>> is an update of the stories. equitiesion off of concerns ofrowing findingp policies not easy passage in congress. there have been billions injected into the system. institutionshe include her role commercial

bank. dvdets, laptops, and bags.s must travel in power 2600 journalists and analysts. this is bloomberg. continuation of the selloff from last year with the hang seng index down.

>> is technology. the conference is. we will talk about everything from the cloud to a partnership. at the same time, the window for acquisition is closing. executives are getting hammered on a pr call. we will bring you the details. the biggest slide since october. abigail is in new york. a big selloff today.

>> indeed. and somece september say that this is a reversal of the priest of the major averages. down and what stands out is the nasdaq having a hit today is when we take a look at the today chart of the nasdaq, yesterday the tech heavy index put in an all-time intraday high. a bit of a reversal. all of the big names yesterday led the declines today including outdoor -- apple, out for that, amazon, and microsoft. paul sweeney earlier told me he

believes this probably has to do with profit taking, considering a lot of the stocks have been so strong this year. a various day on stocks today. cory: when the trump rally started after the election, it was led by banks, but tech is leading. reporter: this year, tech is the best sector. we go to the bloomberg. we can see on the top that tech is up 10.4%. behind it, health care up about 8%. it has a pretty sizable lead over the next best sector, being led this year in terms of percentage performers by activision, skywards, symantec, and xerox. activision is pushing into digital. skywards is the apple supplier. symantec in the security space doing well, and xerox having the best year since 2013.

we have to bring it back to apple. this is the biggest holding in both the s&p 500 and the nasdaq. caroline and i have been looking at the technicals on apple for quite some time. we take a look at another -- it is not pulling up. actually, i'm not able to pull up that chart, but act -- apple can be a little variation -- bearish. signs pointing to the fact that apple could in fact trade down in the near-term perhaps to $120 per-share. that could point to a bit more of a pullback ahead. cory: interesting to watch skyworks perform spectacularly. abigail doolittle, as always, we appreciate it. ibm has a big cloud conference in las vegas.

the company is focusing on the cloud because a lot of other businesses are not going well. they categorized much of their business as the cloud last year. caroline hyde has been on the ground. how is it? caroline: i am in the city of sin, and it has become the city of tech. 20,000 developers and engineers gathered to hear the leaders of at&t, salesforce, and ibm about the push to cloud, ai, and where blockchain might be going. i caught up with none other than the ceo, president, and share of ibm ginni rometty, and we talked

about the crowd. ginni rometty: the idea of crowd is a platform for the new era of business. what distinguishes this is three things. one is that it is enterprise strong. that meet the minimum for the enterprises we deal with. you have to prepare them for the future. there are two more things that are distinctive. line it is a data first architecture, and the third it is cognitive at its core. when i say it is enterprise strong, one is its global next, but the other part is you have to be able to put captive innovation in all the time.

today we also announced blockchain in production on the ibm cloud. after transactions, 10,000 a second. that is really important and blockchain work. we also announced quantum. the first quantum computer available on the cloud. it operates at 1000 times colder than outer space. you can do this on your premises, but the point is enterprise strong, you have to have security better than anyone else. when it comes to being data first, it is very different than

some of the consumer clouds out there. when we say data first, you have to protect clients' insights, not distribute them. when you look at consumer guides, they take data, and it is really how they monetized it by distributing it. some call it commoditized or democratizing. we think the value for the client is in their insight. we can give them data control and tell them for sure that data is not intermingled with someone else, not isolated the insight from it, we are not monetizing. we can show you how to protect it. that is data first. the third part that distinguishes us is cognitive at the core. that is watson. what is different about watson then ai, ai is a small piece of

it. of all the data in the world, 80% of it is not searchable. people think everything is on the internet. 20% of the world's data is on the internet, 80% is not. that is where the greatest value is. that is what watson has been trained to deal with. caroline: the crowd at the moment is 17 percent of revenue. where do you want it to be? ginni rometty: i'm here today because we see lots of clients moving businesses onto the ibm cloud. we do 97% of the largest banks in the world. we run a 30% of their lines -- 80% of the airlines. 90% of the telcos, 90% of the credit card transactions come through us.

