♪ caroline: i am caroline hyde. this is the "best of bloomberg technology." we bring you all the top interviews from this weekend tech. president trump met with ceos on infrastructure plans. but silicon valley executives were absent. how tech could be playing a bigger role. toshiba warns about its future. on the heels of a highly anticipated earnings announcement. we discussed whether the company can recover. 23 and me clears a regulatory hurdle. our exclusive interview with the ceo on the future of the genetic

testing market. first, president trump's message to corporate america, job creation is that the top of the agenda. he made these comments with 20 ceos on tuesday. the meeting was focused on trump's $1 trillion infrastructure program and tax policy. gm, pepsico, and walmart ceos, but tech ceos were noticeably absent. in december, trump had a meeting with amazon, oracle, and apple to name a few, so how is silicon valley's relationship with the president evolving? >> i think just adding alive is the only thing they seem to care about. the infrastructure thing is a

headline, not actually a plan. relative to silicon valley, the actions they have taken our destructive. the head of the sec has made it clear he will be hostile to the needs of consumers, and by extension entrepreneurs trying to create new businesses in technology, so i am not optimistic. i think the opportunities for any president of the united states to build great value through technology are there, but the industry need some help. it got itself a little out of joint over the past few years. there are great opportunities, but also challenges. i think the industry has been way too focused on -- technically the economy is at full employment, but tens of millions of people feel they have been left behind, and i think they have. i would like to see silicon valley to have a new law, create

industries that employ people in good jobs. if you have that kind of challenge, silicon valley would rise to it and a lot of great things would come out of it. there is no reason we cannot be doing this broadly. caroline: automation is what many people feel has been eroding jobs in manufacturing, but should we not be looking for a paradigm shift in the way we work? or do you feel we need to have everyone employed, but what jobs are we creating? >> that is the challenge. the economy requires consumers. consumers spend two thirds of the money, so it doesn't work if a large percentage of the population does not participate, so the goal has to be make jobs more remunerative and fulfilling so people have money to spend.

henry ford's great innovation was the notion he was going to pay his employees well enough that they could afford to buy ford cars. caroline: we saw a bailing of infrastructure. >> one of the challenges we face is we have been doing the same thing, cutting taxes and getting of regulations. there were huge benefits to doing those at the early part of the cycle, but the benefits have then accruing to fewer and fewer people. caroline: a universal basic income? >> i don't know. i am not competent to make that call. it doesn't have to be the way it is now. we have -- you saw this week united airlines with that horrible situation. we have had increasing pieces of news about wells fargo.

those are the result of deregulation going so far that companies have no regard for their customers and no fear of repercussions if they treat them badly. we have to make some changes, because those things are not working and are not healthy for the economy, to have people treat their customers that badly. caroline: silicon valley entrepreneurs, wherever they are based, two great long-term gainful employment -- >> until 1980, companies few themselves as notches having customers and shareholders. they also have the communities in which they operate. caroline: doesn't efficiency eventually erode? >> why is efficiency the only thing we are focusing on?

i think it has taken us to where we are today. too much of a good thing. some efficiency is healthy. caroline: slow it down? >> reprioritize. we will reward people for creating jobs, for industries -- caroline: trying to get people in -- >> taking credit for creating jobs by other people. there is nothing he can do on jobs. we have two qualitatively change the jobs out there. the sharing economy is not the answer. people have to have jobs where they can take of things like health care. i don't know about universal income, but universal health care would take away one of the biggest fears people have and make it possible for the economy to do better than it is doing now, but right now we have hollowed out the economy and eliminated the middle class in ways that are not healthy for public companies, private companies.

if you want to be a business person, ask the question is there a better way then we are doing it right now. i think the answer is likely to bs. yes. likely to be caroline: we will continue ahead. another story we are watching, at&t buying a company in an all stock deal valued at $1.6 billion. straight path is one of the largest holders of a certain kind of spectrum to power 5g wireless services. at&t is hoping to better to compete with faster internet speeds. this is the second such acquisition for at&t this year. coming up toshiba reports , earnings results after delaying the reports twice. we will dig into the results on the company's warning about its future. your phone addiction is not entirely your fault. we talked to one former google employee who says the engineers in silicon valley are the ones creating the obsession.

