interference in the 2016 election. that is a sign the probe is intensifying. prosecutorsthority, can subpoena documents, put witnesses under oath, if there is evidence of a crime. governor jim justice is reportedly switching sides. sources familiar with the plan say he is expected to announce tonight he is joining the republican party. trump had promised a big announcement in west virginia. leaked transcripts of phone calls president trump made to world leaders underscore some early difficulties navigating foreign affairs. revelations include trump imploring president pena nieto to stop saying publicly that mexico won't pay for the border wall. arizona senator john mccain says u.s. commanders in chief are responsible for the military's failures in afghanistan, not commanders in the field.

mccain says lack of a, quote, successful policy" and strategic guidance from washington over several years is to blame." global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm alisa parenti. this is bloomberg. emily: i'm emily chang, and this is "bloomberg technology." turnaroundgopro's continues to take shape. we will get the big picture on its rebound after a dismal 2016. spending sprees continues with a $250 million splurge on kabbage. the online lender's ceo joins us to break down a big bet on the digital business platform.

my wide-ranging exclusive interview with square chair and ceo jack dorsey. it's been a banner year for the payments company. dorsey's take on what's driving growth and high valuations in tech. first, special counsel robert mueller has enlisted a grand jury in washington to him investigate russian -- to investigate russian interference in the 2016 election. that's according to "the wall street journal." the special counsel says it is fully cooperating with robert mueller. the view is being seen as a sign that the investigation is gaining speed. he is investigating efforts by russia to influence the election and whether trump campaign associates colluded with the kremlin in that effort. joining us, our correspondent. what's your reaction to this? what does it mean? >> right now, the white house is saying that they still believe president trump himself is not under investigation, but this is

a sign that this investigation has intensified and is reaching right into the white house, potentially into the oval office. there are reports this evening that this special counsel is looking specifically at the issue of the meeting between donald trump, jr., and a russian lawyer last year in june, a meeting that also included president trump's campaign manager and his son-in-law, jared kushner. ande have been evolving changing descriptions of that meeting, who was involved, and what happened. it looks like the special counsel is going to be getting to the bottom of this with a grand jury that's going -- that's been impaneled. that will give them the opportunity to look at documents, subpoena documents, make interviews. this is something that could go on for several months to come. emily: the special counsel saying they were unaware that mueller had enlisted this grand jury. shouldn't -- what should we reeaa into thatd -- read into that? >> this is going on behind closed doors.

the white house is not being read into every step. it appears that this investigation is intensifying, even as the white house is being forced to react to the grand jury being impaneled. it seems that the special counsel, robert mueller, is looking to do most of his work behind the scenes before he starts sending subpoenas, before he starts sending requests to interview various witnesses. it seems like most of the work is being done behind the scenes, but it is clear this work is intensifying and it could in fact both the president -- a good impact both the president and it could impact both the president and his administration. emily: intellectual property theft -- considering having the u.s. trade representative's office starting to use a rarely authorized section of the trade act of 1974. how will this impact attentional

tariffs on foreign products and especially goods from china? >> president trump, during his campaign, spoke out harshly against china, saying that he believes the chinese were taking advantage of u.s. companies and stealing selection property, so -- stealing intellectual property, so this is an opportunity to potentially punish china for some of the actions it has taken. it is something we can expect over the next couple of days. president trump could take this significant action and it could increase the amount of animosity between china and the u.s. it seemed like there was a short period where president trump was trying to get along more closely with china, saying that china could be helpful on the north korea nuclear threat, but now it appears that president trump has abandoned that tactic and is now looking to get tougher on china and crack down on some of the trade practices. we will be watching very closely to see what exactly the president concludes as a result of this investigation, but it does appear that they are

intensifying their investigation into china's trade practices. emily: all right. live from the white house, thanks so much for weighing in. meantime, gopro reported its earnings for second quarter. le action of a wearab camera and drones kept its promise, beating expectations. shares soared on the news. revenue of reported 34% from a year earlier, surpassing the average estimate. the news proves that the costs cuts -- cost cuts are stemming losses and software is reinvigorating demand for the cameras. joining us to discuss is bloomberg tech's selina wang. what changed? over the last year, gopro shares have been in big decline. selina: gopro investors finally have something to be excited about. they were struggling for the past years, and 2016 was an

