>> you are watching bloomberg technology. what's get a check of your forced that first word news. speaking indianapolis the president insisted the wealthy would not be the only beneficiary. the tax code would be similar -- simpler and more fair for everyday americans. this all comes as the tax rate goes from 35%. for individuals the tax bracket would be 12%. the individual that u.s. has offered a first look at the prototype for the proposed order -- border wall. crews working on two of the prototypes were filmed installing reinforced ours -- bars.

elaine duke admitted that there are challenges and distribution. she spoke after a barrage of criticism directed at the trump administration. louisville has placed coach rick pitino on unpaid leave. this comes after a probe on recruiting corruption continues to unfold. the athletic director was also placed on paid leave. placed on paid leave.

>> coming up the president and the gop roll out their framework to reread the tax code. will be targeting trillions of dollars of offshore profits. we will discuss that. plus amazon steps up their game with a suite of new products. we will review the new products and see if amazon has the upper hand with the holiday season. the iphone x may not be ready for prime time. we will dig into the production delay in cupertino for the highly anticipated device. up first to our lead. president trump and republican leaders have unveiled their long-awaited overhaul to the american tax code. speaking indianapolis. pres. trump: corporations have parked many trillions of dollars in our economy and many have

done this to avoid our taxes the altogether. some companies actually leave our country because they have so much money overseas, so much it is a incredible amount that they move the company to get their money. we will let them bring it home. it is estimated firms have $2.6 trillion in profits offshore. apple leads the way. with me now to discuss is the head of the texting out of our washington bureau. what does this mean for companies that have these profits offshore?

as well. they really stepped up their game introducing several new speakers as low as a new box for the home. emily: you reveal all of these products how does this stack up to what google has? mark: google has their own speaker that is the center of their world. apple has a single speaker coming out. that is also going to become the central hub of the smartphone world. apple also has the apple tv. they have the ipad and ipod. google has the pixel phone and their chrome cast product. what amazon is saying we are going to make the smartphone our entire category.

we are going to take over every part of the home. not only do they have a smaller they also have a high-end speaker that will allow you to connect to your network. as well as a new fire tv stick. i think that really stole the show. a half circle device with a small screen that you can make video calls from. you can watch video and listen to music. you can learn about your day and your calendar. amazon comingis out with these devices for all parts of your life. basically amazon is trying to be wherever you are. emily: do you think we will see more partnerships in the future? mark: this is the third one. they announced a partnership with volkswagen and ford at the

beginning of the year. i have not seen any models of seen any models of those coming out. >> alexa still gets confused sometimes. the voice of a nation still has a long way to go.

did amazon address any of that today? mark: we saw a lot of new functionality. there was a letter first party products. in terms of functionality there is a lot of third-party integration with other devices like lights and thermostats. new ways to integrate with other parts of your life did there is a new button that lets you play a game by pushing a button. there are ways to go with this. there is a lot of stuff they are working and there is a presentation going on. it is totally worth talking to you instead. we will see more from them on that. emily: thank you for taking time out of a very busy presentation to talk to us. you'll have to update us, thank you so much. teaming up to developing self driving cars ford and lyft have

announced they will share data. eventually they will get them onto the network. this move comes after gm bought a stake for $500 million. those two companies are still considering other options to ask -- to expand ridesharing operations. coming up, it is at week we will .- it is add week this is bloomberg. ♪

emily: facebook said they had success fighting fake news in the german election.

the company says they launched a major effort to combat fake news. the right-wing alternative for germany made historic gains in the election they said in a blog post they did not eliminate misinformation entirely. they did make it harder to spread and less likely to appear in the news feeds. studies concluded that the level of the false news was a low. facebook,ith president trump is taking aim at the social network. he said they have always been anti-trump. this comes after the turnover of almost 300 political as that were bought with russian money after the campaign. facebook is making a larger push to attract advertisers. this comes at ad week out of new york.

also with us is gerry smith who covered media for bloomberg news. telling us all about what is happening. what are they saying about facebook? >> i think exactly what you are just saying is that facebook is really making a aggressive push to try to take away advertiser dollars from tv networks. there are a lot of publishers that are producing content for that. you know that is really where there is this big push. $70 billion market in advertising. facebook was a piece of that. the tv networks right now have the line share of that. there is a shift going on with digital. emily: are they concerned about this russian issue? gerry: absolutely. advertisers are completely conservative and they are worried about their brand and the content.

