the free market to pick winners and losers, not big cable. Net neutrality is what makes the difference between those two things. Emily what if the rollback happens . What would the consequences be . Alexis it would only be the start of a conversation that i know america would need to have with their elected officials, but what we can expect is the kind of thing that, unfortunately, wont surprise many people who have dealt with their isps before. That is increased rates. You can imagine an internet that looks a lot like yourunfortunat cable television, where you get a default package that may have some news websites and some social networking sites you like, but the ones you love costs more. Tiered internet is fundamentally broken. It is pretty offensive an idea to most americans who want to access the websites they want to access and for so many entrepreneurs who want to know they can start a business and win because people want the business they have made. Emily the counterargument is that Tech Companies have become incredibly powerful. As we look at google, facebook, netflix. They are throwing their weight around. Alexis netflix is a great example. This was a company that, for years, was on our check side, championing Net Neutrality, then they got to be really big. A couple months ago, people asked what side of this are you on and at first the company said we dont need it. Here is a public we traded company who is only beholden to their shareholders who, because of the blowback from their customers, because the American People said just kidding. We support Net Neutrality. We know this is important. We are expecting a similar thing to manifest now with representatives who hear from their constituents. Whether youre trying to look at cat photos or you are a Small Business owner in kansas who is trying to start something, you want a level Playing Field. On thedick costolo was show talking about the meeting between all of the tech leaders and President Trump that they have been having in washington. He suggested that the president is not listening. He might be holding these meetings, but not actually listening to what tech leaders have to say. Whats your message to the administration . Alexis we are primarily focused on the congress. We think, especially regarding Net Neutrality, this is something where the legislature can accomplish something that is bipartisan and what americans want. Reddit, inc. , has never taken a formal trip to d. C. Before. We actually will next month. We want to start making relationships with senators and representatives. We have not had any meetings yet with anyone on the executive side, but really our focus is where we can make immediate impact. Emily whats the latest on reddit . We know you recently returned to the company. What kind of progress has the company made . Alexis i give so much credit to my cofounder. The two of us came back full time a little over two years ago. He has done an amazing job building this company into something formidable. We are shipping a ton of code. The business and the product have grown significantly under his watch, so exciting times. Emily all right. Reddit cofounder Alexis Ohanian, always good to have you on the show. Neutrality issue is also being discussed today at the annual conference in sun valley, idaho. Verizonsong, ceo of internet media business, gave us his take. Tim i think theres a lot of Energy Around making Net Neutrality work. When you soon into verizon, we have put out you zoom into verizon, we have put out a clear statement. Verizon supports Net Neutrality. Let Congress Pass real laws around it and cement it. Today is a great day of action that has been organized. All those things are really positive. Emily coming up, some major newstors, including the England Patriots owner. We will hear from bobby kotick next. Is liferg technology streaming on twitter. Check us out weekdays at 5 00 p. M. In new york, 2 00 p. M. In san francisco. This is bloomberg. Azor is shooting for a Hong Kong Ipo that could value the gaming here maker at as much as gaming gearmaker at as much as 5 billion. The Company Sells its products via ecommerce giants and in chains like best buy across the u. S. 1 billion worth of product globally over the last three years. Tech and media moguls are meeting and mingling. Activision blizzard announced the sale of its franchises in the Overwatch League. Among the buyers, the owner of the new England Patriots. I started by asking kraft why he made the move to esports. We love the infrastructure that has been set up at activision blizzard. Weve looked at a lot. Us,Overwatch League, to having 30 million players at this point, just in this evolution, really appeals to us. The concept of having a team in the new england region we know we have an infrastructure that we can really do a great job with the development of that. Being part of something that can be globalized is very, very relevant to us. Emily i want to talk a little bit about the finances here. Bobby, how long do you think it will take before the Overwatch League can compete with those legs financially leagues financially . We have a 26year history of providing superior returns to our owners, and so we look at owners like robert kraft as an important constituent that we need to do our very best to provide a superior financial return as quickly as we can. Emily now, bob, the franchise fee is 20 million over time. How much will it costs to operate a team in addition to that it cost to operate a team in addition to that . We have not gotten into the details of the operating costs. The operating costs should be a lot lower than what youd see in other traditional sports. Emily lets talk about the future of esports. Esports on Television Still has not been a great success. Bob, why do you think it can get there . We are looking at whats going on with sports generally. Watching the millennials and the z generation, how they consume products on their mobile devices. But also how they dont watch traditional Sports Products the way our generations did. And you see how much time is invested in playing these games and how they can connect with a global audience while doing it is just unheard