especially terrible year with layoffs, job cuts, product delays, recalls, missed sales, slow demand, and now they are finally starting to turn around, reduce the bloating in the organization, and execute on the vision. their losses narrowed 82% from a year before. that's enormous. even though they cut all of these costs, they have been able to keep the exact same product lineup and increased sales this quarter. emily: what do we think is actually happening with the action camera market? there's been a concern that people are just using their iphones. why do they need to buy a gopro? and that's where the market is heading. selina: it's undeniable there are fewer and fewer reasons to buy a gopro. smartphone cameras are getting simple. action junkies can hold out their iphones, the camera, the lens and resolution has become so good. that's why gopro needs to prove

out there is still a reason why they should exist in the market. they've been focusing on making it an extension of the iphone. i spoke with nick woodman just a few hours ago. he doesn't want to call gopro a camera company anymore. he wants to call it this lens that can be attached to smart phones and capture stories in ways that your smartphone couldn't. key to executing on that strategy is making the camera super easy to use. they rolled out this software that automatically takes the video from the camera, puts it in the smartphone, and then can be edited and uploaded really easily. emily: what's going on with the drone? it took a long time to get to market. how much optimism? selina: it has gopro's brand presence. there's no denying that, but the reviews have been less than stellar. there are lots of competitors in this market, and the biggest one here is the leading global drug maker -- drone maker. they released several drones

that are in a similar price range or cheaper than gopro's drone, but it has even more features and more advanced sensors. gopro is not a winner in the drawn market and investors should not be -- in the drone market, an investor should not be waiting -- and investors should not be waiting on it in the future. emily: thanks so much. sticking now with earnings, etsy shares popping in late trading after reporting revenue and earnings that beat average analyst estimates. it increased its margins outlook for the rest of the year. another earnings mover is yelp. that stock soaring in late trading, up over 18%. yelp reporting earnings that beat estimates and authorized a $200 million share buyback. it was announced that grubhub is yelp for $288rom million in cash. the two companies agreed to a five-year partnership that will see yelp integrating grubhub

ordering into its own restaurant listings. grubhub is seeing its stock fall in late trading as it tightens its revenue guidance for 2017. coming up, deutsche telekom has raised profit or casts, but all eyes -- profit forecasts, but all eyes are on word that t-mobile could seek a merger that would shake up the wireless industry. plus, my exquisite interview with ceo jack dorsey. here is a preview as dorsey discusses growth opportunities for his company. jack: we realized recently that we're not really competing with financial institutions and banks and traditional lenders. our average loan size is $6,000, so we are competing with people going to their friends and family and ask for a loan. and that's a massive market. ♪

emily: sticking with earnings, german giant deutsche telekom gained in friend for it after second quarter profits beat analyst estimates, but all eyes are on its m&a strategy as it keeps quiet on plans for its prized t-mobile u.s. unit. joining us more, caroline hyde, from london. everyone wants to know whether consolidation is coming. we didn't get any clues, did we? weh: we certain -- caroline: certainly didn't. the ceo is actually out on holiday. this is how important the august time off is to the europeans. the ceo is not around for his earnings call, but the cfo did say there are talks, but there is nothing to say. instead, we got to pour through all the numbers -- this is a huge company, the biggest telecom player in europe, 74 billion euros in terms of market cap, and we saw its rise -- it rise.

the reason is not europe. it is the united states, in particular t-mobile u.s. they cited that as their strength, the driving force behind these numbers. , financial analysis. we now havequarter, 47% of revenue coming from the u.s. that's more than is coming from europe, far more than is coming from the likes of germany, where we are seeing a little bit of a slowdown, particularly in their landline part of the big deal. this is why so much has been speculative about what they do with t-mobile u.s. emily: if only we all lived in europe and could take months long august holidays. let's talk about m&a. sprint has said they've had positive discussions about a potential merger. what is the very latest that we know? caroline: this is the ongoing

