>> i am emily chang in san francisco, and this is "bloomberg technology." the u.s. is getting ready to limit tech investments. why do they believe u.s. national security is at risk? the fate of the ridehailing giant's ridehailing operation -- a key regulator to their side. our interview with richard move, one of the earliest investors and largest stakeholders in

xiaomi. are gearing up for the public offering. but first, bloomberg has learned the u.s. treasury department is planning to toughen its dance to protect u.s. intellectual property against china in a move that can heighten a trade dispute. under the new plan, stephen mnuchin would lead to limit chinese tech investments under the guise of national security concerns. china's ministry of commerce did not respond to the inquiry of the report. of donaldn behalf trump, the stories on investment restrictions are false, fake news. the leaker either doesn't exist orknow the subject -- or know the subject very well." senior fellow, a at the asian society, and with me in the deal, redstone isaac.

i want to start with you. reading between the lines. what is your read on this? seems like he got caught off guard by that sunday wall street journal story that talked a lot about this. it does seem to reflect a fight within the administration between trade hawks like navarro ad mnuchin, who wants to have more balanced strategy towards china. emily: we are seeing u.s. stocks getting dragged down with this. what is the impact on u.s. tech companies? >> nvidia down 5%, macron down, intel down 3.5%. china has not had a lot of success in some areas like; after it. you limit the ability of u.s. tech companies to sell into china, and you're putting a lot of pressure on china to compete. we all know this is a very global supply train. -- supply chain.

he comes back here. there is a worry that there is not a lot of nuance in this policy. it ends up hurting companies that are globalized. emily: there has been an impact on u.s. tech companies. what has been the impact so far given the last several months of this tit-for-tat back-and-forth? >> we have seen in terms of chinese investment in general 90% drop among the first month of this year. that is a huge difference in 2018 versus 2017. while tech companies have not been the hardest hit, there is a lot more difficulty both in getting a comfortable reception in silicon valley and in beijing as well. in terms of the latest policy, i think what was really interesting was that on thursday, xi jinping met with a group of business executives and said "in the west, u.s. have this tradition of turning the you guys have

this tradition of turning the other cheek, but we punch back." facese firms can expect to the states. i think this will get worse. emily: isaac, you were just on the show talking about google's big investment in jd.com, the big chinese e-commerce company. are we not going to see deals like that? isaac: i'm not going to say that is the end of the narrow, but that -- of an era, but probably the last bright spot for the rest of 2018. emily: how is u.s. tech reacting? brad: they are trying to do everything they can to make an impact on us policy so the new york times recently reported that tim cook last month was in the oval asking for a more nuanced approach. you have got all the u.s. trade associations going in there and lobbying for changes to this policy. i think they are doing what they can.

emily: is the u.s. administration going to listen? is trump opened this? brad: we'll see. we have seen a lot of economic in nationalhed security terms, and i do not think they have shown a lot of flexibility. emily: do you get the sense the president is concerned about trade deficit our national security or playing to his base? isaac: i think he started with concern about trade deficit. he complained about the trade deficit in the 1980's. japan, he has been surprisingly consistent on for decades. a lot of people around trump have a real fear that chinese investment brings national security concerns, especially zte. companies like people in the administration are getting trump today to -- to diversify percent sin of just focusing on national security implications. emily: there are many who say this is just a dispute.

certainly there may be more levers to pull. how many more are there before we do escalate to code red or whatever you want to call it? isaac: i think both sides have a lot of different walls that they can use for this. the two economies are so deeply china, for and example, there is a lot of major american brands that really see china as their future. i wrote a piece a few months ago 'bout starbucks and starbucks great presence in china. people started to boycott starbucks. there is a lot beijing can do to make it more difficult for american companies to flourish in china, and when that happens, and you have, say, china pushing against tech ceo's like we saw with apple, they will go to the white house and lobbying and lobby on beijing's behalf to a

