♪ >> i'm emily chang this is "bloomberg technology." some white house officials try to restart talks with china before the first wave of tariffs kicks in. tech leaders are starting to speak out about a trade war. at deep dot into new energy sources. we cover the ball out after the departure of brian krzanich and intel ceo. the new demands from leadership in the me too error.

first to our top story. white house officials are starting to restart talks with china. the countdown is on before $34 billion in chinese products are hit with tariffs. they are starting to speak out about concerns about a trade war. the billionaire chair of foxconn said the biggest challenge facing foxconn is a u.s.-china trade war. trade war is not about trade but it is a tech war ended is a manufacturing more. for more global trade tensions we are joined by jenny menard. talk to us about the timeline here given that the first wave of tariffs is expected to hit in just two weeks. >> the efforts that we reported about yesterday which a faction of the white house is trying to

get the chinese to engage in talks to make maybe pushed down the talks. seems to not at least from our reporting now seems to not have worked area we have no signs that the president is willing to back down so the tariffs are likely to go into effect on july 6. we know that china is ready to retaliate with countermeasures. same amount, sam timeline. that timeline still stands. >> tell us what you have learned about some officials within the administration who have been pushing for this if unsuccessfully. >> some officials who are from the more pro-trade wing of the white house from the national economic council have reached out to former government officials in china and experts to gauge the chances of what it would take to get the chinese vice president to come visit before the tariffs are set to hit on july 6. we had a chinese economic

advisor here and the talks for a potential trade deal sort of fell apart after steven mnuchin said the trade war is on hold. then the tariffs were set to move forward. now they are trying to up the ante and the next highest level of person that could come to washington would be the vice president. they were trying to see how could you get him here. how could you get this man to meet with president trump. in maybe figure out a solution that does not lead to tariffs. we know the president is intent on imposing the tariffs because no one has done this before. he is intent on doing a lot of things that no one has done before. maybe while he is not looking to have tariffs in place for a long time, he definitely wants to impose them. we are looking at that timeline, we are looking at investment restrictions imposed next friday. that is coming out of the treasury department. we're definitely going to see first shots fired in what is a

trade war or could be a trade war. let's what you make of the comments coming from business leaders in china? we heard foxconn saying this is a tech war. this is a company that based in china manufactures american products. >> i think what we are seeing is just the beginning of many companies speaking out about this. we have kind of scene the markets have not taken seriously. the president has talked about all of these tariffs but no one has translated that into what this would mean for the economy or for individual companies. here we are now with the investment restrictions coming next friday, that will be possibly a bigger blow for both economies in companies on both countries.

to see what these investment restrictions will do for their businesses. the quote that we just saw, that is just the beginning of many many companies speaking out because they are not being heard by this administration. there are lots of companies who have tried to get to the white house. they just are not being heard. this is not what we are going to see their. they are complaining. they had no chance of getting to the heart of this. >> i know you will keep us posted. flashpoint released a new report this week highlighting the biggest global threats in cyberspace and what they mean for the online and real world. for more we are joined by asia-pacific research who helped write the strip or. china obviously is ground zero in many ways for cyberattacks. do you expect any more activity given these trade tensions from chinese cyber attackers?

>> the trade relations between the u.s. and china are just one aspect of the drama that is unfolding. the long-term geopolitical interest of china and undermining the u.s.'s military dominance in east asia remains the same and long-term from both an economic and a perspective, their interest in acquiring american intellectual property remains pretty static. during this time of negotiations with north korea, where it doesn't like we might be making a little bit of progress there, a large-scale attack is rather unlikely both from north korea and from china. the long-term risks associated with these relationships remain pretty static even though we have been moving into an area of potential detente.

