♪ emily: i'm emily chang. this is "bloomberg technology." coming up, driverless cars are -- an early investor in google and amazon joins me in the studio. plus, the future of artificial intelligence. the white house says it is taking a hands-off approach to ai regulation.

does this mean more industries will be disrupted and faster? amazon has taken on streaming, hardware, and the cloud, so why is it still falling behind on diversity? we will discuss a modest proposal for jeff bezos. but first, to the top story. from self driving cars to robot powered factories, artificial intelligence is taking over significant chunks of the global but with this new technology comes questions about its impact and ethics. joining us to discuss is the principal researcher at microsoft at yale university. he also recently wrote a book. mark bergen is also with me. lay of the land when ?t comes to ai technology

>> we have been having lots of , we have seen the advancements alphabet has made lots of fun gadgets this projection, job displacement and changes to the workforce, we haven't really seen on the productivity side delivering improvements in the workplace. i think that is really the be reached ifs to we are going to make a difference. >> with the white house saying they will be hands-off, is that a good thing and what does it mean. that is't think necessarily going to make the economy more productive. when you think about these new

think ares, those i potentially important to create a market in consumer data which thet potentially improve productivity of the economy by giving people more rewards for creating better data for the economy. >> you mentioned the google assistant, we actually have a soundbite of the assistant speaking with a restaurant, take a listen. >> i would like to reserve a table for wednesday the seventh. >> for seven people? >> it is for four people. >> four people? when? tonight? >> wednesday at 6 p.m. >> there were some who called it horrifying but it is also an amazing example of how far voice technology has come. >> to be clear, they don't have

the product out in the wild. think google was caught flat-footed about the response, they came out yesterday and said when we unroll this product we will identify the system, to let the other person know they are talking to a robot. >> does that example horrify you, or pique your interest? and think it is interesting just emulating a voice well is a very far distance from being able to do, for example, secretarial work or the surface things that will start changing .he shape of the economy

>> everyone seems to be buying ,ome sort of this territory amazon alexa has also captured the fascination. but as glenn has said it is not just the voice assistants, it is so much more. >> you could argue that research capabilities, google and alphabet, are widely considered a leader. amazon is lagging behind but people think i will ask my alexa for something even though there are competing voice systems from google and apple. where we haven't seen a lot of , some people say it's impossible to regulate ai but when the machine learning's tools affects truckers and they

move into sectors like banking and finance that is where we might see some regulation and consequences of machine learning and not broadly about technology. >> elon musk is worried about an apocalyptic future. could it be apocalyptic if we get there? there are so many regulatory issues before we get there. >> the potential footprint they will have is really impactful. view it as much from the national security perspective, i would view it more as the threat to the economy and the way we feel in u.s. and europe, that is what i would be focused on at the moment. >> what is the bottom line when it comes to jobs? will it create jobs, destroy

jobs? how do we robot proof our children to make sure that they have jobs to do when they grow up? >> i think ai can be a huge opportunity for jobs. the reason is it is our data that these systems are trained on. if we start compensating people for that data, if we make a market that rewards the users, that's an opportunity. it is a new chance to provide value but right now we are not being paid, it is being taken from us caroline: and this is going even more in that direction. right now they are trying to move the data ownership back. >> there are so many ethical questions that arise, what do we know about what google specifics are traveling with. >> they talk a lot about broad , we will only be

acquired if we set up some ethics advisory panels and we need to safeguards in place. it is given very limited word about what that means. google has a cloud contract with the pentagon to use that technology with the surveillance drones and a lot of employees are upset about that and they are using the company's. >> mark bergen, who covers also that and others, principal researcher at microsoft, thanks for giving us a glimpse of the future. coming up we will speak to legendary investor and chair of kleiner perkins, his start at intel and investing in some of the biggest companies in the world. and if you like bloomberg news, check us out on the radio, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

