thank you sahil kapur and kevin cirilli. that's it for "what'd you miss?" it is now time for "bloomberg technology" starting right now. this is bloomberg. ♪ emily: i am emily chang in san francisco. this is "bloomberg technology." in the next hour, amazon joins the trillion dollar valuation club. how the giant welfare alongside apple. plus, tech testified. jack dorsey and sheryl sandberg face the bright lights of capitol hill. can they keep lawmakers at bay? should musk be worrying about an sec ban? some analysts say not so much. we discussed the likelihood of

the tesla ceo being suspended. first, to the top story. amazon is starting with a bang. they are pushing the company beyond a market value of one between dollars. a milestone apple reached last month. a big accomplishment, not just for the company but for the ceo who is currently would -- currently the world wealthiest person. most notably the speed at which they hit the milestone. tech competitors are closing in on the markets as well. joining us to discuss is the tigers financial partners chief investment partner and bloomberg tech global editor redstone -- b rad stone. brad, you started covering amazon in 1999 and it was two or three steps eating an online bookstore -- past being an online bookstore. >> amazon stock price had fallen into the single digits and the boys were panicking back then. we are not our stock price they

said. it is something employees might remember today because as the chart you show demonstrates, this company has been propelled by strong fundamentals and increasing income, but really by a wave of optimism. everything amazon is involved in will turn out well. this market capitalization has tripled in the past few years and everything has to go perfectly to justify the valuation and the growing. amazon is not a stock price, it is doing well in all of its core businesses. it has transformed its operation into a service helping other customers and retailers sell online. clearly, there is a lot of opposition. emily: let's talk about the reality. how likely is it that everything will go perfectly as brad said, ivan? brad: i don't think they expected -- ivan: i don't think they expected to go perfectly. they invest -- expect it to go perfectly.

they invest in growth and they are expanding outside of their core business adding different services into their online retail supply chain management system, and also their web host services. they're adding big data analytics, ai capabilities, so they keep expanding what they do. the next big area amazon moves into will be focusing on health care. emily: i'm looking at the chad from 19 -- chart from 1999. looking at the speed they have risen, is this rational? that.the market decides these are all wrestle actors buying and holding stock. this is a company that has executed well over the past 10 years. the acceleration and loyalty to amazon the amazon prime, increasing success of amazon where they turn their warehouses over to third parties. well, the things it does

and online retail is 5% of total retail in the u.s.. it is much smaller than other markets. some of the optimism is that investors are looking and seeing amazon is a well-run company in markets that have so much room for growth. oil prices crashed in 2007. ivan, do you see big potential challenge or headwinds out there that could lead to downside risk year? ivan: with the recent run-up and long-term run-up, there could be profit taking -- tanking. there is a lot of value in other leading tech stocks, specifically google. i think google is a tremendous ande and has not increased does not get the valuation amazon does, yet it has a lot of key drivers similar to amazon.

also, microsoft is getting close to the trillion dollar mark is well. it is little ahead of google. microsoft is evolving into a leading class -- club play as well -- cloud play as well. i think you have people reallocating money into other stocks having potential to go across the trillion dollar or increase in value as well. emily: what about the threat of valuation? brad: we talk about the trillion dollar mark when it is really a subjective number. context,ortant in one which is that it puts an incredibly visible target on the backs of these companies. amazon seeing it from the right with trump and his tweets about taxes and the post office, and of course just -- jeff's paper.ip of the

there is a big conversation on whether amazon's commitment to low prices is having an impact on macroeconomic indicators like inflation. i think amazon is the biggest target around. i think regulation is one of the biggest challenges and obstacles in the years ahead. emily: one venture capitalist rings amazon will be the first company to hit the $3 trillion mark. what do you think of that production? ivan: i think the stock has the potential for a number of reasons. in thehe dominant stock s&p 500 along with apple. as money goes into the market, passive investors, they are both close to four cents out of the dollar going into and s&p index -- an s&p index fund.