>> north korean cyber hackers have continued their action unabated. what do you see? >> there been a string of attacks over the last few months tenuously linked to north korea. attribution in cyberspace is very difficult. it requires concrete attribution and information derived from cyberspace and other resources. it is a very cap and mouse game that requires a lot of time and know-how. north korea has been tenuously linked to a series of attacks in south korea, particularly for one in currency exchanges. recently attacks against financial institutions in latin america. >> i want to talk about how the

u.s. is responding and how they have mobilized a new cyber offensive. we had a guest yesterday. take a listen. >> we have not developed the doctrine under which that would decide when we would use these weapons and when we would not. we won't even talk about it in public. if you can't do that, you can't begin to set guide rails. >> how well prepared is the u.s. to respond defensively and offensively? >> the last year or so has been hard on the american u.s. intelligence committee. you have seen that with various releases from the national security agency and the cia through groups like the shadow

broker's and wikileaks. our defensive capabilities are considered the pinnacle in this space. however we have taken a significant hit over the last few years and i think that will have an impact on how we respond. with respect to his comments a moment ago, as international community this is not to say u.s. problem, we have to determine how we are going to respond to these tests of incidents. when is it appropriate to use force for example and response to a cyberattack attack? when are sanctions appropriate? it has been talked about ad nauseam and there is no easy answer. if there were, we would not be in the situation. >> sanctions have been tightened or extended on russia. how concerned do we need to be about russia? >> you bring up a good point.

a lot of the sanctions that have been put on russia have not seems to have that much of an effect. vladimir putin got reelected. the price of oil is rising again. they are hosting the world cup. there is not a lot of indication that they have paid a significant price or what they allegedly did during the elections to manipulate our democracy. going forward, we are very likely to see similar attempts particularly in the upcoming midterm election in manipulating public opinion. not necessarily manipulating vote counts but doing what which has done best is manipulating public opinion. >> a story we are watching. the supreme court ruled saying prosecutors need a warrant to get phone location data. friday in favor

he of the man who said prosecutors violated the constitution when they obtained phone data and used it to try against him. the ruling could have a far-reaching impact. prosecutors in most parts of the u.s. have been able to demand that data from marble phone characters was required. coming up, cambridge analytical scandal. details on how one blank should drop the social media network. this is bloomberg. ♪

♪ >> the scandinavian bank says any money manager who is serious about ethical investing should drop facebook. they said the social network was unresponsive to questions about the came which analytical scandal. facebook has not responded to a request for comment. we are joined now from london to discuss. what is the real issue here? >> the issue is how proactive facebook was. the fact that it was not at all. they didn't get any good answers to their questions about how

facebook don't with the whole scandal that involved cambridge analytical and 87 million pieces of our data. therefore they feel like they should walk the talk when it comes to sustainable investing and drop facebook entirely. even though mark zuckerberg said really i'm sorry. he went in front of politicians. that wasn't good enough according to them. this is notable coming from nordea. one executive has taken controversial stands before. he stopped buying shares of his own company because he said they were being investigated for tax avoidance. >> should we be concerned that other companies should follow? >> maybe. when you break it all down, they

invested a billion euros of their 300 and 20 billion euros in sustainable investing. of that, 3.6 million euros was in facebook. it's hardly anything when you think about the half of trillion valuation that facebook has. they are not going to suffer. but this is part of a movement that we see in terms of money going stable investing. that is growing 12% per year. think of the responsibility that shareholders are talking of. the head of blackrock is saying it is time to hold companies accountable. he wrote a letter to all of the big companies out there saying look you have to be over about your social purpose. the question is here, whether facebook let go of its social purpose in this whole data scandal. many might argue that he did not

because they still brought the world closer together. that is their purpose. that is their mission. sure they were pretty poor with our data and they have apologized but were they really against their mission? >> their goal is still to make money in the shares are at their highest point ever. they have completely rebounded and then some. are they cutting off their nose despite their face? >> he admits it. the guy who is managing this money is saying look i realize this is financially painful but i need to walk the talk. sure, the rest of the investor base they have seen that the advertisers don't seem to mind too much the fact that the user base has not left them. they are sticking with them. going forward we continue to see facebook react to this regulatory impact as well.

that will be a question going forward for investors. >> thank you so much. coming up, our interview with the new president of jet.com. this is bloomberg. ♪