youtube had a real problem with that this year. advertisers are very concerned about their content showing up alongside fake news as well. emily: what is your take? >> i am hopeful facebook is successful in shaking that money out of television. if that is the model we are building to create content for these platforms sort of in advance of the money showing up. but knowing the consumer attention has shifted. dollars will always lag consumers. i think you will start to see money start to move from money to where people are spending most of their time. emily: facebook and google are really gobbling up the digital time. how much is left over for companies? ben: when you look at how judy -- when you look at how tv has traditionally been bought, advertisers are buying from the cable networks. the digital ecosystem is so that

you are buying for platforms rather than the media brand. that is problematic because building on these platforms. i think the shift is happening now that will take a long time where ads on facebook and google and specifically on snapchat are looking at that $70 billion. they have to place more value on premium content. that content is so important for advertisers. in the need for new content they have to share some of that pie. facebook is now starting to pay content creators for content. they are doing more to share advertising. it is still early but also the competition between these two platforms is important. when youtube was the only show in town advertisers had no leverage. now with multiple platforms competing it is a good time to , be a content creator.

i do think this will be a thing to watch. emily: it is doing very well as a here. -- as i hear. ben: there are 24 shows to watch. emily: what kind of engagement are you seeing? ben: "comeback kids" is the number one show, we are seeing over 20 million views are episode. -- per episode. over 20 million minutes viewed bid that is a enormous scale. it is not the number one show on the platform but collectively and less than three weeks we have had with hundred million views. we have have a million followers to these shows. i think this is the tv version of a subscriber to a program. we are building a fan base and we are building and growing great engagement. we are pleased that the early results. this is going to shake out over a extended amount of time.

emily: do you think traditional tv networks will adopt this method? gerry: i think it will take some time. to think that these media companies are colluding is the furthest thing. there is some frustration with facebook in terms of the companies produce content for the latest initiatives they are not getting the kind of financial terms that they hope for. it seems like facebook has really made a effort to reach out to the journalist community to really try and meet their needs. i think facebook is starting to come around, but the idea that they are colluding is actually kind of funny considering there is real tension between the two sides. emily: gerry smith, always good to have you here on the show.

coming up, publisher mcgraw-hill is undergoing a digital transformation with their textbook. we would hear from the ceo next. be sure to tune into our conversation with the microsoft ceo, with a in-depth conversation about microsoft and the future of ai, we talk about the future of ai, we talk about it all. that is this thursday. this is bloomberg. ♪

emily: how do you transition into a leader in digital learning. you need to install a ceo with the new textbook.

that is the route they are taking in the last three years since they were bought by a management firm. we spoke with them about the transition. >> it has been quite a transition. we had to make it work. what we have done with that is about spending a lot of money trying to see how we can improve this education through using software. >> it was about becoming a digital company? it is about becoming a result company. using a combination of psychology to help people better their education. >> tell us about the software? >> what are you providing? i know you are working with ai. how does it all happen. >> when we went to school we learned by reading a book. now we have turned that aired i'm around. what do we mean by that? we have linked the answers back

to a piece of ai. now, how confident you are and how confident you are not. how accurate you are and how can -- how inaccurate you are. they are helping guide you on a very personal part of life. you and i would have different backgrounds with this subject. one of us may go further. we all can get there. the software is very good at making sure you get there in the end. >> it is becoming a teaching assistant in a way? >> one of the things it does is it gives a lot of data. it goes back to the student. but it goes to the teacher or instructor and say wouldn't it be useful to get that. just before you give that lecture, there is a problem they are all stumbling on. there is a lot of insight that comes with this. >> what proportion is digital now?

how much have you become a new technology? are surprised. it is more than two thirds. it has been a rapid change under 20%. that was not really quite true, now it is two thirds that is software-based. k-12 is a smaller number. that is more complicated to do infrastructure with. we don't want to be fundamentalist about this. then there on his first years of learning to me. there will be a much longer persistence of that with undergraduate education more

likely than not you are going to be doing this. >> the education ceo. coming up, apple has had a production snag on the iphone x we will talk about why they are falling behind did a feature i want to talk about is our interactive tv function. you can watch us live. send our producers a message and play along with the charts. that is for subscribers only. this is bloomberg. ♪

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news. the exact date will be confirmed later. the dpj will not field a single candidate. playboy founder hugh hefner has died at the age of 91. playboy enterprises has released

a statement saying he passed away of natural causes. thing's son paid tribute he led an impact for life as a cultural pioneer. the auto part maker will join toyota iske -- turning green after initially falling. global news powered by 2700 journalists and analysts across 120 countries. losses.orean won saw

the dollar is also under pressure. we are tracking the decline you are seeing in oil. the hang seng is being dragged lower by energy. the rally could be overheating.