the second thing, they are a fast-growing company and continue to evolve into new businesses, and develop new markets and go after markets fast-growing that they can bring their operating efficiencies to. i think they will continue to do that which will drive more growth. there is further upside in the stock. -- 3 trillion is probably a ways away, but when the market rises significantly, amazon will rise significantly as well. emily: brad? brad: it seems excessive, with one trillion in 2018 would have surprised me as well. amazon makes a lot of bets, plants a lot of seeds. alexa is one of them that is leading the voice market. if they bring that into cars and enterprise and workplace, i see a lot of different opportunities. emily: too bad you could buy shares on that day in 1999.

ivan, thank you -- brad stone and iven, thank you. . sheryl sandberg and jack dorsey get ready for their congressional hearings. if you like bloomberg news, check us out on the radio. listen on the radio app, bloomberg.com, and, in the u.s., sirius xm. this is bloomberg. ♪ ♪

emily: representatives from the two biggest social media platforms are set to testify before congress on wednesday. sheryl sandberg and jack dorsey are facing questions on their

progress in fighting russian election meddling and more. the two appear together in from beforein front of them dorsey has the solo hearing. they will be fearing -- feeling the heat. washington,ow from our next guest testified on russian influence and bloomberg opinion columnist. what do these two companies have at stake? thate stakes for them are they do not want to misstep or say anything they shouldn't. both jack dorsey and sheryl sandberg are pretty practiced spokespeople for their companies at this point. i do not anticipate they will set a foot wrong. the challenge is you never know what members of congress will ask. the hearings are about election

interference and free speech. members of congress can ask whatever they want. that is the real risk that they will be asked something they cannot answer and say the wrong thing. emily: knowing what you know about russia's influence, what kind of questions you think they should have to answer to given what you know about the scope of this interference and the likelihood it is happening again? lawyersyear, when the for the tech companies testified, the key question was, how did russia use the platforms in the 2016 election. this year the questions will be different. the fundamental issue is one of these platforms done to protect the united states against future russian information attacks. emily: what do you think about what they have done?

they are adding ai, thousands of jobs, gets a couple of weeks ago we heard the company's both shut down hundreds of accounts tied to russia and iran. dr. helmus: it is a steep issue they have to climb. what's particularly interesting about recently is that they detected a number of pages that appeared to be russian in origin and some have been up for 15 months before they got detected. a fundamental issue is can these companies detect russian action or other foreign action on their once they do detected, what will they do to shut it down. that is a fundamental question. the recent intrusions show detecting is not an easy task and it is an uphill battle. emily: we spoke with ryan costello last week and he is on the house energy commerce committee and will be questioning the act -- questioning jack dorsey. take a listen to his questions.

>> can you demonstrate or open your out rhythm to us so we are able to see that there is not content bias there, and i think the other thing that is less about whether there is a philosophical bias there is something even more fundamental which is, does your algorithm reward extremist rhetoric be it on the left or right? time witha moment in the very fabric of our political culture continues to deteriorate. emily: mark zuckerberg has been through this already. we can expect sheryl sandberg -- willck closely to stick closely to what zuckerberg has said. what makes dorsey's appearance to friend? the platform is completely different inside -- size and scope -- in size and scope. twitter talks about they do not

have the resources twitter -- facebook has to stop. shira resources are certainly an issue. facebook does not have a resources problem. it's interesting that the representative talked about opening up algorithms to outside review which is an issue that has come up on the left side and right. i don't think something that any of the internet companies -- i do not think this is something any of the internet companies are pertinent to happening. this is a growing issue we see on facebook and google, but it is not the result of some neutral computers reacting to the ideas of billions of people. they are the result of our griffins created by human beings and human beings with all of their inherent biases. there are questions on what we that's what actually goes into the search results and doesn't