this is bloomberg. ♪

caroline: japan, toshiba reveal doubts about its future after dealing with the bankruptcy of its westinghouse unit. cory johnson joined us with details. cory: this westinghouse nuclear power business is interesting. accounting problems, whistleblowing, the books were not right. toshiba said we will publish financial results even though our accountant won't sign off on it, and by the way, we might go bankrupt. caroline: we were talking about japan's history in chips, and they used to rule the roost. >> they did. i will never forget meeting the

vice chair of toshiba when it was basically a chip company. they were so dominant at the time. the only american company that showed any viability at all was intel. more orout of memory less and basically being beaten by japanese companies everywhere. he said you don't need to be a semiconductor analyst because we have won. we are tempted to look at google and facebook and apple today, and toshiba gives you a sense that and technology, nothing is forever. cory: they made some dumb bets. betting on nuclear power was a bad business decision. >> companies make bad business decisions frequently, and that comes with the territory. you outgrow your market and look for something else that looks like it will replace it, and

inevitably they are not domain experts in the things they buy, so something goes wrong. caroline: talking about japan a long time ago versus the u.s. now, we have shareholders who hold publicly traded companies -- think of the purchase of whatsapp, instagram, and some question oculus. do you think the safeguards are there to rein in bad behavior? cory: there is fraud out there. i think it is also important when you look at what toshiba has done. the contracts are so wrong and construction takes so long, that when the company stumbles, it does not have the wherewithal to

recover because they don't have the financial backing. caroline: cory johnson, editor at large. a growing global addiction to smartphones, concerned about your own addiction levels, and perhaps you would be right to be. a former google product manager and design ethicist says phones toare creating get people fixated, a phenomenon some are calling brain hacking. we dug into the long-term consequences with tristan harris, now founder of the nonprofit movement time well spent. >> all of these companies are locked into the attention economy. no matter what you're making, you're competing for attention.

what i love to create is the conversation about the cost of advertising and attention economy and whether it's created the kind of world we want to live in, both in democracy with the rise of faking news and in terms of how it affects children with these increasingly persuasive techniques and apps like snapchat. caroline: who are you targeting at the moment with your nonprofit movement and the people listening? >> we went on 60 minutes and there was a great piece with anderson cooper. people in the industry do agree. it is hard to accept what is at stake in get off the train. if you are a product manager, your goal is to maximizing engagement. you leave the company two years later and say, i increased this metric. all this increasing usage does not necessarily add up to what we want world to look like.

it is increasingly persuasive and sucks us in. it leads to us absorbing the most engaging things which are not necessarily the things that are best for us. >> during the election season, over the course of the summer, i became alarmed by my perception that facebook had inadvertently become a tool that was being used to distort democracy first in brexit and the election cycle here. one of the things i discovered in talking to the team was initially a reluctance to accept responsibility, to dismiss this stuff as we are running experiments, some of them don't work out. is this something you think can be a jury rest inside the industry or we need some kind of regulatory thing from the outside to get the proper attention brought to it? >> you are right. we need much more attention

brought to it. is it going to come from regulation or because of consumer pressure when people finally realize these companies are not -- they have to serve advertisers. if you think of it this way, facebook has a team of engineers to work on the fake news problem, that they kind of scrambled after the u.s. election but no matter what they , do, how do we know if they are doing enough and had we know they are putting sufficient resources? especially if what they are doing conflicts with their own business interests. the attention economy is a city of one billion people and our minds live inside of it, but we don't have any representation in that city. these three private companies -- apple, google, and facebook run the city, but we need representation. what is that new relationship where we have representation.

>> it does seem to me that one of the challenges we face is that the consumer has no way to become aware of what the problem is. i look at the issue, the thatlled filter bubbles apply particularly around google basicallyok where you only see things that they believe you like already, and so you build these walls that are essentially impervious to all outside influences, and they have created as tools to allow advertisers to discriminate, and that business model has been so successful that the economic argument for the status quo must be compelling to those companies. it is hard to admit that you caused brexit or contributed to trump getting elected if your entire business model depends on you having done the very things that enable those outcomes. >> i completely agree. if you look back through

history, there are often times in history when we discover something is morally repugnant but our whole economy is based on it. there used to be slavery, and it took 60 years -- the british empire wanted to get off of slavery. they had to give up 2% of their gdp every year for 60 years. now our economy is propped up by advertising. if served us really well and created a lot of wealth, and a lot of great things have come from it but when the costs are , too high -- or like you said, i have a newsfeed that has filter bubbles that confirms your existing beliefs and another that does not, if the one does not confirm your belief does not hope you come on have to shary the one that confirms your belief. on facebook, i'm locked into doing what is bad for democracy. caroline: is it best to target the consumer, shareholders, the investor, then hold the executives to account?