of to us 10, 15 years ago. We really believe this is the future. We think the infrastructure that bobby has set up was something that the investment that he made in this league is something that was very appealing to us and a great way for us to enter this business. We looked at a lot of alternatives. We felt this was the best way to do it. Emily so, bobby, how much will playersbusiness. Make . Can you give us an idea of that . I think the whole purpose for creating the Overwatch League was in the service of celebrating our players and the commitment that our players make to this game in whats now 196 countries around the world. So, there isnt any good reason that a professional overwatch player shouldnt be rewarded and recognized like professional athletes. Our hope is that that is what will happen and it will happen as quickly as possible. Emily and what do you see as the biggest course source of revenue over the future . Will it be tickets, tv, sponsorships . Usthe great opportunity for is being able to partner with these incredibly successful owners and the young entrepreneurs who have built a lot of the endemic teams, who are really these high potential entrepreneurs that seized on esports as a great opportunity. The combination of the professional experience like we get with robert kraft and the great capabilities we have in some of our endemic owners should allow us to generate revenues in sponsorships, in licensing, in venue fees. A big part of what we are trying to do in building a localbased leagues build the local affinity that you see in traditional sports. The boston enthusiast, the boston players of overwatch will have a place to go, heroes they can celebrate, role models that come from the professional athletes that are going to play our games, so thats a really important part of what we are doing. Emily bloomberg has reported that tv networks are breaking revenue basedad on nfl ratings last season. How do you respond to that . We are here to talk about esports, emily. Robert i will do it. I think anyone who looks at last year understands the role that the election had. Look what the two News Networks our main News Networks are doing this year. I think after the election was ofr, the nfl was within 2 ratings last year. I feel very confident that we are going to have a very strong ratings this coming year. You just wait and see and remember i told you that. Emily my conversation there with activision Ceo Bobby Kotick and bob kraft, chairman and ceo of the kraft group. Yet another case of Sexual Misconduct coming out of Venture Capital, resulting in another partner heading for the exit sign. This is bloomberg. Emily now to the latest in a series of scandals alleging sexual harassment. A seattlebased partner has announced its managing partner has resigned after receiving two claims of misconduct. In a statement, it said it received an anonymous allegation last week, which followed another accusation of Inappropriate Conduct last year. Joining us now, lizette chatman, who covers Venture Capital. Yet another case, yet another Venture Capitalist. What happens this time . Lizette some of the details are still coming out. What we know is what you said in the intro. There was a claim made against him a year ago. I understand the firm did investigate at that time. Thats what we are being told. Timeng happened at that but then last week another allegation was made. As of last night, he had resigned. Emily its worth going through what happened in the last few weeks. Outg story out of the about multiple women being harassed. He resigned. The fund is winding down. Dave mcclure has resigned. Ho hadident with another w made statements. What is the problem . Vcste there are a lot of that have treated women improperly. Based on the reporting that myself and others here at bloomberg have been doing over the past week, it sounds like it falls into two camps, the outright Sexual Assault and harassment and requests for a quid pro quo in some cases, where if you do x with me, i will invest in you. Thats a very extreme example. Most of them tend to fall in the second category, which is being spoken down to in many cases or having questions directed at their male cofounder rather than them, even though they happen to be the one pitching the company, and other slights. So, what is happening . A lot of things are coming to a head. A lot of women are speaking out where before they were afraid to or felt like they would be punished. Mark is another entrepreneur who was singled out by the new york times, who has also made statements of apology. Lizette not mark really. Emily there are the apologies, then the second apology backlash against the initial apology. We believe that there. We will leave that there. The fact that this is happening to women is one problem. The fact that firms may know about it is another problem and not take action. What do we know in terms of whats happening on that front . Lizette thats a really good point. Right now, in the case of ignition, for example, they didnt know. The they did know. They did investigate. It seems there are a number of other firms asking questions of partners, whether its already panned out, like in the case of dave mcclure, or whether its on the earlier side. The question then becomes, how much do they share among their network and do they pass along the information that the person is a bad actor. The first thing to determine is whether it is true. It appears some conversations are going on to determine whether its accurate. Emily dick put the burden of responsibility on investors who fund Venture Capital firms and suggested they actually know about this behavior some time and still fund these Venture Capitalists. What do we know about the diligence they are doing . He ise i think that overstating how much they know. 40 whomake 20, 30, knows how many reference calls . Beyond the quantitative, who is this, what is their track record, what is there their i. R. R. , do we like the geographic focus you get into questions of character and judgment. Questions are asked. When i was speaking to a source said,eek, this individual it seems like theres a code. I was told go talk to these three