♪ >> youtube is doing more to keep its brightest stars happy. they are adding a feature that while the content creators to sell memberships to their fans. viewers will be able to pay a monthly fee for perks like custom emojis, exclusive content and merchandise. almost two years ago walmart paid $3.3 billion for jet.com. they have transferred the e-commerce operation largely overshadowing jet.

we asked how jet.com can differentiate itself from walmart.com. >> the jet business has evolved to serve in more urban and affluent customer. particularly in the large metropolitan areas. that is really what we have been doing to focus on that today. we made good progress on that path. through our assortment we have brought on local brands such as the new york favorite shop which is selling a number of grocery products from a service perspective we acquired a startup called parcels. they provide les miles the film in the new york area. we are working towards being urban focus. >> is it jet.com's mission to win over the new york shopper

from walmart? >> it is with the more affluent and urban customer. that highlights walmart's strengths elsewhere in the country. >> grocery is a big focus for you at jet.com. that is a big part of your background. how would you compete with the more established online grocers? amazon fresh? whole foods? >> when i look at the u.s. market is certainly my experience that no one really is combining grocery and general merchandise in a seamless way for customers. that is a great opportunity for jet. the way we are looking at it is to build a business here in new

york and really understand the customer and provide a service that works for them. one of the things about groceries, i see at an emotional experience. >> are you confident that there is consumer demand? >> online can be very emotionally engaging for customers. we want to re-humanized e-commerce. to put that part of entity and was technology. customers are looking for convenience and a business they can trust that is on their side. >> what about cost? last mile delivery is often the most expensive. >> for any retailer, the ability to build a relationship with a customer across all of their life, that is why grocery is in important part of the offer. it is something customers by frequently and they trust. on the back of that relationship

we can work with them to sell a broad range of other categories. >> you didn't quite answer my question. you have to find a way to pay for that somewhere else. >> with any retailer it is about a combination of all things together. we look at everything together it makes sense. >> as you look to implement the strategy that is focused on new york and the larger cities, are you looking toward any other partnerships are acquisitions? >> we are always looking at how do we grow our business? whether that is through partnerships or overtime. an example is we have a division within the team called vertical brands. within that they have a series of brands which are digitally

born and exclusively sold through jet. it is really competing in the red hot mattress market. i think that's a good example of where we can actually partner to provide a unique assortment. >> we should expect more of these. one topic in the news, the escalating trade war between the u.s. and china. are you concerned about the impact of tariffs for jet.com? you obviously have a lot of rocks that are made in china. >> we just want to build a business for our customers. there will always be macroeconomic changes. there always been political changes. we just have to respond and continue to focus on doing what's right for customers. being part of the walmart group allows us to be part of the scale for some of our customers

but my job is to keep focused on the customer. lots of things will happen in the world around that. >> the customers shouldn't expect higher prices? >> as we build an assortment for customers we can benefit from the scale. we are in a good place. walmart has already invested in a lot of u.s. sourced products and u.s. jobs over the last few years. that is something jet can it from there as well. >> that was the president of jet.com. the future of renewable energy is coming up. bloomberg tech is livestreaming on twitter. be sure to follow our global network on @tictoc on twitter. this is bloomberg. ♪

♪ emily: this is "bloomberg technology." i'm emily chang. for years, lithium batteries have been found in smart phones and laptops, but more recent versions are bigger. the electric vehicle boom has replaced gadgets as the biggest source of demand, and along with the growing demand, the need to store more energy to power the world will be a necessity to compensate for the sun. and you can read all about this and more in a new report by bloomberg, the new energy outlook 2018, the new energy economic long-term analysis of the power sector. joining me to discuss, the head of energy storage at bloomberg. thank you for joining us.

what is pushing the drive toward batteries and energy sources? >> batteries have gone to where they are today because of the surge in demand for electric vehicles. what that means is now when we look forward, batteries have become a source of flexibility in the power market. they help enable wind and solar to increase their combined share of electricity generation today from 7% to 50% in 2050. emily: we are not talking just about vehicles, we are talking about homes themselves. >> exactly. whether it is a power well in your home, in your garage, or whether it is a large utility scale system connected to the grid. emily: how does the u.s. compare to china? we hear about tesla and what elon musk is doing here, but obviously china has been a focus on this for quite a while.

