'Bloomberg Technology' Full Show (06/26/2019)



I'm Emily Chang in San Francisco and this is Bloomberg technology coming up the next hour President Trump says the US should sue Google and Facebook this as social media executives are grilled once again on Capitol Hill ahead of the first Democratic presidential debate plus a legal loophole American companies are finding a workaround the u.s. ban on Huawei will it last and Apple hires a key chip designer as it pushes into making its own semiconductors how this could be a game-changer for future gadgets but first to our top story shares of Facebook and Google dropping in Wednesday trading on the heels of yet another presidential rant against US social media companies here's what President Trump told Fox Business earlier you know look we should be suing Google and Facebook and all that which perhaps we will okay to talk more about the market reaction to the president's latest threat let's go to our Bloomberg cross-asset reporter Sarah pond sack in New York Sarah shares did react immediately to the president's remarks what happened today absolutely they did except if you look at Facebook you look at Google you just saw those share prices on the screen down about six tenths of a percent so not anything huge it was still pretty minimal but we clearly saw even pre market before markets open we saw the stocks react off of these headlines interesting ly enough he did also attack Twitter in a way and Twitter actually rose today but this really all just harkens back to the conversation that we've been having over antitrust laws I mean everything we have heard over the DOJ investigations the FCC investigations the fact of the matter is but this is something that is here to stay and we are probably going to be hearing more about this not just in the democratic debates coming up tonight and tomorrow but also through the presidential election and then probably on to the next five years or so because when you look at investigations of these sorts and too large companies like Facebook like Google it's not going to be a quick process it's going to take years worth of time right the House antitrust committee has already launched an investigation into some of these companies we're going to talk about that a little bit more in the moment but first I want to talk to you a little bit about chip companies also rallying on this news that some of them have found a workaround on this u.s. blacklisting of Huawei what exactly is happening right this is a really big deal micron reported their earnings last night and they said that they have actually resumed some shipments to Huawei because their lawyers found that some of those components aren't necessarily included in the ban and when you think of the extent of revenue for the likes of micron that come from qua way it's very large already thirteen percent fifty seven percent of the revenue comes from China alone and it's not just micron that has resumed these shipments we also heard from the likes of Intel so micron up 13 percent today it was the best day for the stock since 2011 we also saw Intel up and actually every single semiconductor stock in the Philadelphia semiconductor index was higher today so really a broad-based gain on the back of these hopes so how does this fit into what's been happening over the last couple of weeks as the threats of tariffs have escalated and we continue to wait for this meeting between President Trump and President Xi at the g20 it really is a wait-and-see moment it's been a wait-and-see a couple of weeks I should say actually because it seems investors are just holding on and waiting to see what comes out of the g20 meeting are we actually going to see a delay of the next 325 billion dollars worth of tariffs because there have been hints from the administration that have said even if they don't come to a deal and most investors are not expecting a deal at the meeting this weekend that they do at least expect a kicking of the can down the road so where the Squa way news actually fits in is good because if these keep going on if we do even see more tariffs at least you know that these semiconductor companies won't be hit to the extent that you thought before if every single one of those components that they do ship to the company were in fact banned all right Bloomberg ser upon SEC breaking it down for us thanks so much for that update to continue our discussion now on the intersection of social media and US politics I want to bring in Bloomberg's Ben Brody in Washington where he covers the tech companies corporate influence in the capital and in studio with me here our social media reporter Kurt Wagner so Kurt the president's threats do they have any teeth the president likes to threaten a lot of people on Twitter and this is not the first time we've heard him complain about the companies being you know anti conservative or in Twitter's case keeping him from reaching his his wide Twitter audience that he likes to talk about so hey he might sue that yeah sure and I don't think the president probably will see them but we already know that the companies are talking to the FTC and and they're under investigation by other regulatory bodies so I don't necessarily think that it adds a totally new element that he's talking about although of course he is the President of the United States Ben you were at this hearing today where House leaders grilled the social media executives from Facebook Twitter Google about fake news about misinformation about conservative bias what was your big takeaway from the hearing today well it was less about the charges of any conservative bias coming from the White House which as you said is something we've heard a lot about but what I was hearing was a lot of discontent from the lawmakers about how the companies have been handling misinformation and terrorist content kind of on the one hand they're worried they're not quite doing enough but then you look at something like deep fakes and manipulative videos that