all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. matt: this is bloomberg west east coast. defense secretary ash carter speaks with emily chang about building a better relationship and the tech immunity building robot soldiers. is there a cyber security bubble? and the pentagon unveiled a plan for high-tech flexible

electronics. all that ahead on "bloomberg west." first, to the lead. ash carter said he has a lot to learn from silicon valley. secretary carter is in the valley trying to build a strong relationship with the tech community. down with carter for an exclusive interview. emily joins us now. tell us all about today's event. will be speaking with mark andreessen. the thing he is trying to accomplish is to rebuild the relationship between the pentagon and silicon valley to recruit engineers who want to work for the government. and change the image that they have to protect users from the u.s. government given that this

is a post-snowden revelation area -- era. drones.d about keep in mind this is a secretary that has 16 months left in this administration. why should they commit to him now? take a listen. >> we will be making investments, private public partnerships and direct investment as we have for decades going back to the air of jet engines and satellite medications right up through the internet. we need to be a technology leader to protect your country and we can be a technology leader only if we partner with folks out here. emily: you understand this stuff area do what are the key technologies and assets you can get that you're not getting from current defense contractors. >> a lot of the brand-new stuff we do get but i find the defense

department over the years has gotten a little too bureaucratic . a little too slow for the pace of people out here. both on the people level, some are not acquainted with this and some of our community have never understood the dcr technology community. in the technology era -- area we have so much to learn from the cutting edge. we do not build anything in the pentagon. private industry and private initiative to create the technologies that, next to the wonderful people in uniform make our military the finest fighting force we have seen. we need that technology. emily: google has been buying robotic companies.

when will we see self driving cars in the field? >> i think soon. we already have drones, helicopters, other things, undersea vehicles. ine autonomy is another step -- another step. them driving underwater and doing all sorts of things like patrolling cyber networks to defend them. all those things will be done at thomas leora and creative man-machine combinations. we need to be part of that revolution. much of it occurs right here and that is another reason for my visit. i see roberts -- robots in the field. it will be a long time before

humans are entirely removed from conflict. also we are always going to want human decision-making and responsibility when it comes to the use of force. have amazon,u facebook, google making their own drones. do think you can low -- learn anything? aboutir learning things how to do logistics. we do a lot of logistics that may seem monday and but if you are fighting in afghanistan or where getting forces and equipment in and out is vital, we learned something from them and areas like warehousing and inventory management. are spending the taxpayers money and we are trying to do it more efficiently. we learn about efficient techniques and effective combat techniques.

: give us a sense of the attack on the e-mail system and to what extent has that prompted you to ask silicon valley for help? we have known for decades that information technology will be critical. we have a lot to learn. the joint chiefs of staff exploited inas not a dangerous way and it resulted a very simple operator someone opened an e-mail. something that mundane could affect that important a network shows you where we are not -- we are not where we need to be.

this is the place were the cutting edge of cyber defenses defined. need to do that in partnership with silicon valley. zuckerberg called internet surveillance a threat. what do you want from them? we're trying to allow people to make use of this technology in a way that is good for humankind and at the same time we do need to protect ourselves childt terrorists, pornographers, criminal networks, drug runners. there has to be a certain amount of public order as well as private freedom.

we can only strike the balance i talking to the greatest leaders and minds. emily: what needs more money, should there be a cyber security arm of the military? even in an era where there is a lot of budget turmoil. we need to invest more and cyber. is cybery thing much thets is not so money, it's the people. it is finding good people that is challenging for us as we try to do cyber demands. hiring those people, deciding what makes of uniform people,

government people, industry people we should have, that is more challenging than the dollars. emily: they will focus on how to get people to work for the government. the fbi has been out here. you have the highest levels of the government coming out to rebuild this relationship. where they at the hacker conference as well? the snowden revelations, federal agents were banned from the hacker conference. they have a lot more federal agents back in. it will be a long time before this trust is restored between the security community and

government. matt: the ceo stepping down more than a month after hackers stole information about 30 million accounts. may have created fake female profiles and very few real women were actually using the site. let that be a lesson to you. startupse hottest dishes. facebook crackdown on video pirates. we will check on how after the break. stay with us. ♪

matt: we just heard the the defenseth ash counter secretary. he has met with secretary carter four times in the last year.

