anchor: you're watching bloomberg: technology. start with the check of your news. catalonia's push for independence is officially on hold. speaking to parliament today, the president said our salon and madrid need to talk. so this call for dialogue on the subject, there is not a dialogue. sose calls should be heated we need to open up a time to have a dialogue with the state of spain. texas: president trump, -- rex tillerson, and jim mattis met at the white house after

reports tillerson called the president eight more on it was considering stepping down. moron and considering stepping down. also reportedly challenged tillerson to like you test. hundreds of firefighters and law enforcement officials are headed to california to battle wildfires that have killed at least 13 people. i wondered 15,000 acres have been scorched and one dozen wineries are damaged. global news 24 hours a day powered by more than 2700 journalists and analysts in more , i am alisantries parenti, this is bloomberg. bloomberg: technology is next. ♪

emily: vicki choir summit in seattle. google, facebook, and twitter are scrambling to hold washington and regular edition at bay as the result of the russian political ad scandal. what is the game plan? being called to congress next month. we will cover how seattle has transformed into the centers of innovation. one of seattle's biggest players, microsoft. an exclusive interview with president. first to our lead. tech giants bracing themselves in the face of congressional regulation coming their way. ads paid for by russia on all platforms influence the 2016 presidential election, it has sent companies into a pr crisis. upping lobbying budgets, hiring

crisis management firms as they get ready for a november 1 public hearing. thank you so much for joining us. i'm going to start with you. you wrote a story about the great lengths these companies are taking to minimize the damage including calling lawmakers personally, talk to us about these efforts. >> these companies need to figure out exactly how much was on civility they should pay, how much change they should promise. these are all very difficult issues that have grown to the scales they have at -- they have now by adding these platforms you can transact on automatically. it has helped propel their growth. thoseat they have cleared ahead of the election, it is something lawmakers are trying to understand and trying to

think about how they should regulate them. it has really been something that nobody has really cared about as much as they do now. the companies are coming to terms with that in trying to figure out what the next steps are. anchor: you are going to be in washington covering these hearings. the same day as the earnings call. mark zuckerberg not expected to testify. >> not expected to testify. i think we will likely see somebody who has more technical knowledge. that is what senators have asked for. mostney is on alex's they -- alex, the head of security for facebook. i have not confirmed that. anchor: zuckerberg has apologized for minimizing the extent of fake news, the problem of fake news. do you buy it? >> not for a minute. he began by saying it was a i think sarah got

it right, you have to follow the money. this is not a pr crisis is a technical crisis and almost a moral crisis. >> what is the responsibility you >> take your responsibilities seriously. that what he failed to do. let's talk about another company, let's talk about uber. anything that built the business is ok. ok with the ceo, business, employees, as long as it built the business. facebook is selling ads. we know now they had people embedded in the trump campaign, helping the trump campaign micro target dozens of individuals. there was an article in the washington post that said they took a trick from the u.s. business playbook. i think more -- foreign

manipulation was aided and abetted by companies turning a blind eye. 60 minutes, the digital director of the trump campaign said they had facebook employees embedded in their campaign. what is the significance of this? emily: this is one of the things i have heard it internally. facebook investors are dismayed to hear they had partisan hands in the election. they don't feel like they did. report isonse to that of course we help them. we help everyone. we did not need to put people in her office is the way we did with trump because she was in new york and we have an office in new york. they don't see the issue. they say this is something we would do with a retailer for black friday or play movie studio -- a movie studio. to come is just trying

to terms with the fact that people don't understand how business works. not understand so much how these things can be interpreted. now that they are looking at it through the lens of understanding health his book the head of the elections -- the elections. the best we can trust them to self police? >> congress has to get involved. it is a difficult technological problem to deal with fake news at scale. i believe there was a willful blind eye to what was going on. if i were good at business i would be in business. anchor: longtime computer science professor. sarah covered facebook for us, thank you so much for stopping by. softbank is leading a $93 million investment.

software that can be used by a variety of industries including health care and more. to technology is intended simple five machine learning applications at scale. seattle's tech scene is on the rise but how does it compare to silicon valley? next. livestreaming, 5:00 in new york. this is bloomberg.