degree because they want tensions to subside. emily: isaac stone fish of the ia society. bloomberg's brad stone. we will continue to follow. elon musk has just -- to make good on his pledge to push out 5000 model three sedans by the end of this month. how is that tesla ceo planning to a compass this?a giant tent . inside the canopy is an assembly line to create model threes. musk has called the tent "pretty sweet." his critics are not impressed. gets a new rate of tory wi -- a new regulatory win. what this means, next. if you like bloomberg news, check us out on the radio. listen in the u.s. on sirius xm. this is bloomberg. ♪

uber's desire to keep operating in london -- protectnt moves to drivers has appeared to a pew's transport for london, reducing one of the biggest hurdles to its operations there. the stance coincides with the start of a highly anticipated in londond -- over the proposal to extend uber's permit to operate in the capital. i want to bring in caroline hyde in london and eric newcomer, who of course covers uber. caroline, walk us through what happened at the hearing today.

it will go on for several more days. are right.ou at least a couple of days. it kicks off at 10:00 a.m. london time. it is in the magistrates court of westminster. withently, it is packed reporters and indeed, the key lawyers involved. he is representing uber. you have a lawyer representing transport for london, being heard in front of a female judge . there is thomas eldridge, the u.k. manager for uber, being cross-examined. there is plenty of mea culpa coming from uber. what shocked the press the most in london is they said the transport for london took in september of last year was the right one. they were not in any way, they felt, perhaps fit and proper to be in ownership of the license, to run here.

emily: what are some of the measures uber has done to appease the regulators? things.lot of different they put independent directors on their u.k. board, restricted how long drivers can work in london, some sort of cross border issues to make sure drivers are working in the right country. you know, they shared some data with the city, so sort of a slate of reforms to make them more appealing to regulators there. emily: we have been hearing from drivers, caroline, and many of them seem to have some goodwill towards uber that you may not expect. caroline: hundreds of pounds have been spent by bloomberg in an effort for you. this is getting into plenty of ubers and asking the drivers how they feel about this. some say the commissions are too high and they could have an easier way of processing incidents, but notably, there is real good will come the drivers overall. generally, they feel they are

supportive of this company. they love the flexibility they offer it. the drivers and delivery people economy companies such as uber, decently, getp flexibility. i can spend more time with my family and i am rewarded in such a way. i don't want to go back to my old job. i don't want to go back to being a long-distance lorry driver. i like what i am offered here. we are offered perhaps a few more safety measures, and that is what they are being offered, getting insurance packages they can tap into coming from uber. for anuber is now asking 18 month license as opposed to a five-year license to operate. they will be going to this potentially in another 1.5 yes. eric: i think they are willing to take baby steps here. i think there is a lot of they are showing a new face and making real in 18 months, it

will mean look better than they do now, and they are trying to .ay yes, we do have problems we brought in new leadership and we are changing. there is a lot of optimism that if they are allowed to go forward here, they will only look better in the future. emily: whatever happens here, does not just affect uber but other right hailer's -- ridehailers as well, correct? caroline: a new company that is trying to enter the market was backed by germany's daimler. they were looking into london and did not get their license allowed. it was taken away after a day of operation, so it's one of those companies waiting in the wings, looking to see how this unfolds and basically when there is a theyrecep did capital city will try to enter as well. to look out for, any

competitors that can win out if uber does struggle to win over it. it looks like they have done enough to move the regulator. up, and the u.s. start it has got the backing of a company, which runs mercedes. they are teaming up, a joint venture, and some of the drivers that bloomberg spoke to said that if things do not look too good for uber going forward, we might start to look at this particular new entrant in this competition pleasantly, and it could do pretty well. emily: what is next as we watch this play out? eric: there would be a ruling that we are all waiting for. if uber loses, they can still appeal and continue to operate, ongoing.s uber is not about to be off the road anytime soon, but if they win, it would be a major victory and put them back on the path emily:. a big victory for the new ceo.

eric: right. emily: eric newcomer, caroline hyde, thank you both. sticking with ridehailing, one of the uber's main rivals is making a push into the australian market, just launching operations. paul allen filed this report from sydney. paul: it is a slow and steady start for the launch of the ridesharing service in australia. has been trialing its service ahead of its launch in the learned today. in sydney and the rest of australia, we are going to have to wait. and newan zealand -- a step-by-step approach with feedback from the melbourne launch used to shape offerings and launches elsewhere in the company. they have been raising capital to fund the expansion. they raised their valuation to $56 billion. sources saying the company have cash on hand of $12 billion.