you and I have talked about may really be a big part of the 20/20 campaign and it seemed like the lawmakers of course particularly the Democrats are really quite worried that the companies just haven't done enough on this and also don't have policies about what they actually should be doing so you talked about the Pelosi video which wasn't a deep fake but they just don't have a policy about how they treat that any differently than a than a fake article meantime there was a quite heated moment from congressman max Rose of New York tearing into their handling of the Christchurch shootings and terrorists content in general let's take a listen to that I'm getting to the fact that you're not taking it seriously because there were no pub there's no public building there's no full-time staff there were no public POCs until after the Christchurch shooting well I think that's what I'm speaking to how how is anyone supposed to think that you all take this collective action problem seriously if you have no one working on it full-time this is not something that technology alone can solve this is a problem that we are blaming the entire industry for rightfully so no Ben that was an interesting moment there because he was referring to the global internet forum to counterterrorism which is this organization that these tech companies have created together to fight counterterrorism and yet he's saying who even works there is this really a priority if no one really works there tell us about that moment yeah it was it was definitely one of the tensor moments in the hearings he really laid into the executives and and he basically told them that their efforts didn't convince him that they wanted to stop this issue he said you don't have anybody full-time working in a brick-and-mortar building I think Kurt can talk a little bit about how that what we call the gifts et is set up it's it's not quite set up like that some of the people who are working on it full-time are actually in-house at the companies but nonetheless this is the kind of anger that the companies are facing here on the hill where they're where lawmakers are just saying look you have all this power over the messages that are going out we're about to go into an election and you have not convinced us that you are doing enough and that's a real problem for the companies right now Kurt what is this organization actually doing and what is the thing about how much of a priority it is yeah well all these companies have people you know searching for this kind of stuff but they're their own employees so they don't necessarily all work in a building together or with people from Facebook Twitter and Google that doesn't mean that they're not actually proactively looking for this or or trying to take it down I think the anger and frustration is certainly merited and there's a lot of people who felt the same way especially after that video but you know Facebook has been talking now for the last year and a half about how much it's doing to try and solve this stuff it is not perfect by any stretch as we know but to say that they aren't trying at all is probably a little bit of an overstatement meantime the first Democratic presidential debate will be broadcast on NBC tonight will be live-streamed on MBC's accounts on Facebook on Twitter on YouTube and they're gonna have to be policing all of the reaction throughout those couple of hours you've talked to the companies about what they've actually been doing to prepare yep what do you know yeah they are going to have both Twitter and Facebook I've talked to today they're both going to have teams basically dedicated to monitoring the debate going through making sure that there aren't you know threads that that of misinformation that are starting to gain traction Facebook you may remember sort of this war room around the 2018 midterms it's basically just the glorified conference room where a bunch of employees sit together so they're all in person and they can act quicker it sounds like they're going to be doing something like that again tonight for the debate so unlike in 2016 where they just weren't even expecting it at least now they say we're not only expecting that but we have people on hand who hopefully can you know tackle misinformation as it happens then a lot of folks listening very closely to what Elizabeth Warren will have to say she's obviously taking a hard line on tech companies there are billboards here in San Francisco about breaking up tech companies that is what she is advocating you know what is this sort of expectation of what Warren might have to say against this backdrop of everything else right I I mean I think the question is how many of the candidates are gonna sort of rush to align themselves with Warren now you saw when she came out with her breakup proposal that a couple of candidates sort of said yeah well I want to break them up too I want to see how much more of that we see tonight and then how many more people might take a moderate position like you have senator Amy Klobuchar who wants to increase the scrutiny of mergers but maybe doesn't want to go all the way to breakup then you have some folks like former Vice President Joe Biden who maybe doesn't want to bring the hammer down on them all that hard at all so I want to see how they fill into those three camps and when it comes to a warrant I think it's important to say that she's gonna be really I think the focus of the debate and lots of ways and I think that means we may be talking about tech policy all right well we're certainly gonna be watching to see where the battle lines are drawn when it comes to big tech bloomix Ben Brody Kurt Wagner thank you both coming up a legal loophole some US tech companies think they have found a way to continue working with Huawei despite being on Trump's blacklist this is bloomer now to a story we continue to watch American companies think they have found a legal way around the u.s. blacklisting of huawei micron and intel are among those shipping some