♪ emily: i am emily chang and this is the best of "bloomberg technology." we bring you all of our top stories from the week in check. coming up, amazon defines revenue, but earnings. what the second quarter means for the online retailers online and jeff bezos. and meg whitman steps down from the board of hp ink. will this be a preview of the bigger move to come? and samsung unscathed despite the crises within the first half of the year.

how it has come within striking distance of apple's top spot is the world's most profitable company. first to our lead, amazon shares dipped post market thursday after they reported disappointing financial guidance, especially a potential loss of a third quarter. the earnings per share missed second quarter the lowest analyst estimates. amazon is preparing to step up competition with walmart and cloud computing challengers alrosoft and also that -- phabet. we looked at the numbers. >> this is a company that is investing. there is a cost to all that free video. emily: where are the expenses? specify, but it is video and fulfillment. they are building fulfillment centers closer to cities. that is why they can get your stuff in one day. they're making all of these

great shows like "transparent" and "man in the high castle." that costs money. the stock is down 2% are in this this is an unflappable shareholder base. there is this deal of the company. emily: shares are down 3%. bob, what is your take echoplex what i think is amazing about what amazon does from a long-term perspective -- this is why bezos is number one or now he isn't. emily: 1, 2, you know. >> the point is, they are able to take long-term investments in infrastructure and turned that into products. as they build up these forhouses, technologies stores without people in them they will be able to license , these things they would have to do anyway and turn them into products, and that is a smart, shrewd long-term perspective. , that's a people are buying -- that is what people are buying into. emily: what about whole foods? are we getting any more clarity into how this acquisition will play out? how will this be integrated into how this will hit the bottom line and the amazon empire?

>> the answer is no. the deal has not closed yet. the cfo declined to comment on it and it not gotten past antitrust regulatory review. we don't know if there will be regulatory scrutiny of any advanced level. they are not talking about that, but we can see that grocery is a major avenue of expansion for amazon, not just the whole foods purchase but with prime now -- they just entered singapore with prime now. amazon fresh is expanding, and hopefully in the coming weeks or months we will nknow more. emily: i'm interested in how the dynamics are changing with nike and sears selling directly to amazon. >> they have this infrastructure capability to deliver goods in another way. another thing i mentioned is they are becoming a logistics company as well. they are building the logistics they need to do groceries. nobody has really solved that

yet and bezos loves solving problems. they are going to take that ability to deliver those kinds of products and take those skills, license them and figure out ways to make money for themselves, but for other people as well. emily: we will see how investors respond tomorrow. but brad is the confidence in , jeff bezos deserved? >> for consistency, he called this shot early on about how he was going to run the company. free cash flow, investing in the long term. the have periodically signaled they are entering into -- cycles cycle where where they will spend a lot of money on certain things. they operate the company with a lot of discipline. they give you these broad estimates, but they always hit those estimates. if you do that enough times, investors trust you. if he has earned the trust. -- i think he has earned this trust. emily: will this accrue any anti-trust scrutiny? the move that amazon is making? will they get too big? >> that's a fair question. as they build out all of these

infrastructure capabilities and they have a larger influence. they are selling themselves. and in the current environment with his ownership of the washington post and the way donald trump views that, there is a some incentive to say yeah, maybe we should look a little that direction. amalie: and despite they sat the fact they sat next to each other at that meeting at the white house, they are not the best of friends. >> by any rational measure, this should pass antitrust scrutiny. whole foods is a small player, part in groceries, but we are in a topsy-turvy political environment. this could get scrutiny just because jeff bezos is not the most popular guy in washington. emily: and there is a frenzy of speculation about what could be the next big thing. ideas? >> let's not forget what they are doing with alexa and voice-based computing. there is an interesting play when we look at that perspective. they were never able to do anything like that from an