>> this is the thing we are working out. i love the idea of having more shareholder control and influence when we collectively realized the costs. that is a fantastic way that has moved other kinds of industries in the past. i think the threat of regulation is another one, although there is -- in california because there is the california legislature. that is the conversation am trying to create. caroline: coming up, and exclusive conversation with one of the well-known genetic testing startups. 23 and me ceo on the company's big win from the fda. that is next. and a reminder that all episodes

of bloomberg technology are live streaming on twitter. check us out at @bloombergtechtv weekdays, 5:00 p.m. in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪

caroline: the dna testing company 23 and me has cleared a major hurdle with regulators. the fda has given the company the green light to sell genetic testing kits it directly to consumers, the first and only company to be cleared to provide such reports without prescription. it is a turnaround for the fda, which imposed a moratorium. the u.k. and canada embraced it. we spoke with the 23 and me ceo and started by asking about the requirements the company had to me to earn this approval.

>> the fda wanted us to make sure the data was accurate so that if i tell you a certain result, we know the quality of that result can be reproduced and it is that result. the second thing we had to prove is the comprehension and go around the country and prove all different education levels could understand this data. it is one of the things that is core to 23 and me, anyone can learn about themselves and science is within the reach of anyone. we design the product and experience so that anyone of any education level can understand it. caroline: how did you select these conditions to run with first and will you be adding to them? >> we will be adding to them.

we want to keep consumers up to date as more genetic discoveries are happening. we've focused on parkinson's and alzheimer's because those are the two common reports customers want. one thing people don't realize is the medical system does not have those. what we found is that consumers really want this information because they might be making a lifestyle change and want to be empowered with information. caroline: they've been seeking information, ancestry history, a a beverages they might react to, and what their children might be inheriting. can you automatically find out what your reliability is in terms of conditions you are now adding? >> it is for customers who are on an existing fda platform.

for customers who are not on a pre-existing platform, they might have had an old experience and will enable them to upgrade. for people who bought a year ago, they will get these reports. caroline: you are giving education, making everyone a scientist, but how and powered are they to use that information? are we expecting people to run to doctors because they have exposure to these genetic conditions, or can they go to insurers and show they are safer than many anticipated? >> one thing people don't understand, there are a lot of aspects of health care of that don't tap into the traditional health care system. we find people find out they are at risk or something and want to make lifestyle changes, exercising more, change their diet, have a coach of sorts, so what we found when we did these studies, people are not running to their physicians. some of them do bring it up on the next scheduled physician

appointment, but it is not generating more visits for physicians, but people do want to make lifestyle changes. i think that is where there is a big opportunity. we want to embrace a consumer health care movement where consumers are inking about their health care, not episodically, but every day. what am i eating? what are the choices i am making? as we think about the retail world and your daily experience an online consumer focused companies, they will help people make behavior changes that customers want to make. caroline: is 23 and me going to be providing coaching as well? >> we are not providing it. our expertise is genetics and making it clear for individuals. we want to partner and enable other companies to help customers take it to the next level and execute that way.

caroline: what about the reach of your own business and where you take it next? you have been using the data. this is the question, what is the privacy angle of 23 and me? can you confirm how the data is used and how that data might push forward research? >> data privacy has been first to us. if you want to share your data with no one, you share it with no one. 23 and me will never share individual level data without consent. people with the specific disease often want us to do research and partner to do research with other companies, so it is a matter of choice. caroline: that was the ceo of 23 and me. coming up, spotify may have an answer for a public market exit

that sidesteps an ipo. we will hear from an investor in the company next. comcast looking to take on netflix, the plans for an online video service. that is next. this is bloomberg. ♪