♪ for the ceo ofer gamestop after just three months on the job. he abruptly stepped down for personal reasons. gamestop is the largest independent retailer of video games, but is struggling to adopt to a world where more software is being delivered online. and u.s. semiconductor giant qualcomm is extending its cash tender offer to buy shares of dutch rival nxp. it is at least the 11th time qualcomm has extended the offer. about 13% of their shares have been tended so far. qualcomm is trying to win beijing's approval for the proposed deal. and spotify is taking a stance

on hate content and hateful conduct. the music streaming service as it will remove music by artists that promote hate and have done things that may be morally or legally questionable. one artist removed from the platform, mark kelly, who was accused of sexual abuse, so spotify has cut ties. and coming up, we speak to storied investor and chair of planner perkins, from his start and intel to investing in the biggest companies in the world. that is coming up next. this is bloomberg. ♪

>> it was a rough start to 2018 tech, making their marks. but investor confidence is slowly returning. just look at the stock performance of facebook, google,

and amazon in the last month. one thing all three have in common, they salt early interest from longtime investor john doerr. he's engineer, a venture capitalist, and share of buyer perkins. ofhas created hundreds thousands of jobs in become three of the world's most loyal companies. now he has written a book about the goalsetting techniques that have helped google and intel thrive. it is called "measure what matters." he joins me now here in the studio. john, welcome. >> thank you. >> objective and key results. this is a slideshow presentation you've been doing for years. companies talk about it all the time i get is their religion. it is about setting objectives and key results, ideas don't matter so much as execution. what is so radical about this idea? >> well, it is not practiced in almost every company.

what i mean by that is take one feature, the notion that everybody in an organization would write down their goals and publish them and share them transparently, that is radical in most businesses are nonprofits. that is one of five things. say it is not goals set at the top but employees setting their own goals. >> everyone, top to bottom. so when larry and sergei at google, i took them to goalsetting system. i would like to say that sergei said yes, we will enthusiastically adopt this, but the truth is he said we don't have any better way to manage the company, so we will give this one a try. emily, every quarter since then, he has written is key results, graded them, and toss them aside, because they don't count for bonuses, they don't count for promotions, they serve a

higher purpose, a kind of collective calling and commitment to getting people on aligned and tracking for the things that matter. >> you presented this to google, where you had just placed your biggest bet of all time in 1999. $11.8 million for 12%. larry page wrote the forward to your book and he calls it a gift. you'm curious, what would say for google today, grappling with artificial intelligence, self-driving car's, fake news? that's a lot of change. >> they have a very clear and crisp set of okrs and if i told you what they were i would be linking. and soonone has them, they will stand up in front of 70,000 employees on a webcast and say these are our results in here are mine personally. will maybe achieve 70% of

them and that is considered a great great. >> you say they are not a silver bullet. they don't take the place of values or culture. >> or strong management. >> exactly. the book is called "measure with matters." how do you measure something so intangible what culture? -- like culture? >> culture answers the question why. objectives answer the question what. the results answer the question how. your question to me is how do you measure culture. you do culture surveys. you draw definition of what your culture is, you periodically pulse your organization to say, do you feel we are living up to these values? have a transparency our aggressiveness are accountability? there is no one right culture. every organization has its own and different ones can succeed in different ways. >> so i want to ask you about

facebook. i know you are on the board of google so you can't say much, but you can opine on facebook. we have seen facebook go through election meddling, fake news, problems, data, privacy issues, data being mishandled. what would your okrs before facebook? what would you recommend they do? >> this is a little hard, being outside the organization, to be prescriptive about that. this is an incredibly well-run company with really good people in it, and i would expect that their internal goals achieve a certain measure of growth and engagement together with, paired with, a measure of trust and user satisfaction. the book talks about the importance of pairing goals. pinto, way back to th ee

he had goals to make the least expensive car he could and the failure was he didn't pair that with a goal around quality. so when someone ran into the back of it pinto in the gas tank exploded, 100 people died, one of the largest people they ever had. if you just let your goals be one-dimensional, you were going to miss the mark. >> he went to the white house and met with president trump. this as questions of tech regulation are looming, a potential trade war. what are your biggest concerns about the economic and business consequences of this administration? a red-blooded, patriotic capitalist. i believe in free markets, but also in putting a safety net in our economy. i believe technology fundamentally advantages the rich, not the poor, and