people about this individual, and you will find some things out. This individual then said, and i called these people, and it was like the twilight zone. Maybe there is a code im not picking up on. I talked to someone just now who said the worst reference you could possibly give someone is, oh, theyre a great guy, i have worked with them, super experienced, hang up the phone. Thats the worst you can say. What you really want to say is, you know, i wouldnt hesitate to back that person again. And workyou know, go with them in a heartbeat. Difficult to figure out from a reporters perspective what they knew and when. Thanks so much. We will be right back after this quick difficult to figure break. Alisa im Alisa Parenti<\/a>. This is bloomberg. Bloomberg technology is next. Emily this is Bloomberg Technology<\/a>. Coming up, Silicon Valley<\/a> mobilizes against the fcc with its army of tens of thousands of Tech Companies<\/a>. Redick cofounder Alexis Ohanian<\/a> reddit cofounder Alexis Ohanian<\/a> joins us with his take on the fight for Net Neutrality<\/a>. Activision blizzard announces the sale of the first franchises. The new England Patriots<\/a> owner went allin. We are live in sun valley, idaho, with one of Silicon Valley<\/a>s most influential voices. Sam altman joins us to discuss why he is leading the charge to find the next governor of california. First, the fight over Net Neutrality<\/a>, a host of internet giants from amazon to facebook joining forces to protest the rollback of Net Neutrality<\/a> rules. Earlier this year, the fcc voted to start unwinding Net Neutrality<\/a> rules put in place by the obama administration. On one side, Internet Service<\/a> providers like at t, verizon, and comcast were largely in favor of less regulation. On the other, facebook, google, netflix, and other tech giants, who could be hurt if the government starts interfering with the internet. Ajit pai has been pushing the proposal since his very first day in office under President Trump<\/a>. Joining us now to discuss, reddit cofounder Alexis Ohanian<\/a>, among the websites protesting the rollback of Net Neutrality<\/a>. Why join in . Alexis read it has always reddit has always been at the forefront of fighting for an open internet. This is something we believe in deeply. Later, we have built something that is the fourth most trafficked site on the internet. The neutrality made that possible. Net neutrality made that possible. Emily companies are telling users to take action. Google, for example, saying todays open internet ensures companies have the ability to reach users on an equal Playing Field<\/a>. D think this protest will make a difference do you think this protest will make a difference . Alexis yes. A lot of folks remember sites like reddit and wikipedia protesting sopapipa. Because platforms and consumers basically had their voices heard, made phone calls. It seems very anachronistic. Calling your senators or your representative is still one of the best ways to get your voice heard. We now have an audience of hundreds of millions of people across these platforms, who are now informed and now going to be pushed to action. While the fcc is not beholden to voters, because they are appointed by the president , our representatives, are congresspeople, our legislature is. If we can show this is an issue that is as bipartisan as we know it is, we can actually get those votes to quit along to crystallize some good legislation around this. Emily we did speak to the fcc commissioner a few months ago, ajit pai. Take a listen to what he had to say about why he thinks this is important. Told 22 Small Businesses<\/a> us this hangs over their businesses like a black cloud. Thats the kind of regulatory uncertainty and overreach we want to remove, because every american deserves better, cheaper, faster internet, and im committed to delivering it to them. The argumentes that less regulation means more innovation, the future facebooks, googles, and netflixes of the world can develop. How do you respond to that argument . Alexis i only know it from the perspective of the entrepreneur. That level Playing Field<\/a> and that neutrality guarantees innovation can thrive. At the end of the day, what we want is for the free market to pick winners and losers, not big cable. Net neutrality is what makes the difference between those two things. Emily what if the rollback happens . What would the consequences be . Alexis it would only be the start of a conversation that i know america would need to have with their elected officials, but what we can expect is the kind of thing that, unfortunately, wont surprise many people who have dealt with their isps before. That is increased rates. You can imagine an internet that looks a lot like yourunfortunat cable television, where you get a default package that may have some news websites and some social networking sites you like, but the ones you love costs more. Tiered internet is fundamentally broken. It is pretty offensive an idea to most americans who want to access the websites they want to access and for so many entrepreneurs who want to know they can start a business and win because people want the business they have made. Emily the counterargument is that Tech Companies<\/a> have become incredibly powerful. As we look at google, facebook, netflix. They are throwing their weight around. Alexis netflix is a great example. This was a company that, for years, was on our check side, championing Net Neutrality<\/a>, then they got to be really big. A couple months ago, people asked what side of this are you on and at first the company said we dont need it. Here is a public we traded company who is only beholden to their shareholders who, because of the blowback from their customers, because the American People<\/a> said just kidding. We support Net Neutrality<\/a>. We know this is important. We are expecting a similar thing to manifest now with representatives who hear from their constituents. Whether youre trying to look at cat photos or you are a Small Business<\/a> owner in kansas who is trying to start something, you want a level Playing Field<\/a>. On thedick costolo was show talking about the meeting