debate. we have been hearing from the ceo about how he feels he is in the driving seat here, even though we've heard leaks from sprint saying that they've had positive negotiations so far. we've also heard from the likes that they might be potentially looking at instead, maybe a competitor, maybe charter communications instead. so, as yet, we don't know who could team with who. the ceo of deutsche telekom has claimed that they will decide what, when, and how. they say this is their kingmaker. the reasoning is, of course, they could potentially do a deal with another mobile company, strengthen consolidation. they could be saving money if they got into bed with sprint or competitors the likes of at&t and verizon. maybe we see a little bit of

horizontal consolidation, not just vertical, because we might see a cable deal done here. maybe they want to get into content. maybe amazon will team up with t-mobile u.s., something that has been circulated by analysts. analysts are also saying they could still dispose of t-mobile u.s. in its entirety. that would free up so much cash to them in europe. but as yet, if you've got a ceo calling it his kingmaker asset, it looks as though he wants to keep hold of it and continue to grow as a launchpad into the united states. emily: last quick question. this isn't the only asset that deutsche telekom is looking to actively manage, correct? caroline: correct. it's been interesting. we've seen recently deutsche telekom set up a whole new unit, a whole new m&a unit for actively managing certain assets that they hold. a portal for cars and real estate in germany, they sold that particular stake and

cashed into the tune of more than 300 million euros. you are also seeing a holding of 12% in the u.k.'s big telecoms company that they had to take a write-down, 400 million euro write-down on this particular quarter, because the italian accounting scandal. they are looking to manage that. also, they have a dutch unit they would potentially be looking to do something with. also, a telecoms tower. they have a lot of fingers in a lot of pies, even an advertising company. it's trying to slim this down and renew focus. emily: all right. bloomberg's caroline hyde for us in london. thanks so much for that update. coming up, we will take a look at the future of artificial intelligence. where big-time investors are placing their bets. the hour, myn exclusive interview with square politicalorsey, how uncertainty is impacting his business. jack: i think the most important

thing is to have an open conversation and speak up. if we can't be open and transparent about how we feel about policy shifts, we are going to move backwards as a country and as a world. ♪

emily: chinese e-commerce giant alibaba is continuing its fight against the online sale of fake roddick's, this -- fake produc ts, this time teaming up with a french luxury group. they have agreed to drop a lawsuit that said the chinese giant was unwilling or unable to stop the sale of fake merchandise. ai wave is cresting with startups and tech giants wanting in on the action. one virtual -- venture capital firm baiting -- betting big is data collective. it applies deep tech to

transform giant industries. joining us, the comanaging partner, zack bogue. great to have you on the show. i want to start with big tech, because everyone has a dog in this fight, facebook, google, apple, amazon. who is winning when it comes to big tech and ai? zack: in terms of computer internet and consumer tech, the big companies kind of have a lock on it. for ai, you need massive data sets. they have the consumer data and the ai to crunch it and to really make use of it, but the good news is that consumer internet and consumer products -- those aren't the whole world. there is a whole rest of the world out there where there is plenty of opportunity for startups applying ai in smart ways to start companies. emily: let's talk about what's out there. you had a company that was bought by intel. but you have mentioned that all potential -- almost all potential ai opportunities have been scooped up. what's left in the wild?

zack: we are particularly excited about the life sciences industry as it relates to ai. some previously impossible, in solvable problems -- unsolvable problems are now addressable using artificial intelligence. the $12.5 trillion life-sciences industry fundamentally lacks core ai competency, which we think is a huge greenfield for venture investing. emily: what are the opportunities? it sounds very big picture. how do you see ai revolutionizing things in life sciences? can: one of my companies build drug and therapeutics and antifungal's from the atom up. they've done this for ebola as well as for a fungus attacking agriculture. that's a massive opportunity. these are using hard-core, applied machine learning to build these molecules and therapeutics from the ground up. emily: you are also investing in space, ai when it comes to space. how so? has: my portfolio company