education is the countervailing force that provides for upward mobility. i said then, i believe now, that we should invest more in research and development, a lot more, across-the-board. that we should take data, which has been bottled up in silos, and liberated, especially in the health care system. this administration is moving very smartly on that front. i'm a believer in free trade. i have differences with the administration on that. a really goods time for entrepreneurs to start new companies and to be working in the field of technology. maybe the debatable view that every company is or isn't going to become a tech company, that you can't really compete in the new, connected world without understanding what

artificial intelligence in machine learning can mean to the products and services you offer your customers. >> what is your view on artificial intelligence? elon musk said it was apocalyptic, we were just talking about that. >> turning us all into house pets. [laughter] >> that is certainly one view. couldn't get that dark? >> i don't think so, but i want to put it in context. it seems every dozen years or so there is a tsunami like transformation in the innovation economy.in 1980, it was the microchip. that takes us forward, 1993-1994. the next big wave was the web browser, all those internet companies, including all the way up to and through google. then in 2006, steve jobs introduced the iphone. and at the same time the club came along. that was the third great wave, to write about today.

what is it now? beennk this field has overhyped but now i think it is underappreciated, and left fielders artificial intelligence. it's programs that learn as they go along. it's deep reinforcement learning, neural networks that mimic in some ways the way humans think. the effects of this will be profound. we can't have self driving cars about artificial intelligence. what we can do with health care is incredibly exciting to me. right now you can take an image of the retina and not only predict the likelihood that, the person will develop diabetes but the likelihood of heart incident, and you can apply artificial intelligence today to all kinds of imaging in health care and get better diagnoses than humans can get. >> as our lives become more tech infused, do you worry about tech

addiction, the negative impact of technology? -- talks about the guilty feels, and how he believes facebook could be destroying the fabric of our society. >> good parenting can deal with this handily. ien my girls were growing up, had a personal objective to have a healthy family -- >> okr can be applied to family life. >> might see result was to get home for dinner 20 nights a month by 6:00 p.m., and the quality result was to be fully present. so i pulled the plug on the router. no one could get to the internet, and it was hard. i got it done maybe 70% of the time, which was a pretty good grade. >> so you are not worried? >> no. >> about the negative potential of all these amazing things? least --n there is at

not when there is at least one, preferably two diligent parents in the household. i think you want to be concerned in families and kids were that is not the case. >> let's talk about leadership. i mentioned elon musk. he is obviously going through production issues at tesla. there was one call where he referred to questions as "boring" and "boneheaded." has another company, spacex. what would you recommend to a leader in that position? companies that are really pushing the limit of technology. >> the same thing i recommend to other disruptive entrepreneurs. make sure you have strategic focus on a large, unserved market. bring through proprietary technology, outstanding management team. raise a reasonable amount of money. you can raise too much and too little. above all, never lose your sense of urgency, which allows tesla

to move far faster than the rest of the automotive players. and i recommend you use objectives and key results. >> we will continue this conversation. coming up, more of our exclusive conversation with john doerr, chairman of kleiner perkins, including his thoughts on a roadmap to diversity using okrs and the best opportunities in d.c. right now. and later, it is not where, but who when it comes to hq2 as amazon prepares for new headquarters. can it to build a workforce that is more diverse? this is bloomberg. ♪ mr. elliot, what's your wifi password?