operating perspective. they wanted to compete against google and apple. now they are coming in from the side with this voice-based computing thing. all of a sudden it is opening up lots of different avenues. the beauty of it is it works across all of those platforms. that is one to watch. emily: and we have to talk about the cloud, where they are the leader. we saw progress at google and that microsoft, and the tie is getting bigger, but does amazon have to worry about that additive threat their? -- that competitive threat? >> the pie is getting so much larger. the challenges when they enter into the price wars and it depresses the profitability of the cloud segment. right now, we are not seeing that and the businesses looking quite healthy. they are hiring a lot of people. they talked about that a lot on the calls. but this is a very hotly contested space. shares, good for your portfolio? good for bezos, but good for your portfolio? >> in the long run, i think so. emily: in other earnings news,

twitter failed to attract more monthly users in the second quarter. investors had been looking for evidence they are on a path of sustainable long-term growth. revenue fell 4.7 percent, and twitter's net loss awful widened, affected by a write-down in the music streaming service soundcloud. -- net loss also widened, affected by a write-down in the music streaming service soundcloud. facebook turned out cash in unexpected growth fueled by strengthen mobile video ads. they now have over 2 billion monthly active users and driving revenue at a faster pace and other tech giants. facebook has also been heavily investing in original content. the first shows will come online in august. >> we see a lot of content viewing and engagement shifting to mobile. our goal is to be a plat warm -- platform for content providers to find their audience and monetize. right now, we are doing some early investing and kickstarting the ecosystem to promote more

viewing on facebook. we do not have much of that kind, and we think it is important so we are making that investment. we have content providers creating that content and finding their audience. emily: my interview with facebook coo sheryl sandberg. alphabet was out with earnings this week. revenue for the search giant coming in $26 billion, up 21% year over year. but aggregate costs per click dropped 23% from a year ago. that includes the effect from the $2.7 billion fine from the european competition commission. "it is so early in our analysis of this decision that it is an ongoing legal matter. they have not decided yet if they will appeal." we discussed this with our analysts. >> i think the reason the stock is down is because of the traffic acquisition costs.

the company has been warning us for some time that as they shift away from ads on a mobile device and programs and ads on youtube, they are on an apple iphone and we see ads -- programmatic ads. outre seeing ads within and -- an app, and those are done by google. they are making sales calls, bringing in those ads, and they are selling them to apple. it is more expensive to acquire that traffic than it is to acquire iphone users, for example, for google. so there acquisition costs had been rising. emily: this is more about traffic acquisition costs? >> more than anything else. i think that's what it is. they wanted a big change in their business, that they are going to be more mobile and programmatic, and it's going to cost more. emily: colleen what is your , take?

you really singled out the strength in mobile search as well as youtube in terms of driving the momentum here. >> mobile is the big driver here. that is kind of the headline. that's why you see increases in decreases inso aggregate costs per click. that's been a big driver in the storyline for google for some time. emily: what about what's going on with youtube? we talked about the ad year,ypse earlier this where there was an investigation into extremist context. was prominent advertising with it, and it seems like a lot of them pulled their content and now they have returned. that revenueated across the site was a strong that benefited mobile search and and youtube. they "take very seriously this thee and are protecting

ecosystem. >> a lot of this has been like a lot of toys. they like the advertising. they like the traffic google is giving them in terms of clicks. it is nothing like anything else in the history of advertising, where you can actually see the result as it runs. advertisers like that. so to the extent that advertisers actually pulled ads a year ago, it was good news for google now because they have fixed what little problems might have been there, extremist content is a serious problem -- but i do not know how big these problems were. but it looks like all the advertisers are back. it looks like none of them stayed away for good. so it might make comparison numbers work better for google. emily: there are investigations in the eu, we had this big fine. -- this big, $2.7 billion fine. google is trying to decide if they are looking to appeal.

how concerned are you about future investigations? >> from an advertiser perspective, there is a lot of concern. you know, obviously the youtube scandal earlier in the year and now the ruling from the eu from the competitive commission does not really help an advertiser's stomach when going to invest in advertising on google. how do you know that your ad is not going to get placed in a position to do not want it to be in, and how do you know if you are buying things like product listing or shopping ads that it is not being skewed against you? obviously some issues, but i agree with cory in that this is a good thing for google in the long run with advertisers pulling out, and then google can identify what do we need to do going forward? what do we need to work on to instill better trust in our --ertising partner? partners? emily: later on, the war of

words between two tech billionaires. we will dig into the barbs between mark zuckerberg and elon here over artificial intelligence. and meg whitman is officially inc..e board at hp, what that means next. this is bloomberg. ♪

emily: u.s. president announced that taiwanese factur manufactu, foxconn will build a factory in , the state of wisconsin. it will produced lcd monitors and will employ 3000 people. that number could eventually swell to 13,000. we spoke to foxconn president terry go to discuss why he chose to invest in the united states. >> why do it here? television was invented in america.

