emily: i'm emily chang in washington, and this is "bloomberg technology." coming up in the next, facebook's fake news fight. how the social media platform continues to tackle this issue, but can they win, and what does it mean for upcoming elections around the globe? plus, tech giants like facebook, alphabet, and apple facing new pressure pressure from washington. what's in store for tech regulation? we will talk with the congressman. tech leaders are congregated in -- congregating in paris this

week. we will speak with the heads of two companies who are both attending a tech summit hosted by french president emmanuel macron. first, to our top story. facebook launching an aggressive new campaign to tell the world how it is fighting fake news and how its two billion users can spot it. the social network has been hiring new employees by the thousands and touting ai as a weapon to flag offending content. we caught up with facebook's chief ai scientist at bloomberg's sooner than you think summit, who talks about how. >> ai produces content. it is part of the solution at detecting when something is bad. people also kind of adapt. we quickly learned to deal with information that is unreliable. emily: here now with more, we are joined by facebook's manager fromuct stamford, california, to talk about what else facebook is

doing to fight this fight. you are launching a massive new initiative today, basically a fake news literacy campaign. you have personally been on the front lines of this. i'd love it if you could start by giving us an idea of the scale of the fake news problem and how that has changed over the last couple of years, especially from your point of view. >> thank you so much for having me. we have been working hard to stop the spread of false news. given the scale, we have a using both technology and human review. i would love to talk with you more about those actions. what we are sharing today are updates on our efforts to communicate more openly about our actions and to be held accountable for the progress we are making. specifically we are sharing a short film with an inside look at the teams fighting false news on facebook. the work we do to disrupt financial incentives, to fight fake accounts, and to reduce the overall spread of this type of content. we are also sharing that we will be working with academics in

order to provide them with data to help all of us better understand and measure the volume and effects of misinformation and the impact of our efforts to fight it. emily: you're launching a new short film called "facing facts," which profiles you and other people at facebook who are working on this, in addition to a tv ad campaign, a print ad campaign. what about the people out there who say this is just pr spin? tessa: what i would say is that we are all deeply committed to fighting false news on facebook. we recognize there is a fake news problem. we recognize it is not what people want when they come to facebook. we are committed based on the feedback from our community to actually improve this problem. in order to be held accountable, we need to do more to help academics access the data, so that we can all measure the current volume and effects of misinformation and the trends in those over time, so we can prove our efforts are having an effect and helping us fight the problem and contain the spread of false

news on facebook. emily: we talk a lot about fake news, but the sort of fully bogus fake stuff is not necessarily the biggest problem. actually a bigger concern might be hyper-partisan news that presents facts in a misleading way and with a political agenda. what are you doing about that? tessa: you're absolutely right that when we say misinformation or fake news, we are referring to a lot of different problems. it is born for us to break them down in order to fight the most effectively. we've seen the majority of false news on facebook is financially motivated. one of the main things we are doing is working to disrupt those financial incentives. that might look like truly fake fact, but that can also look like partisan, misleading content. by going after those financial incentives, we can reduce the spread of a broad swath of that content. but more broadly, we know there is information people are sharing that might not be financially motivated, but might be fake or misleading in other ways. one of the things we are doing

is working with fact checkers, in order to provide people with more context about the stories they are seeing, and in some cases, to reduce the spread of those stories by showing them lower in people's newsfeed. emily: fact checkers are one thing. others have suggested, why doesn't facebook just hire its own journalists? it is an idea that facebook has been sort of allergic to. why not hire some of your journalists who can make these decisions? tessa: emily, we have 2 billion people around the world using facebook in order to connect with friends, family, and the things they care about. what we are committed to doing is to ensure that when people come to facebook, they have the experience they expect, that it is authentic, high quality, and credible information. in order to best do that, we need a variety of tools. we need to remove fake accounts. in the first quarter of the year alone, we removed 583 million fake accounts who were often involved in seating and

spreading misinformation and other types of low-quality content. we also need to go after the financial incentive. we need to reduce the spread of third, false or misleading content by showing those stories lower in the newsfeed. we need to give people more information. the problem is not so much about the individuals who are weighing in on some of this content. it is really about how we scale this effort in order to go after the full breadth of this challenge and fight it most effectively around the world. emily: and once a piece of news or fake news is flagged, fact checked, put out, what do you do to make sure it doesn't get recycled in other ways and appear elsewhere? tessa: it's a great question. to use one example, if we have an article that has been rated as false by one of the fact checkers that we partner with, we reduce the spread of that individual article in news feed. but we also use machine learning in order to identify duplicates of those articles or ways in which that same content might be reappearing from other domains or from other pages.