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and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. ♪ >> this is "bloomberg technology." i am emily chang in san francisco. over the course of his career, john doerr has seen at all, making early investments in google, amazon, and facebook. john doerr is with me here now. i want to mention, you say this is much more than a book. john: i like to say it's a handbook. it's not a business book. it's full of dozens of stories of entrepreneurs and business leaders struggling and succeeding to set goals that matter. my hope is that this isn't just for businesses.

i think we can take okr's to our nonprofits, families, schools, and governments. we are at a critical point in time in which many of our leaders and greatest institutions have failed us. emily: what should trump's okr's be? john: that is a very good question. i would imagine they would be, grow the economy, half the country be respected in and around the world. his objective would probably be "make america great again," right? the objectives are very important to get. so too are the key results. let me say this. sylvia mathews burwell used okr to manage the ebola crisis. government is to be transparent and accountable. why not have a city council adopt this system of goal

setting? i think we can and must measure what really matters. emily: let's talk about diversity in silicon valley. we are holding silicon valley to account when it comes to diversity, and i know you are aware of this problem. as you are advising young companies, how do you tell them how to approach setting goals and results for something that is so important but so easily is lost sight of? john: first answer the question why. why we do this work, why we do this is all important, and it will be expressed in both our values and the mission statement. you ought to have a powerful, inspiring mission. that will help you get the people together to do it. something like connect everybody in the world.

you've got to get a mission right. i think of those as transparent vessels. the what and how into which we pour these values. it's very clear that transformational teams have managed to combine passion with purpose in a way that says they clearly know how to answer the question why we do the work that matters the most. emily: i just wrote a story in "business week" challenging amazon to build its new headquarters -- they are starting from scratch -- to shoot for 50/50.

john: that is a great goal, not so much for social equality or social progress, but because we know diverse groups make better business decisions. the data shows it. until we, the tech industry and kleiner perkins, get to a 50/50 world that reflects the customers we are trying to serve, we are making less good decisions. emily: i have to ask you about your reflections on ellen powell in light of the #metoo movement. she lost in court, but public opinion had mixed feelings. in this new world as we have this conversation, what are your reflections on that? john: it's hard to add much to what has been said or written. you and i have discussed before about ellen powell. i'm human. the whole situation made me really sad.

i really do wish her well. i think the other dimension to this is, i and we should have zero tolerance for a workplace that makes anyone in that workplace uncomfortable, and on the particular question of diversity, i think you know we've been a leader in this field, and we don't think we have gone far enough. in our own people, our partnership, our portfolio, and the third is the pipeline. in our own partnership, 21% of

our investing professionals are female. the average is pathetic, 9%. within our portfolio, 9% of our ceos and founders are female. the average in the industry is 2.7%. that is outrageous. in respect to the pipeline, i guess it was in 2015, 10% of the participants can decline are fellows program, which is harder to get into than it is to get into harvard, were female. this year, it is 50/50, and a 11% are african-american. i'm not satisfied with where we are. i think we have to do more, but i think we have to put women and minorities in positions of power if we are to right this wrong. emily: you brought in some new blood. we have heard he is your heir apparent. talk to us about the transition that is to come and how you expected the firm to change. john: kleiner is in very good shape.

i'm really excited about it. one of my key results when i took on this new role is to help the team attract and grow more talent. it's important to note that kleiner has always been in transition. since i joined in 1980, we had partners who were in their 60's, 50's, 40's, and 30's. i had kind of an outsized presence externally, but this is a very natural process that i think is going well. emily: where do you see the biggest opportunities in venture capital right now? crypto? warren buffett just called it "rat poison squared." john: i think charlie munger said he was "transferring turds." emily: do you think it is a good investment? john: i think blockchain is a powerful new technology. it's not as big a deal as mobility, and i don't think it is as big as ai. we have used blockchain to facilitate international and cross-border transactions.

