caroline: i am caroline hyde, and this is "bloomberg technology." we're showcasing innovation, diversity and power of the regional tech economy. we are coming to you from the annual chamber of commerce event. coming up in the next hour, how they can hold their own -- we will hear from the ceo of wayfarer joins the show. how did they break out?

and the governor of massachusetts, charlie baker on the incentive for the baystate setting up headquarters. now to our top story of course, the top story -- everyday life in the latest rate through in the technological space that has amazed. google's new program caused to make a record -- the other end of the line. just like you or i might, complete with -- people calling for ai assistants to identify themselves. one computer voice is familiar to millions, and is amazon's alexa. one million americans are using -- 61 million americans are

using a voice enabled feature. amazon is boosting that market share, and 70% of people are using echo. this comes with alexa. joining us now, tom taylor, senior vice president for amazon's alexa. tom: thank you for having us here. caroline: is it getting too humanoid? tom: certainly it is very interesting, much to be inspired by. i think it shows how important it is we start with the customer and really think about how to work backwards. it is something i believe amazon has always done from my early days in retail. caroline: you have dominant market share of two thirds. how are you keeping up with innovations when you remain that accomplished? tom: we are very excited by the success we have had in the reactions. i think there are many things we will do over the many years.

rattling them off, first of all we believe very much in many, there will be many ai's who win. they will not just be one, but we would encourage that. we recently demoed alexa talking cortana, and there will be more. whether it is ai or bloomberg -- caroline: bloomberg could have one? tom: it would be interesting. is the same interaction to talk with as many friends and experts that you know. number two, we want to make the ability for developers and builders to create their own ai. we found this through tens of thousands of developers and skilled they can build, even down to recently we released a product called blueprint which allowed you or i to make a simple skill people are doing at a local level. finally we believe in ambient computing which is you should be able to hear and talk to your technology anywhere.

that is the power people have seen with voice. i am not tethered to my keyboard or phone. i can speak. you can see alexa being successful in the home. in the car, everywhere. caroline: we are dominant in terms of music and asking questions, but when do you want to see a pickup making inroads sooner rather than later? where is the low hanging fruit? tom: customers are saying this is great. in my home, but if i want to listen to music, take it along with me when i go to the gym or when i go to the car. there are many use cases of skills you provide. think about the assistants, how alexa might be able to do time, save your own mental thinking. we will explore all those different directions. caroline: in boston, you have a

significant [indiscernible] where are you getting the promise? is the competition getting more fierce given the frenemies out there? tom: boston has been an incredible tech hub and we have been here many years. we have 1200 employees that are scientists, machine learning experts, linguists, so it is fascinating to have the ability to attract talent from universities and industry. we announced we are opening new buildings and we will be hiring thousands more in the coming years. lots of great tech for us. caroline: when you are looking at building up the tech, building up the power of voice enabled assistance, what about the issue or concerns of you and i have about listening? how have you tackled that in terms of engagement using data and public relations? tom: it is a great question. every consumer should be concerned about privacy.

amazon has done a great job working with the customer backwards. take a look at listening. people often, it is incorrect alexa is listening. she is waiting to hear this word, alexa. that is only happening on the device. it is not going to the cloud. that is one of many protections. we have a mute button very we have the ability to control records that she has. we don't sell your data. alexa does not sell your data. so it is very aligned with the customer and builds trust over the long-term. easily lost -- caroline: so many competitors on the line? tom: i will not speak to them. amazon is aligned with customers, we have demonstrated that over years. caroline: what about keeping from bought out, the ethics of ai?

using our everyday language, people are wondering how we coordinate it with reality, how we ensure that it uses less server and different out of control. how are you -- we saw a earlier this week that the assistance or google have been resigning because they are worried about the pentagon. is that something in amazon? tom: it is not debate. we feel strongly we need to be aligned with the customer. ethics is a hard question to answer, but if we are capable and aligned with customers, meeting acting on their behalf and transparent, how we are acting on their behalf, we will make good decisions. we are working with other companies and industry to think about ethics, but most importantly it is down to, are we building good capabilities right for customers, and are we aligned with their interests? caroline: [indiscernible] tom: certainly not today with alexa. caroline: what about the