america does not have a single lcd plant to produce a complicated system. we are going to change that. it starts today with this investment in wisconsin. emily: meg whitman is stepping down from the board of hp, inc.. she will be replaced by chip berg, and remained the ceo of hp enterprise, which split off from hp, inc. in 2015. the news comes on the heels of our report that she is on the short list of candidates to fill the ceo spot at uber. they will name a new ceo by november. we discussed this with our bloomberg tech reporter, eric andomer, who covers uber, economy advisor david kirkpatrick. >> she has long been someone i thought was a possible candidate. she's been advising travis. she is close to ryan graves.

the board member and early ceo. emily: and she is also an early uber investor. >> she has been in the mix. she has the statesmanlike reputation the experience , running a tech company. all of the pieces that you can imagine. it's not a guarantee that she is going to become the ceo, she is definitely in the mix. one of five or fewer candidates left in the pool. the hope is to get it together before or labor day. emily: david, what do you think of meg whitman? >> i was actually just thinking listening to eric there is an interesting analogy between what she really did wonderfully well, which was ron ebay, -- ron ebay and uber. ebay and uber. , they are both marketplaces. i think it's asked with the kind of company she could run better than she has been able to run

hp and hpe. you might say she is generationally too old for this sort of thing. but she is a silicon valley veteran. she brings a lot of the right characteristics to the job. so i am relatively optimistic that she would be a strong candidate at a minimum. emily: it is reported that whitman is unlikely to take the job and may not he a top -- even be a top contender. what is your reaction to that? lacks she is definitely a top contender. hp's statement to us was a sickly -- basically she is going to be here until the job is done, which is super vague. we disagree on this one. emily: that was our bloomberg tech reporter eric newcomer and david kirkpatrick. coming up, capital funds get bigger. we will chat with the general partner at canaan partners about the record-setting latest fund. and a competition in augmented reality space is heating up.

how this company plans to carve out their place in an increasingly crowded field. this is bloomberg. ♪

♪ emily: in funding news, canaan partners close their latest fund at $800 million. it is the largest fund in their 30 year history. venture funding is ballooning to highs not seen since the dot-com bubble. the surplus of cash help it wouldrivate longer that otherwise be raise on the public market. we spoke with a general partner at canaan. maha: our firm is a diversified fund, unlike a lot of others. about 40% of what we do is health care and 60% is tech. on the health care side we have , had an incredible run of exit, largely due to the fact that we have been very disciplined in certain areas, and the same goes for tech. we feel like there are a lot of areas. emily: you have been there for more than a decade. your memory goes back.

what you think of the comparisons to.com times? maha: we are in heady times right now. but there are still so many anpanies amassing i incredible amount of revenue, traction, etc. i don't see that ending. i don't see a cliff like we saw in 2000, 2001. there is no reason for that. there is a ton of momentum and money flowing into the system. you have one hand companies staying private longer. on the other hand, you had 30 some exits in the last year, which is three times the average. how is that possible? maha: in addition to that, some of our companies have been exiting a lot faster than they normally would. so our average time to exit has been less than four years. this is in both tech and health care. we think it's because we pick a franchise approach toward and so we go-- investing, deep and mine them in terms of networking and so on, and that is the secret sauce to canaan.

