emily: i'm emily chang in san francisco and this is "bloomberg technology." president trump cancels the summit with kim jong-un. state of plays with a former u.s. trade representative. plus, highlights from paris as president macron gathers the biggest names in technology.

we will hear from the head of the european operation. and elon musk is in hot water after another tweet tirade. the tesla ceo taking aim at the media? first, to our top story. president trump canceled the june summit with tim johnson, -- pointing tog-un, anger and hostility. mr. trump: based on the recent statement of north korea, i have decided to terminate the plan summit in singapore on june 12. while many things can happen and a great opportunity lies ahead , i believe this is a tremendous setback for north korea, and indeed, a setback for the world. the decision is likely to have far-reaching geopolitical implications and comes just as trade negotiations with china are in a state of confusion.

the u.s. is now investigating if auto imports are a risk to national security and is considering tariffs. joining us now, the former deputy national security adviser for international economic affairs. he is currently the vice president of strategic growth at mastercard. michael, thank you so much. let's talk about north korea. what do you expect to be the business fallout and the fallout for the technology industry more specifically? michael: the challenge is to north korea have been enduring re for several administrations. i think the trump administration is coming to terms with the fact that this is not an easy issue to solve or a linear problem that can be dealt with. it creates uncertainty in the

region. it creates dynamics between ourselves and south korea, ourselves and china that could have spillover effects in the broader economic and geostrategic relationships, but it is going to be one of those context problems that takes a lot of hard work to get back on track. emily: take a look at what mike pompeo had to say about the talks with north korea a couple of days ago and what is in it for kim jong-un. he would find american technology and american know-how of real value to his people. it is something he and i had a chance to speak about generally. emily: michael, how optimistic are you that we could see a reversal in decision or that this could at some point eventually happen? michael: i am no expert on north korea. it has been a long-standing, complex -- it has been very difficult to get forward movement on. previous administrations have

worked very hard to keep north korea from becoming a global nuclear threat. i think the trump administration has a lot on its hands if it is going to try to make progress there. you have a very unpredictable leader on the other side and a hardf interests that are to reconcile vis-a-vis china, vis-a-vis having a nuclear concern thathe giving it up might lead to regime change, and the challenges of regional security vis-a-vis south korea, japan, and china. china had supported the summit from the start. could this give the u.s. and president trump an opportunity er line an even hard on china when it comes to trade? michael: it is important to convey to china that we are going to defend our economic interests regardless of what is happening on the national security side. in china's interest that

there be stability on the korean peninsula, that to there not be nuclear escalation. the administration has said they should not have to pay china vis-a-vis trade for them to do -- previousheir own administrations have said they should not have to pay china vis-a-vis trade for them to do what is in their best interest as far as national security. this administration has taken a different approach. this just shows how complex it is when you mix the two tracks, economic and national security issues. we should be focusing on the trade issues in and of themselves, the national security issues in and of themselves. if thedo you think friction continues to escalate it could undermine the technological progress of the united states it self and create

protectionism?de michael: there is a chance there will be an escalation of protectionism. we have seen tariffs go back and forth and be put on hold while the china and u.s. continue their discussions from last week. today and yesterday we heard the announcement of the initiation of an investigation, a national security investigation into auto imports and the imports of auto parts. all of that could lead to an escalation of protectionism. i think that is different than the role and centrality of the u.s. in technological development. we have a great ecosystem for promoting development and technology and i think we will continue to make progress on that regardless of the risk of protectionism. emily: what is your take on the official car import tariffs?

law this is being discussed under was really whended to be invoked there was a threat to our national security. the last time it was invoked prior to this administration had to do with machine tools, when tools critical to building munitions. this administration has argued that our steel and aluminum industries were weak and that we needed them to be strong if we .ere to remain at global power that, i think, will be challenged by most of our trade partners. cars, it's annto even more difficult argument to make. it's hard to say we have a weak auto industry. we have a very strong auto industry, some of which is owned

by u.s. companies, some of which is owned by foreign companies, many of which build their cars in the united states for import and export. i think the challenge here is we have always tried to limit the use of this provision in law because we were worried other countries would use it to say anything is a national security issue. if we open pandora's box two countries invoking national security as a way to getting out of trade obligations, my sons is we are going to find ourselves in a very difficult -- my sense is we are going to find ourselves in a very difficult position. is food a national security issue? or other manufactured products. that hurts jobs back here in the united states. emily: take a look at what the us trillion prime minister had to say about the onset of a potential trade war. think we need