presence you have in developing ai going forward we might not ever associate yet? are there new frontiers you think ai will start in that we have not thought about? the car could be the next ai space, but what about medicine where it could drive -- tom: i think machine learning is a technique could be applied in many techniques, medicine and other positive ways. and again we want to enable that through other parts of amazon's ars services. the capabilities from large data sets, incredibly less executive power, we can apply machine learning to all of these topics, and that is fantastic for society. caroline: what about amazon as a whole? are we right in assuming amazon's alexa is -- what are

the parts of the business that you think it will help drive and scale? tom: at this moment it is early days for us in machine learning and voice with alexa. we love that customers are interacting with her in very unexpected ways. we are doubling down on those. at home and everywhere in between. we are not in a big hurry about monetization. we have the opportunity to really create a new opportunity for customers to interact with technology and a whole new way. caroline: open platform? you work alongside spotify, but amazon has its own is a product. -- its own music product. how can you ensure that means open playing field? tom: amazon has always believed in open playing field. what we have done with aws and

our marketplace, making small and medium companies very successful. we see the same thing here. it is how we believe customers are best served. caroline: had you travel a lot. you have seen amazon alexa in restaurants, but where else do you feel amazon alexa is looking forward? tom: we have probably technology hubs in seattle, places that in silicon valley, vancouver, europe, berlin, cambridge in the u.k., germany, turin, we have a number of spaces. you look at languages and competency of skills, high efficient engineers. caroline: a second headquarters?

tom: i am excited as anybody to find out. caroline: it will be an office very near where we sit now. thank you for making the time to visit the city and come see us. the senior vice president for amazon alexa joining us in boston. and meanwhile amazon is taking a page out of the nfl playbook. it is not about how to run -- it is how to make a board of directors more inclusive. the e-commerce giant has considered women and minorities -- amazon says the new policy normalizes a practice. they faced criticism for imposing a requirement like the nfl which helped increase diversity on its staff like teen interviews with one minority candidate. they have zero people of color and a third made up of women. that would place it above average for e-commerce companies. coming up, apple ceo tim cook

and president trump on the importance of trade. we bring you the highlights. if you like bloomberg news, check us out on the radio, the radio app or bloomberg.com and in the u.s. this is bloomberg. ♪

caroline: welcome back to a special edition of bloomberg technology at boston's convention center. apple ceo tim cook has finally revealed what was discussed in a closed-door meeting with president trump. he has opened up about the meeting this past sunday in an interview on the david rubenstein show on bloomberg television. for more let's bring in emily

chang, live from seattle. we were desperate to really understand what has been said between president trump and tim cook, so what have we learned? emily: now we know more about what tim cook had to say to president trump. we knew the topic was trade. we can assume the topic was trade with china, but now we know tim cook put more meat on the bone and talked about how he doesn't think tariffs in particular are the right approach. take a listen to what he had to say to david rubenstein. tim: i met with the president the next day, and you know, i would not want to say what he said because that is not the way i look at it. what i talked about was, i talked about trade and the importance of trade and how i felt that two countries trading together makes the pie larger. and that it is true, i think,

undoubtedly true that not everyone has an advantage from that in either country. we have got to work on that. but i felt that tariffs were not the right approach there. i showed him some more analytical kinds of things to demonstrate why. we talked about immigration and the importance of fixing the dreamer issue now. we are only one court ruling away from catastrophic pace there. emily: as we discussed, we have seen some signals the president is moderating his stance on china, moderating his stance on a trade war, given the signals he sent about the sanctions on zte. there is a chinese delegation meeting with officials next week, and apple has not been impacted by trade tensions so

far. caroline: maybe it is all open. also we heard from apple ceo, talking of the amount they consider for the u.s. economy, can you give us specifics? emily: tim cook quick to point out the distributions apple is making. he said how the company will be injecting $350 billion into the u.s. economy, in part by paying taxes, in hiring, and in building a new campus. we don't know where this will be, but this is what tim cook had to say. tim: we are going to create a new site, a new campus in the united states that is in a different location than our two current huge campuses in california and texas. we will hire 20,000 people. and so -- and we are going to spend in capex $30 billion over the next several years. number one, we are investing and investing a ton in this country, and then yes, we are going to