that is the market snapshot. this is bloomberg. emily: this is bloomberg technology. i am emily chang. apple facing production delays with the iphone x. the delays come due to problems with the 3-d sensor, reports a the makers of the components used with visual recognition are struggling to head adequate production levels make you with all the details is alex who covers all of this for us. what do we know? >> we know that there are some problems with the 3-d sensor and that is causing some delays to the production process. they then dug into this a little bit more and with those infrared dots that have the 3-d facial recognition system.

we don't quite know the extent to which that would affect how many phones are on the shelf. >> that was my next question, how well do we know how these things are going to impact july? -- impact the supply? >> going back when they unveiled these two phones for the first time and as far as i know they staggered the release, you can go out and buy one right now. there is a six week window until the iphone x becomes available. we knew going into this cycle there were problems with the screen. now apple says the delay is taken into account. we don't know to what extent the 3-d sensor delay were taken into account when they said the release it will be on november. if it was then investors do not

have anything to worry about. if they did then it may be that they are in short supply come that day, and they will not be able to meet demand. that may be a cause for concern. emily: could this be some answer to why the release was staggered with the iphone eight out last week and the iphone x until november. >> that could be one of the factors. there are only a handful of factories in the world making these displays that give this sharper wider display for the iphone x. we know that there have been some problems with the 3-d sensors working. we do not know the extent of the issue. we have been doing our own reporting and see what the case is. the problem seems to be in the module. they piece together this to make the 3-d sensors. it is there the sticking point

seems to be. they are doing ok. the module assemblers and of that is as far as we know. down in south korea, sharp which is in japan have these issues. emily: it is interesting that tim cook has this supply chain genius. he probably knows more about the supply chain than anyone at apple that at this point they have been working on this phone for months. why wouldn't they be able to stockpile these components? >> i think it speaks to the fact that people have been worrying for a while about the extent to which they are really able to

produce these phones. apple has really been trying to push the envelope and get the technology available to the only difference is that the iphone is the best-selling smartphone in for a while about the extent to the world. there are a bunch of different models. they are trying to use this cutting edge technology. on some of the conference calls for these companies, they tried to ramp up production. clearly that has not been a success. emily: it is interesting, there are people complaining about things networking. how much could that impacts sales? >> we always see a little bit about that. there are always some problems. it is usually solvable with a software patch. with the connectivity issues. i literally just got my iphone. we will have to see if that is the case. apple has said with this problem

with the crackling audio they , will be able to remedy a with software fix. i would not worry about that too much. it is the supply issue which is cause for concern. emily: we will be waiting for that review. thank you so much. now to a stock we are watching. after reporting earnings and another strong quarter. the memory storage chips could be in short supply. they are curbing spending on new plans and production. prices are also be bolstered with cars and other capabilities. coming up, president trump and republican leaders have begun their push to overhaul the tax code. what the changes could mean for taxes. if you like bloomberg news check us out on the radio been you can listen to us on the mobile app

and on sirius xm. this is bloomberg. ♪ emily: the senate has just

confirmed president trump's take to have the justice department antitrust division. this comes after a series of hiccups. he was confirmed with two blockbuster mergers away his review. earlier in the hour we broke down what the proposed tax reform means for big tech companies what about for investments in deal making, joining us is the cofounder and managing director of aspects. thank you so much for joining us. it is great to have you back here on the show. let's talk about this tax reform plan, what does it mean from your perspective? jennifer: i think we are very short on details. we have to look a lot at what the intent is. what we are seeing is that he sees this is the opportunity to drive growth at the small business level and also the

saturation of dollars to drive reinvestment back into the economy. what we are thinking about and looking at is what does it need to be able to have a wide year adoptable spending and what does that look like as the rules around software and hardware and how will that play out for some of our startups. emily: for startups in particular does it seem like it will be beneficial? jennifer: i think it has the potential to be very beneficial for small businesses, particularly as i mentioned in immunity investment dollars. when you think about cybersecurity which is a large part of our portfolio, we think that a lot of the technology around cybersecurity is fairly archaic and not up to a level that many large corporations need to secure their own data. if the rules allow for that kind

of right off with cybersecurity. n formeans up boone -- boo new investment with those kind of products. emily: we have been talking about this massive pack for the last couple of weeks. this week the sec, what technology is it that these companies do not have that they need? does it actually exists? jennifer: i think that is a great question. many of the old infrastructure is trying to build a wall around the network and hoping there is no breach. then trying to identify and constrained those breaches. we are seeing a shift in the fundamental model and a lot of the technology is under the assumption that we are trying to shut down those credentials in order to prevent any data from being stolen. emily: cybersecurity has been a

area that is right for this. do you think we will see more of that as a result of this? if so where. jennifer: i think that is something we are seeing with an -- many are woefully still with area that is right for this.thet are of major issue. so how that plays out in terms of how quickly these companies will grow and if it still remains to be seen, we expect that to be a big part of 2018. emily: do you think these tax reform issues will be impactful? >> it is hard to tell a kind of dollars will be available. think about the trillion dollars that are offshore that he hopes to bring back to the unit is