discounts of up to 50% will be offered to riders until the end of july. drivers who sign up early will qualify for incentives as well. market inaring australia is getting a little bit crowded. we already have uber here and didi will be joining tax if i -- taxify as well on the street down under. emily: coming up, the decision to go public -- can it live up to the hype? the china half of its stock did you, next. bloomberg tech is livestreaming on twitter. be sure to follow our global breaking news network on tictoc on twitter. this is bloomberg. ♪ ♪

emily: the chinese smartphone aker, xiaomi, on its way to public listing marking what would be the biggest ipo in two

years. it may hit a snag in its hopes to reach 100 billion dollars valuation by postponing the mainland china half of its listing. stephen engle reports from beijing. stephen: xiaomi's decision to postpone a simultaneous listing in shanghai with its hong kong ipo could lower ambitions. the hong kong ipo is said to be the world's biggest in nearly two years to raise about six point one billion u.s. dollars, but it is a considerably shaved down offering that originally was expected to top $10 billion. the companies cfo says there is no timeframe to revive the domestic part of the listing. sources say xiaomi scrapped offering because of differences with the regulator overvaluation, but xiaomi says it has no dispute with the csrc. may dispute xiaomi's valuation. the ipo is said to be marketed at up to 29.3 times forecasted

2019 earnings, making it twice as expensive as apple and pricier than tencent, china's biggest internet company. xiaomi says it deserves a premium and valuations because it sees itself as an emerging internet and e-commerce company rather than simply a lower margin smartphone player. the ipo likely begins trading in hong kong july 9. stephen engle, bloomberg news, beijing. emily: we continue our look at xiaomi's ipo as part of our china series. tells tomartner duane paved thewhy he way for more megadeals in the region. >> hong kong has just started ,his new listing structure xiaomi being the first one to file under that listing role. the ipo will be successful, paving the way for innovators,inese tech companies, to go to hong

kong. yet another interesting venue. tom: what are your views on the changes around domestic listings? the moves here in china to encourage more of the tech companies to list in the domestic markets via the cdr plan? aree: i think cdr rules interesting because, historically, many of the bigger , successful chinese tech companies have chosen offshore markets for listing. so, the fundamental change in china has to be the listing requirements that enable similar companies of the future to be able to list in china. i think a lot of people focus primarily on the cdr element of it. one smallat is just portion.

the key is the new change in , arency, the unicorn here lot sooner, a lot faster. tom: tencent, alibaba, and the significance as their role as investors in the tech space. are they proving detrimental? cloud, are of their they proving suffocating for some of these startups? does it make your job more difficult? duane: it sometimes makes our job more difficult. hand, they also -- an interesting avenue affects it. stakeses as well as formerly investors such as -- regard, they had more at the possibilities. in terms of the overall competitive and entrepreneurial

environment, i think a more investmentategic environment is probably healthy. tom: does that intense competition between tencent and alibaba, does that just continue to grind on? duane: i think it will grind on for a little longer. both companies have strong ability to not only do extremely well in their core business, they have the network affect onher on the wechat side or the e-commerce side, and then now, by payments. with that cap of effects, they can get into a lot of new business and continue to be successful. i think it is probably not too

early at least for the government to start thinking to encourage the growth of the home champion, but also be mindful of their effect on the overall startup environment. it has not been detrimental yet. untamed and unchecked, this could be dangerous in years to come. emily: that was doing long -- duane kuang speaking with tom mackenzie. a ceo will join us to talk about investing in tencent and more. that is next. and we take a look into walmart watch exclusive members only shopping experience. jet black ceo joins us later in the hour. this is bloomberg. ♪

emily: this is "bloomberg technology." i am emily chain in san francisco. -- emily chang in san francisco. business had a boost. is one of the biggest is under the radar tech investors in the world and long relied on it anyone percent taken chinese tech giant tencent to accelerate profit, but it's investments are starting to bear fruit. folded 2% stake in tencent and the netted another 1.6 billion dollar profit from the sale of a stake in the indian e-commerce startup in may.