components to the Chinese telecom equipment maker once again here is what the micron CEO had to say about it through this review we determined that we could lawfully resume shipping a subset of current orders because they are not subject to export administration regulations and entity list restrictions we have started shipping some orders of those products to vevey in the last two weeks the companies may be able to classify some of their technology as far and may not made in the United States that would allow them to potentially get around export restrictions to discuss we are joined by Bloomberg text and King and Peter else Jim who was with us from Tokyo so Ian how did the chip makers decide this yeah I mean that's a very good question and that was about as much as anybody got yesterday sanjit was was asked multiple times to explain this to explain the extent of it I got to talk to him after the you know after the conference call really he was just sticking to the party line being slightly evasive what we learned from our reporting was that there might be something of a loophole in terms of where the IP that goes into the chip comes from if less than 25% of that comes from the US or originated in the US perhaps that gives them this ability to continue to ship the chips Peter give us the view from Asia as the US has cracked down as you know over the last few weeks US suppliers have been cut off from Huawei and tensions between the US and China have escalated well it certainly created the sense of crisis at Huawei they felt like they were under fire they were not going to be able to get these critical components that they needed it's not just chips it's also software and all sorts of other components including optical components so the idea that some of these chip makers are resuming shipments to Huawei is certainly going to be seen as a relief from their side and for the chip makers themselves you saw micron shares rally today there is a wide rally and that should make our market they feel like maybe there's an opening here but it's not clear how this is work out and whether this opening is gonna last so Ian we know about Intel we know about micron what about Broadcom what about Google you know supplying Huawei with the Android operating right we're not exactly under an avalanche of willing companies they want to come forward and paint a target on their heads essentially I mean they're in it you have to think about it from that perspective they're in a tough position on the one hand they want to respect the law stay on the right side of this administration which is obviously been very vocal flip side of that is China is the biggest market they absolutely have to be there Huawei is one of their biggest customers so they're trying to balance both sides so you know we're trying to work on this we're trying to find out more but nobody's willingly saying hey ya know I'm still shipping we still haven't gotten a comment from the White House on this yet but our sources are telling us they're the fresh straw meant officially on this but they were very clear when they first came out with the blacklisting of Huawei that this was aimed at punishing a company they felt like was helping Beijing in espionage and hey it was a risk was a security risk to them so it's not clear how they're gonna react to this at this point at whether they may try to do something to try to close the loophole over the long well yeah I mean last night our colleague Jenny Leonard in Washington she did some reporting and you know reached out to her sources and apparently people in the commerce department and other parts of government were not pleased to learn that this continuation of shipping was actually going on so we don't know what actually they can do about it or what they weathered actually we'll do something about it but we do know that they're aware of this and we do know that they're not pleased and do we know that this legal loophole for sure exists is this legal well it's important to say these are these are big established companies micron and Intel don't take legal risks like this lightly they certainly have had lawyers looking at it as as micron CEO explained yesterday they initially stopped shipping and then there's lawyers looked at the specific restrictions here and decided that they could proceed so they're they're pretty confident that they're on solid legal ground at this point but that ground could change so we're waiting for this meeting to happen between President Trump and President Xi at the g20 what's going on inside these companies right now is there a great deal of suspense I mean are they walking on eggshells wondering what's going to happen yeah I mean as we said I mean they want around mean what Sanjay Mehrotra said yes is look we want a resolution to this but we want a resolution that will stick around we don't want this uncertainty we don't want this backwards and forwards we don't want to be basically tennis-balls and in this sort of trade game that's going on we want to know what we can do and what we can work was going forward because China is so important to them the g20 Peter will be held in your neck of the woods what are we doing to prepare to cover this given that it could it could go any which way right we'll certainly British gearing up to cover it and we'll give it full attention I think in terms of these trade issues in particular the expectations are pretty modest about what is going to come out of this we reported earlier that the u.s. is probably going to hold off on imposing this next round of tariffs so we don't think that there's going to be a resolution at the at the meeting but if Trump and XI are able to sit down perhaps they can outlay at least lay out a road map to reach some sort of resolution farther down the line all right well I know you'll be very busy as will you in Ian King Peter Ostrom for Bloomberg thank you both coming up Facebook is boasting a whopping 27 partners for its new cryptocurrency project but not all of