emily do you get the sense a : company would take 10 years to go public or exit, would you stay away from that? maha: no. we absolutely believe we are building companies for the long-term. but because we are taking a more thesis driven approach to investing we are on the pulse of , what they want and are thinking about. that just inevitably causes companies to exit faster than they otherwise would. and some take 15 years and , that's fine too. emily: so what areas are hot where there are big opportunities? maha: syntax is still very hot for us. technology investment. we spent a lot of money in real estate and insurance. we spend a lot of time in cloud. we have a few gaming deals. but we are very disciplined in our approach, as opposed to taking index funds for renter. -- venture. you have three female general

-- emily: emily: you are celebrating 30 years as a vc. you have three female general partners. i'm curious how that changes the environment inside the firm. and in the investments that you make. maha: it has been such an incredible -- i am incredibly fortunate to be at the table eighty a general par general partners and three of them being women. the conversations we feel are a lot more inclusive. and as a fund, we feel it is more reflective of what the true on for an oriole -- entrepreneurial pool looks like. they are surrounded by people with similar experiences. they are much more comfortable. emily: i know you've been following the sexual harassment story. there is a sexual harassment investigation at uber. are you surprised by this? maha: the unfortunate thing is i'm not surprised. i am surprised that the horrific nature of it, i'm not surprised it's happening. the problem is -- sorry. if there is a positive spin on

this, it is this. the sexual harassment has happened. i'm sure there are more cards to fall, unfortunately. but it has woken up to the need that people up to the need of diversity inclusion. at the investing table, but also from an entrepreneurial perspective. we need to be bringing up women entrepreneurs, people with diverse backgrounds into the investing roles so that all entrepreneurs feel welcome. calls i know what you say everybody is calling everybody. ,what kind of calls are you getting? maha: i'm getting a lot of calls and spending an hour or two a day either talking with entrepreneurs, i am on the board that is taking a very serious look at what's going on and thinking about how to approach this topic in a holistic way. limited partners of hours -- it is certainly top of mind. we are talking about the fact that it is happening, what we can do, can we put motions into

-- notions into term sheets, can pool ofa more diverse investing professionals around the table? there are many things like hotlines, and many notions being talked about right now. my hope is we can come together as groups and make this a more inclusive environment for venture and spilling over into the entrepreneurial pool. maha: i know that entrepreneurs come to you. have you ever found yourself in a position where you are a partner with a co-investor, and there is bad behavior alleged against that person? maha: i have been very fortunate for that to not be the case. i see female entrepreneurs, each of these two people have told me a bad story. this is been happening for 17 years. we've got to put effort into finally making it stop. emily: what are those efforts? signing a decency pledge is

great in theory, but shouldn't everyone just be decent? maha: that's an incredibly low bar. [laughter] no, we should not need to sign something. i have said this again -- i believe that a huge part of this bad behavior stops when you have females and minorities at the investing table. and senior investing roles stuff , like that will not happen. -- their there behavior will be checked. and from a social psychology standpoint, i want to invest in people that look like me. in the gp role 40% at my firm , are female. 25% of our companies were founded by women. that's not an accident. it is not something we did purposefully. it just happened. emily: the average is more like 6%. maha: exactly. we have reached a tipping point. if we can pass that, we have one.

the general partner at canaan partners. up next we speak with thom and , dive into the earnings report. this is bloomberg. ♪

emily: welcome back to the best of bloomberg technology. cloud delivery from akamai boosted better-than-expected revenue reporting a 6% year-over-year increase, but forecast missed estimate, and the company stock sank to its lowest level in a year. the ceo joins us in the studio for an exclusive interview. the important thing to realize is traffic is growing at a very rapid pace. we have lost some share to .o-it-yourself efforts outside of that, our traffic growth is bigger than the internet as a whole, so you can

infer from that we are gaining share. i think the important thing to take away from second-quarter results is that now our performance and security business, our web division customers is the majority of our revenue, very profitable business, growing at 16% year-over-year. in security business particular, almost $500 million. we expect that to be $1 billion over the next four or five years growing at 34%. emily: revenue is still strong, but slowing down. is that just the law of large numbers? is that because you past the early adopter stage? tom: growing up 34% is pretty good and you're the largest cloud security provider. there is strong growth ahead, enough we are confident we can make a $1 billion of business. just tell launching our first to enterprise security products. we think in the long run they had even more runway than the existing web security business, which has been very successful. emily: when will we see new products contributed to growth?