andrd the most egregious strongly held opinions the matter how wrong they are or, what if anything should be done to stop it. i think those are big questions about the internet, what kind of internet we want to have in the future. emily: to that point, human beings are flawed, bias, and they build technology and the artificial intelligence fighting this kind of meddling. know about how the russians achieve what they achieved in 2016, is it really possible for facebook and twitter, run by human beings, to stay ahead of the meddling when we know the attackers are always one step more grants to then we are if not more? dr. helmus: that is the fundamental problem. it's an arms race out there because as facebook and twitter and others look to detect ways of identifying content of the

russians and certainly other --ernments such as chinese china and other actors, will be detecting new ways to insert that content in their. there. the ways -- tin they havee ways looked at is social media campaigns in rubles and they will not make that mistake again. the trick is to continue the research. it will make it a very easy arms race and they are going to conduct relevant research on this. walk us through how google fits into this given they are not sending their ceo and congress was not very happy about that, but google will still be present. shira: it's going to be incredibly awkward. basically an empty

chair where the google representative is supposed to go , that will make them an easy punching bag and they are part of the internet conversation. in terms of certain youtube, and to not have a representative there, it feels like a misstep by google. i understand they did not want to send larry page who would be awkward in that setting to say the least. both. thank you we will be covering these hearings drop the week. facebook's revenue slowed down and heightened scrutiny to a toxic brew. that is according to michael nathanson who downgraded his rating to neutral from five. said regulators will weigh on markets.

still ahead, china is considering its position in the race for 5g dominance. will the nation get the jump on the united states? we will discuss that next. bloomberg tech's livestreaming on twitter and be sure to follow our global breaking news twitter -- network on twitter, tictoc. this is bloomberg. ♪

emily: the global fight to dominate 5g is on. china is said to explore a megamerger with two of the three nation wireless carriers. china, unicom, and telecom merger would create the second-largest wireless operator after china mobile and give greater speedup of 5g and gain advantage over the united states. let's bring in the asia society senior fellow. walk us through the benefits and to whom a merger of the size. >> if china unicom and china

telecom, or whenever they decide to call it, if they merge, you will see a much larger customer base allowing for a lot more data analytics, trials, ability to hit a large market. it would immediately put them up in second right below china mobile. also, they would get a lot more government support which is always key in china. this is an example beijing is trying to make this company into a global player and would put a lot more resources behind it. emily: what are the drawbacks especially for post-china mobile? drawbacks is -- that it has another big domestic competitor and assign that perhaps beijing and the party is looking a little less favorably to what the company has and is doing. twoher drawback for the second and third largest

companies in china is that putting companies together like this will not lead necessarily to more innovation and efficiency. this is a party driven mood, not economy driven move. we don't even know if the fundamentals make sense to put these companies together or if this is something beijing is doing for inscrutable reasons. emily: we see a similar situation in the u.s. with t-mobile working to a merger with sprint. on the day that was announced, the ceo of t-mobile said if we do not take decisive positive action, we risk feeding global leadership in the entire next -- entire nexty wave of technology to another economy. i like how he says a company other than america, like he is afraid of saying china. i think this will be bad news for major american telecom

companies. this means they lose the footing for 5g. as far as american competitors are facing it, it is a step in the wrong direction. emily: in the meantime, to theyer story out of china, are obsessed with the arrest of m facingder of jd.co charges of sexual misconduct. it is very unclear what the charges involve. sexual misconduct, where he was arrested in the state of minnesota, can mean a lot of different things. he is a huge figure in china, very popular, and the billionaires and tech giants often become tabloid fodder. what you make of this particular situation for the company and him? isaac: we know very little about the accusations and whether or not any indications of if he is

guilty of what he is accused of doing. it's hard to see this as anything then bad for them. even if the charges are groundless, it is embarrassing and bad press. it's easy to imagine people in beijing will say this makes china lose face by having these embarrassing allegations and there's almost no sense this has anything at all to do with u.s. china trade or any political dynamics. it just feels like this is something he was accused of doing. emily: there are also reports that something happened that one of his residences in australia for which he was not charged, and another guest was. and i guest was convicted. what does this mean for rivals? could this give alibaba a leg up? isaac: it is certainly good for rivals. ack ma certainly has

reputation as someone who --dles issues a bit more with a bit more of a moralistic fashion whereas the other is a --tle more it is also time for them to possibly move into some of jd.com's business. as soon as he got back to beijing, liu attended an event or signing trying to say this is but if the usual, minnesota police come back with serious allegations, it will certainly be a big distraction. emily: i should mention there are no charges, just accusations at this time. the story we will continue -- that is a story we will continue to follow. for us in newsh

york. coming up, mark zuckerberg versus the fight and now sheryl sandberg and jack dorsey are in the hot seat. we will discuss. this is bloomberg. ♪ ♪ retail.