them are completely sold who and why why not next and we're live-streaming on Twitter check us out at technology and follow our global breaking news network tick-tock on Twitter this is Bloomberg you Facebook said last week that 27 partners including Visa MasterCard and uber had signed on to its new cryptocurrency project Libre but according to the New York Times those partners aren't fully on board executives at seven of those partner companies told the Times that they signed non-binding agreements because they knew they weren't obligated to use or promote the cryptocurrency and could easily back out if problems arose companies are hesitant to join the project as the social media company faces off with regulators around the world joining us to discuss Bloomberg's Julie overage Julie Facebook has set off a firestorm not just in the United States but in Europe in Europe with lawmakers criticizing or being skeptical of this project who are these companies that have partnered with a Facebook that have said they're skeptical to write so a lot of them leading up to this announcement we got a big list of all the companies that are involved in this all 27 and there's a number of them that were excited to talk about it and then there were a lot of others that were like you know the statement we have in there is all we're really gonna say and then on background they'd say things like you know we haven't paid them anything yet we haven't signed anything saying that we have to stay in this we've just sort of said hey like we're willing to start exploring this with you and we can back out at any time so I think not only our regulator is very weary of what Libra and Calibra the Association might become but a lot of its partners are too so something that I'm gonna be watching over the next few months as they're starting to create this consortium the agreement that they have together and get this list of partners up to a hundred hopefully is just if anyone ends up backing out the time story also points out that something I hadn't heard was that they had approached Goldman fidelity and a few others and they'd actually declined to join at that point so it'll be interesting to see if they actually do get banks involved because David Marcus on Bloomberg last week said that they do hope to get banks in this consortium and he expects that they will write the New York Times reporting that they approached not just Goldman and fidelity but also JP Morgan who declined to participate at the time Facebook in a statement saying that the company plans to engage in a healthy dialogue and debate with our fellow founding members and to welcoming additional members over the coming we know this will take time it won't be easy but together we will be able to make the Libre mission reality Julie talk to us about the challenges ahead in getting not just lawmakers on board but regulators as Facebook is going through you know a you know an investigation by the FTC a potential investigation by the FTC over antitrust and general distrust from the public right so especially on the trust from the public aspect when we were interviewing Facebook for this story leading up to it they said things like you know we have this association it's going to be a subsidiary of Facebook and it will not be sharing information with the broader company and you know they said things like that with whatsapp too so they really have a big hill to climb here and just earning trust from not only partners but people like you and me and as well as people in DC which we should find out more in a couple of weeks when they have the hearings in the Senate and the house on July 16th and 17th I think that's gonna be one of the big areas where we've already seen lawmakers come out in the US and across the globe voicing concerns over this and this is sort of their first chance to you know talk to David Marcus the architect of all of this and get a lot of questions answered I expect it'll be you know a full day hearing and we'll be covering it fully on Bloomberg now you cover financial technology Julie what are you hearing from your sources in that community about this announcement what kind of waves has this made you know I think a lot of people are still wait and see like a lot of the partners said when we were interviewing them is that in their minds not much has really changed so far this was just Facebook finally announcing to the world like what they hope to do there's there's no agreement set so far like I said none of the a partner's have signed anything where they have to stay on for five years or sent any money over so it's basically just we kind of know what their plans are we have no idea what currencies or assets are going to be backing Libra like there's a lot of decisions that have to be made at this point I think step one is you know deal with DC make sure that they're dealing with regulators and stay on their good side as they haven't necessarily in the past and then getting that list of partners up to 100 and making sure that they can get these groups together to actually agree on things because a lot of the members that they have Safari you know payments companies could feel threatened by Libra and that's one of the biggest reasons that they're like you know ten million dollars is a very small price to pay to just have a seat at the table and make sure that if Libra does succeed we're not disintermediated in any way around this all right we'll continue to cover you'll continue to cover Bloomberg's Julie average thank you so much for that context coming up hanging on the telephone is the NSA still after your phone records we'll look at a discovery that the ACLU is calling beyond redemption that's next and if you like Bloomberg News check us out on the radio listen on the Bloomberg cap Bloomberg comm and in the US on Sirius XM this is Bloomberg you this is Bloomberg technology I'm Emily Chang in San Francisco when it comes to the privacy of personal data of the main culprits of people's anger tends to