buy some of our stock because our stock is a good value. so from a shareholder point of view, if we can buy stock from people that think that it is worth less than we do, then that is good for the company. actually it is good for the economy as well because people sell stock, they keep taxes on their gains. emily: with these buy backs, apple is returning to the traditional corporate behemoth. apple analysts say it is not about the next lily pad or huge innovation, it is about being able to demonstrate growth and keep shareholders happy. caroline: keep shareholders happy but interestingly this curves the word from some rivals that maybe our dining on hard data. at the same time we hear

facebook is trying to reduce some of the bad actors area they are getting rid of users on the platform. it is like half a billion accounts shut down? emily: 583 million fake accounts facebook has taken down. here is what is surprising. it is 100 million less than what it took down last quarter. so they have taken down 1.3 billion fake accounts. that gives you an idea of the scale of the problem facebook is dealing with. in addition to this the company took down 800 million pieces of spam and millions of pieces of hate speech, sexual content. the good news from facebook is ai in particular has become more helpful in flagging these issues. if flagged about 100% of the spam.

it is less successful when it comes to flagging hate speech, but certainly this demonstrates the scale of the problem facebook is attacking and very interesting coming in the context of the remarks tim cook made at the duke commencement ceremony about companies, not mentioning facebook, but companies trading on user privacy. caroline. caroline: thank you very much indeed. great insights. we saw of course [indiscernible] apple ceo tim cook. a new season of the david rubenstein show in june. coming up, much more from boston. we will discuss the thriving education seen with the president of a university. ♪

caroline: welcome back to a

special edition of the bloomberg tech, live from boston. one thing that makes this sound out -- several of the top tools in the country are right here, some of the biggest companies in the world. [indiscernible] the president of the university, here. >> fabulous to see you. caroline: how are you ensuring the next generation is set up, ready for the age of technology? gloria: too many schools believe it is either hard skills or soft skills, and, not or. we try to merge liberal arts with a type of business skills that we know they will need from day one and all lifelong learning skill. every job is a vibrant job. you will need a combination of things. you will need technology prowess.

you will need to think about a future in which you will constantly have to be upgrading your skill set because the jobs you want today will evaporate. you will need the skills for a new job. i think schools are not fully adapting to the new world. i don't think they are inviting business into schools often enough, working with an on curriculum that used to be a dirty word. having businesses work with you, now it is the point of the realm. caroline: what about students forming their own businesses? many of the top five companies were born this way. [indiscernible] gloria: absolutely. in fact we have classes in entrepreneurship. i am not sure you can teach entrepreneurship. you can read balance sheets and come up with a business plan, but you can teach innovation. a lot of that comes through class projects, invited companies to talk about how they take an idea into fruition.

when students work on teens and solve problems, especially when there is great diversity and acting, that starts to whets the appetite for being able to bring that innovation to live. we are working hard on making classrooms and outside the classrooms laboratories so kids can know that they can make things that don't exist. caroline: i don't know if you have seen the book by the microsoft ceo and his artificial intelligence star. his argument is the skills are going to dominate because ai is overtaking so many of the things that basic analytics, accounting skills, are not going to be needed by human graduates any longer.

so we will focus. we will continue to double down on the soft skills. that is where the future is. caroline: one of the worries about ai -- what about teaching the only innovation but inclusion? you embody it as a president of a tech university who is female. gloria: i think diversity and inclusion, my generation got caught up on the word diversity. we didn't understand inclusion. having one on each -- what is important on the inclusion front is you learn to have a different set of perspectives. decisions are better. we know when women are brought to the table, where they have not been before, greater innovation occurs. we know the bottom line grows. same thing for individuals of color and other people. here is the silver lining. millennials get it. they were born into a different world. they expect inclusion, now it is up to us to offer that. caroline: we will let you join the party behind us. that was bentley university president gloria.

up next we are speaking with a senior bringing augmented reality to the world of online shopping. this is bloomberg. ♪

caroline: welcome back to a special edition of "bloomberg technology." we are live at the boston chamber of commerce annual meeting. it's raining outside, but inside it is heating up. the first thing that comes to your head may be apps. wayfair is using different attitudes. [indiscernible] ♪

>> it's virtual reality for retail. >> there you go. >> in its quest to become the largest online home furnishing store, wayfair's going high-tech. >> we have about 10 million products on our site and we are trying to rapidly build a catalog of models. a huge selection of models for our customers to visualize in their home. >> through oculus rift or a smartphone, shoppers can scan a room or outdoor living area, select the piece of furniture and see what it would look like in the space exactly to scale. >> four patio chairs and a table and i am trying to move them to the side i want to put them. >> the cochair of wayfair. as this bath and company has grown, so too has the size of the engineering team as well as the complexity of the software features they are building.