between all of the tech leaders and President Trump<\/a> that they have been having in washington. He suggested that the president is not listening. He might be holding these meetings, but not actually listening to what tech leaders have to say. Whats your message to the administration . Alexis we are primarily focused on the congress. We think, especially regarding Net Neutrality<\/a>, this is something where the legislature can accomplish something that is bipartisan and what americans want. Reddit, inc. , has never taken a formal trip to d. C. Before. We actually will next month. We want to start making relationships with senators and representatives. We have not had any meetings yet with anyone on the executive side, but really our focus is where we can make immediate impact. Emily whats the latest on reddit . We know you recently returned to the company. What kind of progress has the company made . Alexis i give so much credit to my cofounder. The two of us came back full time a little over two years ago. He has done an amazing job building this company into something formidable. We are shipping a ton of code. The business and the product have grown significantly under his watch, so exciting times. Emily all right. Reddit cofounder Alexis Ohanian<\/a>, always good to have you on the show. Neutrality issue is also being discussed today at the annual conference in sun valley, idaho. Verizonsong, ceo of internet media business, gave us his take. Tim i think theres a lot of Energy Around<\/a> making Net Neutrality<\/a> work. When you soon into verizon, we have put out you zoom into verizon, we have put out a clear statement. Verizon supports Net Neutrality<\/a>. Let Congress Pass<\/a> real laws around it and cement it. Today is a great day of action that has been organized. All those things are really positive. Emily coming up, some major newstors, including the England Patriots<\/a> owner. We will hear from bobby kotick next. Is liferg technology streaming on twitter. Check us out weekdays at 5 00 p. M. In new york, 2 00 p. M. In san francisco. This is bloomberg. Azor is shooting for a Hong Kong Ipo<\/a> that could value the gaming here maker at as much as gaming gearmaker at as much as 5 billion. The Company Sells<\/a> its products via ecommerce giants and in chains like best buy across the u. S. 1 billion worth of product globally over the last three years. Tech and media moguls are meeting and mingling. Activision blizzard announced the sale of its franchises in the Overwatch League<\/a>. Among the buyers, the owner of the new England Patriots<\/a>. I started by asking kraft why he made the move to esports. We love the infrastructure that has been set up at activision blizzard. Weve looked at a lot. Us,Overwatch League<\/a>, to having 30 million players at this point, just in this evolution, really appeals to us. The concept of having a team in the new england region we know we have an infrastructure that we can really do a great job with the development of that. Being part of something that can be globalized is very, very relevant to us. Emily i want to talk a little bit about the finances here. Bobby, how long do you think it will take before the Overwatch League<\/a> can compete with those legs financially leagues financially . We have a 26year history of providing superior returns to our owners, and so we look at owners like robert kraft as an important constituent that we need to do our very best to provide a superior financial return as quickly as we can. Emily now, bob, the franchise fee is 20 million over time. How much will it costs to operate a team in addition to that it cost to operate a team in addition to that . We have not gotten into the details of the operating costs. The operating costs should be a lot lower than what youd see in other traditional sports. Emily lets talk about the future of esports. Esports on Television Still<\/a> has not been a great success. Bob, why do you think it can get there . We are looking at whats going on with sports generally. Watching the millennials and the z generation, how they consume products on their mobile devices. But also how they dont watch traditional Sports Products<\/a> the way our generations did. And you see how much time is invested in playing these games and how they can connect with a global audience while doing it is just unheard of to us 10, 15 years ago. We really believe this is the future. We think the infrastructure that bobby has set up was something that the investment that he made in this league is something that was very appealing to us and a great way for us to enter this business. We looked at a lot of alternatives. We felt this was the best way to do it. Emily so, bobby, how much will playersbusiness. Make . Can you give us an idea of that . I think the whole purpose for creating the Overwatch League<\/a> was in the service of celebrating our players and the commitment that our players make to this game in whats now 196 countries around the world. So, there isnt any good reason that a professional overwatch player shouldnt be rewarded and recognized like professional athletes. Our hope is that that is what will happen and it will happen as quickly as possible. Emily and what do you see as the biggest course source of revenue over the future . Will it be tickets, tv, sponsorships . Usthe great opportunity for is being able to partner with these incredibly successful owners and the young entrepreneurs who have built a lot of the endemic teams, who are really these high potential entrepreneurs that seized on esports as a great opportunity. The combination of the professional experience like we get with robert kraft and the great capabilities we have in some of our endemic owners should allow us to generate revenues in sponsorships, in licensing, in venue fees. A big part of what we are trying to do in building a localbased leagues build the local affinity that you see in traditional sports. The boston enthusiast, the boston players of overwatch will have a place to go, heroes they can celebrate, role models that come from the professional athletes that are going to play our games, so thats a really important part of what we are doing. Emily