be big tech companies like Facebook or Google but before that much of the debate centered around the NSA as you remember the secretive government agency began covertly gathering domestic phone and text data after September 11th that bulk collection ended in 2015 but now an ACLU Freedom of Information request has revealed that the NSA was still collecting records on us calls and text messages that it wasn't authorized to in October of last year to discuss in Boston we've got Jameel Jaffer he is the vice president of strategy and partnerships at iron at a cybersecurity firm started by the former director of the NSA retired general Keith Alexander before that he served as senior counsel to the house permanent Select Committee on Intelligence one of his duties there was oversight of NSA surveillance so Jamil what happened here so Emily you know as you point out the 215 called data records collection program was modified in 2015 by the by the USA Freedom Act and what happened here was that the phone comes were put in charge of giving data to NSA under this new program and they over sent too much data at the wrong kind of data to NSA in the aftermath of this of this legislation so what we have here is an error for sure and over collection but an error made not by NSA but by the phone companies so how do you do this by accident well look what's going on here is that NSA is seeking specific information about potential terrorist threats and the phone comes are producing records and sometimes what happens is they they may pull a certain set of Records and that records come attached with other records in their database and unintentionally they provide these data thinking they're providing the right stuff and it turns out that what they provided is too much what happened here interestingly is that NSA itself identified that the information was an over collection and took steps to stop the collection and and to save the phone company hey you need to fix the way you're producing this information we don't need or want this data give us one of the stuff we're allowed to have under the law so can we trust you know given all these issues given this error that the NSA is not still doing this that's up or the phone companies are not still doing this and that this couldn't happen again sometime in the future well I think what's important to note here is that this is not an intentional you know sort of over collection or an effort to go beyond the lot either by NSA or the phone companies it appears have been an unintentional error now we have seen a lot of these over the courses program and that ways in the calculus of whether the government continues the program as you know there's an ongoing debate within the Trump administration about whether to seek reauthorization of the program from Congress at but under you know the both the Bush and the Obama administration's it was seen as a very productive program in the sense that it was in an early warning system against terrorism and so there's an ongoing debate as there has been about the value and the relative costs of program and that will continue going forward both with Congress and the public eye as well as with the administration talking to Congress about whether they want to reauthorize it right there are still folks out there saying that this data is valuable that's this collection could should still be happening tell us about that argument well you know part of what's going on here is that the data being collected is what is believed to be phone calls between terrorist targets overseas and people in the United States if you can imagine those are probably most important calls you want to know about if that's happening you want to see are these people involved in terrorism here in United States and if so what should we do about that it actually limits the scope of content collection which is the really privacy intensive stuff now because what it does is it looks just a metadata to identify who the good targets for collection are and who shouldn't be collected against so in a lot of ways there's some privacy enhancing aspects of metadata collection that limit the scope of what you might do on content collection now that being said you know there's been some debate about how valuable the program is did we get enough people was it just additive to other collection things and I think part what that reflects is a is an understanding of how intelligence collection works right intelligence collection doesn't always give you the obvious right answer right here it's a it's a thing of breeding they're an amalgam of a lot of data to identify who might be doing bad things here in the United States States against Americans and that's the key to this program is it's one element of a much larger effort that aims were protect us against terrorist threats and other foreign intelligence threats there's also a sort of larger effort this particular case as an example to sort of reduce the power of us surveillance and in your view as somebody who had oversight over the NSA's actions is that a good thing are we more or less vulnerable than we were before well I mean you know Emily we're seeing all sorts of huge threats out in the world today we know about the efforts by China to conduct cyber attacks against US companies and the like we've seen what Iran has done in physical space with respect to oil tankers in the Persian Gulf and shoot down a US drone we know that North Korea is engaged in major cyber attacks including wanna cry and Russia with the not petty attacks whose anniversary is tomorrow my birthday you know we know that they engaged in attacks against Ukraine but had a huge effect on international companies including Merck Mon delays and Maersk and so we know that people are getting aggressive in this space and so if we're gonna reduce our collection capabilities whether they're against foreign terrorist targets or foreign nations that's gonna make us a little more vulnerable now the trade-off between how more vulnerable