joining us to discuss, naspers ceo. fastening story of how they transformed themselves 30 years ago. tell us about the recent share sales. why did you think you needed these billions of dollars to build naspers of the future? >> thanks a lot for having me, emily. the main reason we freed up our capital is driven by opportunity. we have been focusing building our e-commerce business in class at -- classified and online for delivery. we realized there is so much for the opportunity to pursue. shore up theted to balance sheet and give us the capacity to do that. apeat the model of finding great business, finding a way entrepreneur, putting our backing behind him, and making a great company grow. small to walk away from a stake in tencent is risky given how fast the company continues

to grow. where do you plan to put this money? where do you see that opportunity? bob: what we see basically -- of an amazingcent is company. probably one of the most impressive growth stories anywhere in the world today. but what we also see is that we have managed to build excellent businesses in 120 countries, and we are just not done. we realized that if we continue to be looking for the right entrepreneurs, we find them. we actually trust them. we give them a lot of runway. we can actually do this again and again. we have done this with flip and found the opportunity really early and backed a founder in 2007 in india, looking at and e-commerce dream. wanting to build this great business. while there were no credit cards, no logistics, no structured retail, we backed them from early on and he made

something great happen, and that is what we do. emily: you bought that small stake that in 2001. it's worth upwards of $150 billion. i am sure there's been some fascinating drama over the years whether to get into games or e-commerce. you have been ringside for all of this. i am curious if you could share more about your shared history. what has it been like to be on the front lines of $.10 growth -- tencent's growth? bob: it's probably the company that is run by the most incredible leadership team in the world. i think what they have done structurally well is they care about their customers. they start with the customers. they start with technology. and they have been basically taking a view on what is the best possible product we can offer. and that is very much what we do as well in our other investments. we find these entrepreneurs with and customeroduct focus, and tencent is the best

example of doing that. that's fundamentally what we do. emily: your state in tencent -- stake in tencent is worth more than naspers overall. what is your strategy to close that gap? we are of course a company that is quite diversified, so you would expect a certain discount to be for us normal to trade at. us, there are structural other factors that make our lives a little different from others, but fundamentally, what we focus on doing is find these great entrepreneurs that build great businesses. actually, the last set of results are good examples where we see very strong growth in the e-commerce business growing close to 40%, accelerating year-over-year, and our core e-commerce investment starting profitable. building great businesses is what we do. you look ataid listing some business units individually. curious which of your businesses

are you think our listing-ready? -- are listing-ready? bob: we are looking at a broad set of options to which businesses can actually help us over time to unlock this value. there is a broad set of options we have. we have done it many times in the past. for example, we have an online for delivery business called delivery hero. that company went public and is on a fantastic ride. we look at which businesses would be better off if we take them to a public situation. emily: but can you give us any more insight on what kind of structural changes you are considering? and when these businesses could be listed and where? bob: yeah, if you look at the today, theere it is questions that we face, what we

really want to do is take a step back, and when you make change to the structure of the company, you don't want it to be short-term. that is what we are in at the moment. the number of structural options could be listings or also could be other structural changes in the portfolio. we are not at the time where we can talk about it. we get back to you on that. naspers is the biggest tv operator in africa, but the business has not been doing that well. including netflix are entering the market. is that a business you would consider selling? what are the plans for it? bob: if you're familiar with the situation in sub-saharan africa, currencies have struggled, and as a result, our businesses have had a tough time as well. this year, we managed to increase the profitability of our entertainment business

substantially, on the back of a turnaround program we have been running for the last two years, which are getting a broader subscriber base and also reducing our costs. that is working well. we are focused on continuing that. penetrationinternet is considerably lower in africa, we will take some time before everybody has access to broadband. we do want to be ready for this changes and consumer habits. we have launched a video -- it has grown tremendously on the continent. it provides great local content that people love, looking at languages. i think that will do a whole lot more about that. people basically selling their old stuff, where you are now competing with facebook marketplace. thebook obviously has benefit of scale.