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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. emily: is is "bloomberg technology." top story, amazon finally joined the $1 trillion valuation club, a milestone that apple hit just last month. while it's great news for the happening, no one is benefiting more than founder jeff bezos. he's added $67 billion to his fortune just this year. this gives him a $167 billion net worth as of early tuesday. joined by tom metcalf who has this wealthng accumulation. talk about how quickly bez

os'wealth has ballooned as a stock has run up in just the last three years. tom: it's been absolutely incredible. he's got a 160 been dollars fortune, and he started -- $160 billion fortune. at $100ed the year billion. aloneare prices up 74% this year. for a company that size, it is unprecedented. emily: and his family has also made out. both his parents invested in the company, his siblings invested in the company. tom: they been investing in amazon as early -- since as early as they were able to. you're looking at over $2000 a share. it's one of the all-time great investments. as a family, they need no more assistance, i think. they are just trying to work out how they can give away their

money fast enough to keep pace with this great growth. emily: how does this be that they accumulated this growth compared to other wealthy founders like mark zuckerberg, the founder of google, and bill gates? bill gates did hit $100,000, that would be worth about 100 -- $150 billion. that.has blown by there's nothing in history to compare. tom, what are the risks here? he's got a lot of money, he's heesting in a lot of things, has his space company, blue origin. what are the risks once your fortune gets so large? tom: he's just not diversified at all. stock -- of% of his

his wealth is in one stock. blue origin is one of the few risky things you can find out there, that is the space exploration company. it's very, very risky. emily: tom metcalf, thank you so much and for all the work you do on the bloomberg billionaires index. we are continuing our look at testimony on capitol hill. facebook, google and twitter sent them all your's to explain what they're doing in the fight against russian election meddling. mark zuckerberg defended facebook on the grounds that it data.reless with users now jack dorsey and sheryl sandberg will appear before congress for the first time. the focus is back to where it all started in october, russian election interference.

i want to bring in the man who literally wrote the book, david kirkpatrick. you know better than anybody else how mark zuckerberg and sheryl sandberg had very different communication styles. sheryl sandberg as much you -- much more used to being under the bright lights. how do you expect her to perform tomorrow in the hot seat? david: i'm not hoping for too much candor. i would hope for it, but i'm not expecting it. i actually would suspect that in comparison, we will think that zuckerberg did an extremely good job. she has done such a poor job of being candid and responding to tough questions in the last 6-9 months that i really wonder how she is going to handle what are likely to be some very unfriendly and tough and probing questions from people like senator mark warner, who really knows a lot about the subject.

we do have sheryl sandberg's written testimony in front of us. at the beginning she said we were too slow to act, it violated the values of our country -- of our company in the country we love. she goes on to talk about what facebook is doing about this. yet here we are weeks now away from the midterm elections. we already see signs that this is happening again. what do you think sheryl sandberg is really going to have to answer to hear? i was a senator, rather than have her repeat the same thing she said before, that is old news. i think it is more or less meaningless. why did it happen? how do they allow this to happen? who was asleep at the wheel that allowed a system to emerge that was so intrinsically manipulator will -- manipulable?

you need to ask how global the problem might be, what is the prospect that facebook might be able to ameliorate interference in literally every country on the planet, which i frankly think is small. i don't think they can ameliorate it successfully. articles in the last 24 hours, one about libya which is really hair-raising. are targeting people for death and selling weapons, and all the stuff on facebook that is completely a violation of their rules, and yet it is happening. why don't they find this stuff themselves? those are the question senators ought to be asking. the same sort of issues apply in u.s. electoral interference. emily: the same thing could be said for what's happening in myanmar, in the philippines with the help of facebook. google will not be testifying.