we know that, in many cases, the bad actors behind this content are not just sharing one example of it, they are trying to create duplicates in order to further achieve their financial incentives or whatever their objectives might be. i think what is really important is that we have to recognize that the fight against fake news is an adversarial fight. that there are people who are highly motivated, whether those motivations are financial or otherwise, to continue to spread this type of information and to profit from it in whatever way that might be. we need to ensure that our systems are staying ahead of their adaptations and anticipating the next wave of this fight. emily: on that note, obviously, russia, efforts to undermine american democracy using facebook are continuing. is it actually possible to stop this problem, to stop misinformation on facebook, or is it a losing battle? tessa: it's possible, absolutely, for us to do a much better job of ensuring that the information people see on facebook is authentic and

high-quality. now, the broader conversation around misleading information is something that has been around long before social media and will continue to be a challenge. we need to ensure that we are doing everything that we can to give people information, so that they can also make informed decisions, which is why one of the things we are sharing today is a broader effort that we have to help people identify potentially false or misleading information by giving them tips for trends they can spot. this is part of a broader effort we have to be more transparent with people about the information they are seeing on facebook, the people behind that information, and the steps they can take to control the information that they see in their own personal newsfeed. emily: there are reports that engagement is down across the board on facebook as a result of the changes you have been making to newsfeed and the top couple dozen news sites are seeing decreased engagement. is that the case?

tessa: i want to take one step back. mark was really clear earlier this year that our fight to protect facebook is the top priority, and that, at times, that will require trade-offs in other parts of our business. whether that is trade-offs of people who are focused on the integrity problems or -- regardless of the trade-offs, we are committed. to your question about the trends we are seeing, we announced a number of changes to newsfeed over the next several months. one of those changes is we are reprioritizing friends and family content coming that has first. caused pages across the political spectrum of news, of other varieties to see changes to their own traffic. but what we are remaining committed to is ensuring that the public content people do see is authentic, high-quality, and informative. we have announced a number of changes to both reduce the spread of bad content like sensationalism and false news and also promote broadly trusted sources, but this is going to be an ongoing effort, and we will continue to have more to share as we improve our efforts.

emily: facebook is still trying to figure out how news publishers fit into this whole transparency initiative. initially, the plan was to have political ads on other news sites be put into this public database that would then need to be verified, essentially, but there was a lot of criticism of this and now facebook is rethinking this plan. any progress towards a clear solution? tessa: i think what this reflects is that, across the board, we are trying to take steps to be more transparent with people and to give them more information. we are also working closely with governments around the world and with other civil society stakeholders in order to understand how best to do that. we will continue to learn and evolve and ensure that, at the end of the day, we remain committed to giving people that transparent information and the controls that need to come with it. emily: mark zuckerberg testified before eu lawmakers yesterday. some came away feeling like he did not answer their questions.

what do you think mark zuckerberg, the leader of your company -- does he have a greater responsibility to give more straight answers? and answer the questions that people continue to have? tessa: we all have a responsibility, mark and all of us who work on these problems, to be more open and transparent and to answer questions directly. we've made a lot of progress, but we certainly have more work to do. if there are places where we are falling down, i expect people will hold us accountable. we want to be held accountable for being more open and open about those answers. the facebook newsfeed product manager, thank you so much for joining us. great to have you on the show. coming up, french president emmanuel macron hosts dozens of tech leaders in paris. this is bloomberg. ♪

emily: ibm has announced it is hiring 1400 employees in france over the next two years. the new positions will focus on ai, blockchain, and cybersecurity. europe has become a draw for tech companies big and small. one of europe's biggest startups spoke to bloomberg during the sooner than you think summit in paris and talked about growth. >> we are in 12 countries, western europe, southern europe, uae, hong kong, singapore, and australia. the u.k. was a great place to start up a business, convince people to work in a dark room without heating in the beginning. people were willing to take a risk on that. we found it pretty straightforward to launch in other european countries as well. france is our second-biggest market, and we've had a lot of success here recruiting a great team. you are about to go meet the