>> we are currently in the wayfair next lab space. this is a team we put together to help innovate on augmented virtual reality solutions. >> the company is innovating the $116 billion home furnishing industry and its progress is exciting investors but questions remain about its long-term viability. wayfair is not turning a profit and e-commerce competition is heating up as amazon and walmart ramp up their home goods categories. wayfair hopes its focus on presentation can pay off. >> if we can make a tool that makes it better to shop while you are at home, that is better for us. it helps keeps customers excited about using our platform, shopping for furniture on the internet. >> the more description and imagery to help customers make purchases, the fewer returns wayfair will see.

that is leading to more repeat customers. >> look at that, wow. caroline: coming up now is niraj shah, the ceo of wayfair. welcome to "bloomberg technology." big investment in the company. when will it pay off? niraj: what you see on the phones today, you are seeing the devices have the technology and enter mainstream adoption. we think it will be a classic way you would always shop when using furniture and decor. caroline: do you hope to stay ahead of the competition? niraj: technology is a critical piece of how we provide the customer experience. we have over 1000 engineers of the company today and the only category we focus on is home. as we improve the experience, customers come to us more and more and that is driving our growth. caroline: revenue up 40%, but

when will we see that in the bottom line? niraj: one of the things that is interesting, the united states has been profitable five of the last six quarters. we believe it will be profitable again. people mix the u.s. with our international segment. it is younger and growing dramatically quickly. we are actually already there. caroline: investments as well. you are investing in the supply chain and deliveries. is that really trying to get ahead of the competition? niraj: no one has built a delivery infrastructure we have built for home goods. our goods is big and bulky. amazon is the leader in delivering small packages. we are the leader in delivering big packages. we have market-leading customer satisfaction, driving the repeat cycle and that profitability. the truth is as we continue to invest, we are getting that paid back very quickly. advertising pays back in less than a year, so on and so forth.

we grew $350 million. caroline: as you grow, the payback many to come back to the u.s. government in form of taxes. looking at the online only presents may have to be taxed. what is the regulatory environment? niraj: it is interesting because we were one of the folks in the recent court case. 0% to the united states. we want an even playing field. going forward, everyone, online or not, should collect and remit. today, where the federal rule is different from state rules, creating quite a bit of a mess. we are already at 80%. caroline: a level playing field. how are the playing fields in different countries? wayfair in the united kingdom, internationally spread. niraj: what we find is the customer experience is similar

because the customers want access to selection, great visual merchandising, convenient delivery. these are the things we focus on providing and that is what drives behavior. in order to provide unique things to different customers in terms of how you integrate with the suppliers, every country is a little different. we build the software and the physical operations to bridge that so the customer can get the experience they want. caroline: we are here at the annual meeting at the boston chamber of commerce. receiving an award. what is it about boston that has allowed wayfair to grow so much? niraj: boston, the talent in boston is incredible. you think about the world's leader in biotech. you think about m.i.t., other universities. places like fidelity and wellington. you start to realize that boston

is the center which drives talent whether you are at ngh or you are going to put your skills to work in building what we think will be the company, the world leader in home goods. we think what you need is talent in order to win, to provide the customer with that experience. you cannot be in a place where there is not talent and we are excited to be here in boston. caroline: certainly overwhelmed as well. congratulations on the award and thank you for being with us today. niraj shah, the ceo of wayfair. thank you for joining us. coming up, our interview with the governor of massachusetts, charlie baker, next on bloomberg. ♪

caroline: welcome back to a very special edition of "bloomberg technology," live from greater boston. we are at the chamber of commerce, the annual meeting at the convention center. we are now going to be welcoming our bloomberg bay area radio listeners. i'm joined by the boston bureau chief and the man who takes the helm at the radio, tom moroney. we have two very special guest. charlie baker, governor of massachusetts. tom: everyone wants to know about amazon. we talk a lot at bloomberg about amazon. is boston going to get the second headquarters? gov. baker: i certainly think amazon will have a presence here one way or another.