tom: i think next year. so far they are on a track record that exceeds what we did in the first year with web security products. emily: you obviously see what is happening with streaming services, some of these new services. can you give us any color on how quickly these services are being adopted? tom: that is a great question. we deliver for a lot of those companies. video now is the majority of traffic on our platform and growing at a good clip. that makes us optimistic about the future of our media business. the question really is, how fast with the adoption be? everyone thinks over a period of years a majority or large majority of the watching will be on the internet. emily: that was tom leighton.

phone-based augmented reality is becoming a major trend in coming years, but it is not just tech giants making a play. london-based blippar claims it has more than 99% accuracy and to recognize 370,000 public figures. caroline hyde spoke with coo danny lopez and asked about the business applications of its latest features. danny: the facial recognition in our app, it is fun, social. we want to learn from the experience. they key for us is the accuracy and the recognition. our facial recognition has a 99.67% accuracy rate. once you have that, you can take that from our app and use it in a whole host of sectors. think mobile banking with

identity management and facial recognition is a way to be able to transact. building access when you're trying to find your car and it recognizes you as an employee. so many different smart networking. we go to conferences with 5000 to 10,000 people trying to figure out who is who. you can just scan a photograph and get information. caroline: security? issues or worries to be able to scan a picture and no details about them. how does that scale? danny: security is a key area. not something we are working on right now, but i think like everything you have to embrace the technology. if you acknowledge facial recognition gives you the ability to find where the bad guys are, is a very positive development. think about the person who is in a foreign city and has nothing on them.

the ability of somebody else to come and do facial recognition, to find nationality, to find embassy the next of , kin. there is so much value this can bring. caroline: what is blippar now? five years ago is about branding and exciting ways of using it and getting access. what do you want to stand for now? danny: we are a technology company that specializes in augmented reality. the app is a showcase of the technology. we made a very clear decision to be able to scale, you need to be good at computer vision. when you have a perfect marriage with augmented reality and overlaying technology, you have a perfect technology to allow ai to scale.

if that happens within our app, the technology we have built can be taken outside the app so other companies can capitalize in what we have done a computer vision. caroline: what is it mean in terms of money? are you looking towards profitability? how do you make sure this is a revenue driver as well? danny: we already generate revenue from the brand we work with. we take a long-term view which is we are building something ambitious. we are indexing the entire world. he the best engineers in the field. we have a lot of those here in london and on the west coast in the u.s. fundamentally we want to become a profitable company the future. along the way there are significant milestones.

caroline: are you going to be fund-raising anytime soon. however investors reacted thus far? danny: we have raised just over $100 million over the last five years. we have incredibly supportive shareholders who are comfortable with the progress we're making. who is to say what happens in the future. right now feeling good about where we are going. caroline: there is talk in the press you are brighter cash, etc. but it sounds like a heavily investing area you are in. danny: is your board comes of all the progress you are making? if the answer is yes, that's exactly what you want to be.

emily: that was blippar coo danny lopez speaking with caroline hyde. coming up, samsung is closing in on apple's spot is the most profitable business in the world despite turmoil in the company. what is boosting its ascent, next. all episodes of bloomberg technology are live streaming online. this is bloomberg. ♪

♪ emily: webmd the is selling itself to kkr for $2.8 billion with a medical website making itself private. webmd is used by 70 million users a month. is outcore --comscore

with monthly data. snapchat u.s. app visits reached 90 million. pinterest continue to stall, highlighting the risk it may struggle to broaden its appeal beyond women into same user growth. amazon, google and facebook continue to see visitor growth challenges in june. samsung has had a rough 12 months, from its exploding smartphones to its heir apparent on trial for corruption. the company has been making positive strides. in his earning reports that enough increases in sales and operating profits field mainly by the memory chip division. that growth is the company closing in on apple's spot is most profitable business in the world. global head of tech coverage traveled to seoul to look in the south korean conglomerate and detail the turmoil at the company in the latest edition of bloomberg businessweek. >> first of all, samsung is great. they collaborated on the story, brought us in. but probably talk to six or