president of france, emmanuel macron. what will you be talking to him about? will: our interactions with the french government have been very positive. he has been pro-business, progrowth, pro-investment. just looking forward to hearing from him. >> a lot of it is about tech for goods. how do you ensure that deliveroo is scaling with the ethics that you want? will: today we announced an insurance product for all of our riders around the world. it protect them from injury. it protect their income in the event of injury as well. we are doing a lot of things along that front. >> regulation has been focused upon, as a driver, and flexibility meeting protection. is that something you can circle to a certain extent? do they need more in terms of pay and ensuring they get the minimum wage?

will: the number one reason why deliveroo riders work with us is overwhelmingly flexibility, the ability to log in and out, the ability to work whenever you want. at the same time, i personally believe we need to offer benefits as well. there has been this sort of impasse between flexibility and benefits. we want to work with governments, including the french government, to end this. >> what about scaling? you are going into new ventures, new ideas, helping fund new concepts and restaurants. what are some of the new innovations you're coming up with to stay ahead of the competition, such as uber eats, at today's meeting? will: for us, we are all about food. it's about going deeper and deeper into the food chain. we created hundreds of delivery-only kitchens to help our restaurant partners expand. we are helping our restaurants build virtual brands that only exist on deliveroo. we are helping fund new concepts as well. this is just the beginning, so we are really excited about that. >> just the beginning

geographically speaking as well? you are in 12 countries. how many more will we see you go into? will: we are in expansion mode, not just for new markets, but going into emerging markets as well. we are going into france pins expanding into new cities around the world every single day. >> what about the future of deliveroo? you have been giving equity to those who work for you. you clearly at some want to have point a liquidity event to help satisfy those workers. will you ipo? will: it's not on my mind. i'm just focused on the opportunity. for us, we are so early in what we want to accomplish that an exit event is not even remotely on my radar. emily: that was will shu, deliveroo ceo, speaking with our own caroline hyde. coming up, the european union is about to set the standard for protecting user data. our conversation with the eu ambassador to the united states. and bloomberg technology is livestreaming on twitter. check us out, @technology.

be sure to follow our breaking tictoc onc on -- twitter. this is bloomberg. ♪

emily: as we have discussed, the french president has been on a drive to boost investment in france, meeting with some of the biggest names in technology, including mark zuckerberg and satya nadella. caroline hyde spoke with enstrom at the sooner than you think event and talked about what he expects to come out of the summit. >> i think it's great that macron is engaging with technology, because we need that. but also there are aspects where technology can have positive

impact. it can have negative impacts that we need to deal with as well. caroline: talk to us about the ramifications and responsibilities of technology. mark zuckerberg will be at this particular event. he is a man who has had to deal with a lot of the repercussions of getting too big too quick. >> technology, since the start of the industrial revolution, has created a lot of growth, economic growth and prosperity. it also has had a lot of negative impacts, environment and so forth. and my belief is that the new generation of technology, the digital technology, high-tech, has a lot of positive impact in terms of climate change, water, and so forth. however, it is also now the technology starting to have some unplanned consequences as well. we all need to deal with that, whether that is privacy, whether that is algorithms with

biases. these are things that everyone in the technology world have to take responsibility for. caroline: when you are funding, how are you having those conversations with founders to ensure that the culture and ethics grow in the right way? niklas: younger founders are watching what's happening. they are sponges. they think, what can be learned from the previous generation of entrepreneurs? they want to build these things into their companies from day one. when we are investing in them, we are coming in talking about governance, but also asking questions about diversity, and ethics. this is something that they are responding well to. there are opportunities to work with the next generation of founders to build in some kind of code of conduct from day one. caroline: what about next generation of european founders versus american founders? is this a coming-of-age? we have seen spotify list for $20 billion. you have money coming back into the ecosystem.