♪ caroline: welcome back to the "best of bloomberg technology." i am caroline hyde. now to a bloomberg scoop. comcast taking on netflix and cbs, planning to introduce an online video service from the nbc universal video network. comcast is still determining many details, including whether it will have a live feed and if it will include sport. lucas shaw broke the story and joined us. >> if you are a comcast, cbs, time warner, fox, disney, you have watched as netflix and amazon have attracted huge audiences with their services

and seeing viewership for live , traditional tv go down. what can i do about this? we clearly need to do something for the future and come up with some new service. time warner has one with hbo now. comcast has done a couple of small ones. they have a web service for comedy fans, but this would pull together the strong programming from across the comcast universe from whether it is on nbc's broadcast network, cable networks, and maybe some sports as well. caroline: the advertisers could love this. they do have a certain demographic. >> yes. cbs, which has a product called all access, like the cbs broadcast network, online, live feed, and on demand.

they said the average viewer is lower than that of cbs. if you look at the trends in tv viewership, it is only getting older for live tv. most young people are not watching as much live tv, so if you want to reach them and don't want to sacrifice that demographic to facebook or netflix, you have to come up with something on their own. caroline: it breaks my heart, because i am a massive fan of jay-z. he decided to pull his music from spotify. now, i will have to get tidal. is that why? pretty much the only reason i can come up with. he pulled his catalog from spotify with the exception of two records with r. kelly. if you want to listen to the classic jay-z albums, you can only get it on tidal.

he is clearly trying to send some kind of message. the timing of this is most musicsting, because his from it disappeared over the weekend. it would be helpful if someone from his camp would give me a call back. caroline: tidal was a -based company that he bought. and we know how successful it is doing? >> the big attention getter has been exclusive windows, an early chance to release new music from jay-z's friends, proteges, partners and so on, but most analysts think it has 3 million to 4 million subscribers which would make it the third or

fourth biggest streaming service on the market, but behind spotify and apple music. the owners did sell a stake earlier -- in tidal this year. caroline: lucas shaw there. now speaking of spotify, the company made waves after reports it is considering an unusual way to satisfy investors. spotify is weighing a direct listing rather than a traditional ipo and would not involve underwriters and would sidestep price speculation like we saw with snap. we spoke with one of the backers at lead edge capital. take a listen. >> our view on direct listing is quite positive. we think it signals confidence by management. first and foremost, the company reflects this idea that the business is financially sound , and they have enough cash to

support the business and don't need to raise billions of dollars in an ipo to be sustainable and successful. that is the first thing. the second thing is that it does challenge this notion that a business needs to go through the traditional roadshow process, but our view is that great companies, great businesses don't need the ipo roadshow necessarily to have a following from the investment community. we believe in management's capacity to do the right thing for the business and shareholders and are not convinced the ipo roadshow is de facto route to go public. caroline: there has been debt taken on by spotify and it confuses me as to why they would not want to take more money to pay down that debt, but the owners in some way or pushing them to go for an ipo or direct share listing sooner rather than later.

would you like to see this come in 2017 rather than 2018? >> we would love to see the business go public. management has to determine the right time for an offering. our view is that the trigger for the ipo is not the debt piece. the appropriate marking conditions and timing for the company are driving the decision. this past week, they did solidify negotiations with felt that was we a huge milestone in going public. drivers for the big the business rather than financial instruments we believe the company can more than support. >> does this reflect a changing atmosphere around tech ipos in general? you could argue that what we saw with snap and now with spotify, is there this sense that tech companies are trying to take

more control to themselves away from wall street? so what does that mean for wall street and investors? >> it is no surprise us that , as innovative as spotify is, they are taking an innovative approach year with a potential direct listing. our view is that historically ipo roadshows led by the investment banking community, stocks can be underpriced. in the snapchat example, the stock went up 40% the day after it was listed. in this case, we let the market determine what the price of the stocks should be. sure, it may come at the expense of investment banking fees, but we believe it is a viable route for companies in general. if spotify can successfully execute a transaction like this,

they can generate investor following on the equity research side and have liquidity in their stock. this can become a template for countries in the future to do a direct listing versus the traditional ipo route. caroline: china's farmers are looking to the sky. how the chinese government is replacing manual labor with automated farming. that is next. plus, an e-commerce battle brewing in india with billions of dollars at stake. this is bloomberg. ♪