they have several thousand employees here. they are adding several thousand more. the building that is going to go up right down the street from here. i certainly think they appreciate what we bring to the table which is a wonderful selection of tech talent clusters, terrific environment generally. a great place to raise families and we have terrific public schools and great communities. i fully expect we will be in the hunt. tom: i want to follow up on that. when you were elected, we had that awful winter of 2015-2016, we all still remember it. gov. baker: some of us will never forget it. tom: that is true. you had pledged you would fix public transit, the mbta. i take the commuter rail into boston every day. i have delays, there are mechanical problems. i know there have been some improvements, but if we have amazon, are we going to be ready? gov. baker: today, i was inspecting new orders and new

redline cars. we are talking about 50% increases. two weeks ago, we had a proposal to add onto the green line over another 50% over the next decade. i happen to think that these investments are good ones. we are talking billions of dollars of infrastructure around public transportation. we also have a futures commission that is taking a look with the next step will look like in transportation. i have a feeling that will let elements in it around electrical, autonomous vehicles. it may also change the game. i believe we will be well-suited to deal with whatever comes with

growth. caroline: what about the investment -- gov. baker: by the way, i would rather have this problem than the alternative problem which is not having to deal with growth, not having to deal with the highest number of people working in state history and things like that. caroline: what about the investment and billions you are making in incentives to woo the likes of amazon? is it worth it? gov. baker: we are not making billions of dollars in investment in companies. we are making billions of dollars in investments in our communities. transportation investments will be available to everybody. with respect to ge, we made a deal with them where we agreed to make significant investment in properties we already own that they will be able to occupy. i think in some respects, those are the right kinds of investments. those are ones that benefit the commonwealth or the public. those are typically the kinds of investments we prefer to make. caroline: i want to ask you

about your regulatory outlook for airbnb. building technology here but sometimes the regulatory and ryman is not always as welcoming. you have been pushing it, marty walsh is pushing it. what do you see in terms of that business and how it can function in boston? gov. baker: i use the uber and lyft example as a precursor. we came up with what i think was the right framework for uber and lyft to operate here two years ago. last year in 2017, there were 65 million transportation networking rides in massachusetts which is obviously a gigantic increase over the previous period. on the airbnb piece, we ought to come up with the regulatory model. for those people using it once in a while as a platform to support a summer house in the cape, something like that, fine, be my guest.

if you are going to be renting that room out or apartment out 150 nights a year, as far as i am concerned, you are in the hotel business and you should pay the same tax. tom: we know in boston, the mayor had a bit of a tussle with airbnb. they will not tolerate multiple unit owners. do you support what the mayor is doing in boston? will we see this across massachusetts? gov. baker: i think the way it out to work is there should be a statewide standard that works for everybody. i share the mayor's frustration. our purchasing unit, or renting unit simply to turn around and let them and make them airbnb units. that is not what the developing

of housing in boston is supposed to be about. i think what is going on in boston is a reflection of what i would describe as hotel behavior on the part of people that are buying and renting these units. i have sympathy for that. what we ought to be able to do is solve this problem statewide, come up with a formula that helps everybody. if you are in the hotel business, you should pay hotel taxes like everyone else. a lot of those folks are in the hotel business. caroline: let's stick with the regulatory theme, because there has been a change to the environment. the supreme court will allow betting on sports. is this going to be a state that might adopt that? gov. baker: i think we should take it seriously. we had a leadership meeting with the legislature yesterday where we started talking about this. we are obvious the going to talk to majorly football, baseball, hockey, and all the rest and get their sense about the thing.

we will talk to the big ones like draftkings. we will also talk to the folks in the casino business and get their say. as far as me to see if we can ignore this and choose not to pursue this -- tom: are we going to see a position established? who is going to police all of this? gov. baker: i think that depends on what type of industry we end up supporting from a statutory point of view. depending upon where we land, using one model or another. i think it is something that will be on the radar and people will take seriously. people would be in the position where they would be literally betting on games while they are going on. the whole notion of what will be possible is dramatically different than having sports book in vegas, period. this is a much more significant expansion. tom: it seems to me, governor, it is more like the marijuana business. it is new, unexplored territory.