>> indeed. it is important to differentiate between deployment and manufacturing. in deployment, the u.s. is a world leader. in manufacturing, we have seen strides in china that are beginning to outpace what is happening here. in order to compete on the manufacturing side, u.s. companies will have to increase their investment in scale and increase investment in technology. emily: will the supply chain be an issue given that much of the supply comes from china? >> we believe we have seen supply chain constraints over the last two years, notably with lithium and cobalt, causing prices to spike. however, longer-term, we think we will have sufficient supply to meet demand and we do not see china as a main risk. instead, we see cobalt coming from the democratic republic of congo, being a much bigger concern for automakers. emily: how so?

>> roughly 60% of the world's cobalt is sourced from there and it is a territory that has had significant sort of stability issues, and this is something that the automakers are concerned about when they look at the supply chain. emily: i want to bring in two people familiar with the growing need to create more energy storage, especially with the ion batteries. we have one of the largest manufacturers in the world for rechargeable batteries, also the ceo of fluence, a leading storage provider. john, i want to start with you. part of the surge is because the price and batteries has gone down so much that this is more economical now. so how do you say batteries disrupting the current power monopolies? john: batteries have come about

really as an alternate to some of the power plants we would've otherwise built. often, we are building power plants for the reliability of the grid and today we have the opportunity to put battery systems in place fsame reliability and flexibility that logan was talking about. this is the perfect complement to the kind of renewable generation that is really the main driver of new energy. emily: michael, how big of a driver is transportation in terms of driving battery development and growth? michael: i would say that certainly ev's is the largest driver of batteries today. logan was talking about. i think china over every year is consuming about 18 gigawatt hours of batteries just for buses. and they are transitioning i think all of their bus fleets to zero emission technologies, which produces an energy agnostic platform that can use

solar energy, wind energy, whatever the need is, they are adaptable. so as they clean up their technology, the adaptable technology is immediately used from technology. and china today, i think they have produced in the first quarter more -- over the time of production -- more ev's then all of the nations put together, so they are driving these chemistries, the manufacturing components, the leverage, all through their electrified vehicles. the vehicle technology. emily: who are the biggest losers in batteries? >> i do not think it is the losers of it, i think it is the fact we have an analytical infrastructure we need to continue to invest in. it is fundamental to economic growth everywhere in the globe.

as asset age outcome old transmission lines and things have to be replaced. what we are finding is that are is in large-format systems are a better way to rebuild the infrastructure, so we are finding batteries that go on the grid and his substitute some cases for jobs. we did with transmission lines, some of them with power generators, but in all cases they are complement in the grid, making it cheaper and more reliable, and making it cleaner. emily: michael, it is not all smooth sailing ahead. there are some things about battery that i understand that keep you up at night, so what are they? michael: certainly, if you select the wrong chemistry, there are some chemistries that are high-energy density, but also susceptible to thermal runaway. it keeps me up at night if the industry does not select the correct -- we could have landfill nightmares in the

future when we are trying to recycle the batteries. the other thing that worries me is the tyranny of the embedded-based. i believe we are displacing industries, entire industries. the internal combustion engine technologies i believe will be in the past. electrify transportation is more reliable, sustainable and it is adaptable. so we will see a lot of disruption as electrified vehicles gain more market share. emily: logan, that sounds a little scary. logan: scary or exciting, depending which perspective you are coming from. emily: how would you characterize the way tesla fits in here, how revolutionary is it or not? logan: i think if we look at says the as a manufacturer here in the united states, it currently has about 19 gigawatts -- of power, putting it on par with any manufacturer in the

world at the moment and it plans to increase that to 105, once again here in the u.s. so that scale is part of a general rush from leading manufacturers, whether it is from china, korea, or japan to cement that position. tesla is at the forefront, but it is not alone. emily: john, being from an industry that is being disrupted again and again, what do you think are the main trends that will shape how batteries grow and develop over the next few decades? john: we have been in this for a little while, we started about 10 years ago on the grid and most recently formed a joint venture with a.s. to take this to the next level.