to be vigilant and do all we can to minimize the threat of a trade war. i think at this point in time, china havestates and indicated pragmatism. they are having discussions, and that is positive. think aow likely do you full-blown trade war is? think the most likely outcome is that we avoid a trade war and that there is some sort of agreement. the question is what that agreement will look like. the administration has sent two messages to china. one is that they should buy more from the united states unless from other countries. the other is we won to protect the trance -- wanted to protect the theft of intellectual .roperty those are two very different issues. the first is the one they have

with thetiating over chinese delegation talking about what products they might buy in greater quantity. the second one is much harder to get that because china has doubled down on their 2025 objectives. they have made it clear they want to be globally dominant in a number of key technological sectors. it would require backtracking from that in a way that might be difficult to negotiate. is ife is if -- they promised to buy more soybeans from the u.s., , that thattractors will be enough to avoid a trade war. that remains to be seen. emily: i want to ask you about zte, the chinese smart

phone maker. this is not looking good in congress. should the united states take on zte? michael: i think it's difficult to take a law enforcement issue, which is what this was initially, a company caught violating export control laws with contraband and talking about how they were going to mislead the united states and other governments to avoid being caught, to now say we are willing to pull back on punishment of a law enforcement matter in order to make it part of a larger trade agreement sets a very bad precedent and sends a strange message to law enforcement officials that the laws they are working to enforce could be set to the side for economic and in trade. in trade. i think we have to deal with the te issue on its own feet, but

to be traded chip away as part of a broader trade negotiation. president trump has talked several times now about his strong relationship with chinese president xi jinping. of the signalse we are getting from the chinese government? they have cut import duties on a range of consumer goods. message is that sending to the united states? i think china wants to reach a deal with the trump administration and did the united states. i think they are being pragmatic about it. they understand how important it is for president trump to have deliverables and they want to live him those, but they want to know what -- give him those, but they want to know what the price actually is.

it's important to know that the trump administration, in flagging the issues china poses to the world trading system, these are real, legitimate issues, and the trump administration has been successful in building a broad consensus in the united states and around the world that these are issues that merit attention. the question is how to deal with them and whether we can channel chinese efforts in a way that does not pose a distorted effect on the global economy. for example, make sure they meet their wto obligations. if they have been found in violation, they take action to that bringe policies them into compliance. those are the sorts of things we should be doing in collaboration with our allies, to put pressure on china to live by the rules of the open space system. michael froman, former ambassador for the united states, thank you very much. a story we are watching, the etyptocurrency mark

slipping further. an investigation into whether spoofing is flooding the market and being used to trick traders into buying or selling. points being a -- coins being examined include bitcoin. , in those guy hits the public market at a time when online lenders -- coming up, it hits the market at a time when online lenders are not getting much love. ♪

emily: online lenders have not gotten much love from investors in recent years. but pimco backed greensky is banking on a different trajectory. it just went public on nasdaq. the online lenders sold at $23 a share, driving its market value up. our ipo reporter caught up with ceo.ree greensky quick sweep our commerce at the point for a growing ecosystem -- >> we power commerce at the point of sale for a growing ecosystem of merchants and banks. we now serve almost 2 million consumers. there is a large and growing opportunity to accelerate commerce at the point of sale.

>> when i think of what the public market is used to in terms of past lending platform stockses, trading in effectively spooked the market for your industry. how do you differentiate yourself and distance yourself from the two narratives that have not been well received by the street? >> we are about commerce, not credit. ability for instant credit to almost 2 million consumers. >> so, for consumers looking to , electiveprovement surgeries, that is where you are now. where can investors expect you to push next? >> we have tremendous opportunities for growth.

we now have a rapidly growing , a growinginess e-commerce business. expect to see more verticals and more announcements to come. company is based in atlanta. being outside the valley, being outside new york, was that a strategic decision for you? did that help you in terms of how you thought through your company's development of a ?roduct in terms of greensky >> i am grateful to the people of atlanta, georgia. i moved their 22 years ago. what an incredible place to do culture ofo build a service. i really pleased that when we started this company, it was all about creating value, and i am really gratified that after all these years, that is being recognized. we look forward to the years ahead. a look at your

$140cials, you had about million in net income last year. profitability continues to be a surprise for some startups, but you managed to get there. we see a lot of spending for growth at the expense of the bottom line. how did you manage your company in the past years you have been operating to get to profitability pre-ipo? >> we think that cash flow never goes out of style. when we started the company, my partners and i bootstrapped it. every dollar mattered. we were not spending someone else's money. we were investing our own. we were dedicated to creating value for our constituents and our customers.