we are and whether we get these benefits from cost savings or privacy benefits is a hard one to make and one the government is constantly looking at but we shouldn't just say that it's that there aren't very real threats against our nation which there are and it shouldn't be obviously we're always should be reducing our collection capabilities that can have negative effects to Jameel happy birthday thank you for joining us a day before your birthday we appreciate it I thank you as always for stopping by well it changes at YouTube the streaming video platform said it'll let users override automated recommendations this after Susan Wojcicki – CEO and other YouTube executives were criticized for being either unable or unwilling to act on internal warnings about extreme and misleading videos Wednesday YouTube wrote in a blog post although we try our best to suggest videos you'll enjoy we don't always get it right so we're giving you more controls for what we don't joining us now Bloomberg's Lucas Shaw so Lucas tell us about how dramatic a change this is I mean it's pretty significant when you consider that the entire principle of YouTube and a lot of new media tech companies both YouTube Netflix Facebook they say that they collect data on their users to tell you what you like they will know more about their users then some of your friends will even know because they can see your full search history or your full viewing history but this is a recognition on the part of YouTube that there is a growing frustration with how these different algorithms recommend videos now they're very benign forms of that maybe you get recommended a music video or a late night clip they don't like that's okay you just choose not to click on it but I think there also a lot of examples of algorithms recommending maybe somebody with political views that you really don't agree with or people saying something racist or homophobic or misogynistic and those you know those viewers do not want to be recommended those videos and now they have the ability to silence a particular channel if you turn the algorithm off does that mean potentially that users would watch less YouTube if they're not getting automatically pushed new videos when our video ends that would certainly be one of the fears for YouTube which is why it's hard to see them totally turning the algorithm off because it is engineered to kind of feed you more of what you like think of it I think of it now I you know there's somebody who used an analogy kind of like candy you know you get fed one piece of candy that you really like it's hard to stop eating more but once you start and I don't think YouTube will fully get rid of the algorithm this is more of out of a selective way and something that a lot of a lot of tech companies have embraced if there's something that's particularly offensive you know on Spotify they too have enabled a feature where you can block a particular artist that you find is either not your taste or it is offensive to you in some way because after cases of artists who were you know abusing women or a case of somebody like Michael Jackson who is accused of all sorts of molesting of children some people just didn't want to hear his music meantime speaking of anti-semitic YouTube has found itself in another controversial situation in Europe where they you know as I understand it shut down some you know one channel at the same time they were making policies about Nazi speech tell us about what's going on there and what this means for the EU yeah well Europe I think is where YouTube and Google and most tech companies are vitalized a lot more concerned about some form of regulation because the US government has shown less enthusiasm about punishing tech companies there there have been some investigations out of the FTC and we're waiting to hear the results of one on YouTube here but by and large goo excuse me Europe is where the tech companies have come under a lot more scrutiny and kind of the the case that that you mentioned with regard to anti-semitism to me is just another example of how YouTube has really struggled with where to draw the line on what is appropriate and what is not YouTube's prize they are on the side of not taking things down it believes in allowing more speech but you know there are some cases where people get so riled up so upset that they sort of go against their own guidelines and will take something down in a one-off case all right something we'll continue to follow Bloomberg's Luca Shaw thanks so much coming up president Trump and Chinese President Xi Jinping will attempt to resolve trade tensions at the g20 summit this week how the meeting could impact Apple next this is Bloomberg you Facebook CEO Mark Zuckerberg is currently speaking at the Aspen ideas festival in Colorado we've been monitoring the conversation he's been talking about election interference on social media how the company has spent billions of dollars on election security security in general he also talked about how Facebook can only do so much she believes and how it is up to governments to make a difference with election laws take a listen to a bit of the conversation as a private company we don't have the tools to make the Russian government stop right or for you know I mean we can defend as best as we can but our government is the one that has the tools to apply pressure to Russia not not us familiar refrain their Facebook has said in the past they simply can't keep up with all bad actors we're gonna continue to listen in there he also touched on the Nancy Pelosi deep fake quote unquote video saying they made an execution mistake there we'll bring you any more headlines as we have them meantime Apple shares traded higher Wednesday after a US Treasury Secretary Stephen minuchin gave a positive outlook on a us-china trade deal in an interview with CNBC Minuten said he was confident President Trump and Xi Jingping could make progress in trade talks at the upcoming g20 summit he said quote we were about 