boom: seattle has seen a in the past few years. the company racked up $2.1 billion in funding, dwarfed by silicon valley. as of may this year companies in seattle received a $600 million. how the seattle scene stacks up to the general partner rebecca lynn. >> it has been a wild. >> you met with a few companies in seattle. what trends are you seeing? >> it is amazing. two of the richest men in the world here. and bill gates. the start of scene continues to evolve. i think it is always been strong but when you go around seattle

you see the amazing number of new companies that have come up. emily: you invest across a range of investors. what is your take on bitcoin? >> it is early. bitcoin is in the gambling category. i think there are the bad actor cases at bitcoin in terms of out and out fraud. casesk i ceos, there are that can make a con of sense. -- i ceos, debt financing. wasmpany in south africa selling solar cells and the and unity on that income was the

currency other words. it for companies of that nature. emily: what is of interest and what is not? >> stantec is always hot. there is a billion dollar in every cycle. reinvent the to banking system and we are moving more into real estate. they were really excited about it. syntax will continue to be hot in many sectors. what has cooled is the lending space. emily: you invest in early on, had issues, a new ceo. what do you think about the risks associated with it and the sandal -- scandal? >> lending club was a ceo transition. scott stepped up, he was amazing

for that company. he has done a great job leading that company through that executive transition. in that case it was a case of management transition. there has been a rash of sexual harassment stories, women at tech companies along -- among venture capitalists. personally, i have not been sexually harassed. is kind of funny because i get asked this all the time. i think it is setting the right example to be honest. more from the men than the women. it has to be not tolerated. i think what we are seeing this days is people stepping up and saying this is not ok. i think that is what is going to take. what about discrimination? at the taste that -- have you faced that? i've always been lucky. i was the only female in the often, it is not that

i have not seen it. it is people saying something about it. you don't let us go. i do think -- i think that is how you can change it. >> in the memo came out where he >> in the memo came out where he said he thinks there are biological regions -- reasons for a of women in leadership you said to the new york times there is a high awareness right now but there is a fear. many men feel like they have a gun to her head. >> i hope not. i would say when people heard about these things coming out they themselves were mortified that this is happening. our peopley about going to extremes where they are women to inviting

dinner for a business meeting. very normal things guys would do together. i worry about that because i feel like that will set us back even further. awarenessere is an and a level of it. a level of not expecting it that needs to happen. >> they should be doing these dinners, how do you make sure these don't happen? >> in terms of? >> have you make sure women are included? >> the inclusive. ask yourself what everyone feel comfortable if we are going to this event. i often do that with myself. what -- would everyone wants to go to this activity? sometimes you have to make sacrifices that are better for the overall group. a lot of it is a judgment call. the guys that are accused of these things, is not a one-off thing.

it is a repeat occurrence. it is not endemic in the industry. actorsre specific bad that have not been called out before that are now. emily: rebecca lynn, thank you for joining us. all right. coming up, much more from seattle university of washington . helping to transform the region as a leader of computer science education. he will join us next on bloomberg.

emily: uber says it's ok drivers would face broad changes if considered employees with benefits. it is considering alternatives to its model after scrutiny from regulars. uber would become a private higher car service, more control over where drivers work. the company said how it may adjust if the government implements new labor laws. hubtle has turned into a outside of tech giants like amazon and microsoft. home to a growing number of startups that could lead to a new wave of cloud computing. thee joined once again by bill and melinda gates chair at the school of engineering in washington. one of the top programs in the country. a few for joining us.

microsoft are a duopoly in seattle. what are the advantages and risks? >> you just saw the amazon announcement recently. it is interesting. it seems they need to geographically diversify. amazon is just phenomenal as is microsoft. horse towne a one and amazon cannot be a one town horse. it just makes sense. the important thing for us in seattle is to figure out what caused jeff a ghost to move here in 1993 in what allowed him to grow this great company with 50,000 employees in seattle. the fact that amazon needs to diversify his -- is obvious. at the same time we want them to grow in seattle and it is just announced they leased 700,000 feet downtown. it is an amazing contributor to our economy.

see the policyou impacting the industry in the long-term? >> in the long-term we all mother statistics in this country. a stunning proportion of them were born elsewhere and moved here. people from everybody in the world came to get a graduate education. they historically have stayed here and built a great company and driven our economy and we are telling them we don't often anymore which is crazy. amazon was one of the first companies to join the challenge to join the travel ban. microsoft and amazon committing to defense for its employees. this is critical to the university as well. some of our best students. emily: ai, machine learning, these are areas of innovation

that are exploding. do we have the resources to train students to be ready for these jobs? is there a coming skills gap? >> there is a huge skills gap in this country in computer science. there is a workforce gap in this state. the gap between degrees and jobs available is four times as great as the gap in other areas combined. in washington. 77% -- 73% of all the newly created jobs in all of stem it will be computing. created -- whether all computer science all the time. we have got to educate them better and faster. >> i know you are incredibly passionate about diversity in computer science. what is the progress you are seeing?