but when you have a technology platform and you create so much value for each member of our ecosystem, you can build a business, grow a business dramatically and generate profit. customers, theng banks that are lending, and the emergence. as you think about expansion and much manpower, how much people capital and sales and marketing do you want to spend? >> what is wonderful is now we are experiencing a tremendous network of fact. businesses that join our networks are referred to colleagues, friends, and sometimes -- by colleagues, friends, and sometimes s.mpetitor

we spend less than 5% of our revenue on sales and marketing. that's what happens when you have an ecosystem that really creates value. >> how do you think through where we are in the cycle right now? what are you doing to prepare greensky to keep running if we see a negative turn in the credit cycle? >> green sky is not a lender. we are not a balance sheet. we are a technology platform. we know not if, but when a recession happens, commerce will continue, purchases will continue, and in fact, credit will become even more important to consumers. bank partners are committed to growing through the cycles a quality profitable, durable business. up, the world's second largest pc maker posts

the biggest jump in sales in almost two years. we will hear from lenovo's ceo next. ♪

quarter, the latest lenovo posted its first double-digit percentage growth in sales since 2015. bloombergs stephen engle caught up with the lenovo cfo and asked in thets presence smartphone market. >> we are aware we did not do as well as we expect. nevertheless, when you look at the business, i think generally, the numbers show a decline, but ,f you look at the core market we see a top line with profitability. north america, we see significant growth. emily: twitter has advertising inon

a bid for transparency. advertisersire running political canteens to identify themselves and certify they are located in the united states. candidatespolitical to identify themselves and certify they are located in the united states. later, we hear from bloomberg's head of europe about the company's operations in paris. will discuss plans for fatalg tests after a accident in arizona last march. >> for us, it brought home the idea that safety has to come first. we haveat tragedy, grounded our autonomous fleet. that was a decision we made. >> any sense of when you will start driving again?

brexit will be in the next few months. -- >> it will be in the next few months. ♪ retail.

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this is "bloomberg technology." i am emily chang in san francisco. it has been a volatile year so far for big tech. look at facebook, amazon and alphabet. says silicon valley is not as attractive given the overvaluation of already.ts instead, he is looking at long-term investments that can weather volatility. his portfolio has companies like lift, magic leap, fan dual and more. david walsh is here with me in

studio. why not silicon valley? david: there are great tech companies being formed and there will be for a long time. there are areas in the u.s. and abroad that are starting to produce great technology, too. beenur point, we have spending a lot of time on planes getting in those other geographies and looking at businesses that are there. things we of the really look for in business. specifically, do you see potential? wrecks we have been looking at denver, salt lake city, seattle, even down in l.a., down to the east coast and florida. austin, texas. places that have traditional good tech environments that are starting to build a bigger businesses. emily: what are you investing

in? you are not doing early stage, pre-ipo. david: we are looking for three key attributes. seen them execute through multiple cycles and show good product market and fit in with what they do. we are also looking for businesses where the management team and existing investors want to build something large and are not trying to do a quick flip. wantthat ambition, we people that are disciplined. we want them to be able to look at a business model and say not only will it work when things it canng well, but weather a storm if there is an economic downturn. multiple industries, multiple technology types. you have been doing this

for about a year and a half. an incredibly long time. anything specific you have learned? seems what we are doing to be resonating. when we find the right team that wants to partner for the long haul and described to them the things we can bring to the top wethe platform, we realize can help them accelerate, potentially, and social -- solidify their ability to be a big market leader. find businesses going through a long haul and focus energy there as opposed to what some investors have done and try to time the market or be a quick return. that has never been kkr's way and that is not the way we are doing our fund. emily: you invested in lyft before it over exploded. uber exploded.

are they losing market share now uber is back? think they are doing fine from market shift gain. what we saw in them was a management team that was very dedicated to continuing to grow a lot and wasn't looking for a quick exit. that has really played out. have had fortunate tailwinds behind us in different ways, but them working with us and other investors to build the business in the long haul was a big piece. about a company like magic leap that has no products on the market yet and it has ?een a few years david: that was a little bit of an anomaly when we started getting into growth three or four years ago. a hugenally there is

market and a transformative technology where we might take more of a passive role. that was more of an historical investment. going forward, we would look for things that have better already product fit. emily: if they looked so good, why haven't we seen anything from them? >> what i do know is they continue to make improvements on the product and the technology. i think they rightfully wanted to expose something once they were sure it was consumer ready. huge victorywas a with the supreme court ruling that the ban on sports betting is unconstitutional. fanned all is being acquired. is that a good exit for you -- fan dual is being acquired. is that a good exit for you? about combination is not the exit. it's about long-haul benefits.