♪ caroline: on the latest tech funding board, a real estate firm called real matters is gearing up to be canada's first tech ipo in years. the company issued regulatory filings on tuesday. according to people familiar, real matters is seeking a valuation of $750 million.

meantime, the european cable is planning- altece3 an ipo for its u.s. business. the company's billionaire founder is looking to exploit potential stock market gains to fuel expansion. altece usa was formed from two u.s. acquisitions. meantime, ebay is investing half dollars in flipkart. it is a targeted move against amazon after jeff bezos vowed to spend $5 billion there. the downside? the down round. ebay's investment is part of the

funding round that flipkart raised last month. for others, that valued the company at 10 billion dollars. that is down from $15 billion. so what does this mean for global e-commerce competition? >> internet market there is overheated, and you are seeing consolidation and companies rush in. that is why it is an opportune time to get in on the e-commerce leader while the industry consolidates and venture capital -- it is a big deal for flipkart that venture capital will not be pouring into some of the other startups competing in this space. caroline: we spent last week talking about the opportunities for investment in india, apple,

many tech giants. many tech giants are understanding india is where it is hot while china cools down a little bit. is that all about indian e-commerce right now? >> india is the world's number two population, 1.2 billion people. they are right behind china at 1.4 billion. what many investors are realizing is that amazon is positioning to take this marketplace, and you are seeing consolidation around the remaining companies so they can fend off amazon. in particular, with ebay handing over their assets and this infusion of cash from microsoft, tencent, and ebay, these are companies that are positioned to compete against amazon. caroline: this could be a stepping stone in this saga that

is the consolidation involving flipkart, because snapdeal could actually be teaming with flipkart in the next couple of weeks. >> that is what a lot of the speculation is, and some sources are saying that deal is in the works. ebay also has wound down its snapdeal ownership. it still has about a 5% ownership should -- ownership. you are seeing this global coalition building around flipkart to fight amazon in this critical market, and your other guest mentioned the population. it is also the internet access, and internet access in india is growing very quickly along with wealth. so the country even if you limit it to the number of connected people, it is still far larger than the u.s.

caroline: a global coalition, i like that turn of phrase. the global coalition is forming. do you think it is enough to stop the $5 billion bet that jeff bezos is making? >> that is the question. we want to see softbank's involvement in the combination of flipkart and snapdeal. that would consolidate two players. then, you would have that formidable rival to amazon. the thing to remember about the marketplace in india is that it is still relatively nascent. the distribution channels are fine in tier one cities. but, when you moved to 22 -- to three, there is a lot of required investment. amazon can fund investment from its own cash flows. companies like flipkart have to rely on money from external sources. this is an industry burning a

lot of cash. we are seeing negative gross margins, billions of dollars being invested every year, so amazon will be well positioned given its capital base to succeed. plus, they lost to alibaba and -- in china and want to prove to investors they can win in foreign markets like india. caroline: the winner being alibaba, taking another leaf out of the playbook there. do you think therefore that the money -- it is interesting, he seems to be willing to sacrifice valuation in snapdeal, which could merge with flipkart. there are rumors we could see an 85% cut in valuation if we see a combination of the two. it looks as though he is willing to take a hit to win. >> that would be an interesting transaction to watch and see how it is structured. he may be willing to take that loss on snapdeal if he is able to get a larger stake in

flipkart. he likes to have stakes that are in that more meaningful category of 25 to 30 -- 25% to 35%. we saw them do that with alibaba, a tremendous investment for them. caroline: the future of farming is heading to the sky. in china, agricultural drones are being used to spray crops. the chinese government is encouraging farmers to move to automated farming. we have the story from china. [drone flying over] >> this year, he is trying to -- trying out new technology. he has hired drone operators to spray pesticides over his crops.

chinese] >> the team of six arrived at dawn and got to work. chinese] >> agricultural drones like these are taking off in china. recently, the government has been encouraging farmers to move away from manual labor and to automated farming. right now, drones are only used on 2% of china's farms, but the market could be worth $4 billion a year. dji is betting more farmers will start automating. the company introduced to drones for pesticide -- introduced two drones for pesticide spraying

and use microwave radar to scan the ground and to maintain the right distance from crops. >> our drones help to mitigate the over use of pesticides. the system is doing a lot of the work automatically to guarantee sere precise spring -- preci spraying. >> the drone has a small payload. the operator has to refill the canister every five minutes. right now, it can only be used on smaller farms like this one. it is tedious, but cheaper and faster than hiring labor. it is almost seven dollars cheaper per acre than manual labor. chinese] over] flying ♪ caroline: still ahead, tesla tops general motors. the electric upstart eclipses

the american auto institution in market cap. what this means for the u.s. auto industry. if you like bloomberg news, check us out on the radio. you can listen to us on the app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