190 satellites in orbit right now that can take a snapshot of every square inch of the planet every day. that's a massive data set, and you need ai and applied machine learning to be able to make sense of that massive data set. most satellites can tell you what's going to happen tomorrow. lannett labs can tell you what happened yesterday, but you need -- planet labs can tell you what happened yesterday, but you need -- honing in. companies on these uncharted territories -- do you see companies honing in on these uncharted territories? zack: there is a massive opportunity. emily: you think they will keep buying? keep buying ai startups? zack: absolutely. emily: elon musk has talked for a while about the sort of doomsday scenario around ai, warning that artificial intelligence could become smarter than human intelligence. mark zuckerberg has said that's

professionally irresponsible and that he is more optimistic about the future of ai. where do you fall on that debate? zack: elon's scenario, if it is possible, is a long way off. right now, we are talking about narrow-based ai, which is ai being applied to a specific task. this is crunching aerial imagery and figuring out what changed. this is not figuring out what's going on out in the world and developing intent and acting on it. emily: how do you think ai will significant we change the tech monopolies as we know it? do you think this will be a key differentiator at who's in the lead in 10 years? zack: it is already a differentiator and it will continue to be the case. the big tech companies do have a lock on that data, and their ai scientists are getting better and their data sets are getting better and it creates this virtuous cycle. emily: does anyone have a bigger lock on it than the others? zack: i don't know. that's above my pay grade.

i like to deal with startups, and i feel like, in terms of the life sciences industry, no one has a lock on it. the startups are rapidly moving into that space. emily: what industries do you think won't be transformed by ai? wherei feel like anywhere you actually need a person to interact. i see a massive amount of companies iterating to try to replace real estate brokers, but, at the end of the day, you want a residential real estate broker interacting with you face-to-face, holding your hand, getting you comfortable with this big investment you're going to make. i think that's a long way away y.om emily: where are you looking at placing your next egg that? -- next big bet? zack: on the flipside of that, where we see jobs going away, first and second year banking -- investment banking analysts.

we have a credible shot of replacing big blocks of that. as well as our company which is automating the back office or big banks, compliance -- back office for big banks, compliance, customer regulations. pretty labor-intensive process, which should be done by artificial intelligence which can be automated. emily: zack bogue, data collective, great to have you here on the show. thanks for stopping by. coming up, my exclusive interview with scare -- square ceo zach dorsey, talking about banks, what roles tech players should play in closing the bank -- the gap with washington. ♪ we check our phones 85 times a day.

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see how much you can save when you choose by the gig or unlimited. call, or go to xfinitymobile.com. xfinity mobile. it's a new kind of network designed to save you money. you're searching for something. whoooo. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if... ....there was a single site... ...where you could find the... ...right hotel for you at the best price? there is. because tripadvisor now compares... ...prices from over 200 booking... ...sites ...to save you up to 30%... ...on the hotel you want. trust this bird's words. tripadvisor. the latest reviews. the lowest prices. mark: i'm mark crumpton in new york. you are watching "bloomberg technology." "the wall street journal" reports special counsel rob miller -- robert mueller has impaneled a grand jury.

it is a sign the probe is intensifying. under its authority, prosecutors can subpoena documents and put witnesses under oath if there is evidence of a crime. the white house press secretary put out a statement saying officials are fully cooperating with mueller. republican senators today introduced a border security bill to aid law enforcement at the u.s.-mexico border. >> this bill requires the department of homeland security and law enforcement to consult with local officials at each step of the way, a point i just made. the folks who live in these communities know them best and must be part of any successful border security effort. mark: the bill also cracked down on so-called sanctuary cities. today, attorney general jeff sessions threatened to deny federal crime for -- such-fighting resources to municipalities. official turnout figures for sunday's election were manipulated. ays the software firm

behind the claim is bowing to u.s. pressure. he also stands by the official count of 8 million votes. the company says numbers are off by at least one million votes. japanese prime minister shinzo abe reshuffled his cabinet, putting well known moderates in key roles. abe has faced criticism for prioritizing conservative issues. the other parties have suffered following a series of scandals. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. it's just after 5:30 p.m. thursday here in new york, 7:30 friday morning in sydney. my colleague, paul allen, has a look at the markets. paul: nikkei futures are looking weaker to end the week as the market in japan awaits toyotas earnings, which will be reported after the bell.