they do not need to spend that much to attract new customers. how concerned are you about the threat of facebook? bob: nobody should underestimate facebook. what we have seen in the last few years -- if i take a step back about 2.5 years ago, there is an amazing entrepreneur who we knew from before. we invested in his company before. he came to me and said i can build a business and it has to be the most vibrant trading place for used goods, india. since we knew he had done it before, we listened carefully. if you look at what happened in the last year, that is the company involved. it was the second fastest growing up in the united states in any category. 100 are now approximately million in stores. they have been selling 400 million items in the united states, and that is after two years.

most clearly on an amazing path to change the way that americans trade their secondhand goods, and i think it is an amazing story. emily: so obviously, you are still figuring out what to do with all that cash, but you had major success in china and india. what regions or sectors in particular are you most intrigued by? bob: we are very excited about india as an investment sector. in know that at this point time already based on mobile internet, india is the second largest internet market in the world, just after china. if you look at the potential of smartphone growth in india, we think that the online population could go double. it could catch up to the same unparalleled levels where china is today. is that amazing growth really what excites us about india, and we have also noticed are indian entrepreneurs tenacious, and they have great ideas and aspirations. i think we found a great

example. we have seen other great businesses there. we invested in an online food delivery business called swiggy, which has seen explosive growth driven by large markets, a universal need the business is addressing, and a great entrepreneur that runs with it. emily: do you think you could ever top the success of tencent? bob: that's a great question. i think if you look at the history of internet investment, i don't think there is another company that delivered a similar return of that investment. if that is the benchmark, everyone failed so far. the model of finding an exceptional group of people to have a real vision to build an amazing business, that is what we do all the time. emily: and going forward, you know, how do you expect to continue to advise tencent? what would you like to see them do and not do when it comes to

expanding into new markets? bob: so if you look at the position that tencent has in the markets, there is a lot of reason to be excited about what they have been doing. fundamentally like is how customer and product-focused they are. if you take that approach, where you have an obsession with doing the right thing, you take the largest internet market in the world, and with the starting position and ambition, and there and this amazing ecosystem of companies they , they actually have become very large businesses in their own rights. there is where we get really excited for the future. emily: all right, naspers ceo, bob van dijk. thank you so much for stopping by. apple could between kunitz audio device strategy. a new home pod and studio

quality over the air headphones could debut as early as next year. in the process, apple is expanding its partnership with foxconn and shifting away from smaller hardware makers like invent tech. we talked to the future of retail. this is bloomberg. ♪

emily: walmart wants to be your personal shopper, if you're lucky enough to be invited. the biggest retailer unveiled jet black, a shopping service for busy urban families. members can text their request to receive same-day delivery. give -- giftwrapping included.

york, the from new to developblack personalized shopping services. thank you so much for joining us. talk to me about how this works and what the goals are. is a personal shopping service over text message. you text us whatever you want, whether it is largely determined, and give -- laundry determined, a gift. we will get it to you. we will send you recommendations of the products we think are the best fit and then we send it in a career-style delivery. it is hasslefree return should you want to return everything. we are trying to take away all the work from e-commerce shopping. emily: it is not just walmart and jet.com products you will buy for people. you might want to order something from pottery barn and you will fill that too. will you first fulfill the walmart and jet orders to drive traffic to your own compan

ies? jenny: the goal is to give the customer the best fit product recommendations. we will truly serve up whatever that story and vendor is the best fit recommendation, so that may be that it it an amazo walmart -- it is a product, but it could be from sephora. we can build that trusted relationship with them. we are trying to get smarter so walmart can understand brands and products they might not carry but that a consumer might need and want as well, so maybe over time, they add products to their inventory as well. emily: how are people using it so far? how are they using it? jenny: the are in new york city for our customers, invite only, scaling our business following our shift three weeks ago, trying to uphold a premium experience. it is striking that balance, but

we want to be best in class to give you that seamless experience that lets you save time when you are shopping. how quickly do you plan to expand this beyond new york? jenny: we are moving very quickly. this is the second business i started, and we are already growing a large team in new york. we are going to start looking at other cities as well. our wait list has given us indication of other areas throughout the country that have excitement for the service. it will be interesting to see. we launched in new york city and urban center, but what does the experience look like for suburban areas who might not have the wide collection of products? we will be experimenting with a few different products. packaging. this is very much a startup type experience and the world largest retailers walmart, so it's great to see they are being so

