poll has hillary clinton leading donald trump nationally by a staggering percentage point. poll has clinton at 51% and trump at 37%. the poll attributed to solid democratic turnout in early voting. an earthquake shook central india -- central italy on wednesday. a powerful aftershock closed a major highway. historic buildings were damaged. two months ago, an earthquake destroyed nearby villages, killing 300 people. for the first time in 25 years, the u.s. has abstained from a resolution criticizing the embargo against cuba. the u.s.than 50 years, had a policy of isolating cuba. resolutionng on this we do not support all the policies and practices of the cuban government.

we are profoundly concerned by the human rights violations the cuban government continues to commit. mark: republican lawmakers support the embargo despite the resumption of full diplomatic relationship with havana. i'm mark crumpton. "bloomberg technology" is next. emily: i'm emily chang. this is "bloomberg technology to thetesla shares jump and car company reports a rare quarterly profit. plus we will dig into big blue's that on watson and a new partnership with gm. and a conversation with steve ballmer. he weighs in on twitter's

future. he is a big twitter investor. tesla shares take off after the company posts a rare profitable quarter, et seq. second its history as a company. butsted revenue also beat beyond the financials, investors are listening closely to the call. plans on combining with solar city. shareholders get to vote on a plan in just a couple of weeks. earlier this year, we got our hands on an e-mail from elon musk to employees saying "it would be awesome to throw a high in the face of all the naysayers on wall street who keep insisting tesla will always be a money loser. is this a pie in the face of

wall street and is it just one pie or will there be more pie? it is clearly a pie in the face of wall street but how many more pies he has left is unclear. one of the things that was important in pushing them over the line where these credits from california. those are essentially going away. it not clear how they are going to repeat this in the fourth quarter, though he is saying they will repeat it. emily: they did boost production. is that sustainable? guest: they have to keep ramping up production. they can up to a given point. i've done research in the factory and i believe there's a limit in the short-term and potentially the longer term when they file for new environmental permits, but that is higher than where they are now. up until that point, i think they are good. investors are also

excited about free cash flow. why is that? it hasn'tause happened before. you look at the valuation of the company and if this is what a profitable quarter looks like, how much cash are they going to return to investors? accomplishment and i think they pulled out a lot of stops to make it happen and they got over the line, but not like they are generating huge amounts of cash. you have to wonder if they are going to reach a point where they are going to throw off a lot of cash. emily: you cover solar city and solar city shares are up. does it mean shareholders are more likely to approve a merger? guest: i think shareholders have always been likely to approve a merger. but if you look at the details, it doesn't make sense. you are going to marry rooftop

technology with battery technology but the whole plan find rooftop solar technology is the ability to access net metering, storing your power in the grid. if you ring in the battery, you eliminate that dynamic. saw the 140 we leases but there's a 35% rate on the street. that was a big benefit in the quarter and we know there was big discounting. deal neverof the made sense and one thing that is worth noting is when you had ever quarter do the valuation, they didn't have solar city or tesla's financials before they gave it be ok. it's like they were in the dark. elon musk takes a machiavellian to layingyou want him

around but you don't want him doing it with your money. emily: you are smiling and nodding. guest: one of the things he didn't mention is that capex is reduced. as a start building up the model three launch, a lot of investors assumed that a lot of that ramping has already started happening. they are behind on that, yet there's no impact to model three production which is a really aggressive schedule. we are expecting tesla to unveil its solar roof oduct. what impact are you expecting on a potential merger? guest: i don't think it's going to be a big impact. we're looking at applications for net metering and rooftop solar. there's no doubt the u.s. market has taken a nosedive this year. the average selling price in the

u.s. was $.65. there has been a big drop. the solar rooftop market is suffering as utilities are battle the net metering and that's going to weigh on all of them, including solar city. sanityto question your -- you are following elon musk into the void. and we think that's what it's going to be, a void of cash flow. i don't get it. to someone who had the -- you drove the self driving car and is excited about the new generation of tesla cars that are going to be fully autonomous. but there are questions around the existing autopilot feature. you wrote a column where you talk about the number of guests related to autopilot and there

some contention. clarify what you were trying to say. guest: i wrote in the column that several people have di. and i had to correct that to tw o. and that's the number of deaths tesla does not contest. there have been a number of debts and there are some question about what the owner what the data says are in conflict. tesla does not provide owners .ith copies of the data in the u.s. come you are supposed to and they say the data collection system doesn't meet the definition of this. they don't provide a commercially available tool, so none of test was claims have been verified by third parties. so as someone who writes these corrections open to and third-party verification, i just wish tesla played by the same rules. both. thank you