>> that is a good question. it is taken for more seriously. the university of washington has a long way to go but we graduated with a high percentage last year. the national average. not year -- not nearly enough but we are working hard. melinda gates took the challenge one year ago. the firstt to conference in 1994 as there were 500 attendees, 15 or so were men. this year was 18,000 people. >> one of the challenges that remain? think me tell you what i the hope is. among twiceeration from mark soft, startups, the latest challenge. in the first hour of code that heidi ran, more women and

minorities spent one hour programming than in the entire 50 year history of the field. groundswelleate a of students from elementary school who demand more computer science. it will change education. interesting young women in this is important. 50 yearssciences spent making things smaller and faster and less expensive and it has been a great run but that does not make society a better place. the next 50 years are going to be how we impact health care, education, energy efficiency. how we impact the developing world. that is what computer sciences about these days. that is going to attract a far more diverse group of people because they care about societal challenges, not faster, smaller, cheaper. emily: what is the response ability in the industry? on impacting the pipeline? >> one thing companies can do is ensure there are places for everyone to work and google has

done that. microsoft has done that. you have to pick up the newspaper to see how the smaller companies are doing. it is a complicated thing. entrepreneurism breeds people who push the envelope and they may push the envelope in terms of culture as well. making it clear that these are great jobs, everybody is welcome. the most important thing to me we need a diverse workforce because we are in a creative process. engineering the creative process. if there are points of you that are not -- not represented or worse for presented, there will be problems you do not consider. even if you don't care about social equity or any thing like that, if you are a craft capital who wants to sell more stuff, you want a diverse workforce. emily: we will have to leave it

there. the university of washington, we will be back with more from the deke wires summit area talking with the microsoft president rapped about these issues and more. this is bloomberg. who knew that phones would start doing everything?

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>> 2:29 in sydney. i am paul allen with the latest first word news. election campaign is underway in japan with candidates across the country in search of support. 465 seats are on the line as shinzo abe seeks to bolster his mandates and revive the economy. he faces the challenge of renewed opposition led by yuriko corday and criticism that his first five years in office have failed to start growth. theresa may may trigger the anger of voters after declining to say she would vote to leave the eu in a future referendum. a series of interviews, she says

she voted remain at year but things move on. the deputy major says he thinks the u.k. is better off inside, although both said there is no chance of a second vote. thailand's return to democracy is said to happen next year after the government said elections would be held november 2018. the army seized power three years ago, pledging to restore stability after political unrest. the new military backed constitution that gives soldiers and bureaucrats the power to stifle elected politicians. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. juliette: checking markets midsession here in asia. we are seeing the regional benchmark index holding onto the 10 year high. many markets a decade or even a decade highs. taiwan of .7%. coming off the high.

the first time it has traded after a long weekend. very close to the 27 year i. on after theback lunch break and it is holding at its highest level since december 1990 6, 1 day after the they hit a high. a positive movement coming through in commodity players. iron or helping out the australian market and china's. hong kong is coming out of the morning session, pretty flat. developers looking very strong as we await more details in hong kong. having looked at movers in the region, great wall is up by 13% in hong kong. solid numbers after yesterday. it is one of the cheapest hong kong car companies. a lot of solid support coming through from the south korean

players. good movement coming through there. steel down 20% at lunchtime in the tokyo session. emily: we are continuing now with live coverage of the key are -- wire. why brad smith, microsoft president and still with me, the professor at the university of washington. good to have you. you are the chief legal officer at microsoft. you came out stronger than any .ech company on daca saying if you come after our people we will support them, we will pay their way.

daca is an issue we believe is important for the country and our business. as an industry, we critically depends on having the best and rightist and many of the best and brightest are among the 800,000 people who are registered under daca. if the government seeks to deport our employees, any of the 44 microsoft employees who are daca registrants, we will not sit on our hands and watch. we will pay for them to have legal counsel, we will file a brief, we will seek to intervene in court. we will be by their side. we want our employees to know that we have their back. >> microsoft has a history of challenging the of ministration. ?hat are your main concerns >> we sued the executive branch four times, when president obama was heading it. 2017, we are continuing

the debate that were started in the last of ministration around national security and privacy. the protection of customers. certainly immigration is a bigger issue this year. we step forward in the wake of the travel ban. we step forward again in the context of daca. we believe we need a immigration system that is in for -- in, but we need to recognize that we absolutely benefits. all of us in this country. doesn't matter what we do. we all benefit when some of the best and brightest in the world work by our side. emily: are you worried about retaliation or blowback? >> the good news from our perspective is if we are principled, we never make things personal. for the up strongly daca. our view is simple.