niklas: it's not a turning point, it's an inflection point. we have seen steady growth. when we had the exit in 2005, it was a big thing. now i feel all the -- along the way, we had $60 billion companies in the last 10 years. you had 14 $5 billion companies. so, the scale is getting bigger and bigger. there is no doubt in my mind that europe is now at that inflection point of continuous growth. caroline: we have had different types of exits. meanwhile, spotify did list. do you wish you listed skype? was it a probability? niklas: when we started skype in 2002, we said we are going to build the company for a really long term. if this company is going to be

around and be a meaningful player in 15 years, we will be happy. 15 years down the road, it is doing fine. we are happy. we never had the intention to sell. you also have to look at what are the alternatives. back then, there was really no prospect of listing. so that was the right thing to do. however, now when we are speaking to our founders of companies we are looking at investing in, we want them to have a listing as a long-term goal post. we want them to build independent companies, instead of building something that you are selling. we would like to say that great companies may be acquired, that bad companies get sold. if you just focus on building a long-term company, that is the right way to do it. caroline: skype is doing fine. could it be doing better? niklas: i don't know. i'm not following it so much. of course it can always do better. it probably has fewer uses than could do better.

but it is very rewarding for me as i travel around the world. i still have a lot of people thanking me because they are using skype to connect with their families. that is rewarding enough for me. caroline: what about where they list? we talked about every company should aim to go public. europe or the u.s.? niklas: i don't know if it matters as much. i would like to think it is a global market. however, i would say that, if you're building your company, i'm thinking very much about how are we building this ecosystem, whether it is europe or other locations. you need to have really good talent coming from the top universities. then you need to also have capital. e, we havexample europ fantastic institutions which are long-term investors. pension funds. if they can get access to these

tech companies, then that will be very positive for the ecosystem. the value goes back to the pension holders and the whole european economy. i would love these companies to list locally, of course. it's a choice. the stock market here in europe is very welcoming to tech companies. as a matter of fact, last year four of the 10 biggest tech companies last year were in europe. emily: bloomberg's caroline hyde with niklas zennstrom. atomico. coming up, our conversation with the eu ambassador to the united states, david o'sullivan. gdpr the future of global trade. and if you like bloomberg news, check us out on the radio. listen on the bloomberg radio bloomberg.com, and in the u.s., on sirius xm. this is bloomberg. ♪

emily: this is "bloomberg technology." i'm emily chang in washington. on friday, europe's new data privacy laws will go into effect. the general data protection regulation could bring in unprecedented fines for companies that failed to adequately protect the data of eu citizens. we are talking 4% of an offending entity's total global revenue, or $24 million, whichever is judged to be higher. this on the back of mark zuckerberg's testimony before eu lawmakers, where some legislators felt they didn't get the answers they were hoping for. >> would you allow users to escape targeted advertising? i asked you six yes or no questions. i get not a single answer.

and of course, you asked for this format for a reason. zuckerberg: i will make sure we follow up and get you answers to those. emily: to discuss this and much more involving the european union, i want to welcome eu ambassador to the united states david o'sullivan, joining me here in the studio. thank you so much for being here. what do you make of the criticism that zuckerberg didn't answer all the questions and said he would get back to them about a lot of the questions, which we still don't know if we are going to get those answers? david: i think it was very good that he went. it was good that he agreed to speak before the european parliament, and it was good that he heard first-hand some of the strong feelings there are amongst european politicians about these issues around privacy and use of data. the question of the format was something decided by the parliament. i think it would have been impossible to answer all those questions in the time allotted. i think this is part of an ongoing dialogue.

we are having other contact with facebook. i think they know there are issues, and these are complicated issues. i think this was a good first step in opening a dialogue, and i'm sure there will be more. emily: one of the questions was, convinced me why you're not a monopoly and why we shouldn't break up facebook. he talks about how facebook faces stiff competition, and yet this is a company with 2 billion users that owns facebook messenger, instagram, and whatsapp. what could the eu conceivably do to address the monopoly question, and how likely is that? david: it's important to understand that eu anti-monopoly law is not run on a political basis, not run by the european parliament or the member states. it is run by the european commission on the basis of whether established rules about dominant positions, and so forth. i think the issue of abuse of dominant position or monopoly inquiries under the antitrust