seven senior executives. without a look at the new chip facility, which i'm about to tell you about. but, yeah, it is poised to be most profitable company in the world,. overtaking apple we will see when apple reports. in the largest semiconductor maker in the world, overtaking intel. it's remarkable. with this sort of crisis around the company, its chairman on trial for corruption, the note 7 debacle last year, they are executing well. emily: we had a question if they were ever be able to recover. here now today, talk to us about the trial and how that's impacting the company. brad: it's a consortium of 60 to 70 private companies. there is a founding family that hovers above it all, the coordinating group that is been disbanded. the leaders have been

charismatic figureheads dipping into make major decisions, acquisitions, major investments. in south korea this is a political situation, to turn the tide of public opinion against the day companies like samsung. emily: which of the south korean conglomerate. what is the likelihood he will emerge from this unscathed? brad: they have not produced a smoking gun. the allegation is they persuaded the government to put pressure on the shareholder group's pension fund to approve a samsung murder to shore up the family control of the conglomerate. if there was a quid pro quo, it was an unspoken one. they are not produced a smoking gun. i think he probably gets out of this ordeal. we will find out in the next couple of weeks. there is precedent for the heads of these companies to spend time in prison. south korea is a very conflicted relationship between government, the people, in these large companies that feel its economy.

emily: for all the things they are doing well, there was this big thing they have not tackled which is software, which may be the primary reason people don't buy samsung phones. brad: let's do a contrast. in two years to have spot a massive semiconductor fabrication facility. intel has a factory in arizona for five plus years and trump has tried to put pressure on them to complete it. samsung deploys militaries of workers the at these things up and running. it is a different set of skills, the militaristic discipline. they are releasing this personal assistant around the world right now, their siri and there has been criticism about how they presented it. and how answers queries. this is something samsung has to master.

there is bright spots with samsung pay, a lot of failures. their operating system never caught on. emily: what was your impression from within the company having spoken to six or so executives? brad: they remarkably recovered from the note 7 debacle. they have released the note 7 in south korea. what company would do that? the brand literally went up in flames. the note 8 is coming out soon. the galaxy s8 is out with good reviews. my impression of relentlessness. they deploy so many resources. they are so disciplined and efficient that they are tough to beat. particularly on the manufacturing side, this area of strength that an apple or google cannot capture. emily: what does it mean for apple given iphone 8 expected release in september?

brad: they are frenemies. samsung memory chips are an apple products. apple has a reliance on samsung, even at the high end of the smartphone market they compete. emily: they are trying to change that by designing their own chips? brad: right, for they don't make them. samsung makes the chips. the problem is apple can't get out of its reliance on samsung because samsung went and tortured all the competition. it is hard for apple to go and ween itself off samsung. samsung can rely on apple and its business to basically subsidize the smartphone business it competes with. emily: xiaomi is pushing into online lending and other p2p financial services. their head of consumer lending tells bloomberg that china's pie is big enough for them.

>> over the past few years we have noticed a lot of problems in this industry. the industry needs some revelation in place to enforce the activities and behaviors, and to make the industry developed in a good way. >> is it important to innovate before those regulations stifle innovation? >> it is difficult because sometimes it needs more space to innovate. at the same time, a lot of players in the market are not self-contained. >> self regulated. >> regulated. the government and regulation, there are rules that need to be

in place to make sure everything is fine. >> what is the biggest risk to you? >> risk management. many people, the debt ratio is so high. some of them may have trouble to pay back. the other side is the financing side. over the past few months we have seen the costs increase so huge and squeezed our profits. those are two risks i have seen. >> your chairman has talked about the troubles xiaomi has had of late, losing market share and sales coming down. he talked about maybe the company grew a little too fast. are you late to the game? >> i would not say it is late. it is just timing to extend our business into this space.