bloomberg has reported that tv networks are breaking revenue basedad on nfl ratings last season. How do you respond to that . We are here to talk about esports, emily. Robert i will do it. I think anyone who looks at last year understands the role that the election had. Look what the two News Networks<\/a> our main News Networks<\/a> are doing this year. I think after the election was ofr, the nfl was within 2 ratings last year. I feel very confident that we are going to have a very strong ratings this coming year. You just wait and see and remember i told you that. Emily my conversation there with activision Ceo Bobby Kotick<\/a> and bob kraft, chairman and ceo of the kraft group. Yet another case of Sexual Misconduct<\/a> coming out of Venture Capital<\/a>, resulting in another partner heading for the exit sign. This is bloomberg. Emily now to the latest in a series of scandals alleging sexual harassment. A seattlebased partner has announced its managing partner has resigned after receiving two claims of misconduct. In a statement, it said it received an anonymous allegation last week, which followed another accusation of Inappropriate Conduct<\/a> last year. Joining us now, lizette chatman, who covers Venture Capital<\/a>. Yet another case, yet another Venture Capital<\/a>ist. What happens this time . Lizette some of the details are still coming out. What we know is what you said in the intro. There was a claim made against him a year ago. I understand the firm did investigate at that time. Thats what we are being told. Timeng happened at that but then last week another allegation was made. As of last night, he had resigned. Emily its worth going through what happened in the last few weeks. Outg story out of the about multiple women being harassed. He resigned. The fund is winding down. Dave mcclure has resigned. Ho hadident with another w made statements. What is the problem . Vcste there are a lot of that have treated women improperly. Based on the reporting that myself and others here at bloomberg have been doing over the past week, it sounds like it falls into two camps, the outright Sexual Assault<\/a> and harassment and requests for a quid pro quo in some cases, where if you do x with me, i will invest in you. Thats a very extreme example. Most of them tend to fall in the second category, which is being spoken down to in many cases or having questions directed at their male cofounder rather than them, even though they happen to be the one pitching the company, and other slights. So, what is happening . A lot of things are coming to a head. A lot of women are speaking out where before they were afraid to or felt like they would be punished. Mark is another entrepreneur who was singled out by the new york times, who has also made statements of apology. Lizette not mark really. Emily there are the apologies, then the second apology backlash against the initial apology. We believe that there. We will leave that there. The fact that this is happening to women is one problem. The fact that firms may know about it is another problem and not take action. What do we know in terms of whats happening on that front . Lizette thats a really good point. Right now, in the case of ignition, for example, they didnt know. The they did know. They did investigate. It seems there are a number of other firms asking questions of partners, whether its already panned out, like in the case of dave mcclure, or whether its on the earlier side. The question then becomes, how much do they share among their network and do they pass along the information that the person is a bad actor. The first thing to determine is whether it is true. It appears some conversations are going on to determine whether its accurate. Emily dick put the burden of responsibility on investors who fund Venture Capital<\/a> firms and suggested they actually know about this behavior some time and still fund these Venture Capital<\/a>ists. What do we know about the diligence they are doing . He ise i think that overstating how much they know. 40 whomake 20, 30, knows how many reference calls . Beyond the quantitative, who is this, what is their track record, what is there their i. R. R. , do we like the geographic focus you get into questions of character and judgment. Questions are asked. When i was speaking to a source said,eek, this individual it seems like theres a code. I was told go talk to these three people about this individual, and you will find some things out. This individual then said, and i called these people, and it was like the twilight zone. Maybe there is a code im not picking up on. I talked to someone just now who said the worst reference you could possibly give someone is, oh, theyre a great guy, i have worked with them, super experienced, hang up the phone. Thats the worst you can say. What you really want to say is, you know, i wouldnt hesitate to back that person again. And workyou know, go with them in a heartbeat. Difficult to figure out from a reporters perspective what they knew and when. Thanks so much. We will be right back after this quick difficult to figure break. Alisa im Alisa Parenti<\/a> in washington, and you are watching Bloomberg Technology<\/a>. Lets start with a check of your first word news. Brazilian president was found guilty of corruption and sentenced to more than nine years in prison. He was convicted of taking bribes and money laundering. He was president of brazil from 2003 to 2011. The current president there is also under investigation. The eus chief brexit igo shader says that they must meet tough negotiator brexit says they must meet tough conditions before a trade deal talk can begin. Five men convicted of the murder of a russian Opposition Leader<\/a> will be sentenced tomorrow. Prosecutors are asking for life in prison for the trigger man and long sentences for the other four men. The putin critic was gunned down in 2015. The uns special envoy for yemen says the twoyear conflict there is intensifying. 14 Million People<\/a> are in desperate need of food. One of the largest icebergs ever reported has broken off from a nice shelf in antarctica from an ice shelf in antarctica. It has twice the volume of lake erie. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti<\/a>. This is bloomberg. It is just after 5 30 p. M. Wednesday here in washington, 7 30 thursday morning now in sydney. We are joined by bloombergs paul allen with a look at the markets. We had a fresh record for the dow today in the states. Paul thats right. It looks like it will propel markets in the asiapacific higher. Nikkei futures looking positive as markets in japan weight on the results of wait on the results of fast retailing. Asx futures are 0. 4 higher. We saw some strength on the aussie dollar on the back of those comments from the fed chair, janet yellen. Other banks around the region will hold rate decisions today as well. The bank of korea is expected to hold its sevenday repo rate at one point when he 5 at 1. 25 . The bank of malaysia is expected to hold its overnight policy rate at some 3 . We will begin in the trade trade balance for the month of june, expected to come in at a 42. 6 billion surplus. Exports are expected to drive the result there. We have an 8. 9 rise in exports forecast in june, up from 8. 7 in may, while imports are expected to pull back a little. More from Bloomberg Technology<\/a> next. Emily staying with the annual conference in sun valley, idaho, Jared Kushner<\/a> and ivanka trump are said to be heading there to mingle with tech and media moguls. This as the email scandal concerning the trump administrations possible ties to russia continues to swirl in washington. Bloombergs david gura is standing by with a very special guest. David thank you very much. Im here with sam altman, the president of why companies are of ycombinator. Sam we are trying to recruit a slate of candidates and someone to run a valid Initiative Ballot<\/a> initiative for the california election. A lot of people in the country are unhappy. We are in the middle of this massive shift. This is as big as the technical the cultural revolution or the Industrial Revolution<\/a> this is as big as the agricultural revolution or the Industrial Revolution<\/a>. David how are you picking who you would back . Asm i tried sam i tried the principle of here is what i think is important. Theres a long list. If you agree with these, then im interested in talking. Im interested in people who are great leaders, effective people, and generally agree with what i think. But open to career politicians, new people who want to become politicians. David as you talk to those people who may or may not be interested in getting into politics, whats the hurdle . If you know some of the who is bright and optimistic, whats keeping him or her from doing it, in your experience . Sam so many things. People like their lives. Why would i go do i understand we need better people in politics, but what a miserable life. Thats a big hurdle to get over. David why is this the route . If you want to effect change in policy, why is getting into that arena away to make change . Sam thats how our political system works. Its a very fundamental tenet of democracy, that the people have to participate. If all of us say it is somebody elses problem and im going to just focus on my job and what i do, then i think we get into the situation we are in now. David how wide is the ideological gap between where you live and washington . I recall during the last administration, the secretary of defense tried to make some inroads. How wide is that gap . Has it gotten any narrower . Sam i would say its gotten wider with the Current Administration<\/a>. I think theres there are huge changes coming. You can pretend they are not coming and tell people the cause of their problems is something else, or you can be honest about whats happening, and thats harder. The Current Administration<\/a> doesnt do that. David we have been told that peter thiel is the conduit through which Silicon Valley<\/a> can channel its interest in policy, what it wants to see changed, through him. Is that happening . He is a partner at y combinator. Is he a voice for you and your colleagues . David you should ask that to him. I dont think he has been that conduit for a lot of times. Sam you should ask him that. I dont think he has been that conduit a lot of times. David sam thats the kind of thing, one of the many kind of things that is wrong with this current medical system current political system. If someone disagrees with me, im cutting ties with them. We have gotten into the situation we are in because of behavior like that. I dont think thats the path forward. We need people to say, hey, we are all in this together. If america falls from global world superpower status, thats really bad for all of us. We have devolved into this fight where its like, i hate you, your horrible, you are the worst thing ever, absolute extreme statements which is not a surprise, given we have a reality tv star as our president. We need to get back to an atmosphere where we say here at these fundamental american principles, here are the policies we want to see enacted, and we need to work with everybody. there was a moment where a lot of the country was looking to Silicon Valley<\/a> to lead on a number of these issues. I think of marc benioff, others who have spoken out on immigration. How do you get others to embrace that in the long term . The election has passed. There may be dissatisfaction with some quarters with who is in action in office. Sam im trying to do my part here. I hope others will as well. Given that this is a Technology Revolution<\/a> we are in the middle of, i do think there is a moral obligation for people i wouldnt call myself a tech leader, but people in the Tech Industry<\/a> to be vocal and try to help and try to get involved. We have an opportunity and a responsibility to show people a Better Future<\/a> and say here is what life could be like. We can get to a place where young families can afford homes. We can get to a place where everyone has a path to education, everyone has Great Health Care<\/a> provided by the state. Our current government is in the way of that. Here is a set of technology and policy that we can get back to. We were the greatest country in the world and still are, but we were especially great when we were really good as a