laws are a matter for the european commission to conduct in the usual way, so i don't think this is something which enters into the political domain. emily: they have been quite aggressive when talking about companies like google in particular. do you think they could take a greater interest in facebook? david: i have no idea. it depends on what the facts will say. anti-monopoly and antitrust legislation and action is based on objective facts, analysis. i think this is not something that is just going to be driven by political concerns. the cases you have referred to have been the result of long investigations and in a very transparent and open way. i have great faith in the objectivity of our antitrust activity. emily: we are just days away from gdpr going into effect. how will we really know if they pass -- if facebook and other companies are complying? david: the rules are there. it would be eventually for people that feel that their data being properly protected,

it would be for them to introduce a complaint to one of the data protection authorities, then there would be an examination, the company would be given the opportunity to respond. you talked about these fines. a fine will be the instrument of last resort at the end of a process in which companies have been asked to explain whether they are compliant, whether they are not compliant why they are , not compliant. i don't think there is any risk companies will suddenly find themselves subject to heavy fines without there being due process and time given to respond to any concerns there may be. emily: on this note, you have made the argument that companies could actually be more innovative as a result of gdpr, but there are also small businesses who say they have been put out of business as a result of this. does that concern you? david: i'm not aware of anyone who has been put out of business. gdpr is notar, the substantially different from the privacy directive we have had in 1995. it does introduce some new procedures and it does introduce the element of enforcement through fines. but we had a two-year period for

people to get used to this and to prepare. frankly, i think there is a little too much hype about the possible impact of this. it is evolution, rather than revolution. i believe most companies have been able to adapt and prepare for this in an orderly way. emily: do you think the u.s. will or should enact similar legislation? david: that's for the u.s. to decide. nearly 120 countries around the world have overarching data privacy rules based on the same principles as the gdpr, which were based on oed see principles -- oedc principles established 20 years ago. it's up to the u.s. if they want to go down that road. they are a little bit the exception. emily: we have been talking about the primaries in the united states. are you satisfied with what facebook has done so far to clean up its act when it comes election meddling? david: that is not for me to

judge. as mr. zuckerberg said already, they have taken some action in the area of election activity, but this is an ongoing and complex debate. i think it will take more time to figure out how the potential abuse of social media platforms in attempts to influence elections or other political results -- it needs to be countered in the most transparent and effective way possible. emily: we have to talk about trade and the eu's exclusion from the steel and aluminum tariffs expire june 1. where do talks stand? david: we are still in conversations. our position is that we do not believe that european exports of steel and aluminium pose any threat to american national security or even to the american economy. we are the second largest exporter by volume, the largest exporter by value. in many cases, we export.

-- we export very specialized products which can't even be obtained here in the united states. these are imports to american companies producing products frequently used by the auto industry or other companies. we think our exports are good for america. we don't see why they should be subject to tariffs or volume restriction. that's our position. we wait to see what the president's decision finally will be. in the same context, we have said that we are willing to discuss other trade issues the u.s. may wish to put on the table, such as industrial tariffs, but only once we have settled this issue of the permanent exemption for steel and aluminum. emily: how optimistic are you that you will get that permanent exemption? david: i honestly don't know. we've made our case. we believe it's a good case. we understand there are pressures going in other directions. we will wait to see what the president and administration decide. emily: would you tolerate quotas? and if so, at what level? david: we have said that we would be willing to see what would happen if there were to be

100%iff rate quota set at of existing trade, in other words no diminution of our exports. we would be willing to see how that might impact our exports and reserve our rights under the wto. our basic preference is for a permanent and full exemption, because we do not think there is a case to be made that these exports in any way damage america's national interests. emily: if you don't get that exemption on june 1, what will you do? david: if tariffs are imposed, we fully reserve our rights to impose rebalancing tariffs on equivalent amounts of american exports, and we have already started the procedures in the wto to make this possible if we get to that point, which is not where we want to be, and it is not the outcome that we wish for. emily: on iran, realistically, is there a way to salvage the accord that the u.s. has pulled the plug on? david: yes, i think we have said very clearly, as have the other parties to the agreement, that