that goes to show how much effort the secretary is putting into rebuilding these bridges. a $3 billionave valuation. it does a lot of work with the government. i asked what that is like. >> the government is the most interesting customer we can have. they are the biggest in the have interesting problems. problems.interesting about assee is interesting as it gets. part of theer agenda is to rebuild trust. how difficult will that be to people basede many on the idea that we can help dod and intelligence.

it turns out in many cases many of our engineers really want to help the men in the field be more active and more effective. there is some trust that needs the nsa.lt around there is a lot of goodwill that already exists and we need to capitalize on that. emily: you worked on the technology for you started selling. tell me about that. >> there is a myth you can build this product and start selling it. you have to get it right the first time. we spent five years with engineers building it and working with customers in lamps and production to make sure was working. that is what has allowed us to go from zero dollars of sales of two over $200 million this year. the technology works and that takes a long time. emily: what is so special about it?

look at our customers they do not know how many computers they have. much less what they are doing or their data. talkedtalked to cios who about having over 2000 security -- 2000 computers. can start analyzing against all the things you want to make sure true. operations are being done correct way, the right processes are running. we have customers who have gone from 80% compliance to 99.7 compliance in weeks. that is what is helping. a crowdedseems like market. valuations are getting high. >> when i am seeing our companies that are running --

raising money on an idea. there is so much interest in this area. any good idea is being funded to the point where it can keep going forever and that will have to change. companies where the cost is higher than the revenue. there is going to be a consolidation in our space around to allergies that work. there is going to be a change in hunting. the venture community will recognize there is a pattern here they do not want to continuously promote and that will be good for our customers. many are struggling to figure out what is real and what is not. emily: how do you see this playing out? >> in many cases they do not have this much technology. of companiesot

that do not deserve to exist. they will shake out. we may not be in a bubble. there will be some companies that will break out and become 20 or $30 billion companies. do notf the companies have anything with funding. emily: there have been reports that you are raising money. >> i can say the reports are inaccurate. in the coming days or weeks or months you will get the real story. emily: you're not raising money or the valuation is not correct? >> one of those. emily: how are you prioritizing growth? >> we have been growing year-over-year and we have been profitable every quarter.

as al say being profitable startup is hard but it is worth it. many of these things are throwing things against the wall and seeing if they stick. the company is better. emily: there will be a lot of dead unicorns out there. it will be interesting to watch. facebook beefing up its tools to spot pirated videos. so-called free pudding has become an issue. copied compact -- content quickly.

similarities to possibilities -- two other companies. up on hp, and boeing team a new innovation hub. we will talk to the director. we leave you with footage of new drone killing laser.

byte. time for the daily

tests mobileer payments from apple pay and google wallet. it gives them a $5 million violation. they plan to use the money to keep expanding in europe. that is the focus of the new initiative announced by defense secretary s and carter. it will receive $171 million funding putting $75 million from the department of defense at self. emily: dr. thompson, thanks for joining us. you are going to be running this center. you have seen a lot of technologies developed over the years. you have probably seen changes

between the government and silicon valley. it may some examples of where we will see what you are worth e.on in military applications. putting a thin-film film of electronics all over an aircraft wing. you stick it to the outside of their left-wing and it measures stresses in the wing. you look at the plane and the wing flaps. emily: when light we see smart -- when will we see that? >> the air force brought some wings with that stuff on it already. emily: they talked about incorporating sensors into some military uniforms. what can the company like apple contribute to this customer

every company does different things. they do not tell us everything about what they're going to do or the next product. this isy will do is say not an apple. it's just an example. isant something that stretchable. every -- ever try putting a bandage over your elbow? there is an example of something . you want to find out how your healing and you want to see if this is infected and you want it monitored. that is an example of something. we're working on stretchable electronic especially when it is cured to the human body.

deliverables are two find out where the gaps are that is preventing things being manufactured. put out a proposal and we get all these companies working on this gaps. so eventually to three years from now there will be a much more complete ecosystem and people will be manufacturing these things and higher volume. emily: thank you for joining us. we'll have more on monday. we will continue to follow the toretary after he continues rebuild this bridge between the pentagon and silicon valley. incredibly -- an incredibly military edition. emily's full

conversation with mark andreessen. ♪

>> i am lizzie o'leary. --and with all the respect, we thought it was demon sheep who had you all freaked out. john heilemann the demon sheep. john: posts of a marketplace weekend is a guest hosting. lindsey graham lectures and trump economics, 101. the political