i would love to see blockchain applied in a powerful way to the health care system so you have fine-grained control over where your health information goes so you can automatically at any time have a longitudinal record of all of your health care experiences. emily: what else? john: we invested in ico. emily: but in tech more broadly, where do you see the opportunities over the next 10 years? john: i think they are in artificial intelligence. i remain convinced that selectively they are in the areas of innovations around energy and energy technologies. i am quite convinced we will see a lot more disruption in systems for enterprises. the big tech giants, especially those with strong positions in consumer markets, they are a lot more competitive than their predecessors were, so i think it

is harder to start a new consumer internet-based venture. emily: john doerr, chair of kleiner perkins, out with a new book called "measure what matters." john: a new handbook at whatmatters.com. emily: great to have you. the european union's general data protection regulation goes into effect may 25, but how exactly does gdpr work, and does it have a chance of inspiring similar laws in the u.s.? bloomberg's "quick take" gives you all you need to know. >> you may have seen a few of these pop up in your email. google, facebook, go daddy, tesco, h&m, and many more are updating the policies to give consumers more control over their personal data. those updates are thanks to a new law governing data privacy. gdpr only applies to people who live in the european union, but its adoption is largely expected to have americans asking, why

don't we have that? here is how data collection currently works. when you sign-up for facebook, you have to click a box agreeing to the company's terms. those terms give facebook the right to track your online activities even if you are not actively browsing facebook. facebook allows third parties to access this. >> consumers will have a right to copies of anything. up to entire archives of all the content they have generated on the service. >> on may toy five, companies with more than 250 employees and that whole data on european citizens will have to giet unambiguous consent from users before gathering their data. it will make it much easier to revoke consent users had previously given. for consumers that opt in, they have a right to know what is being done with their data. >> for companies like google and facebook, they have been making data available for download and deletion for quite some time.

>> consumers have the right to be forgotten, which lets citizens request companies to delete their data. for example, you may be able to trade something like a gift certificate from zara in exchange for your shopping history from j. crew. any failure to comply with this will be costly. penalty fines can be as high as 4% of the company's annual global revenue. >> europe expects companies to act within the spirit of the law and not just to follow it to the letter. this means there will be disputes and legal precedents to be set. >> while the u.s. is reeling over facebook and the cambridge analytica scandal, the eu is moving forward with new rules. many will ask, should the u.s. of being next? emily: coming up 78% of amazon's senior executive and manager positions are filled by men, but the company has a chance to

shoot for 50/50 at its new headquarters. this is bloomberg. ♪

emily: amazon has turned the selection process for its headquarters and months -- into a month-long reality show. we are about to recommend three cities in particular, and it's not aware but who that may matter most. amazon faces a stunning lack of diversity. with men holding 72% a professional jobs and 78% of leadership roles, hq2 allows the company a unique opportunity to diversify its workforce. my colleagues and i have a modest proposal in this week's edition of "bloomberg businessweek."

when amazon crates 50,000 new jobs at hq2, why not shoot for 50/50 men and women and representing people of color in line with the local population? joining me to discuss, christie coulter, a former amazon employee, and "bloomberg businessweek"'s jeff green who covers corporate diversity and helped write this story. lay the land for us. where is amazon now? where could it be? jeff: if you look at where they are in terms of their attraction, men versus women, they have predominantly male employees, 75% to 25% in the upper echelons of the company. they trend male in their job listings. everything is positioned somewhat male, which is an impediment if you want to be gender-neutral. emily: christie, having worked at amazon, i am curious what you think of this proposal? is it realistic?

christie: i love the proposal. i think it is realistic insofar if anyone can get this done, it would be a company as old and not afraid to break the mold as amazon. it will be a matter of not just hiring 50/50 but retaining 50/50, and i think that is where amazon has cultural tweaks to get there. why not give it a shot? emily: talk to us about the culture as you experience of the good and bad and what might be working against a more diverse workforce. kristi: i was at amazon for 12 years. obviously, there was a lot of good in it for me. the good is that it is incredibly innovative. i don't think i was bored a day. you get to work on huge problems and do things people don't think are possible. the downside is it's an aggressive culture, i think, to a fault.