staying on the earnings front, the groupon shares sliding after hours, after they announced they were buying livingsocial. amount of thehe purchases not material and the transaction should close next month. it was once valued at $6 billion. groupon posted a loss but met analyst estimates. chairman ande ibm ceo joins me live from the world of watson conference in las vegas. herb rignet on watson, head. and steve ballmer, known for sounding off says twitter is the best way to do it. he will make the case later this hour. this is bloomberg. ♪

emily: twitter will report third-quarter earnings on thursday, but the company has bumped up its release time to before the bell, departing from its usual time after u.s. markets closed. based on our scoop that twitter plans to fire 8% of its workforce as the struggling social media company prepares to go it alone, we caught up with steve omar, the former ceo of microsoft and got his take on the company's road ahead. very important, given that he is an investor in twitter and microsoft. take a listen to what he had to say. : twitter is an air reproducible asset. think of what goes on -- donald trump tweeting what goes on late at night. there's not any vehicle that lets you speak broadly to amass an audience better than twitter. be easier toduct

use? of course. that's an important area. could the product benefit from additional innovation that takes it in surrounding areas? yes. the cost structure, there are rumors that they are working on it. but i see a lot of potential in twitter. you see twitter having a future as an independent company? steve: i think twitter would be great as an independent company and there are acquisitions that would make sense for the company and shareholders. -- anythingthing you have heard about? steve: i read what everyone else reads in the paper. see. emily: what about going private? steve: i think the company would efforter served putting into innovation that all the work of a take to go private. emily: we have heard rumors about you being interested in buying the company of various

silicon valley heavyweights getting together. any truth to that? steve: no truth to my interest in buying the company. nobody has reached out to me. emily: what about jack dorsey having his two jobs? steve: it's easy to question. people like me like more out of twitter. the ceo is clearly divided and time, itack spends his would be reassuring if he was entirely focused on twitter for top emily: is it possible to be the ceo of two public companies and do a good job? these: it's not possible for me to comment on it. ever called you and ask for advice? speak to the management team once a quarter after earnings and i share the

opinions i have as they come up. i do not give solicited advice a -- unsolicited advice. emily: what do you talk about? steve: product innovation, real opportunities, costs structure, do they have it where they wanted to be. as one of their biggest investors, what would you like to see? would you like to see them they independent or sell themselves? what would you like to see? steve: i would like to see them work on the things they need to do on a product and cost structure standpoint and be always open to opportunities to be independent and make a sale of that teams of orton. emily: how excited are you about the live streaming asset? steve: i think it proves the power of twitter. we will all learn, but it shows

the power of the brand and the asset. emily: my conversation with steve ulmer, former ceo of microsoft. tune in for my firm -- for my full conversation on "studio 1.0." he's also the owner of the l.a. clippers. always full of controversial things to say. you don't want to miss it. coming up, we had back to las vegas and ibm's world of watson conference and speak to stewart butterfield. ♪

emily: the secretive silicon valley startup may be heading toward an ipo.

the company is well-positioned to go public. they were previously valued at $20 billion. seen increasedd affections overcompensation backlash and its reluctance to go public. turning to another major tech exit -- snapchat trying to raise as much as $4 billion. that could value the company at $25 billion to 35 ilion dollars. snapchat is going for it? for itthey are going after this year of ipo drought. they are going to kick off 2017 with a bang. $4 billion on the high-end is what they are looking to raise. ambitious, given that last time, they were in about the $18 billion range. company looking at a

optimistic about its evolution. this fun, and disappearing text that got used for sex sting -- evolved and it's becoming much more of a media platform and much more useful to marketers. they are innovating and creating new types of advertising tools you can use. you can add filters. politicians have glommed onto snap chat as a way of getting their message out. is on there, trump is on there. they realize it is important and marketers see the same thing. and snapchat is moving into video.reas like they are taking your video clips and compiling them into this rough draft video of events

around the world. it has been a big evolution for snapchat. emily: and it is filled with exclusive content. from any number of media organizations, you have to be on snap chat to see the content and if you don't, it goes away. that said, so much of this is so new full what makes snapchat seem like they are in a rush? maybe that's because everyone else is moving so slowly when it comes to the road to ipo's. guest: the impetus to stay private for so long is not going -- is notop uber going away. asr has dragged this along humanly possible. the venture capitalists putting money into these companies are looking for an exit. i'm not privy to the conversations between snapchat's

cs and banks. summary of my investments are staying private for a lot longer. i want an exit somewhere. onedon't forget employees -- the cost of living in san francisco and the bay area is really high. they want to buy a house and start their kids in private school, so employees are looking for exit and management is looking for a way to unlock some of the value they have been sitting on. emily: some early ventures in partnerslike benchmark are also investors in uber. it's ironic that they are businesses that are valued much more highly, yet they are still waiting in the wings. guest: exactly. something to bear in mind, by some measures, snapchat is doing better than twitter.