in australia, asx futures are looking very flat. we waiting on earnings from crown resorts. we will see if there is any impact on the result after the jailing of -- earlier in china this year. watch the commonwealth bank after the government agency brought more than 53,000 charges of money laundering against australia's biggest bank, each charge cause -- carrying a possible maximum penalty of $18 million. be impact on the aussie dollar. in singapore, watch out for dbs bank, reporting earnings. more from "bloomberg technology" next. emily: turning now to square. shares were up 4% today with the payments company reporting strong second quarter results

and boosting its annual guidance . the stock gained more than 80% so far this year. after square's earnings report, i sat down exclusively with ceo jack dorsey and asked what the biggest driver of growth is for the company today. jack: our core business. that's what we are most proud of. we continue to build a business that scales. we are reaching more of our small businesses, more of our independent contractors. as i said on the call, we realized recently that we're not really competing with financial institutions and banks and traditional lenders. you know, our average loan size is $6,000, so we are competing with people going to their friends and family and ask for a loan. and that's a massive market, so, you know, we continue to innovate within that space. it's got great fundamentals to it. it is something that continues to be attractive to all of our square sellers. emily: you're rolling out new product lines, trying to develop

new revenue, all-in-one solutions for businesses. where do you see the most promising sources of new growth in the future? jack: i still see a lot in the core. we still have a lot of small merchants to reach, a lot of room to grow. we recently introduced square point-of-sale for retail, so we are getting more specialized and really paying attention to what retailers need, in particular. know,s something -- you we've always been more of a horizontal service. we have been able to really specialize and go vertical, and, by doing so, we get to open the funnel in who we get to reach. emily: let's talk about the decision behind the physical card you are now offering. do you want to offer more actual bank services? years, weover eight have taken on a partnership mindset with the banks. we are not out to compete with financial networks or to replace but what we've been

really good at is making what they currently offer today accessible to more people. we started with sellers. an industry know, that would only enable 40% of people to get through to start accepting credit cards, we took that number to 99%. we think there is a lot of room still to do that in seller spaces, like square capital and loans, but also on the individual side as well. so, when you consider us, i would consider us as a simple, easy way for anyone to be able to start immediately and participate in the economy, whether that be on the seller side or an individual side. what we are seeing with square cash is we are reaching an underserved and under banked -- a very young audience as well. that makes us barely -- really proud. it's consistent with what we've always been. emily: you're talking larger sellers. how do you handle the additional competition as you move up market? jack: it goes back to our core

differentiators. self-serve is a big one. building software that is intuitive and easy, no matter the scale, is important. and then i think one of our greatest differentiators is really around being cohesive. we are not just a point-of-sale. we are payments and we are square capital and we are crm. and we're instant deposit. and it's all built into the same package, so you just download one app and you have everything you need to scale. you can start as one location and scale to 40 without having to think about anything and without having to talk with anyone either. that's where we come in and that's what we are serving. emily: you did report a net income loss. i'm curious how you think about profitability and how that impacts how far out you plan the product roadmap. jack: something i'm really proud of is we are a company that's moving money, so we put a lot of controls over everything that we

do and we have a lot of discipline. and getting to profitability means that we have achieved a disciplined milestone. how we get to choose then we invest or how we drive profits. we will get to that milestone and we will continue to invest in building better and better services and products. emily: one analyst recently suggested that paypal should buy square, saying that their millennial venmo customers would perfect complement yours. jack: i think there's a lot of value in the fact that we are a platform that brings institutions together, networks together, platforms and hardware together as well. so, there's a real value in our independence. that's what we are building against. emily: more of our exclusive conversation with square ceo jack dorsey coming up. we will hear what he had to say about the gap between silicon valley and president trump. has beentbank

investing in startups that focus on ride hailing, robotics, and vr. it is now expanding into online lending. we will bring you that story. "bloomberg technology" is live streaming on twitter. check us out weekdays at 5:00 p.m. in new york. this is bloomberg. ♪

now to more of my exclusive conversation with square ceo jack dorsey. square stock has risen more than 80% so far this year. i asked what he thinks of sky high tech valuations that we are seeing in the markets. take a listen. jack: i'm not an economist, so i don't know how to answer that question. we live in a market, and the markets decide a value of this particular thing. that will always have ebbs and

flows. it's not something we control. what we control is do people want to use what we are building, and our job is to make sure that that answer is yes, and they want to use it so much that they can't help that talk about it with people that ask for recommendations about what tools should they use for a certain business. or i'm trying to get out of this nasty contract. where should i go? that's the thing we control and that's the thing we focus on,. emily: you must have a keen insight into the health of the u.s. and global consumer. where do you see people spending and not spending, and what's your confidence? jack: we see people going to our sellers, and we see people purchasing. those trends continue to be positive. i think the great thing about square's business is its nondiscretionary. so, everything else can fade away, but you have to be able to make the sale. i feel really good about what we