we will partner wherever we can and stand apart whenever we should. >> i have nothing to add. he said it perfectly. this is a really important issue 's action the principal. you see it in all their actions. google, twitter being called convicts for paying for these ads. have you been looking at microsoft -- whether russia had any involvement on anything on microsoft's platforms? >> we are looking. we have not found anything yet. i think we need to think about two things. what happened in 2016? how can we learn from it? doesn't matter if your twitter, facebook, the more we learn the better we will be. the question i believe we need to really focus on as a country is not what happened in 2016. how do we prepare for 2018? how do we prepare around the world?

there will be a new prime minister in 2019. there will not be a presidential will be a20 -- there presidential race in 2020. it's assumed people are going to get more sophisticated and trying to abuse the social media platforms. they're going to get more sophisticated in cyberattacks on political candidates. how do we get better as a tech sector, how do we work more closely with the government? how do we asked the government's of the democratic countries of the world to use their voices together to say this is an attack on democracy has needs to stop? >> do you think we can trust microsoft to self police? >> i think we are going to need congressional action here. >> i would agree with that. we need to accept once again that as an industry we have a very high responsibility. we might even have the first responsibility. it would be a great mistake to think that these fundamental,

frankly illegal acts under it -- international law are something the tech center can defeat by itself. it would be like looking in the street and seeing losing and lootingstoreowners -- and asking for better locks on the doors. this is an attack on the different -- democratic and the structure on our country. the governments of the world need to come together. companiessted perhaps were woefully ignorant in this regard. do you think so? >> i don't. is these platforms are large. there are so many people using them, somebody different kinds of ads being purchased. occurred tok it anybody in the tech sector or government or media last year to ask are there people from a foreign government buying ads?

it did not occur to anybody at bloomberg, i bet it did not occur to us either. into: they started looking but in june, several months before the election. they did not understand at that point that the scale. that is what they said. >> it is like looking for a needle in a haystack. if you look at all the ads they get purchased on social media sites, it is a big haystack. of course you're going to get veterans finding needles once you figure out what they look like, where to look for them. i think we are starting as an industry to discern that. we needed to do more. we need to get better. we needed to look ahead because the attacks will get more sophisticated. let's noto say, assume the government should do nothing here. emily: europe is looking at regulation. are you concerned about more regulation coming to tech companies?

are you bracing yourself? >> i worry less about more regulation and more about less thoughtful relation. there is a place in the world for good regulation. the whole industry is extraordinarily focused on may 25, 2018. that is the date next year in europe when the protection relation takes effect. much stronger privacy protection. that is good for people around the world. anytime it is good around the world is not bad for tech. it gives us more legal clarity. if we can get good get regulations we can figure out how to manage. to seattle forus minutes. when i moved here microsoft was 12 people in albuquerque. times have changed. role in beingd a

here. talk about come position. >> i think seattle is the capital of the world. it is definitely cloudy. -- the cloud company of the world. between amazon and microsoft others -- and these companies you're going to find a engineering department with lots of creativity. i think we all benefit as the community grows in the right sort of ways. toyou mentioned, i was happy encourage the folks there. we have a great relationship with them at microsoft based on personal relationships. it in part goes beyond that. i think as the world comes to seattle we will have new opportunities to play a leadership role in the world and create new benefits for the people who grew up here. biggestmazon is your rival so to speak. especially in the cloud of all places. crexendo's grace.

we are in a incredibly competitive industry. we have some of the best competitors in the world. if you want to look at competitors doing great work all you have to do is look at amazon and google and facebook and apple. ,e also work with each other apropos your point about competition. inneed to collaborate cybersecurity attacks and the light. at the end of the day if more people have confidence in the cloud, if we can move the frontier of artificial intelligence forward, this is for all of us to be successful. emily: you may disagree with the ministry on a number of social issues but on tax reform you may be more in line. what are your thoughts? >> i think we need a tax reform. we needed text from for a couple of decades. it is overdue. as much as anything is an international company we want to see a territorial system.

which is what the rest of the world has. get rid of the system that creates these incentives for us and others to keep profits offshore. let's figure out how to get money back into the united date, put it to work here. let's bring our tax system into the 21st century. the president of microsoft chief legal officer. thank you both for having us here in your cloudy city. i have enjoyed it. we bring you an exclusive interview with the starbucks ceo. when it sees its biggest market for growth. this is bloomberg.