-- to the u.s.. could that be driving growth and some of these categories that is the question. emily: i have to ask you. you went on to cofounder m&a what has been your thoughts on these sexual-harassment claims at these tech companies. there seems to be no end to these stories. jennifer: i think what is interesting is that people are talking about it. the real shift is not necessary that there is significant change in some of the behavior but there is a opportunity to talk about it and to try to drive that change it it is not the majority of behavior. it is bad acting on the margins. that bad acting can also create an the culture and create a toxic culture for the startups did what is really powerful and impactful is being able to change the culture very early on

for many of these companies. particularly the ones that are going to have a dialogue about how to do that. having those stories cannot has been very impactful. our focus has been more about driving diversity. we think that is a competitive advantage for some of these companies. to get that early on is for the ones that do well. emily: there is also discrimination which may be a even bigger issue when it comes to female founders not getting funding because that is not the same as what a female that a male make it. -- might get. what do you see behind-the-scenes that could change this? do think there is a real recognition happening right now or is this all going to blow over and go back to the way they were? jennifer: i think there is a fundamental shift in that there is a challenge to seeing the microsoft ceo make comments about recognizing that we have a

real issue and a long way to go that just around equal pay for creating this opportunity. when you have large corporations like microsoft and others. melinda gates has made a huge initiative and supporting women as well. when you have a large impact with investors like that recognizing that challenge there will be a fundamental shift in the dialogue and how that permeates the culture and how it will play out in the startup community as well. i think we have a real opportunity. certainly in the aspects portfolio we are seeing have of our portfolio has a women entrepreneur with diversity to really make better decision-making with a better return. >> i am glad you mentioned the microsoft ceo because we will be have -- have the interview tomorrow when we talk about this. he will talk about their bonus is his bonus and they are tied to a diversity of initiative.

i was to have you here on the show. music streaming service spotify will go public at the end of the year. that is according to a report. also private trades and shares are valuing the company at about $16 billion. spotify declined to comment for this story. coming up, china issues a new warning. they could see the service go away completely, this is next. this is bloomberg. ♪

emily: the largest restaurant company in china is building a war chest backed by alibaba. they are close to finalizing a deal. the company is targeting at least $3 billion at their valuation which would make it the world's fifth most viable -- valuable startup. according to people familiar with the matter they are hammering out the final details with investors in days. staying in china a new warning from the government to facebook. the cyberspace administration says the service should act to stop the spread of illegal information and take provocative measures intercept this. this comes after the service coming across china. the north asian correspondent joins us from hong kong with more. we talked about this earlier in

the week, what does this message mean to you? stephen: it is interesting we got a message because when you are reading the different rules and regulations it is all about speculation. is it just slow or what is happening? is it in the crosshairs by a regulator. now we actually have a statement from the cyber security administration in response to questions posed by bloomberg news. they came back and said whatsapp needs to stop the spread of illegal information. they must take proactive measures. basically to do what they are already requiring other services to use. whatsapp is obviously run by facebook. it is that the last remaining service that is every available in china. we have been having intermittent outages if you will. in july users reported that they could not upload photos or

videos. now on sunday and monday outright outage including the text message part of the service. all of a sudden on tuesday the service came back on. this is a clear warning from the authorities that they are watching and perhaps found a way to get around the encryption that it has employed. emily: china recently signed tencent. stephen: you have a question of what the efficacy would be big they could obviously find them. they had been cracking down on tencent. because in beijing they have lay down heavy fines for these violations including the alleged spread of propaganda and terrorism material. they are really cracking down

which does start three weeks from now. the big question is are these temporary measures before these big political power was or is this a lasting enforcement that will go on for years. emily: are there other messaging services that are benefiting from this disruption? >> there is the big one that has nearly a billion users. that came from the russians which incidentally a lot of the

bitcoin groups went over to telegram when groups are being crackdown on. that way they could talk about strategy and giving their money. there are a few other niche players. emily: do we expect more disruptions to a current with this big meeting? >> my one-word answer would be yes. emily: short and sweet, thank you so much. that does it for this edition of bloomberg technology. tune in for our conversation with the ceo of microsoft for a in-depth conversation about his tenure at microsoft, the cloud and the broader tech industry. all that and more. we are watching on twitter, check us out. that is all for now. this is bloomberg. ♪

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