just in terms of pure numbers and some measures of engagement. point where they are looking at revenue of $350 million and you start to think about them as a more mature company, a company is ready to get out there and take in a lot of money. there's a lot of snapping that can happen using $4 billion. you a i want to ask question about apple. down after they reported earlier this week. thought they should have done better in light of samsung's massive note 7 recall. analysts explain the stock reaction. investors have been asking of tim cook is to make apple grow again.

that is what we finally saw in this outlook. in our estimates and the outlook in terms of revenue for the december quarter is excellent. >> as investors inc. about their confidence in the business, it should have been boosted last night. i think the reason the stock is down is expectations ran up over the last two weeks. bank of america was out with a to 71hat they would guide and a guided above the street the below some of those whisper numbers. franchise is going to return to growth and will stay there for about the next seven quarters. >> it is clear that apple is no longer a growth company. we look at the intrinsic value of apple and it has a very loyal

customer base which is growing, not at the pace we would like, loyal and toin spend more money with apple on a bunch of different products. emily: i did speak with the apple cfo yesterday and asked about the samsung issue and said they could not tell how much this has impacted them. we've beend is seeing so many android switchers to the ios platform. presumably they will have more information by the end of next quarter. what is your take? there was a little disappointment that they are not making more hey. apple can always surprise us. this could be a great holiday season for them. a projection and they don't know if that revenue is going to be $78 billion. it could be higher than that. the thing you have to remember

is samsung is going to come back with a vengeance as soon as they 8 out.t the in china, they have to deal with a lot of low-cost competitors. concernn area of great that you have to take into consideration. down 32%venue in china year over year. thank you so much for stopping by. joins up, ginni rometty us live from the world watson conference in las vegas. her big bet on watson, just ahead. this is bloomberg. ♪

are you on medicare? do you have the coverage you need? open enrollment ends december 7th. so now's the time to get on a path that could be right for you... with plans including aarp medicarecomplete insured through unitedhealthcare. call today or go online to enroll.

these medicare advantage plans can combine your hospital and doctor coverage with prescription drug coverage, and extra benefits all in one complete plan for a low monthly premium, or in some areas no plan premium at all. other benefits can include: $0 co-pays for an annual physical and most immunizations, routine vision and hearing coverage, and you'll pay the plan's lowest prescription price, whether it's your co-pay or the pharmacy price. or pay zero dollars for a 90-day supply of tier 1 and tier 2 drugs, with home delivery. don't wait, call unitedhealthcare or go online to enroll in aarp medicarecomplete. mark: i'm mark crumpton. you are watching "bloomberg technology." 2016 has been the deadliest year for refugees crossing the mediterranean

heading to europe. 3800 people drown. many of the refugees were attempting to travel from the african coast to italy. refugees set fire to a refugee camp in france. authorities dismantled the shanty town known as the jungle. the people are being moved to centers around france where they can seek asylum. an egyptian court has upheld life sentences a the now outlawed muslim brotherhood. the appeals court rejected appeals from the group's leader. that sentences were also upheld against 10 others. the case dates back to 2013 in the aftermath of the military led removal of mohamed morsi. a new report find that if current trends continue, the gender pay gap will not be closed for another 107 years.

the pay gap has reverted to where it was in 2008 after peaking in 2013. u.s. ranks 45 on that list. global news on a four hours a day powered by 2600 journalists and analysts in over 120 countries. this is bloomberg. yorkjust after 6:30 in new . my colleague in australia has a look at the markets. paul: let's start in new zealand. up one third of 1%. futures are looking mixed and we are expect the modest gains at the open. we will closely be watching shares of national australia bank. they just announce a profit, beating estimates. still coming under pressure from had that's, up 7%.

interest margins contracting by two basis points and a 99 cent dividend coming out of australia. the market will have its first chance to react to bank of china, which came out with third-quarter earnings after the close on thursday. later today, more earnings from china construction bank, agriculture bank of china and samsung. more from bloomberg technology, next. emily: this is "bloomberg technology." i'm emily chang.