emily: apple's plan to challenge netflix and amazon just got clearer. the iphone maker announced plans spielberg'seven amazing stories according to nbc universal which is one of the companies working with the tech giant. amazing stories would be the first original series apple would finance has they hired sony executives to shepherd its tv efforts. we are live here at the key choir -- geekwire summits. starbucks. the company was founded here 46 years ago. earlier we caught up with starbucks is ceo -- starbucks' ceo. i asked about the difference between him and the former ceo. merchant is an iconic and in many ways he has got years of intuition. i would characterize howard, a much more spontaneous intuitive

leader. with my background in tech and digital i am much more thinking about using data to help inform me of decisions and being intentional walk what we do. for ae worked together long time. i value his creativity, point of view. i think i bring unique rings to the table that are going to help us as a company as we bring this transition into the future. taking a stand on political and social issues, a plan to hire refugees, you got pushed back over that. how do you navigate that? how long do you plan to continue? peoplentimes misinterpret things we are doing at the political -- as a political statement. aroundre hello -- color opportunity, that started with the work we are doing to hire veterans. you recall we said we would hire 10,000 veterans, we have exceeded that number. we have of that to 20,000 by the

year 2020. we identify the fact that there are over 6 million young people ages 16-24 who are not in school and not at work and we started opportunityu we are now hiring 100,000 of them. the refugee portion is consistent with that. that was our first global initiative, given that there are refugees around the world that we felt like we could play a role in helping those communities. getting those people jobs and opportunities. in many ways this is the core of who we are, creating opportunity for people, not about creating a political statement. emily: do you get pushback from the board? >> the board is heavily involved. do, we, things that we work to make sure they are consistent with our mission. they are not politically driven things we are trying to do. the fact is that we hire military veterans and they have made our company better. the people we have hired have

been fantastic partners in our stores and make our company better. is core to who we are. >> you're getting pushed back over the -- six weeks for moms in stores. how do you reconcile that when the employees on the frontline are not getting the same benefits? >> the fact is that we offer int in class parental leave our stores compared to anyone else in the industry. what we do is every year we take feedback from what is important to them and so far partners in stores, what has been important for them is been the increase in wage. we have a significant increase in weight. over $250 million in wage increase trying to do the right thing for them. i think this is a journey and we continue to listen to partners and do what we believe is right to help them in their unique situation. emily: you announced the closure

of teavana. the future of retail is changing. if everyone is shopping on amazon what do i need from starbucks? >> the good news from starbucks as we have always been a consumer destination. we think that is one of the key ingredients in retail going forward. that we continue to innovate in a way that customers want to visit versus us trying to intercept traffic in a mall. as a result we have built over 2000 new starbucks stores at a time when there are records closure's of stores by the retailers. those stores are posting higher a uv's than other generations. our ability to create great stores,xperience in our to extend that experience from the brick and mortar to the digital mobile experience you fairly to key ingredients they think will power us to the future. emily: markets are becoming saturated.

they have their coffee now. it is putting pressure on accelerating companies like china. what is the plan and how much estrogen you go -- faster can you go? >> we are now at about 2800 stores in china. we have committed to build more than 500 stores in the next five years. china is the biggest growth opportunity before us. grow,s. will continue to the u.s. and china are the two growth engines for china. we can build china for decades and still have opportunity for growth. emily: that was the starbucks ceo kevin johnson. coming up, the president of the chinese search engine gives his take on censorship and views on trumps policy. that is next and this is bloomberg.

new base inng a seattle as part of the drive to further develop ai technology. i spoke with the president in and exclusive interview where we talked about his thoughts on trump and censorship in china. >> if you look at the trajectory that china is becoming more open. technology industry. growing phenomenal. >> when i was in china, facebook and twitter were allowed. google was allowed and the old got shut down. there thing is honestly is a lot of momentum in china for the industry. hugely competitive. look at our search space. there are more search companies in china then the u.s.. yes we have google and bing.

search business, now you have probably had a dozen other companies doing search. every day that new technologies that compete with us and search, the whole competition is fierce it is intense. it is a good thing. it makes us more constructive and innovative. how would you characterize the health of the chinese economy, to complete the debt -- particularly the debt? >> chinese economy is very resilient. gdp.growth in it was amazing. there might be things here or .here , overall things

are quite healthy. reporter: are you concerned about president trump cracking down on free trade and the relationship? >> if that happens america benefits from openness. from talent flow. emily: that does it for this edition. much more coverage from the summit in seattle wednesday. we will be taking a closer look at amazon operations, speaking with tony reid, alexa, the ceo of amazon. we are live on twitter, check us , 2 weekdays 5 p.m. new york p.m. san francisco. that is all for now. this is bloomberg.

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. >> the following is a paid advertisement for the traeger renegade elite. traeger renegade elite is a superior woodfired grill that gives you that delicious wood grilled flavor in every bite. taste the difference. the traeger renegade elite!