as long as iran maintains its part of the bargain and continues to respect the agreement, we will do everything we can to keep this agreement in place. it is an agreement which is not just agreed by the european union, by three of our member states, and by russia, and china, but by the international community. it has been approved by a resolution of the un security council, so this is a global agreement, not just something involving the united states and iran. we deeply regret that the united states has taken the decision it has, but we are fully committed to implementing this agreement as long as iran meets its side of the bargain. emily: that said, despite these reassurances, there is some skepticism that european countries would actually risk the ire of the united states. david: european companies? emily: countries. david: i think the question would be more clear if you said european companies who do business in the united states

may feel they have a choice between doing business with iran or the u.s., and that commercial choice will be made in due co urse. there are many companies in europe that do not do a lot of business in the united states. by the way, we should not forget that there are chinese and indian and russian companies who will step in. one of the consequences of this could indeed be that some of the vacuum is taken by competitors of the united states and of europe, who could benefit from this decision. emily: we're potentially on the brink of a trade war with china. what would you like to see the united states do here? david: well, i think that the united states is perfectly entitled to put on the table with its trading partners, whether that is china, whether that is europe, or in the context of nafta, concerns that they have. i think the key issue, however, has to be that, for these -- any discussions of this kind to be successful, you need to look for win-win outcomes. you need outcomes where everyone

feels they come away with some additional benefit, and that is what i think we need to pursue in addressing any of these concerns, whether that's in dealing with china, whether that is between the united states and europe. we also have many concerns with china. we share many of the administration's concerns with china, particularly on the conditions for doing business in china, compulsory acquisition of intellectual property, and so forth. we would be happy to work with this administration and with china to see if we can find solutions to those structural problems, which are by far the most pressing for our industry. emily: david o'sullivan, eu ambassador to the united states, thank you so much for joining us. david: thank you very much. emily: coming up, hpe reports its second-quarterm and the numbers look positive, but why did they get such a bad reception on wall street? we will take a look. that is next. this is bloomberg. ♪

emily: it was a rough start for hewlett-packard trading wednesday morning. shares of hpe fell as much as 10%, the largest drop in 15 months, this despite what appeared to be solid second-quarter earnings that saw hpe top estimates in earnings-per-share, revenue, and net income. it was also the fourth consecutive in which -- fourth consecutive quarter in which hpe sales grew from the year before. what caused wall street's that reaction? we want to bring in idc's chief research officer. what gives? >> hey, emily, how are you? i think what you have here is a situation where, you have to keep in perspective that there has been a long history with hewlett-packard and with

hewlett-packard enterprise, in terms of a lot of change. i think that when the ceo said that there was going to be tougher compares going forward, probably there was a lot of concern about that and that they were bracing for the second half. having said that, this was a good quarter, and the company executed really, really well, and they are transforming the business. at idc, we are not in the business of predicting the outcome or how markets are going to interpret this stuff, but as an analyst, i will tell you this company is executing really well. the compares are going to get more difficult going forward, but, boy, i would take the hpe of today over the historical hpe given net where they are, they are executing well. emily: ceo meg whitman has moved on. they have a new ceo in place.

what should be at the top of his agenda, especially given that he has some communication to do with investors? crawford: that communication is going to be ongoing. antonio's relationship with the street is actually excellent. it is just they don't know how to interpret that comment. i think if you look at the company, what they are doing is, they are starting to enter the next phase. that next phase is going to mean, as you said in your intro, they have had four quarters of consecutive growth. that means the comparisons are going to get harder. they operate in some very difficult businesses. they operate in low-end and high-end servers, storage. these are tough businesses. they have to be able to drive margins from the most premium parts of those businesses, as well as from services from those businesses. i think that they are doing that.

they are seeing higher margins in services. they are going after the higher-margin parts of the server and storage business. they saw over 50% growth or close to 15% growth for aruba, which is arguably one of the best acquisitions they have ever done. they are executing really well. i think they have to prove that execution as they get into this next phase. emily: who are the competitors that hpe really needs to worry about? crawford: look, this is becoming a two-horse race very quickly, and that's dell. those two companies compete across a wide theater of products, whether it is storage, servers, other kinds of infrastructure. they are on the periphery. dell has invested in things like pivotal.