country at leading the world in technology across many different industries. And we invested probably more than anybody ever has in research and development. Our government did that. It led to massive prosperity. In this country, we had a hundred years of incredible territorial expansion and a hundred years of incredible technological expansion. Weve had this massive growth, which you need in a democracy to work. Everyone is sensitive to their lives Getting Better<\/a> every year. If there is economic growth, our lives get better. If there is no growth, you have to vote against me. That is where we are right now. We desperately need to get back to technological growth as a country. Its up to us to explain to people why that can work. David youve made the argument there should be freer or open immigration policies. Does that argument is that argument being conveyed well to those in position to change policy . Sam clearly not. Its not happening whether we are making the argument well or not. I think we, the united states, should be the Technology Developer<\/a> for the world. We should think about how many people at this conference are immigrants. How many people came here and built these companies that have created hundreds of thousands, millions of jobs . Theres an argument to make, and im willing to consider both sides that lowscale immigration is not necessarily good for the company, but there is no argument i have ever heard that letting entrepreneurs into the country, letting the worlds smartest scientists into the countries is not good for us. That argument, i do feel like, we can win and we will, but we got caught up in this david its been a great pleasure speaking with you, sam altman of y combinator. Back to you. Emily david gura on the ground for us in sun valley. Thanks so much. Amazons third annual prime day ended of being its biggest ever shopping event, surpassing sales on black friday and cyber monday. It generated about 1 billion in revenue. It also saw more new members joining prime than any other day. Coming up, london has been known as the hub of fintech. Does this reputation still hold true . We will talk with the ceo next. If you like bloomberg news, check us out on the Bloomberg Radio<\/a> app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Emily an update on the story we told you about earlier in the week. The Chinese Government<\/a> says it will not disrupt legitimate access to the Global Internet<\/a> by businesses and general users. Telecomd ordered carriers to bar individuals from using vpn services to circumvent its great firewall. Ministry of information industry and Information Technology<\/a> said in a statement, trade or Multinational Enterprises<\/a> if they require to access the internet abroad can turn to authorized telecommunications entities. Music sting notice will not affect the existing notice will not affect normal operations. This marks ntechntec this marks fi week in london. Caroline hyde will be speaking with a special guest. Caroline this week is fintech week in london. The ecosystem is alive and well. A new funding round was announced today for resolute. It has 66 million to Fund International<\/a> expansion and a move to crypto currency. Ceo of Funding Circle<\/a>, the number one online lender, one of the u. K. s socalled unicorns. Samir is joining us live from san francisco. I want to start with the fact you have scaled. You have headquarters in berlin and san francisco. How is the u. S. Business going . Samir its going really well. If you look at our business, we started in the u. K. In 2010 and we launched in the u. S. In 2013. Weve been really pleased with the progress. Around 30 of our business globally now is actually from overseas markets, not from the u. K. , and those are growing at a much faster rate than the u. K. We have been really pleased with the progress today. We have entered germany and the netherlands as well. We would like to keep adding more and more International Markets<\/a> over time. Caroline europe, done. U. S. On the agenda. What about asia . Well, we are not quite done with europe yet. We are in three markets. There are many more that we would like to go to. But what weve found with our Business Model<\/a> is it does work regardless of the market. We want Funding Circle<\/a> to be the first choice for Small Businesses<\/a> globally, wherever they are, when they want to access finances to expand and grow. I think weve got a little bit more work to do in europe before we start looking to other markets. Caroline how has, of course, the ongoing Brexit Debate<\/a> affected you . Has it affected lending on Funding Circle<\/a> . Has it affected the Investor Base<\/a> or the business is looking for small loans . Happened, werexit were concerned, to put it mildly. It was a big dislocation event. We didnt know how people would react. What we came out and said to our Small Business<\/a> customers and the wider market, we are very much open for business. We started Funding Circle<\/a> just after one of the biggest financial crises there were, because we felt there needed to be an alternative way of getting money to Small Businesses<\/a>. What weve seen since brexit is businesses boom. Funding circle originated record amounts of loans in the First Six Months<\/a> of the year. Funding circle did nearly as much net new lending in the u. K. As the entire Banking System<\/a> combined. What youre starting to see is, even in times of stress, actually, this model can really provide a viable alternative. So, far from being the kind of event that we were worried about, it actually provided a great opportunity for the business. Caroline i mentioned you are also in europe and, of course, you have been based in berlin. There is news out today that samsung is launching a new vc looking for offices in berlin. How much are you surprised by the vc money coming into europe . Are you feeling like its escalating . Is money coming into the start of field . Startup field . Samir what weve noticed over the past few years, really you can start a business anywhere. Europe, asia, the u. S. ,ctually, a lot of the capital the Venture Capital<\/a> and late stage money, is increasingly