are seeing in the economy and also how we will continue to thrive and support that. emily: there have been a number of reports about sexual harassment in the tech industry. people have lost their jobs. it has renewed concern about the lack of women in tech. what are your thoughts on this? jack: it is something that -- it is a situation that we absolutely have to provide a lot more attention to, and our focus has really always been on inclusion first and making sure that we are building an organization and environment and the company that people feel like they belong and people feel like they can contribute to and they feel part of. that, but weay also need to make sure that it's not just an environment that people belong, but they can actually help contribute to decision-making and to really --e sure that they continue

they help own our outcome. emily: the gap between silicon valley and president trump still steams -- seems quite large. what role do tech companies and leaders like you play in closing that gap? jack: i don't think there's any difference in the role tech companies play or individuals like me play. the most important thing is to have an open conversation and to really speak up, and if we can't speak up and if we can't be open and transparent about how we feel about policy shifts, we are going to move backwards as a country and as a world. so, that's my role. that's our company's role. that's our industry's role. but it's every citizen in this country's role as well. i'm certainly going to use my role and my experience to inform what i believe is right and what i believe is necessary. emily: as somebody who runs a company that moves a lot of money around, how concerned are you about not just economics,

but political uncertainty right now? jack: every entrepreneur and leader has to deal with uncertainty, and we just have to be comfortable with that. uncertaintyomic that people talk about is not something i necessarily feel on a daily basis to affect my decision-making. what i am concerned with is the economic disparity that we are seeing, not just in this country, but around the world. and our goal as a company -- and we will have a very small part, but it's a part nonetheless. we will continue to provide tools for people to engage in the economy and participate in the economy, and we are going to do our best to do that. so, that's what we are focused on trying to help fix. we are not going to do it alone, but we are going to have a loud voice as we do. emily: how does that impact where square goes next? you have been expanding abroad. where to next? jack: we want to go everywhere.

we want to be a tool and a service that is success -- accessible to everyone in the world. we have a lot more friction in our industry, because we have to work with banking partners and we have to work with regulators. every local market has its own rules and regulations, so we are going to take our time because we want to do it right,. we don't need to be first in market, we just need to be the best option out there. emily: my exclusive conversation there with square ceo jack dorsey. well, softbank has jolted the vitor capital -- the venture capital industry by investing billions of dollars in late stage startups, most focused on technology like ride hailing, robotics, virtual reality, and even a new farming method. the japanese giant continues its string of big startup bets by investing $250 million into online lender kabbage. joining us, kabbage ceo rob frohwein. thank you so much for joining us. let's start with softbank.

how did those conversations start and proceed? rob: thank you for having me on the show. they started -- an affiliate of softbank had invested in a round of hours in 2014 -- round of our s in 2014. that was a totally separate affiliate. about nine months ago, we started conversations and they just accelerated. emily: what has softbank told you they are particularly interested in when it comes to your company? rob: first of all, they are interested in companies that industries and companies that can reach audiences and customers that are hard to reach traditionally. as it applies to kabbage, what we are able to do is we are able to take any small business that is out there, have them land on our site and within six or seven minutes deliver capital. we go from knowing nothing about them to knowing an incredible amount through the data they share with us, then funding them and allowing them to grow that business.

emily: i was just talking with square ceo jack dorsey. they are moving into more of an underbanked market, reaching a new kind of customer. are you competing with square? rob: i wouldn't say in reaching an underbanked customer. to the extent that small businesses have not received capital to help them grow in years, that's something we have addressed now for nearly six years in providing capital to small businesses. emily: square has a lending business as well, square capital, which does provide capital to small and medium businesses. rob: sure, to some extent, we are going to be providing capital to businesses that could be taking capital from square and vice versa. we operate in an open market. we operate with any small business regardless of whether they are using a dedicated channel like square or any payments system. we leverage data that sits on an open network and is not confined or walled garden by a particular