the ibm cloud is about helping them bring that into a future world. caroline: will that build your revenue? ginni rometty: it does. if you look at the global technology services is this, many think it is running services for other people and has gone down, but it hasn't. we have built the backlog. part of that is the work they do around cloud. i think it is a fallacy with existing customers when they will build new things on the crowd, but they have reasons they keep other info -- it's a reality. what we had to do is build hybrid cloud environments as well as be the best public

cloud. caroline: will the revenue you are garnering from the cloud drive revenue growth in the next couple years for ibm? ginni rometty: it will. 70% of all of ibm's revenue is $13.7 billion, and it is 35%. as you take a look at the crowd, the analytic revenue including ginni rometty: it is an important and good part of revenue. but i see growing is to models. very large state enterprises, or large enterprises, and really just building power. 12,000 startups today in china. 12,000 a day. you need to look at the two markets differently and start them both. that is what the cloud will do. we were strong in the enterprise market and now this allows them to serve them and the origin for

narrow -- and the entrepreneurial market. caroline: ibm ceo ginni rometty there. next, the internet of things with ibm general manager harriet green, then we talk about blockchain. then, none other than the salesforce chair and ceo marc benioff, talking all things ai and jobs. caroline: cory: i can't wait for that. all episodes of "bloomberg technology," are streaming on twitter. 5:00 on the east coast, 2:00 on the west. this is bloomberg.

♪ caroline: cory: now back to the ibm conference in las vegas. caroline hyde is there now. caroline: thank you. we are joined by harriet green, who is leading the internet at things -- of things at ibm. wonderful to have you here. lovely to see you again. let's start off with the internet of things. >> if you take the whole platform environment that has developed and learned about what the internet of things is, then we have a whole range of applications, how to get started in the internet of things. then the digital transformation that goes around it. 10 days ago, we had the genius of things event and our munich

internet of things headquarters. we had 600 clients from 400 different businesses. we had 22 companies sharing outcome. how bmw, how visa, all using cognitive in the internet of things, as well as a series of companies working with those around: location. -- colocation. companies like bnp paribas working to innovate and create using cognitive. these co-laboratories in these ecosystems. caroline: what does bnp paribas make? >> we are looking into it. we are looking at the problems that data can help solve, and together we create services and products with their intention vertical knowledge and our own cognitive knowledge to come up with a solution. caroline: if it driving revenue for ibm? >> yes, the internet of things most definitely.

we has thousand -- we had 6000 clients through the application or digital transformation. it is a real inflection point. caroline: what edge is the i -- ai giving ibm? >> i think it is enormous. one of the key elements is this mass of data, structured and unstructured, coming from every possible sensor, device. you saw our announcement with at&t and the onset of 5g. watson is able to not only process all of that data, structured and unstructured, but very quickly in natural language share correlations and patterns that you would just not be able to see. case letter is an example. they are the biggest manufacturer in the world.

their factories are going to be smarter and more efficient, but they are also creating a cognitive self determining ball bearing that knows when it needs maintaining, that knows when it needs replenishing, and knows when it is off. watson really is the differentiator. without watson, how could you really analyze and create meaningful products and services

in this space? caroline: do you think watson is the edge vis-à-vis google's cloud, microsoft's cloud? >> i think the fact that we have cognitive capabilities that is actually with clients discussing outcomes -- yesterday, the largest french transportation system was talking about the myriad of ways they save money. cognitive is huge. the second two areas that are big in the internet of things, which are very differentiating for ibm -- the first is the whole security. for 50 years or more, ibm has been protecting the data of our client. i know you are usually based in germany and the u.k. we wish you well. harriet green, heading up the drive in terms of internet of things and watson for ibm. cory: interesting stuff. thank you. coming up, a string of scandals. board member arianna huffington

says details must change at the top. all that next. this is bloomberg. ♪

cory: it has been a terrible, horrible, no good very bad few weeks for uber. the ride hailing company, trying to get an update in efforts to fix the internal culture that has been blamed for a succession

of scandals. there was the exit is from former president geoff and three other high-level employees heading for the hills, along with it confidential proprietary information. and yes, the sexual harassment scandal. this is weird. reporter: yes. the advertised it as we are not going to make any news. they said they would have a diversity report out by the end of the month. eric holder's report on sexual harassment and cultural problems with the out by the end of april. they made commitments to working on the organization. the head of hr sent a had a cult of the individual and needed to change that. cory: he had of hr referred to the own organization as a cult? reporter: the idea was we had good values, which is pull yourself by your own bootstraps, solve the problem. that sort of becomes excessive and creates a culture where one superstar is more important than the morale of the rest of the team. cory: this is unusual for a company to do this. companies have problems. they might be extreme and also unusual, but the airing of the dirty laundry and working it out publicly doesn't seem like the uber that we know. reporter: it is a company that consumers have a very close relationship with, so i think there's a big obligation to own up here customers. know. reporter: it is a company that consumers have a very close