today we have already deployed battery systems in 16 countries, and we have some of the largest systems existing in places like arizona, california, hawaii, and other places as well. the united kingdom, australia, japan and around the world, so i think we are recognizing the fact that storage is here. it is supplied in a quantity that can replace things like power plants, and it is fitting a lot of policy goals. it is cleaner, it is more compact. and it allows the grids to be flexible. emily: michael, when will my home and car be run on batteries, and every home and car, is that in the future? michael: it is one of the only sustainable solutions. if we are looking at true zero emission technologies, or an ecosystem where you start with

renewable power and you make it relevant, and you use environmentally friendly batteries, like we were talking about, to balance and dispatch that power and responsibly use that power for transportation or led lighting systems in homes, that ecosystem i believe is the only sustainable ecosystem in the future. we cannot depend on finite fuels that believe air and water. we have to turn more to renewable power to be relevant. the companies that will select those will stay relevant in the future. emily: michael, john, logan, thank you all. new details have emerged about the self driving uber that struck and killed a pedestrian. a new report from tempe, arizona police department says the safety driver was distracted and was streaming a television show on their phone right before the

crash. the car was in autonomous driving mode, the driver watching "the voice," and did not look up until about half a second before the crash. the crash was deemed avoidable. no word yet on if the driver will be charged. ♪ coming up, processing billions of dollars in payrolls. what has the start up gusto learned about the new workforce. that is next. this is bloomberg. ♪

♪ emily: a new crop of startups trying to tackle one of the biggest headaches in the workplace, payroll and benefits. this start of has been building a client base, processing billions in payroll transactions and to the company has likely benefited from the stumble of one of its competitors, zenefits, whose ceo was ousted amongst a scandal. meantime, gusto has been full speed ahead and they say they're listening to what the workforce wants, launching a new feature. the ceo joins me now. employees can decide to get paid the next day if they want, whenever they want to be paid, so why is this significant? >> most people are paid on a two week schedule, and one of the downfalls of that is if you have rent due, sometimes you have to take out a loan or use credit card debt.

we are saying people should get paid when they want. if you have worked seven days, you should get paid for those seven days of work. employees can literally go in and choose to get paid tomorrow, then that is possible without the employer debit cycle changing at all. emily: how much backend work does it involve? >> we have been building the product for six years, it is based on our ability to process millions of dollars of payroll that makes it possible. emily: in practice, how many employees will take advantage of this? >> employers, eight out of 10 say that personal finances of their employees affects their performance, and you have 12 million americans literally taking out payday loans every year, so we think this will have a profound impact on an employee's personal finances. emily: the cost of acquiring small businesses is not small, and that is part of what brought benefits down and the cost with

bigger enterprises is even bigger, so how do you keep costs in check? >> it is mostly word-of-mouth. we have to build a great experience. today we serve over 1% of all employers in america and a lot of it is based on word-of-mouth. emily: is the goal to get larger businesses? >> for the next several years we are focused on 100 employees, that is 90% of the companies in america, so we love serving that segment. emily: i was trying to track your progress. i noticed online they market them those as the number one in hr software -- are they? >> we have over 60,000 clients and if you look at the details, that is the largest of anybody out there in the newer crop of companies. adp is bigger, they have about 10% market share, but the truth is pen and paper still has about 50% market share, so our focus is on getting small businesses

using gusto. emily: is any of the work involving pay equity, can you track pay equity? there is a lot of talk about how diversity and equality can be built into hr systems, so things do not get uneven. is that something you are thinking about? >> definitely. we are thinking about that moment when you set up compensation, what ideas go into that, so nothing to announce today, but it is an area of a focus for us. emily: do you think ai solutions are possible when it comes to equality and building diversity in the workforce, or is it on personnel? >> technology can be used whether it is ai or others as a tool, but people have to ultimately make the decision on the value system you have. frankly, you know, people have

not had great tools before, they have not had access to the data and part of our job is to equip that for them. emily: you were on the show at the height of the scandal and talking about how focused you were on culture. so much has happened, so what are you doing at the company to make sure that problems do not arise when it comes to the culture that you are building? >> for us, for the last six years, we plan to do this for decades, they just has been focusing on the customer and staying authentic to our values. we tried to avoid the echo chamber that sometimes comes up in silicon valley. so a shop in oklahoma city just wants to know, who will set up health insurance, and we now do a lot of health insurance with the gusto. emily: i found something interesting at gusto is people walk around barefoot, it is like a thing, you make people take off their shoes. >> we have some traditions.