a cannabis commission, talking about cafés. it is slow going. do you see that sort of process evolving with sports betting? gov. baker: maybe. i'm of the opinion that slow going on the cannabis law that the cannabis commission is pursuing is the right way to go. there is still a lot of money and questions to regulate it. i think we will have the same kinds of questions with respect to sports betting. with that said, it is something we have to take seriously and engage in an aggressive way in the legislature and the folks involved in the industry. caroline: how are you engage in terms of infrastructure projects? particularly, gas pipeline projects. we have seen a few projects. why? is there a concern we will see more gas pipelines being built in massachusetts? gov. baker: a lot of that is decided by the government, not

so much by the states. the two big projects we have related to us right now is the big hydro project coming down from canada and the deepwater offshore wind project. those are both over 1000 megawatts. the two largest clean energy procurements in state history and we control that through state statute and working with our colleagues in other states to implement. those are the ones i believe we have the most control over. some of the stuff with respect to gas just decided by the government. caroline: clean energy in california, they are focusing on making solar energy a focal point. reinforcing it. is that something you would look at doing here? gov. baker: massachusetts has one of the most aggressive solar programs in the country. we respect solar installations. solar has been booming here in the past decade. i want to get this hydro project

done, the deepwater project done. put a new regulatory framework on the solar piece. we are putting money in side-by-side with some of our researchers and private sector companies which has huge potential to take solar and wind to the next level. that is where i want us to focus our efforts. tom: battery business in massachusetts is very robust. are you satisfied with the progress you are making across-the-board? i know you build an element to alternative energy. energy can be very expensive, especially in a cold winter here. are there other things on the table you might be interested in hearing about? gov. baker: part of what makes the hydro project and the wind project interesting to me and a lot of people in massachusetts is the price point on these are very competitive. the hydro is 24/7, 365, and the wind speed will generate a lot of energy.

i think the possibilities associated with battery technology and storage in particular can do a lot to deal with polar vortex is, hot summer days and the issues that translate into high prices, and also the use of many dirty fuels. tom: those of us who live in massachusetts, have watched cape wind come and go. now there is a project. gov. baker: cape wind was never going to meet any test like these deep water projects will. i think that is what makes these projects a lot more interesting. if you are pricing people out of wind, the price would be pretty competitive or even better than what people are paying now, that is a real win-win for the environment and residential. tom: farther offshore, you would get less opposition from those who don't like to see windmills in the sky.

gov. baker: deepwater for the most part is owned by the feds. caroline: let's bring it right here at where we are sitting at the boston chamber of commerce. how are you going to make sure that massachusetts remains technological advancement and a place people can build? gov. baker: i think the biggest thing we can do is continue to have great tools, which we do. our k-12 system is number one in the country now for seven years in a row. we continue to build on our stem portfolio. we have a lot of stem classes, graduates, and internship programs. many have a lot of high school kids and getting them interested in stem. we have colleges and universities here that graduate literally thousands of stem graduates. umass amherst and umass lowell are graduating thousands of

engineering students. i feel if we really do what we should do on the student front, the pipeline will continue to flourish. that is really what people are looking for when they are here. caroline: massachusetts governor charlie baker, great to have you here. the storm is roaring. it is getting hot inside. we will let you get a glass of wine. tom moroney joining us as well. we are pleased to have our audience on bay radio. thank you for listening. coming up, we will hear from boston mayor marty walsh. where the city stands on autonomous driving. that is next. this is bloomberg. ♪

>> there's no question that people have been reaching for yield. >> consumers will be able to t-mobile forew lower prices. caroline: welcome back to "bloomberg technology" in boston. all this week, we are talking to leaders in tech, education and politics in this region.

our boston bureau chief tom moroney caught up with mayor marty walsh and how the city has lured technology. mayor walsh: self-driving cars is important for us. some are working in some won't work. if you don't try them, you don't know what is going to happen. i think the self driving cars, when it was first brought to me, i said, he was telling me in 30 years, no one is going to be driving their car. caroline: that does it for this edition of" bloomberg technology" right here from a very stormy boston. we will continue to bring you highlights and interviews from the city tomorrow. self-driving tracks, discussing the next steps for autonomous tech. that is all for now. this is bloomberg. ♪

announcer: the following is a paid presentation for the bissell crosswave. ♪ ["blue danube waltz"] ♪