the daily fantasy market continues to grow. we are not exiting the business with this merger. we are joining together, holding the stock as a combined entity and looking to grow it over time. emily: talking about volatility, does this mean you would be ?llergic to crypto david: i don't know about allergic, but i would probably little skeptical about it being a long-term investment that would be right for little t being a long-term investment that would be right for us. we are looking at where the business is based today. little skeptical about it being a long-term investment that would be right for us. we are looking at where the business is based today. with all of the ups and downs, it's tough for us to get our heads around that being a core asset. the competitive landscape changing? there are competitive funds, mutual funds. they are also looking outside silicon valley.

us, it is broken into three parts. early stage, later stage, crossover funds, mutual funds, and traditional growth players. early stage guys tend to take more risks. crossover guys tend to time and exit may be a year or two before hand and don't really take an active role in the business. we don't see them very often. we see core growth investors trying to invest in larger businesses that still have a lot of runway. that core set is not as big as people think. they still want to provide value added services. there are competitive steps and they are all more geographically dispersed. we fit in pretty well with the firm's we see as our competition. you talked about staying

away from high valuations. do you think the tech industry is reaching a plateau? is it bubbling? is it going to pop? david: i think valuations are probably on the higher-end than the lower end of where they are going to be in a cycle. whether we are at the top of a bubble, i don't know that i am the best person to guess on that. we look attal -- ratios of where businesses have been over the long haul. inthe silicon valley particular, those have gotten out of wet. that has driven us to go to other geographies or to be disciplined -- out of whack. that has driven us to go to other geographies or be disciplined and the relationships we build. we often will work with businesses and say we are not going to take the highest valuation we can. we are going to come in with the

investor that can give us the best value over time. emily: thank you so much. story about amazon's alexei sparking privacy concerns. a couples private conversation was recorded by their amazon echo and sent to one of their contacts according to a report. the couple found out only when they received a phone call two weeks ago from one of the husband's employees telling them to unplug the alexa because they were being hacked. extremelyd it was an rare occurrence. hear what the founder of ethereum thinks of cryptocurrency regulation. before that, french president macron telling the crowd how he wants to level the playing field for startups competing with tech giants. they tell me, i pay tax in france. fine.

but it's not fair for somebody else to pay no tax. that's why i am a strong of the european digital tax. i think it's fair. it's good for everybody. and sustainable.

♪ losses,fter years of uber has turned a profit in the first quarter of the year -- sort of. it's after accounting for the value of selling its southeast business and its russia business. without those windfalls, it would be a different story. uber's financial

status, the ceo took to the stage in paris to tell people that uber will be profitable one when.e just can't say he also announced two new initiatives, one in a flying car research lab and one in pasture safety. -- passenger safety. >> we wanted to make two big announcements, one that has to do with provider access that is aimed at bringing a social safety net to all the drivers and passengers using it uber. with this announcement made as an investment of 20 million euro in france, here in paris, in partnership with one of the leading engineering schools aimed at developing a research and how weobility

take it from two dimensions to three dimensions with flying drones and flying taxis, as we call them. theefore we get into excitement of flying cars, let's stick with the driving part of the business. enough tonk this is assuage the issues about the gig ?conomy >> my sense is there is more to do, frankly. something i am very proud of at the moment. my senses we have not done a good job listening to drivers. to be moreng responsible. that's by listening to drivers. one of the things they told us , we value the flexibility you bring to our lives. at the same time, we want to

have a social safety net that fits of the traditional employment model. the growth of independent it isment makes us feel important to figure out that so that drivers feel protected and have the peace of mind they are after. >> what about protection of the user, the passenger? appeal aooking to particular decision. are you confident about it? ourafety of the users is number one priority as a company. -- madeceo thou that that vow a few months back. the license we got a few months back is a good reflection of some of the mistakes we made in the past. it was a great catalyst for us

to take a deep look at ourselves better reveal the trust that eroded over time. the core integrity at of everything we do. i am hopeful that with those changes we will be able to get our license back, but it's up to the court to decide and there is a hearing in june, very soon. caroline spoke with the ceo of consensus systems and the founder of a currency platform on the newshoughts that the u.s. department of justice has opened a criminal probe into the possible manipulation of bitcoin and other cryptocurrency. >> the company focuses on building infrastructure and software applications on the decentralized web.