we have over 200 million phone users. over 60 million iot devices connected. >> to you at a disadvantage because you don't have the nearly one billion users that we chat has, for the multi-platforms that alibaba has? >> the chinese market is huge enough. as i see it, we have enough space to grow. we have so huge monsters, competitors in the market. >> monsters? >> i take it back. the players. we still have space to grow. emily: that was xiaomi's head of consumers. coming up, the public battle

between two tech clients, a war of words between mark zuckerberg and elon musk about future of artificial intelligence. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app sirius xm. this is bloomberg. ♪

emily: uber is at risk of losing another big chunk of the global market. grab raised $2 billion. the company says that expect another $500 million from new and existing backers. the move is just the latest hurdle for uber the struggles to right the ship, the series of scandals. it is the battle of the tech titans of the future of artificial intelligence. in one corner, elon musk warning ai is a potentially existential threat to the human race.

mark zuckerberg says he is optimistic about the technology and thinks musk's gives a -- doomsday scenario is "pretty irresponsible." mark zuckerberg: i'm really optimistic. i think people who are naysayers and try to drum up these doomsday scenarios -- i don't understand it. it's really negative and in some ways i think it is pretty irresponsible. in the next five to 10 years, ai will deliver some improvements on the quality of our lives. emily: musk responded on twitter, saying zuckerberg's understanding is limited. we took a ringside seat. sarah: elon for the last couple of years has been beating the drum about how afraid we should be about the eventual takeover of the human race by the robots.

there was a couple of weeks ago where he spoke at a conference of governors and said we need to be very proactive about the regulation of artificial intelligence before it is too late. most regulation in the government is once something bad happens, you react to it. he says by the time something bad happens in terms of ai taking over it will be too late. emily: zuckerberg says we are already on this path and i think ai can be helpful. the future does not look as dramatic to him as it does to elon. cory: when facebook looks at machine learning, they are trying to within the realm of facebook come up with faster answers to the things people are discussing.

gets you closer and closer to services were people can spend money on facebook or use facebook messenger in particular as a forum for making decisions and doing a lot of things. i think when zuckerberg look at this, you should respect technology to come from my company to be kind and benign. it's important that these are people that have all kinds of advisors and these are not two knuckleheads sitting on the couch on twitter. mark zuckerberg was to put out an image of technology friendly, technology is your friend, facebook is your friend, love us. elon musk once everyone to think i'm a visionary genius. loan the money so i can build electric cars in spaceships. emily: elon says i know more than the rest of you about this. cory: is definitely saying i know more about this.

emily: does he have a point? sarah: at the same time zuckerberg is known to stop progress just out of fear. there are so many things to fear about facebook given their data to this nebulous organization. you are right. mark is trying to humanize it. he is meeting people around the country and trying to be unthreatening and approachable. cory: mark zuckerberg's business model for his company is to get very intrusive information about people and put it out in a friendly way. it is not about sharing information. people provide information. facebook is trying to use it and put it out in a nice way. elon musk says i'm smarter than you, i can see the future and you can't. give me your money. emily: this is not the first time they have sparred in public. sarah: zuckerberg is the going out and doing his tour of the country, trying to relate to people.

it is so rare he says something negative about somebody else topically, let alone a mogul. the last time this happened was in a very expensive disaster occurred. there was a rocket that supposed to take a satellite for facebook into space to spread internet access to under served population. it was elon's rocket blew up on the launchpad. zuckerberg was so disappointed he wrote a public post saying he was disappointed in spacex specifically. emily: that was sarah frier and cory johnson. that is it for this edition of "best of bloomberg technology." we will bring you the latest in tech throughout the week. tune in at 5:00 p.m. in new york and 2:00 p.m. in san francisco. all episodes are live streaming on twitter. check us out at bloomberg tech tv. that's all for now.

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♪ >> "bloomberg best coming up shaped theories that week and business around the world. the federal reserve holds the line. the central bank sees balance sheet normalization starting relatively soon. we hear what that will mean for markets going forward. >> that means to me is slightly higher 10 year rates, perhaps 2.5% over the balance of the year, but not much. david: an earning bonanza. the busiest week of the season, we hear from tech giants alphabet, samsung, amazon, and facebook. >> we had a really strong second-quarter and it was based on increased engagement and increased ability to work with marketers. david: deutsche bank earnings