ibm has placed a huge bet on watson being a big part of the companies future. it's all coming out of the world of watson conference in less vegas where ceo ginni rometty joins us now. great to have you. ginni: thank you. nice to be here. emily: you are announcing several new order ships today. watsony more people will touch as a result of these partnerships? ginni: we just had a great conference. over 20,000 people. i just told the crowd that right of watson touches hundreds millions of consumers and by the end of next year, we are on the path to be a lien. you just mentioned some of the customers we are ordering with. in the motors coming out 2017 the a goals and onstar go,

a partnership with watson about using your time in your vehicle and a personalized but safe way. generic's largest manufacturer -- what we are doing making the whole process and the delivery of drugs different with watson. week thennounced last work out and available quest diagnostics, which does make precision medicine available to almost everyone in the united states. emily: let's start with the gm partnership. ringing watson to the road. give us an example of how watson will be powering a new driver experience. iskeep it simple -- it interactive and gm has got in about 1.5 billion uses of information from connection and you individually permission in what happens.

the car gets to know you. to pick a prescription up, tell you where to get off early and went to get it, to pre-ordering and paying for your to runto you are going out of gas, getting you to the right place and paying ahead at the pump. is just the beginning and there are a number of partners. you've got mastercard and a whole group being added on. but in a very permissive way. it changes that experience because people on average spend 37,000 hours in their car. tech companies are vying for control of the car. what makes you think watson and otherve something special companies cannot replicate?

in this case, using watson and artificial intelligence can't replicate it. therefore, gm has data that cannot be replicated either. ics playing a role across many different parts and auto. daimler car to go honda, we have done with this kind of cognitive intelligence will come into play and it's not just autonomous driving. autonomous driving with substance in the car. it's opportunity that is out there and it's all different there your own car, and will be a wide variety of ways you will participate for top emily: you say watson is differentiated because every client gets their own individual version of it. if i understand it, ibm will not own or use that data.

why is that important and what advantage does that give you over other companies pushing hard on ai? ginni: as you know, we have been building watson for quite some time. we have really made some strategic decisions that make watson the ai platform for business and knowing what matters to business. in every business, you have accumulated a lot of business and it is yours. so should be the competitive advantage. we've made the choice of an architecture where we will bring data and watson and algorithm and you bring that to the client. they don't train the base form and you make choices on that. to a client, that's extremely important. there's not a client in any industry that isn't going to have the basis of their

competitive advantage be the base of that information for this is in my mind one of the most important decisions we made. you have been hard at work transforming ibm and watson is a huge part of that for transformations intact are not easy. are 105.d you know we we are the only ones that have made it through multiple transformations and multiple euros of technology. at ibm, of 400,000 you've seen the strategic imperative. rose, 40% of ibm and watson is a silver thread not only through those, but you will you in many parts of our base system. doing ishat they are cloud andients to the

watson is a piece of that. isly: ibm has several leg and investors still seem to be focused on these legacy businesses. legacy businesses. how do we see them over the short-term and long-term? i don't think of them as legacy business. we thought we were commoditizing and better with others but the businesses we have our orton for the franchises we run. if you look at our technology services business, these have been modernized many times. they may not be in growing markets, but modernized whether block chain, mobility come a security and have watson be part of them. from running the banks of the world to airlines of the world, they work together. the announcement at gm was a good part of that.

that served as a platform as we moved into onstar go with watson. so, they are related together and there are two different markets and two different growth rates. businesses that are building a scale andw clearly at the other businesses are core franchises, while they may not be growing, they are profitable, solid businesses together. you have ramped up a lot of acquisitions to hold that data and boost the power of watson. is that a strategy we should expect to see continue? ginni: yes. we've done a good number of acquisitions. we look at them is an example for watson health.

that's an industry that would benefit tremendously from data. seen ways to train watson, so that is all for watson health. which is the world most expert group in financial services. he will be training watson as we launch watson financial sees. you are really changing industry than changing processes. those skills and information as well as the technology itself and that is an important differentiator for what we do. emily: ibm ceo and chairman, ginni rometty. thank you for joining us. we are also going to be catching up with stuart utter field coming up next. after announcing this big

partnership with ibm. this is bloomberg. ♪

ibm a worldto the of watson conference where slack and ibm are teaming up to bring watson to global developers and enterprise users. developers will be able to create more lots and conversational interfaces. ceo,ng us now is the slack stewart butterfield. lots,time we talk about if you like we are new words to the dictionary. tell us how this partnership with ibm changes the user experience for slack users. stewart: i would love to. we are going to

be integrating watson technologies in a very direct way is to increase the capabilities of slack. which helps users answer questions. that's just scratching the surface. there are thousands of developers creating applications for slack for customers to use to interact with systems for business workloads and things like submitting an expense report or setting up a meeting time. a lot of those are very dumb. they are useful, but very. we can helpt developers leverage the technology to make the applications smart and understand what kind of things can be shuffled around and do a better job. approaching human level intelligence these very simple applications. are using ibm ai, then how do you decide what to build an house versus what to bring in from outside?