we don't focus too much on .ryptocurrencies that said, it is really valuable to have regulators in the space taking a look at some of the practices and much less regulated situations. whether it is with respect to cryptocurrency, cryptocurrencies in my opinion should remain because they are non-use cases, or whether it is equities or other assets and how law,maps into securities we are happy to see the work regulators in the united states and different parts of the world are doing. not deeply aware of the activities in the cryptocurrency trading space. we just don't do that sort of thing. there certainly are price swings .

it could be just because the total value of the monetary base is our small. .t's a very young technology lots of news is coming out. but traders are sophisticated and traders will do what they can get away with. >> what are the questions you are being asked? what are the key issues you face and the challenges you have to overcome? focused onostly securities law. we are able to issue investor tokens or tokenized securities. we are also able to issue consumer utility tokens that would not be considered securities. we are focused on getting clear and helping regulators around the world understand there are network business models from membership that represents

consumption of various resources. as long as these projects are selling tokens to token buyers and make use of the token they are not selling in large quantities to speculators who are hoping to make money by the actions of others, that is a good, clean definition of a .onsumer token >> and that is what ether is? wrecks that is exactly what ether is. -- >> that is exactly what ether is. one of the first crypto commodities in the decentralized web. you can do transactions, automated agreements, smart software objects in order to pay for all the shared resources, you need to pay with some of this crypto fuel. that token represents

essentially a way of offering shared resources to the world. >> that was joe lubin at the tech conference in paris. anotherp, elon musk on twitter tirade taking crack that the media and more. we will discuss next. this is bloomberg. ♪

emily: just weeks after elon musk's bizarre behavior on an earnings call, he is back at it on twitter. the tesla ceo with a series of combative tweets this week attacking the media over critical news reporting and more. here to dissect that as well as what else musk is talking about, max jenin who covers all things tesla and elon musk. i want to start with a couple of these tweets. the holier than thou media the truthlay claim to but sugarcoat the lie is why the

public no longer respects them. your take? pri have not checked my avda score yet, but the bottom line here is this is part of a long-running pattern with the elon musk that goes back to the beginning of tesla. he has often complained that the media is in the pocket of the oil industry and detroit. i think what happening here is you have a series of news stories, none of which are super bad for tesla, but when they start adding up, and piling on the fact that tesla is in a mode musk has described as production hell, it is creating pressure and perhaps leading to this kind of twitter rant.

some of the things he is not so happy about the media scrutinizing, cash burn. you can see a chart there that shows cash burn, which is quite extreme. hard to produce not looking great. talk to us a little bit about the big problems elon musk has to worry about. >> i would say the most significant thing that happened over the past couple of days was consumer reports, which was widely respected as a kind of arbiter of quality in cars, came out with a report criticizing the breaking of the model three. it was kind of a small issue. tesla said they were going to fix it. that's one thing. there was a continuous back and forth with various labor groups over conditions at the factory. there was an nlrb complaint filed over an unrelated tweet.

and on top of that, they are trying to get as many cars outdoors as they possibly can. again, it's a kind of soup of stuff that creates pressure on the company. emily: he also seems to have picked a random date, march 15, to unveil the model y, and then he stuck with it. what do you make of that? model y is the suv version of the model three. would imagine,u would be kind of a compact suv, which is a very popular class of car, and something tesla needs of the long rum. the march 15 date he said sounded good and decided to stick with it. -- he has since put out some statements saying it could shift a little bit but that's a pretty good guess.

they have set production could start by 2020. you have to think that's around the time they went to launch it and start taking preorders. i would not make too much of it. thing that has allowed tesla valuentain this very high relative to profit is this continuous stream of exciting that mask andnts his team have been able to put out there. model y becomes important because if they are able to create excitement around the suv, that gives them more runway. borrown continue to money for nothing. and whatever production problems they need to get fixed, get them fixed. and hopefully down the road start making money. emily: all right. we will see what musk does tomorrow. oft does it for this edition

bloomberg technology. tomorrow, everything you need to know about the data regulations going into effect in europe. ♪

meeting is off. president trump cancels the north korea summit and says the u.s. military is ready for any eventuality. >> the president used a more traditional form of message to convey his decision, saying he still hopes he and kim will meet one day. >> stocks initially fell on the news but closed back up. gold seeing its biggest gain in a month, again rallying. >> storage bank cuts jobs and gives up o