♪ caroline: the ride hailing company lyft is worth $7.5 billion after a new round of financing, up from $5.5 billion, and more important is who is investing. new backers include kkr and a handful of asset managing firms. lyft is tapping investors who frequently back public companies or provide funding ahead of an ipo. while the company has kept quiet about its exit plans, investors have long speculated it would be smart to go public before

uber. meanwhile, tesla hit a new milestone after surpassing general motors to become america's most valuable auto company. take a look inside my bloomberg and see where tesla push past the competition. the white line is the increasing ascent of tesla. past ford ande gm. for more, we spoke with bloomberg's detroit bureau chief. >> tesla has more debt. this is more of a symbolic moment where tesla has crossed the line of being more valuable than gm and ford. you really have to look at why. investors see tesla as this possible future dominator of electric cars, maybe electric

cars or electric storage. they have a lot of businesses with potential. it is a long-term play. with general motors and ford, auto sales are starting to trail down. both companies will make a lot of money this year, but investors are seeing this as the best is behind us over the last 12 months and maybe we will put our money someplace else. tesla, there is hope they will grow and get a bump in their stock. caroline: piper jaffray put it as optimism, freedom -- struggling to replicate that symbolizes where tesla is. remind us of the disparity and the number of cars these companies are pumping out. >> g.m. will sell about 10 million cars this year. tesla, they got a big bump in their stock when they sold 25,000 in a month.

by a factor of 10, less than general motors. it is not about car sales with tesla. it is about the model three coming out, the lower-priced car, and it being a success. caroline: gm has the chevy volt. already, it is showing a similar range as what the tesla model three will be showing. it has a similar price point. still, the optimism is still much higher about the model three which is yet to start coming off the production line. >> the big car companies had seen hybrid cars to meet regulations. so, they made compact cars and things americans typically have not liked. tesla made electric cars cool. the model s is a cool, luxury car, sleek, and fast. the sport utility vehicle, not

as cool but a neat vehicle. there are certain features that luxury buyers who bought portions have latched onto. a model three still has a design that looks like it is still in the same family, but some people just aspire to drive a tesla or a piece of the elon musk allure. the guy has a lot of fans and enthusiasm behind him. there is a connection to the brand that has become powerful because of those initial vehicles. now people who can afford a $40,000 car can get a piece of that. a chevy that looks like a compact minivan, not so much. caroline: let's remind ourselves it is number six in the world when you are looking at auto companies. it could quickly get to the fifth-place if honda does not look out.

>> they could pass honda soon. they could -- however, getting up to the values of toyota is quite another matter. the real story is that tesla stock has a lot of momentum. we aren't close yet to the model three launch. once that hits, it will really be a test for how much demand there really is, because we do not really know. how quickly they can manufacture them, and can they manufactured them without defects and problems? if one of those things becomes a problem, the stock could take a hit. it always has been a kind of volatile issue as well. we will be in for an interesting ride over the rest of the year. caroline: my thanks to david welch there. that does it for this edition of "best of bloomberg technology." we will bring you the latest in tech throughout the week with tech earnings rolling out. tune in on monday as we kick

things off with netflix. all episodes of bloomberg technology are live streaming on twitter. check us out at @bloombergtechtv. that is all for now. this is bloomberg. ♪

♪ michael: coming up on "bloomberg best," the stories that shaped the week in business around the world. barclays' ceo gets in some hot water. united airlines take some heat after a shocking video. banks are fired up for the start of earnings season. >> the wall street side of the banks is not doing as well. -- is doing well. the main street side is not as strong. michael: janet yellen says the fed is ready to change its focus. while the fed's james bullard's focus is on the balance sheet. >> $4.5 trillion is higher than anyone thinks it should be. michael christine lagarde goes : over what keeps her up at night. >> who do you think will be the next french president?