i don't know if we want to categorize them as intelligent technologies, it is very broad. value, soill a lot of we are working on that and improving the technology and working on things that are particular to people's use of slack, so things like recommendations on channels people should join or channels people should leave. intersection's an where we can collaborate with the ibm team are on things like information you missed while you or, if you mention a capable, intelligent chief of staff is able to read all of your messages and distillate down to proactive recommendations. i'm lucky enough to have someone like that but even she is not capable of reading every single message.

isson power body theoretically capable of that and we have a good expectations for the future. emily: slack seems to be a target these days with everyone from microsoft and facebook trying to do what you do. tools in place like yammer, office and skype. do you have any concerns about that and mark stewart: we welcome the opportunity to compete. this is a brand-new category and not everyone knows about it. the seal ofving it approval will help us quite a bit. if you ask our customers what you used for slack, 80% of our customers say nothing. you can imagine what kind of challenge that is when we come to brand-new companies when people have no idea what they would actually use is for. i believe in our ability to produce a product people truly

love and people list slack as a job description. here at ibm, we start off with 5000 people and ended up with 30,000. that's because people of the product and find genuine utility . so i think they will have to compete on that basis. similar feelings about facebook's new product? they are touting ai and facebook does a lot of things as well. stewart: i don't know if you've ever seen the photo of 1977 euros microsoft and nobody thought they could take ibm in the operating system. ibm is still a very successful company and they went against google on being and put a lot of money and effort in two

competing on search. microsoft was not able to catch them on search. then you have everyone trying to take down facebook on the social side. catcheren't able to facebook on social and now you have facebook going up against snapchat. if you are a large incumbent, you have many lines of his this and you're going up against a small and capable startup with a lot of traction, it is very difficult for you to compete. i hope you are taking lots of pictures for us -- for posterity. oftentimes, the traction is about individual teams. how do you overcome the challenge? if not everyone at the company is using it, you are not singly full power of using the product.

stewart: we will move to the enterprise product, which comes out next year. we are starting to see the benefit come from the whole company, but it has always been a product for a team. it can be five people or 50 people. when you get to 50,000 evil, it's a loose metaphor. so we want to move on to something different, the ability to have multiple overlapping teams and there can be shared channels and you can create any kind of organizational structure you want. but there's a huge amount of people.r a team of tocould be a functional area be using slack just within their team. butterfieldrt joining us from las vegas. we will be right back. this is bloomberg. ♪

emily: microsoft kick off its

surface 2016 event, announcing an all in one pc called surface studio that may be aiming to take on apple's imac. they've also announced a new computer that focuses on creative features. joining me to break it down is my guest. what you say highlights are? going after the imac 5k. it is a pricey vice. going to be somewhere around $4000 depending on the features. but they are leveraging touch, which is something apple is not willing to do. that, what microsoft is also doing is leveraging premium hardware. they are starting to integrate features only available on the surface, which is a trick we

have seen out of apple and google. surface dial, which is a way for creators to navigate quickly which only works on the surface devices. so you are starting to see microsoft leverage the power of the surface to give you that experience. about how what they are doing fits into the broader context of the market. i think the pc market is at an important inflection point. we see demand in commercial starting to recover a bit. what microsoft is doing is they are going to leverage their ecosystem. the leverage insider program, bringing 3-d paint, away to experience and scan 3-d devices to windows will allow a broad range of users to start experiencing 3-d.

what they are also starting to do is they are going to intorate that ability office. we believe by 2021, augmented reality will be used in 35% of connected meetings in a new environment to help people collaborate in a new way. is the beginning of that trend in microsoft is taking the power of office and integrating 3-d. the next phase is integrating augmented reality, which they announced today. from pc leaders like hewitt packard and lenovo. you are starting to see that hardware and new kinds of experiences around augmented reality. emily: apple is expected to unveil a new line of lap tops tomorrow. will any of these things change direction of the pc market?

guest: yes. the short answer is that pc is relevant. it's not going away. it's the number one creation tool. it's about refreshing the platform and that's what we are seeing. .mily: great to have you here thank you for stopping by. that does it for this edition of "bloomberg technology." tomorrow is a big day for earnings. tech"isodes of "bloomberg are streaming on twitter. check us out. that's all for now from san francisco. this is bloomberg. ♪

announcer: from our studios in new york city, this is "charlie rose." join me in welcoming james clapp. [applause] i want to begin with the russia and the u.s. relationship with russia. the russian u.n. ambassador rice said in the last week that relations are as bad as he has seen them in the last 40 years. characterized the u.s.-russian relationship. james: it is not at