relationship with, so i think there's a big obligation to own up here customers. it is not some b-to-b company. this is a ride people are taking to every -- taking every day, and they need to explain. drivers were a big theme of the call saying they would try to improve their lives. cory: when you've got an asset-less business, where you don't own stuff, you're demanding the attention of customers and providers of the service. these guys leave in cars every day. reporter: what people forget is uber wanted to fix the of session with brands. that's why jeff jones was a marketer. it was supposed to be all about brand, and obviously it has been destroyed the first three months of the year. rachel holds, one of the top executives -- cory: we have a quote from the call. this is jeff jones saying that -- that seems like it's referring to something that went down. reporter: it was a pretty biting

comment. clearly he disagreed with travis kalanick on a lot of issues. i sourced a couple of them. one was how drivers were treated, the tipping issue. he supported tipping drivers. another was safety on the platform. he had concerns about the leasing program that encouraged less safe drivers to join uber. there were a number of clear debates within the company on which they seem to be taking different sides. cory: this company is so fascinating. i'm so glad our colleague work -- wrote a book about it. thank you so much. still to come, marc benioff, the ceo of salesforce says the

window for deals is closing. an extended conversation, next. ♪

mark: i'm mark crumpton. you are watching "bloomberg technology." ek hutcheson and hong kong will report for your earnings later today. the first letter since the reorganization of business empire. investors of both companies expect a race of diligence.

doublingnd the face investment and tripling the local workforce, changing their name after last year. they recently turned profitable for the first time. thatts from geneva say pyongyang is not afraid of new sanctions. reports say that the north may have testfired more missiles today. local news, 24 hours a day. this is bloomberg. markets have been trading on the asia-pacific. with was not great today the session closing out and you

saw a big loss with the iron ore contracts. also a risk you are seeing bonds and gold in the commodity with one of the liger's in this region and the hong kong and hang seng index is off. waiting on earnings. stocks wea couple of moneyeen tracking and market rates climbed to the to injectd they had hundreds of millions of you on

there was pressure coming through. will be live at the top of the hour here. this is bloomberg. cory: this is "bloomberg technology," i'm cory johnson. we continue coverage of ibm's cloud focused event. they gathered in vegas. we heard from the ceo ginni rometty earlier this hour. caroline hyde is on the floor with more. caroline: i am, indeed. i spoke to a man passionate about the changes in the workplace with ai, but also concerned about the changes in the work place -- workplace with

ai. we are talking about salesforce ceo marc benioff. >> what we have been able to do is find a way to work with both companies together. a great example if you probably know, crazy hailstorms we had last week -- we managed five of the top insurance companies in salesforce. those companies want to know when the hailstorm is about to happen. they want to notify those customers to put their cars in the garage. it will save them a lot of money. the combination of ibm and salesforce lets us do that,

because watson will tell us what the weather is. we are able to notify customers to get the car into the garage. the rest is magic. caroline: you have a company that has built your own product via internal rnd. was it low hanging fruit that they had already there? >> we had some incredible ai technology ourselves, but it is highly integrated into our corporate form -- core platform. it has been available now to all of our 150,000 salesforce customers all over the world. the opportunity with watson is to bring a general-purpose ai platform that is programmatic so customers can extend solutions with what watson can do. caroline: you mentioned insurance. where else is the low hanging fruit? where are the demands coming from for the ai product? >> it is really almost in every industry, and they can be much smarter. when you find employees are --

able to extend capabilities. we are seeing salespeople being much more productive than ever before. they are able to know exactly who to call on, when to: them, how to call on them in a prioritized way. that is all done by einstein. the power of ai. caroline: you have done global outreach. you have had significant growth in europe and asia. where geographically is eating up the desire to get into artificial intelligence? >> you really see that across the whole world. ai is really starting to percolate into that software across the world. in fact, we are seeing ai inside all of these different jobs and work streams. the advances in ai have far exceeded our industry's expectations over the last several years, and now vendors like salesforce and ibm can extend and complement our solutions with this amazing technology. not just machine intelligence are learning, but deep learning as well. you probably saw two weeks ago coco cola -- coca-cola announced they will be building coolers with cameras in the, and cameras can do real-time inventory management so that you know what's happening in the coolers. as people take the coke out of the cooler, trucks are rolled to