90 percent of the way there and I think there's a path to complete this a deal could save Apple from needing to rethink manufacturing and increased prices meantime President Trump warned of more tariffs if a deal does not come out of the summit he told Fox Business Wednesday my plan B with China is to take in billions and billions of dollars a month and will do less and less business with them joining us to discuss what with securities managing director Dan eyes and Bloomberg Sarah McGregor who covers tree so Dan where does this leave Apple look I mean Apple is really the poster child for the u.s. trending UFC battle and that's why there's a lot riding going into g20 you know we believe it's actually worth about 20 or 25 dollars to the stock because remember they're not just impacted on the demand side but on the supply side with Foxconn that's where they bet the farm in terms the mass amount of iPhone manufacturing so in our opinion this is really a fork in the road situation for Apple right now really an innocent bystander but it comes down to we get a trade deal that's the stock that's gonna go meaningfully higher in our opinion so look it's not the first time we've heard different messages from the President and members of the administration but what are we supposed to make of this so I think that Treasury secretary Stephen minutiae in his comments or of no surprise all along in this process you know even through the ups and downs he's sort of been the happy clappy member of trumps cabinet who's you know along with people like Larry Kudlow and White House economic adviser has sort of always had the view that that a deal can be made in fact venusian himself last year presented Trump with a deal that he had made with China and and Trump rejected that so you know I think he's the markets guy he's from Wall Street and he wants to appease people he definitely doesn't want to make a panic ahead of this meeting for sure you know Trump himself is saying that he may go forward with these tariffs and that's really what matters if this meeting doesn't go well Trump is ready to move forward with the tariffs of course it could go if you go swimmingly and they could end up having a deal to have more talks that seems like a pretty likely scenario as well but you know reaching that deal ultimately in the weeks and months ahead even if they agree to keep talking that's where the difficulty lies so looked in what do you imagine let's say Apple as an example executives are doing right now it's simply a waiting seat or are they actually drawing out different scenarios whereby if the meeting doesn't go swimmingly as Sarah says they have a plan B I mean they're definitely hedging their bets I think starting to study potential alternatives outside of China but we've talked about realistically only five to seven percent of production could maybe go to an India Vietnam best-case in the next 18 months so that's why why right those are long-term plans but right now for Apple even though they need to hedge your bets a bit that's why I cook continue to be a pseudo ambassador you know really between US and China they are the poster child for this trade war and that's why it comes down to the 325 billion never happens this is all noise and the Apple makes new highs all right so Sarah this is now happening in a matter of days what are we expecting in the lead up so you know this all came together quite quickly in terms of you know the two two leaders of the world's biggest economies meeting you know it's come together in a bit of a haphazard fashion and so the agenda of course has sort of been evolving you know Trump and XI when they met in in December at the g20 it was sort of the same scenario and they did manage to come out with a bit of a truce so I think that's the ultimate outcome they can talk about the bits and pieces of the deal but ultimately if they're giving their trade negotiators there's a mandate to move forward and to try and come up with a deal that's sort of the the best-case scenario at this point and I think you know companies that's that's sort of what they're watching for you know just to buy a little more time of course then even come on coming up with the deal just leaves this total environment of uncertainty and I think you know businesses are working around that we had this important story about micron finding loopholes in export restrictions that have been put on sales to Hawaii and you know companies more and more just trying to find loopholes and ways around the tariffs and other restrictions all right Sarah McGregor who will be coming every beat of the drum for us as this meeting approaches and Wedbush Securities Managing Director Dan I thank you both still ahead she went from being homeless to launching her own venture capital firm how will we will hear a backstage capital founder and Managing Partner garland Hamilton broke into Silicon Valley with a bang next this is you four years ago Arlen Hamilton was sleeping on the floor of an airport and living on food stamps the former music manager had no money no degree but she had one goal in mind to invest in underrepresented entrepreneurs today she is making waves in the white male-dominated world of venture capital her venture capital firm backstage capital has invested over five million dollars in 100 companies launched by women people of color or founders who identify as LGBTQ I sat down with Hamilton the founder and Managing Partner of backstage capital in the latest episode of bloomberg studio 1.0 and asked about how she made her way from backstage music manager to rule breaker in Silicon Valley take a listen it actually kind of correlates because it was while I was on tour that I I knew of a Troy Carter so Lady Gaga's manager I knew of a Scooter Braun Justin Bieber's manager they were all making these investments these small investments into startups in a place called Silicon Valley and to me you know that sounded like okay that sounds interesting let me see why these interesting people