it encourages behaviors that men are typically rewarded for, like disagreeing openly, being very aggressive, being loud with your opinions, and it is not necessarily an environment where women have been trained or raised in our culture to succeed by emulating those same behaviors. they are behaviors that men tend to be rewarded for and women punished for. it's often the fact that you are the only woman in the room because of the numbers, and that can be a hard way to feel like you are being authentic. emily: i did talk to a senior woman at amazon who had only positive things to say about the culture. it's not for everyone. it's an ownership culture, and you need to come to work every

day and treat whatever business you are working on as if it were your own business. it is an amazing place. it is not an easy place. jeff, we spoke to people close to the search process for hq2. they are doing some things like talking to cities about their representation of women programmers, talking about potential partnerships with schools and the stem pipeline, and you actually did some math. based on those things, you picked three cities where hq2 would have the best chance of getting to 50/50. talk to us about that. jeff: we kind of looked at what percentage of the local population were female programmers, what percentage were women, and we looked at the minority situation. toronto, chicago, and the greater washington, d.c. area all look great. the question is, which of those do you choose? washington, d.c. has political overtones.

maybe chicago ends up being the compromise location, but if you want to do what amazon needs to do, 50/50 isn't just 50%. you need to have 50% of all positions so women are represented in every pay position, too. that is important, and that is why those three cities look like good choices. emily: let's talk about that when it comes to amazon. jeff bezos has 10 people on his senior leadership team. all of them are white. one of them is a woman. amazon's board is 70% male, all white. there are three women on the board. the company just rejected -- the board recommended a vote against a shareholder proposal to use the rudy rule when interviewing new directors, which means making sure there are women and people of color among the interview candidates.

what do you make of that? kristi: i was really disappointed to hear that. i think the rule is great. my husband runs a much smaller company. he implemented the rooney rule for their hiring, and they have been thrilled with the results. i was happy to see in the "recode" article i read about this that amazon employees are speaking up. there was a culture for a long time where it felt like it was ok to not talk about diversity or acknowledged the company's lack of diversity, and it seems like that is changing. whether it is through the rooney rule or some other route, i am glad to see that employees who care about this are pushing for a change. emily: kristi coulter, jeff green, a provocative proposal. we will see how amazon response. coming up, it is smaller than a football end zone, and it makes

as much leafy greens as an entire football field. farm in a box is next. this is bloomberg. ♪

emily: the vertical farming market in 2016 was valued at somewhere between $1.5 billion to $2 billion, and it has people growing food in places like skyscrapers, warehouses, and shipping containers, which is what freight farms is doing. caroline hyde looks at what it is like to farm in a box. ♪ caroline: this might look like your typical burger, topped with all the fixings, including that leafy-green lettuce, cooked and washed in brooklyn, farm to table greens, only it is a different kind of farm, a

320-square-foot husk of a shipping container in the heart of downtown manhattan. it's called the leafy green machine, and it's the brainchild of boston-based freight farms. it is part of a new wave of vertical farming that is set to be a $6.5 billion industry by 2023. >> shipping containers were pretty much everywhere in the city, on trucks and everything. they are widely available, and the infrastructure is built to move them around. you get a lot of refrigerated shipping containers off the secondary market, so they have installations built into the walls. carolyn: designed to be eco-friendly, using only 120 kilowatt hours per day. according to freud farms, that is as much electricity as two family homes. what about the most precious of resources? this farm only requires five gallons everyday.

lgm claims that is 98% less h2o than traditional farming, and you can operate it from your smart phone. currently, there are around 200 leafy green machines in 12 countries. >> we all know space is at a premium in new york. we produce the same amount of food as a 1.8 acres of farmland. caroline: the yields per week, 35 to 80 pounds of leafy greens, or 500 full heads of lettuce, and according to the united nations, in order to feed another 2 billion people by the time 2050 rolls around, we will need to produce 50% more to eat across the world. for people who live and harsh climate conditions that make growing produce impossible, an old shipping container might be the delivery they need.

emily: that was bloomberg's caroline hyde. all of next week, you will be able to see more of the technical innovations taking place in boston because that is where we will be broadcasting from may 14-18. the show will be live from a different location every evening showcasing the innovation, diversity, and power of the regional tech economy. we will also be live with programming 4:00 until 6:00 p.m. eastern time. that doesn't for this edition of "bloomberg technology." have a wonderful weekend. this is bloomberg. ♪

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