there are areas where hpe has invested most recently and also in wireless. that's the big competitor, the at-scale competitor. if you get a little bit more niche-y, you get into lenovo, netapp. there are other competitors. this wide range computer business is really becoming a two horse race between those two companies. cisco is there for parts of the business as well, but more for pure networking and other businesses that have invested in. emily: we've talked a lot about how -- michael dell has always said bigger is better. meg whitman said smaller and leaner is better. does either of their performances indicate which of those is true? crawford: it's an interesting question. in the case of dell, they are playing the scale game and the efficiency game as they right-size and reduce overlap

within the emc universe of products. for them, that playbook is going to work really well. for hpi, the pc and printer company, and e, the enterprise company, that separation, from this analyst, needed to happen. it needed to happen because they were not able to really focus in on what those businesses needed in order to show growth and show new kinds of innovation. you are seeing that at hpi. i think what's really interesting and frankly was missed by wall street in this quarter is that the strategy that antonio and his team are putting in place for hpe is really starting to take shape, and that is a pretty nimble strategy, focused on software that differentiates and adds value to their systems, as well as being able to participate in a world that is multicloud and hybrid. and that's why they launched

products like onesphere and are now seeing uptake. that's why they launched products like synergy to allow for a really dynamic, private cloud, composed of all composable infrastructure product. you will see them try to add value to software all across infrastructure. that will be the strategy. that's how they will generate higher margin. it is never going to be a super high-margin business, but i think it can improve given the acquisition from where they are today. i think for hp, that strategy allowed them to shine a focus on those two specific businesses. emily: thank you, as always, for joining us. coming up, our exclusive interview with airbnb's biggest competitor in china. we will hear from the ceo from the goldman sachs technet conference in hong kong. this is bloomberg. ♪

emily: goldman sachs annual technet conference is underway in hong kong. bloomberg spoke exclusively to some of the region's leading and emerging tech players, including tujia's cfo. tujia is known as china's airbnb. it is jason the rapidly -- it is chasing the rapidly number of chinese visiting other countries. we asked about the difference between the two home sharing companies. take a listen. >> airbnb is a well respected competitor in china, but we think we are the number one player in this industry in china. that's one thing. the other thing is we are not just a pure online company. we have off-line operators as well. we have a local team in most cities in china to help local house owners to run their business. that's the big difference between us and airbnb in china.

emily: silicon valley could look to seattle for a playbook on taxing big tech. washington state's largest city last week levied a $15 million annual tax on big companies to help offset its homeless problem. san francisco, mountain view, east palo alto, considering similar taxes on large local employers to solve growing inequality and overcrowding they blame on the same tech industry that transformed them into boom towns. bloomberg tech's eric newcomer joins us now with more details. how does this work, eric? eric: there are different versions. take mountain view. it would be $250 or $300 per employee that companies would pay to the city. mountain view wants to raise something like $10 million. you could imagine about half of that would probably come from google, their largest employer. emily: why now? how will they use the money? eric: why now is what is super

interesting here. trump tax cuts took effect, so the cities are watching companies get back up a lot of money from the federal government -- so i think that's one. these are liberal cities with endemic housing, homelessness, and transportation problems that i think are fed up, deciding to go where the money is, clearly with the companies in their hometowns. emily: how far out could these new taxes be? eric: i think it is imminent. mountain view, it seems like it could be on the ballot in november. even cupertino, apple's hometown, is thinking about a tax. throughout all of this, there is a discussion of the public-private partnership. if the companies come forward and say, you know, we will give you some money to do this if you don't entrench it in the law, that could always divert one of these taxes. but those are the conversations that are happening right now. emily: one last quick question for you. uber is officially shutting down

its self driving program in arizona after an accident that killed someone. what's the status of their self driving program going forward? eric: they've been halted nationally. the arizona governor came out very strong after the fatality, so uber is totally shutting down operations there with no hope of going back and says it will focus on pittsburgh. that's where their autonomous research is being done in the first place. i think there is some advantages to keeping the testing close to the engineers who can react when there are problems and help keep improving the autonomous vehicles. emily: all right. our bloomberg tech reporter eric newcomer, thank you so much for that. that does it for this edition of "bloomberg technology." from washington, i'm emily chang. this is bloomberg. ♪

retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

the following is a paid presentation for crepe a race, the number one antiaging body treatment system. it can deliver smoother, firmer, younger looking skin on your arms coming your lakes, to your hands, your neck. here is jane seymour, legendary actress and real crapo race user. -- crepe er