payments system. emily: i asked the same question to dorsey. how does economic and political uncertainty, especially when it comes to rates, what does that mean for you guys? in terms of know, economic and political uncertainty, i think what he said was accurate, which is, as an entrepreneur, you live with uncertainty. every small business that we work with, some percentage of that audience that we serve every day is going through stress. these are not the businesses that are buying the fancy cars, the big mansions, and are going on fancy trips. these are small businesses, dry cleaners, restaurants, folks whose lifeblood -- who are the lifeblood of the economy. the key here is to be able to give them access to capital to help them grow and deal with uncertain times, which they always have. emily: so, i know you are looking ahead. talk to me about expansion and plans to go public. rob: sure. we in terms of expansion,

are going to go much deeper with our small business customers. we are going to start focusing on specific industries, like those that i mentioned before, and get deeper and richer information and be able to give that data back to them. we are also working with banks around the world. we are lunch in australia -- australia, u.k., canada, mexico, and we will be expanding that reach, delivering the same service we do in the u.s. through kabbage through behind tha are right t. emily: kabbage ceo rob frohwein, thanks so much for joining us. coming up, hbo hacked. the cable network says it's emails are safe, though. we will tell you more about what the hackers took. if you like bloomberg news, check us out on the radio. this is bloomberg. ♪

emily: the hacker turned hero who stopped a devastating worldwide cyber attack in may has been arrested. he is credited with finding the kill switch for the wannacry ransomware. he was arrested in las vegas. he is facing charges that he created other malware to hack banking systems. wannacry software hit nearly 300,000 computers in nearly 150 countries, including the u.k.'s national health service, fedex, and nissan motors. now, the latest on the hbo hacked. the cable tv giant says that hackers did not reach their email system. this is according to an internal memo obtained by bloomberg. however, a person familiar with the investigation says the hackers allegedly stole episodes of "curb your enthusiasm" and "ballers." joining me, bloomberg's gerry smith. gerry: hbo has not commented

publicly about specifically what was stolen in this hack. the fbi is investigating. do not said that they think at this point that their entire email system has been compromised. and if that's true, that's very good news, because a lot of people, when this news first broke, immediately started thinking about the sony hacks from a few years ago, where hackers were able to compromise the email system and a leak all alls of -- and they leaked sorts of embarrassing communications with sony executives on the internet. emily: there are reports that this hack is seven times bigger than the sony hack. do we know about the actual size and the impact? gerry: you know, it's still to be determined. one thing that is worth considering is that the email -- hackony email -- the sony was largely emails, where it appears with the hbo hack, these

are in some cases actual episodes of programs. we've reported some episodes of "curb your enthusiasm" and " ballers" were stolen. the actual amount of data in that video might be much larger than email, even if there were far more emails from the sony hack that were compromised. emily: there are other reports -- "variey" reporting -- "variety" reporting that the hackers are threatening to release material over the weekend. what doing a -- what do we know? gerry: hbo is not commenting. i think the big concern for hbo is trying to limit the damage here. from what we know, their big show is "game of thrones," and, as far as we can tell, there have not been any stolen episodes of upcoming episodes of "game of thrones." hbo is still investigating this with law enforcement. their hope is, especially with

at&t about to acquire their parent company, time warner, hbo is hoping the damage is as small as possible. emily: so many companies have been vulnerable to hack attacks of late, but when it comes to media companies in particular, do they have a particular problem with security? gerry: certainly, after the sony hack a few years ago, michael, the ceo of sony, he's gone o on record publicly and said, you need to be very careful about your email. for an instance like this with hbo, it's not clear exactly how the hack took place, but, you know, i've talked to security experts in the past and they said, look, there are two types of companies out there, was that have been hacked and ones that have been hacked and they just don't know it yet. computer security is a huge problem across corporate

america, and media companies are struggling with it just like others. emily: gerry smith, who covers media for bloomberg news, with us from new york. thanks so much for stopping by. that does it for this edition of "bloomberg technology." we are live streaming on twitter. check us out weekdays at 5:00 p.m. in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪

>> from our studios in new york city, this is "charlie rose." charlie: graham alice son is a professor at the kennedy school at harvard. can america and china the trap. he examines the potential for conflict as china threatens to displace america on the world stage. m pleased to have graham alison. when did you first know that this was a subject that needed attention? >> probably a decade