emily: uncle sam gets hacked and the feds point the finger at china. what the government possibly wants the data on 4 million workers. ♪ emily: i am emily chang. apple -- we are telling you what you will and won't see. plus, ellen pao is not sitting quietly. the next chapter of a gender suit begins now.

wearable tech wants wearables for the world's poor. all of that ahead on "bloomberg west." u.s. officials are investigating a breach that compromised records of up to 4 million employees and it might be part of a larger plot to collect federal workers personal information. evidence suggests that the hackers are the very same hackers who stole millions of records from lou cross earlier this year. these thieves are reportedly linked to the chinese government and could be using the information to target people through bribery, blackmail, or other forms of espionage. how worried should these employees be? we are joined with more. a former senior analyst for the nsa. also have danny rogers from washington who is a cryptography expert. and, mike riley. how exactly did this happen and who has been hardest hit? mike: we know they are related

to a series of acts that had been reported. one of the things that the office of personnel management does, it houses a lot of data for individuals who are applying for background checks, for national security clearances secret and top-secret. apparently what the opm discovered as they began to increase their security based on last year's hacks is that of they had been hacked but not just that, the bad guys got away with everything. data on 4 million former and current government employees. there are briefings on the hill that are going on now and are basically saying, if you ever worked for the federal government, your information has probably been stolen. emily: why are cyber experts saying that this is originating in china and that it might be state-sponsored?

guest: they are a prime suspect and attributed to a lot of these attacks. they have a very large intelligence organization that is in the business of gathering as much data as they can. as a result of that, whether it is employee records or financial data, anything to further their agenda, they will be in the business of trying to make themselves more successful. emily: if they might have been lurking on the network since late last year. why did this take so long to uncover? danny: i think there is a big problem in the industry right now where breaches are taking too long to discover. the average breach discovery time is somewhere between 200 and 230 days. the key to mitigating this is early detection. the industries moving towards a

mindset of risk management in instead of trying to focus on prevention, now it is important to focus on early attention to. every organization is going to be breached at some point and the big differentiator is how quickly and how effectively you can protect that breach in order to deal with the damage. emily: mike, what do they plan to do with it? mike: that is the big question everyone is asking, especially when you connected to another hacks that were done by the same group. anthem and major healthcare, hacks, the elite group of cyber spies hacks all of these organizations. we had all of this information about health records prescriptions, medical conditions. you can match it with a list of

employees. especially those that might have security clearances are being very sensitive positions or in places where they can impact china policy. it is a great list to connect in these different databases together and use them for spying operations. the fear is now they have all of this information, the u.s. government has to be really vigilant in terms of what they will do with it all. emily: what does this say about government security? are these just like the rest of us? guest: i think they are pouring more money into cyber security than anywhere in the world. the government has a very large surface. they have so many critical elements and data flowing through their networks. it is a really hard problem to try to protect all of that data, specially on unclassified networks. the networks are segmented and more difficult to attack. even those are not immune to

advanced threats like china who are in the business of doing whatever it takes to try to get this data and are very well-funded and motivated. emily: what can be done to protect that? we understand your technology actually scans the dark web. danny: we don't focus on prevention as much as rapid detection. we call this a data intelligence system. this is really focused on very strong privacy. the idea here is that if we can automate detection, we can bring the detection time down. that is key to mitigated damages.

emily: could your technology have helped the government? once they are inside, how quickly can they snatch the data? guest: i think we can help in the current situation. the line between economic motivations is really quite blurry. the data that is stolen is monetized on the dark web for economic gain as well. whether it is stolen health records, personal records, these are valuable commodities. where we can help, is now that we know that something has been taken, we can fingerprinted that information and continuously scanned the dark web for the instant that it goes out to be monetized. at least cut out that part of the damage. they might not be will to help with the espionage part that we can mitigated the personal damage to the actual federal employees. emily: this is not the first and

last. thank you all so much for joining us. it has been a big week for investor chris -- he laid out his message on how to fix twitter. he said that this would be an instant fit for google but mark zuckerberg himself once in and -- wants in and even alibaba. i set down with sacca. chris: i think it would be a creed of to google and what they are doing product-wise. they had never gotten social personal identities. they haven't nailed any of that. the insights that come from twitter would immediately feed into their adage. it would make them a ton of money. i think it would be a business deal that wall street should be able to wrap its head around immediately. i think those teams would mess