are interested in that and I realized oh my goodness I'm an entrepreneur I'm a start-up founder that these are my people how did you learn about Silicon Valley how did you find this place how did you figure it out you I've been watching you for I think it's been about five years you're a staple here and so much so that I associated Silicon Valley with your with your image and it was a combination of just looking up every video possible on YouTube there's some podcasts I could listen to but most it was like reading blogs and and just reading everything and then I've created flash cards so I had index I bought index cards and I put everybody's it's like the player's name on it so like Marc Andreessen Stewart Butterfield and Aaron levy and all of these people there now investors in our fund but I first had them on these cards of like what who are they what do they mean to the ecosystem and so I was just teaching myself everything I could because I wanted to be ready to go in and pitch to an investor I wanted to know what was on the other side and it was then well in that process of oh I want to start my own company that's when I started seeing oh wait a minute no one is taking me seriously and if they're not taking me seriously and I just went through all of this I wonder how they're taking someone who maybe doesn't put a ghiyath into their sentence at the end of their word sir maybe has a slight southern accent er maybe he didn't go to the college that they did that that they went to and isn't as confident as I am and talking about why that's okay because the fact the investors these white men which is was mostly what I was talking to they were not bad people they were not like jerks for the most part some of them were and you know who you are some of them were but most of them were just like kind of in their own little bubble in their own little world and they just wouldn't go past that now you made it from Texas to Silicon Valley yes I did but it wasn't a straight line I mean you were sleeping on the floor of the airport yes you were on food stamps yeah it was um it was tough a lot of those times and that actually goes back to why when people say that I don't deserve deserve this I uh I just kind of think to myself okay they weren't there on the floor with me at the airport watching venture capitalists walk by with their roller bags because every day I didn't know that I was gonna stay there in that next day it was always oh well this was that last night was the last time I'm doing that like of course I'm gonna figure something out so it was like okay am I going to get to eat today that was the question so how did you get your first big break I think well there's a lot of little things that kind of led up to it but I think you can argue that the biggest break was Susan timberland coming along and and and giving me $25,000 to invest in me and said she said I believe in you I don't know what this is I don't know what this will become but I do believe in that you will make something of it so let's see what you can do Marc Andreessen Stewart Butterfield Aaron Levie all people that you mentioned are now investors they are how do you get a Marc Andreessen to listen well I think it starts by recognizing that Marcus as human as I am and as we were equal I should add that Bloomberg beta is also an investor you see our latest do ya do ever worry that you're just checking a box for some of these people oh I so I don't worry that I am I know that I am in some cases it doesn't bother me though why not because um there's some money that I don't take and I have turned down and I and I won't take and I have you know conviction around that whose money have you turned down I've turned down money that was associated with Peter Thiel very like in the same month that he doubled down on his investment and donation to Trump and it was it wasn't an easy decision because I wasn't it like 250,000 yeah it was that but that was it was a complex decision but an easy one is how easy you've taken on people like Peter TL Paul Graham people who are worshipped mm-hmm in Silicon Valley and that's not been easy for you I imagine because the response has been harsh sure you have sort of an equal number of supporters and an equal number of trolls I've seen it yeah on social media yeah why do that because it's the truth that's how I feel I'm not sure I'm not out looking for trouble but the same reason that they are allowed in this country to say what they say feel what they feel and do that out loud and in their cases it has a massive effect on other people I should be able to speak my mind and and say that that's wrong that's just simple as that my interview there with backstage capital founder and managing partner Arlen Hamilton it is a fiery one you can catch the full episode on Bloomberg studio 1.0 tonight 6:30 p.m. Pacific 9:30 p.m. Eastern you do not want to miss it and that does it for this edition of Bloomberg technology Bloomberg tech live streaming on Twitter check us out at technology and follow our global breaking news network tick-tock on Twitter this is Bert Oh

6 Comments

  1. after3698 said:

    Emily Chang is an icon

    June 29, 2019
    Reply
  2. dnguy62 said:

    I don’t want to watch small clips. Send these out on a 24h basis. This used to be done a month ago. Y’all slacking.

    June 29, 2019
    Reply
  3. K Y said:

    Just be tough to China,banned all Chinese companies,China deserves be banned cuz they didn’t play by the rules for decades,they deserve the punishment

    June 29, 2019
    Reply
  4. Leila Zhang said:

    Second

    June 29, 2019
    Reply
  5. Tim Robin said:

    the only Fake News is from Trump / Conservatives
    WTF both Facebook & YouTube are already totally bias towards Conservatives…
    I can't find any fake news from LEFT, all the Lies are from the "right"/wrongers

    June 29, 2019
    Reply
  6. Mthwakazian Mthwakazian said:

    First

    June 29, 2019
    Reply

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