becoming global. Its agnostic about where a business starts. What people are really looking for is ambitious businesses looking to go global. And i think it makes sense for people to have lots of different operations in different markets, to be close to the entrepreneurs and businesses trying to do that. Caroline talking about being close to entrepreneurs and businesses. In your london office, you have an entire floor open to companies, startups smaller than yourselves who want to come and rent. Why do this . Are you looking at acquisition opportunities, or do you just want to be close to what these other startups are doing . Samir our business is growing incredibly fast, so we have originated about 4 billion since we started the business seven years ago. But 1 billion of that came in the last six months. The business is scaling incredibly fast, and what that means is we need to keep adding more and more people all the time. What we found was that we were constantly having to move offices. By taking another floor and actually renting it out, we actually are able to make a little bit of money on that, but also which wasnt the primary aim , but it gives us space we can flow into. Its been really nice. We have a number of different startups there. Is cheaper than renting it is cheaper than renting anywhere else in london. Its created a nice little ecosystem. Unfortunately you are going to kill that because we have to move into all that space at some point. Its been nice while it lasted. Caroline a recordbreaking 2017 in terms of new lending and managing to have a Side Business<\/a> as well. Great to speak with you, samir desai. Thank you so much for your time. Cant wait to have you back here in london. Thank you very much. Emily all right. Caroline hyde for us in london. Thanks. Coming up, global Cyber Security<\/a> concerns continue to take center stage. We will talk to a ceo to see what the firm is doing to prevent future attacks. This is bloomberg. Emily earlier today, christopher wray, President Trump<\/a>s pick to lead the fbi, faced the Senate Judiciary<\/a> committee. He was asked about his thoughts on the ongoing debate over the battle of encryption versus privacy. Take a listen. Christopher i do know that we are going to have to, as a both thetage fbi, the justice department, others, industry, foreign partners we are going to have to find solutions to these problems, because the role of technology is overtaking us all. Im committed to work with everyone to find a solution. Emily sticking with the fbi, one former consultant to the fbis Senior Management<\/a> team is now the ceo of flashpoint. Executes thez companys Strategic Vision<\/a> to empower organizations with Business Risk<\/a> intelligence derived from the deep dark web. Earlier today, the Company Announced<\/a> the close of a Series C Funding<\/a> round. Josh joins us now live from new york. Your ability to see deeply into the dark web has been touted. What gives you any special ability over the other firms . Josh what we do at flashpoint is, first and foremost, understand our customers requirements. We work with customers across 18 different verticals, from financial services, retail, legal, and well beyond. We have an approach that really blends a deep fusion of subject matter expertise with analysts who speak 15 different languages who understand the intricacies and complex cities of illicit hacker communities, whether they be iranian, etc. And we pair them up with software developing technology that provides a level of scale and visibility that heretofore was unavailable in the enterprise market. And what weve found is that has enabled us to really position as a true partner helping our customers across the enterprise to navigate through and address problem sets that are multivariable, highly sensitive, and truly complex. Emily some of your analysts used to work for u. S. Intelligence agencies. How do they do their job without the resources of the u. S. Government . Found in thisve dates back to the origins of the company in the early 2000s, is that there is a tremendous richness of intelligence, opensource, unclassified intelligence that can be gleaned if you know where to look. Thats why, when you look at our model, which again pairs that deep subject matter expertise with technology, those subject Matter Experts<\/a> play such a critical role, to really have that radar and that Situational Awareness<\/a> to understand where illicit actors in political in particular communities operate. Is it in deep web, dark web passwordprotected marketplaces, internet relay chat, peertope er chat software, etc. . Without that deep, on the ground understanding from your subject Matter Experts<\/a>, it presents a real problem. We have been fortunate to attract some of the best in the industry that are a core driver of the success we have experienced to date and will be a core driver of the success we are forecasting going forward. Emily very quickly, big banks, energy firms, Insurance Companies<\/a> are all using your technology. Some of them just want the bad guys out. Do they need to know who hacked them or why . Josh its a great question. In many ways, its less about the attribution and more about the how and why. When we think about is this risk intelligence, about Business Risk<\/a> intelligence, its about driving more informed his asian making around risks you may be exposed informed decisionmaking around risks you may be exposed to. Cybersecurity teams are front and center, but it expands more broadly to insider threats, fraud, and well beyond. What weve seen is the ability emily we will have to leave it there. Im sorry, josh lefkowitz. Thanks so much for joining us. We will be back with more tomorrow. From our studios in new york city, this is charlie rose. Host charlie is traveling. We begin with politics. Donald trump junior released in email exchange that suggests that he went into a meeting with a lawyer knowing that it was part of a russian government effort to aid the campaign of his father. He met the attorney after he was told that she had compromising information on hillary clinton. Donald trump jr. 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