-- mesh pretty well. i said that for microsoft and and facebook. zuck would not let twitter go to google without making a bid. he sees so much potential. some people i know are very close to him. his perception that twitter is not doing everything they could has not changed. he would love the opportunity to own it and to improve it. back when we did the search, monetization deals when twitter first started selling its search data, it was -- who negotiated that deal. he was across the table from me. those are the three people. i think alibaba might be interested. emily: facebook, microsoft, and google. i think those --

chris: all three companies would see immediate benefit of the company belonging to them. it would fit into each of those companies without blowing out or competing with something else. emily: what about apple? chris: i don't think they care. i take they don't care about the social or the human element of some of the stuff they are building. i want to be clear about this, i don't think that twitter should sell to them. i think one of the reasons that i wrote that is that there is literally unlimited potential on what twitter can continue to build. if they do that, the stock is a trading in a 30's. that is what i would like to see twitter do. that is why i am not campaigning privately or publicly for it to be sold.

i want to be clear about parsing these answers. my point about border relation if the board stump to leaving at any point, i don't know that anyone would block that sale to someone who thinks they can do a better job of it. emily: you can catch my full interview next thursday, 7:30 p.m. pacific/eastern. ellen pao versus kleiner perkins. why we may have seen just the beginning of this court fight. ♪

emily: amazon quietly rolls out an allowance feature. it allows people to set up monthly or weekly payments to give their kids or anyone else over the age of 13 with the balance. the so-called e-giving market is expected to balloon to $14 billion in 2017. apple is gearing up for its annual developers conference. the new music streaming service is expected to be announced on monday.

5000 developers will descend upon downtown san francisco to learn what else apple is breaking on. joining me is -- we are looking forward to monday. apple music seems to be the biggest thing. it is a very crowded market already. so, what can we really expect? guest: what can apple do that is apple and distinct? when we think about these services, there is not a huge difference in the library of music available. how you package it, how you put it together, how you discover music. all of those things become more important. will they have djs on channels and things like that to try to bring some new life to this music service. the big question is what can they do to distinguish themselves from the very strong competition. emily: we thought there might be something about tv but it seems like that is not going to happen. rob: the tv thing will get that

much -- take that much longer. in the long run, i think they are doing the right thing but they need local channels for local sports and things like that. that is what people want before they cut the cord. emily: apple on tv has been a long time in the making. what about the updates to health care? i love my watch, by the way. bob: that will be the big news. it is the developer conference. this is about getting their developers excited about building apps for their ecosystem and platform. they talked a lot about home kit last year and they recently started talking about health kit, they talked about watch kid. i expect the big news will be around -- they can do more with home kit, how it will integrate, what kind of products will be

available. how you can do better faster apps with apple watch. people were saying, they are really slow and they don't do a lot. developers did not have full access to the device. emily: what about cars? a lot of excitement about cars. we got hints from an apple executive that they are interested. bob: exactly. it's a huge area. will we start to see apple finally do this kind -- their own apple version of iot. they have all of these pieces with fitness, home, car. they haven't told the whole story of this coming together. will we start to see them talk about a digital identity service that allows you to move across

services and devices, cars everything, all unified through some kind of apple identity. emily: we are expecting updates to the operating system, no hardware. bob: that is the genera sense of it. emily: how much will this one matter? bob: this is more of a refinement year. some years, you have the big announcements, new products, a lot of things happening. we talked about a lot, now we will flesh it out, we will refine it, we will make it better. the end result is, the news result is, a little bit on the lower side than in previous years. emily: bob o'donnell, thank you so much. as i said, we will be live from apple's worldwide developers conference 1:30 p.m. pacific from san francisco. i will be inside all day long