the stores knowing they need to replenish the supply is. caroline: it sounds phenomenal. what does it mean for your bottom line and topline? you said $10.2 billion for revenue growth. whether it is einstein or what's, what does ai built into that? >> salesforce is already the top five ai companies in the world. we just delivered a phenomenal quarter. you saw our deferred revenue hit $14.5 billion, up 28% for the quarter. that exceeded expectations. a lot of that is driven by ai. it's also driven by a lot of other major trends we assigned ourselves to very early, including the cloud, social networking, and mobility. our customers are really moving to those trends. we need to outline salesforce with those trends to get growth. that is how we created extraordinary growth. caroline: crm is where it

remains? >> crm is the fastest-growing of all the enterprise segments. it will be the number one industry by 2020. we are uniquely focused on sales, service, marketing, community, analytics, apps and commerce. caroline: you mentioned how ai will be affecting jobs. does the world realize how much this is going to make people lose jobs? >> that is the $64,000 question. that's why i went to washington dc on friday. i'm really focused on that issue. the workforce will dramatically change over the next one to two decades. it will be driven by artificial intelligence. that's why we need to start retraining in new types of job development before the technology had baskets. -- technology hits. i called for a moonshot of

apprenticeships based on what we learned in other countries, like germany or switzerland. we can bring that to the u.s. and improve the quality of the workforce. i hope the government listens. caroline: do you think a support system -- a support system -- it do you think everyone can be retrained? >> absolutely. there are so many vehicles to train people. especially in the u.s., we have phenomenal opportunities. community colleges, k-12 systems, and a lot of workforce development programs already. there are so many people ready for these jobs. i look at the thing we are doing with veterans. we bring them into the company and retrain them. salesforce will create 2 million jobs and add $400 billion to the gdp by 2020.

we are really focused on creating these new jobs and getting people ready for salesforce jobs. i think creating a platform for the is so important. i think apprenticeships are the key, and automation and one-on-one. caroline: you're looking at hiring and growing a lot. you have been an acquisitive company. does that remain the case of the evaluations at the moment to remain acquisitive? >> last year i think i was super clear i thought there was a window that was really open for mna at that -- activity. we bought the number one company and commerce, and deliver commerce solutions to a lot of amazing companies around the world. adidas will do one billion to $2 billion.

and we got some amazing private companies as well, like this incredible productivity tool. a lot has happened this year, which are the markets are rewarding. the m&a windows have narrowed. i don't see us doing a lot of that this year. caroline: maybe marc benioff is not going to be quite so much on acquisitions in 2017, but he is able to have a flutter, particularly when it comes to blackjack. he was up to the wee hours playing with teammates. we stick to the financial theme next. we talk about the effects of blockchain with arvind krishna. that is coming up next. cory: i think the benioff news about not doing acquisitions is a huge deal. the company has been centered on acquisitions a lot for the last couple years. great stuff, thank you. this edition of out of this world. president trump has signed a $19.5 billion authorization bill for nasa. it passed congress and the house unanimously. this will give the agency the objective of the human exploration of mars. it maintains the government's support for the international space nation, the all right in vehicle, and commercial space programs. we catch up with ibm's research

director of arvind krishna about blockchain. this is bloomberg. ♪

cory: here's a story we are watching. as if the pc industry doesn't have enough problems, the trump administration has imposed a new rule banning pcs on life from the u.k. -- flights from the u.k. to the middle east. officials say there's no specific threat, but the new rule is what they call evaluating intelligence. the uk's following the suit with a similar restriction. back to the ibm cloud conference in las vegas with caroline hyde. caroline: i have a great conversation up next.

i'm talking blockchain. what is it and what does it mean for your business? we discussed that with the senior vp of ibm business, arvind krishna. a great new product you have unveiled. ibm blockchain. what actually does it do? >> the blockchain is one of the most fundamental technologies since the early internet. it will change transactions. what the internet did for information blockchain will do for transactions. how is it going to do that? it is the first time we can have proper transactions with multiple parties. caroline: so, immediately i think the key part of this would be the banks. ? but is it across industry? >> many. cross -- shipping containers, health care, in terms of transportation, health care, it

can go to food, like companies like walmart doing food safety. of course, financials. capital market, settlements, equity changes. i believe blockchain will change the physical world, not just the world of money. caroline: is this already being sold to clients? how much do you think this will drive revenue for ibm? is there a competitor? >> it will drive revenue. if i give you the number of clients we are working with, over 400. we have hundreds inside ibm working on it. that gives you a sense of the excitement of the opportunity as well as the investment behind it. caroline: investment is strong in ibm research, do you feel there's enough going in? >> absolutely. not just on blockchain, but