entrepreneurial about it. emily: talk me through the rice point. do you think $50 a month is a good price point? this is very different. but still, you are ending to offer something that is high touch. jenny: absolutely. we will continue to find product market fit. for this consumer, that is a couple hours of babysitting. our customer typically has young children at home. for them, the greatest luxury is timesaving. time intoing them major ways. the first is in finding the right fit product. currently, a customer shopping for a travel stroller might spend hours researching to find the best product a suit them. we take away that research on them and actually arm them with the best product fit. we also said you time in the mental list where you have to remember to buy paper towels, a birthday gift. this mental clutter that can take away from the day-to-day

and just being present in your life. for this customer, that $50 per , metalnd timesaving known free shipping, same or next day shipping for most items. we do free gift wrap, handwritten gift notes, the returned a hasslefree where we take your of everything. it very quickly can justify the $50 per month price point, if not more. emily: all right. jenny fleiss, we will keep our eyes on you guys. jenny: thank you. emily: instagram is estimated to be worth more than $100 billion. that means facebook owned photo sharing company which reached one active users will see its movie -- will see its revenue move. in 2017.d be up 11% week, we have special coverage highlighting what may be the golden age for chinese venture capital. our interview with one of the biggest players in these days is

next. this is bloomberg. ♪ is next. thiss oomberg. ♪

emil one of the earliest due tors in xiaomi is the windfall in the public offering. as part of bloomberg center china series, richard fu sat down to tell us what drove his decision so early. basically, when we made the decision to invest in that company, that was ideal. if nothing. the secondary market makes the judgment with the number. they see we can have observation. how many users react to the innovation the company delivered . they do not know the company's

background. they have no idea. they just know this is maybe a small studio. ,eally screaming about this really oil to the pop -- really loyal to the product. we already cut market share from the competitor. any.without when the valuation -- although it looks like a very expensive, but it is really cheap. >> how much money did you invest altogether in xiaomi? >> no more than $100 million. one of the most successful

technology companies in china and you are a major shareholder out less than $100 million. investment is excellent. we are happy about that. >> what is another one? one that perhaps no one has heard of yet but will hear about in the next five years? richard: we invested in another company. we believe that ai is highly related. we are also investing in a company for robotics. one of the biggest smart devices is a car. we have seen they are very impressive. they made great progress.

still, in the very early stages. a minimum>> some have hit rate. they look at the number of startups they invest in and have a limited number to grow their valuation by a certain amount. do you have any kind of minimum bar when it comes to your investments, any mark for success? richard: sometimes, we say venture investment is kind of an art. what we invest in is uncertainty. we have the principle. we have our strategy. we have our planning. but we do not have the kpi. it's very dangerous. >> are you worried about the potential impacts of trade sanctions and a trade war between china and america on the tech companies you invest in? richard: in the long run, i do not worry too much. in the short-term, we definitely worry about how people will

impact those sectors. the united states has the best higher education in this world. and we have the very -- are working -- we have very hard-working engineers. they can work together. they can address the business opportunity. both in the united states and china. i am concerned. so intelligent, so smart, they can make their lives -- they have a choice. i believe that. i have confidence about the erican pple. liu,: that was richard founding partner at morningside. toe losses in addition strong growth when it filed for hong kong ipo. bloomberg learned the company is looking to raise $6 billion in funds to better compete in areas like ridehailing, finance, travel. it follows xiaomi, also targeting a hong kong ipo. is another signal of

china's tech strength. against thension united states. that does it for this edition of bloomberg technology. we will hear more about the uber issues in london. we will be back. this is bloomberg. ♪

>> this is "bloomberg daybreak: europe and middle east." investors fear a trade war is going from rhetoric to reality. the s&p 500 suffers its worst day in almost 12 weeks. lira following president historys election fizzle out. and theare flattening two and 10 year yield hits a fresh 2018 low. several wall street firms are questioning their year and forecast. >>