not something we expect our customers to do, but we started in palo alto and we were all raised to take our shoes off, and it became a tradition that was like a default. now 600 people in our offices, we take our shoes off. emily: everyone? billion-dollar company and everybody takes off their shoes? >> yes, it is authentic to us. [laughter] emily: isn't it a liability? what if somebody steps on something, you are an hr company? >> it is something we have looked into. we have comfortable floors, it is a cultural thing. companies should stay true to their values and this is one that we care about. emily: i am from hawaii, so i understand. josh reeves, thank you for stopping by. blackberry shares plunge the most in a year, selling 80% from a year earlier, and the company blamed the drop on a change in

accounting standards. the company is also transitioning from clients paying up front to this at such a model. speaking on bloomberg television, the ceo says the turnaround is complete, despite the fall in software sales. >> we are looking at expanding our business and a geographically and vertically, so you know, the company itself is now saved. and now we are going to have to make it interesting. emily: coming up, brian krzanich is out as the ceo of intel, did this just become corporate america's me too movement? we will discuss, next. this is bloomberg. ♪

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emily: intel is looking for a new leader, after ousting brian krzanich for having an inappropriate relationship with an employee. a new name has been thrown into the mix, according to research, pat gelsinger would be an ideal candidate. he was previously cto of intel. my next guest says this scandal is corporate america's biggest me too movement yet. she has written all about it. welcome. suddenly, an executive having an affair with somebody at the company is nothing new, but does this job a -- draw a new line in what is acceptable? >> you are right, this is not new for corporate executives. the office romance is kind of an american institution. bill gates famously dated and

married an employee. but the scrutiny now is on everyone, including in corporate america, in this post me to movement, and everybody's behavior has to be above reproach. their board had no choice, there was a policy that managers could not date subordinates and if you are the ceo, basically everybody is a subordinate, so i assume he knew those rules. emily: thinking about the names that have been thrown out, rene james, the former intel president who actually pitched with b.k., as he is called, they pitched together to become ceo and president, also stacy smith, who worked at intel for many years and recently left. and other names, lisa sue, diane greene who is running google cloud, diane bryant who was cpo

for a time at intel, and is now working at google, so how do these names strike you? >> a couple things, they are all highly qualified people, but it is interesting they are all outsiders. intel in its history has never had an outsider ceo. and this is a company that in the last five years under brian krzanich, the bench has been thinned out, in part because maybe he did not make room for strong executives underneath him. so the fact we are talking about outsiders, former intel executives who are now elsewhere, as potential ceos, that is a stunning thing for one of silicon valley's iconic companies that has always hired from within. emily: also interesting many of these intel veterans left after he became the ceo. clearly, the bench at this point

isn't as strong as it was a decade ago. >> it was a stronger bench even five years ago, when brian krzanich became ceo. and some of those people were in the running for the post and it did not get it, so maybe not so surprising they did not stick around, but there have been some high profile departures in the last five years at intel. again, those were folks who could have been groomed to be the next ceo, so it seems like it was a miss on the part of intel that it let some many people go, maybe they could not be at the same company as brian krzanich. emily: how do you think this me too moment will affect of the broader movement? >> i do not have a good sense of whether the rest of the world pays attention to executives of tech companies. but i do think that broadly in corporate america there is now a

clear message that behavior has to be above reproach. emily: ok. thank you so much. that is all for now. have a wonderful weekend. we will be back on monday. this is bloomberg. ♪ what's a gig of data?

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