watching those updates as they happen and bringing them to you right here on bloomberg tv. the next chapter in ellen pao versus kleiner perkins. she lost a high profile gender bias lawsuit earlier this year. this is three times the month -- amount kleiner offered to settle the case. she also wants them to repay $1 million in court costs. basically she is asking for 3.7 million dollars. in return, she will drop the appeal. they had already offered to waive the court fees. they said, she is obligated as a matter of law to repay a portion of our legal cost and we have no exception -- expectation of meeting this demand.

a judge may not hear her appeal. if granted, it could go on years after that. even though she lost the trial she sparks intense debate about the role of women in silicon valley. up next, wearables to the people that need them most. that was a challenge that unicef taking text to the poorest part of the world. google gets called out for sitting on a mountain of cash. could a dividend be in the future? ♪

emily: it is time for the daily byte, one number that tells a whole lot. today, it is $1.5 billion. that is what charles sizemore is paying in an annual dividend.

for companies with a $50 billion market value, there are only 11 that don't pay dividends. prompting sizemore to write online, time to grow up, where -- wear your big boy pants and start paying a dividend. it is a one and a half billion dollar annual dividend, really that much? apple paid out 11 billion and microsoft, nearly 10. so, what is in a wearable? if you own a fit bit or a jawbone, you can track your steps, your sleep. what if you are in one of the world's poorest countries are off the grid. maybe it could be life saving like telling pregnant women when they need to see a doctor. unicef has teamed up with a u.k. chip maker to create a chip for developing countries. thank you so much for being here. i find it interesting that you

chose wearables. why wearables? what are the applications here? guest: we are looking at things that people need to have, things that are nice to have. if there is a fire that breaks out in the slums that could kill millions of people, can we prevent it by having something that is in the environment or on someone's body? emily: how would it work? guest: you have something that they could wear that alerts for increased carbon monoxide. it could then alert the authorities or the people in the community. emily: what do you expect to see and it option rates? we have a lot of fitbits and jawbones in the desk drawer. you see these becoming the fabric of their lives. guest: i think we will need to rethink what wearables are. at the moment, they only catch a portion of your life which is

usually related to your health and well-being. as they start to touch people's lives in a way. could we track mother's health through her pregnancy? to let her know that she needs to go to the hospital to deliver. or to track the nutrition of children or to help children figure out, i should be washing my hands. i take it is these kinds of things that can help save people's lives that will turn the tide with wearables. emily: facebook developed a light version of their app that they have developed for countries where the internet is slower. this has suffered some setbacks. what do you make of this project and the setbacks that we have seen of late? guest: when it is a really new area, i think it is quite a cult for the mobile network operators

to think about losing potential revenue. we all know that people need to access the internet. i think it is a great opportunity to get really lifesaving information out there. at the moment, the speeds are too slow or it is too difficult or too expensive to access the internet. emily: aside from facebook, our people shifting from basic services? guest: they are using the basic services. we have seen our content called facts for life, all the facts that you need to know to grow up healthy are the most popular uses of content on the site after the facebook app will stop the number we have seen is that people are using it. emily: the co-leader of the unicef innovation unit, thank you for joining us. interesting to hear what you are doing. that is everything in this edition of bloomberg west. join us for our special coverage

on monday. apple's conference, i will be inside, 1:30 p.m. pacific, right here from san francisco. have a wonderful weekend everybody. ♪

ady wins the race. ♪ mark: iowans gun their motorcycles, the caucus gets souped-up. first, hillary's rivals go all turbo. she called out the hands of the republican gubernatorial types and their states on voting rights. today, a handful of gubernatorial types returned to the volley. >> secretary clinton doesn't know the first thing a