across the board. ibm is a fountain of innovation for the company. we have ai, the watson platform, blockchain, the latest announcement of quantum computing. caroline: tell me, the health care companies, transportation, the banks -- who is knocking on your door? is a developers --is it developers or cto's? >> it is open source, with developers and cto's. it is ground up. but it is often the ceo who gets into the conversation. the ceo drives it with much greater awareness to the benefits of their business. they look at it and think how many benefits can i have? when you think of how big the number is in the supply chain and the reward back into the real world, this is going to transform the way these things work. caroline: i feel in 2017 every other week we are talking about the record high or sudden

plummet in bitcoin, not to mention the crypto currency's how much is the volatility in currencies sometimes getting blurred into concerns about blockchain? >> that's a great question. these are separate universes. there's a world of cyber currency. that's one side. they had value, but that's not what we talk about. there is enterprise blockchain meant for business. these do not depend on a nonentity. -- a nonentity -- anonymity. caroline: how quickly do you think you'll have people copying what you are doing? this is your first interest -- entrance into supplying with luck chain? -- blockchain? >> we will always get competition. we stay ahead by innovating,

getting more clients, and building blockchain networks. caroline: that's why you need people like arvind krishna, explaining it and breaking it down when it comes to blockchain and what it means for your business. cory: thank you. up ahead, apple unveils the cheapest ipad to date. behind the company's revamp of one of its most popular products. this is bloomberg. ♪

caroline: twitter -- cory: twitter said it has suspended 336,000 accounts, in an effort to extract violent extremism. more than half have been shut down in the last two quarters. twitter says it started taking legal requests to remove content posted by birth by journalists. -- posted by verified journalists. apple has a special edition red iphone 7. this will join the fight against

aids. they also revamped the ipod. the lowest price moves ahead of plans for a new iphone later this year. let's stick with the ipad first. really interesting business in apple. it grew spectacularly, then fell amazingly in terms of sales growth. reporter: it is the business

which was supposed to be the replacement for the iphone. unfortunately, people hang on to the iphones for quite a long time. they have a good life expectancy. i don't know how many ipads you have gone through, but i have had about two. if you compare that to iphones, it's not very many. cory: we discussed this on our radio show that my ipad -- i remember having an argument with my boss. i should have said i would have it longer than i had the job, it was three bosses ago. reporter: the thing that's interesting about it is the margin on the ipad are worse than a laptop. one might imagine apple would prefer to be selling laptops. but of course, you have apps in the ipad. cory: that's interesting. apple has been advertising services. reporter: exactly. it is the way to drive more revenue, cutting the price on the ipad is a way of getting the tool into customers hands and hoping they will spend more money. cory: which one do you have? reporter: i think i have the ipad pro, the smaller one. cory: not the many -- mini. is the device itself new? reporter: the old device on new pricing.

different memory options as well. cory: how dramatic is the price drop? reporter: they are $229 now. still not an insubstantial amount of money considering you can get a laptop for over $100. cory: not a very big one, the pro-one, but the one that it is the size you pay for. reporter: it's a way for branching out with products. if you think about apple in the 90's, they were considered a creative industry. gradually they moved into the broader market. now there's a certain recalibration. they are introducing these pro models. the lowest model starts around $600. that is an even more substantial chunk of cash. cory: how does this work in terms of the developer community?

the killer app on the phone was not phone calls, it was lots of other stuff. reporter: one of the problems is the way the app store used to be set up, in such a way you would pay for an app once, maybe user couple times, and never use it again. what they are trying to do is incentivize developers to develop apps that are prescription based, and more compelling. it serves to make ios devices more sticky, i.e. you keep using them, because the apps are really compelling. cory: also the replacement cycle -- we have seen that a little bit with phones, and certainly with pcs. people are not updating with the latest new operating system for the non-apple business. with the ipad and the phone, the times got fleshed out longer and longer. is that because people have all three? reporter: there are a number of factors. on the one hand people think there's not much more innovation

you can do. the curve is flattening a little bit. on the other hand there's a sense perhaps everyone who has a smartphone needs a smartphone. the opportunity to attract new customers is limited. i think those elements are replacing slightly. a sensing -- samsung recall help them regain shares. cory: also, now the trump administration banning the use of devices to the middle east on flights. that does it for this edition of "bloomberg technology." wednesday, we hear from the ceo of adobe after their big quarter. this is bloomberg. ♪

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anna: stocks fall the most since the u.s. election as investors go from euphoric to skeptical about policy. asia follows, the u.s. lower. exports jump more than 11%, the most in two years. cap the momentum be sustained? anna: access baggage. bands laptops from flights on security concerns. canada considers the measure.