ceo decided not to send the brin.rry page or sergey we have written testimony from their top lawyer saying google remains concerned about attempts to undermine democratic elections. we have now fulfilled all of our commitments to provide increased transparency in election advertising. tack, we see same this happening, we find it unacceptable, and here's what were doing about it, yet google won't even be there to defend it. how big a problem is that going to be for google in the months ahead, given that the president is very much focused on google right now? david: are they saying they already solved the problem? that sounds completely implausible. i think google has done a lot of

excellent rings to control content, to restrict bad content, but to suggest that they've done what they need to do, to me is not true and is disingenuous and the wrong thing to say. this is an arms race like all bad things in digital. these companies are going to be finding new ways to manipulate , coming froms unexpected directions for the foreseeable future. therefore what we need is a whole new set of processes from the companies and probably from external actors, whether government or other advisors, to have these companies figure out what to do. i do not have confidence that these companies have the tools to really address the scope of the problem they have encountered. the bottom line is, they thought they were building social and informational and advertising platforms, but they also built rapid pacee a very

in all kinds of ways. it's a big, big problem. emily: david, hang on because wednesday's tech hearing isn't the only be showdown on capitol hill this week. the confirmation hearings for brett kavanaugh begin tuesday. democratic senators tried to have the hearing adjourned within seconds of it beginning. the court will have its share of tech related cases to hear. watching thes are supreme court nomination hearings, what comes to mind when you think about how brett kavanaugh might rule on some of the upcoming tech cases. >> some of the hearings going on with facebook, with google submitting statements, legal issues, i think it's important context in mind

when thinking about how kavanaugh or any supreme court nominee would fit into the existing court. issues of privacy, cybersecurity, intellectual there are a bunch of different things that fit together when thinking about the tech applications for the supreme court. at the forefront of everyone's fine at this point are the privacy concerns, how it translates over to the digital world. kavanaugh was involved in the net neutrality ruling spirit from a tech perspective, that is at the forefront of everyone's mind, getting into some of his legal decisions and how he is thinking about cases. emily: free speech is very much an issue as well, what stays up, what comes down on the social media platforms. ,ow has he ruled on free speech especially when it comes to digital platforms? free-speechhe is pro- from a corporate perspective. when you look at the net neutrality rulings and view

those as some kind of restriction on how service providers are able to restrict flows of data are certain information, kavanaugh was highly critical of that. the say he has landed on pro side of free-speech issues, which goes with kind of a general trend of pointing to allow more free speech, but also a little bit of concern when you think about how to best regulate some of the companies moving forward if there are not sufficient protocols in place. there are general security concerns that are implicated. it strikes a balance between free speech, and he's also a staunch supporter of national security interests. i guess it is a balance between those two issues. emily: so is it a good thing or a bad thing for these tech companies that you have a judge who is pro-business, as thee-speech, but also

president is ratcheting up the amount of attention he is paying to these tech companies that have made a lot of money under the prior administration. ared: certainly we increasingly living in a tech knowledge i society. the supreme court will be facing tech related issues more and more as time goes on. i would say on balance what he believes would probably a good for the companies. america is all about free speech. he believes in the constitution, clearly. these companies would dearly love to have some authority tell them from above what is and is not allowed when it comes to what is said in the public sphere that is digital. the thing about kavanaugh the interests me is that he is such a legal scholar, and he seems to be, for all of his extreme wellrvatism, deeply respected for his scholarship.

i have seen it said that he's probably going to be the most scholarly supreme court justice, if he gets on their, that we have had in a long time. it may be that his sheer thoughtfulness will be beneficial. there are a lot of issues coming up that are not right or left issues, that will just require some solid, hard thinking. emily: both liberals and conservatives have these platforms for being biased. seeing antitrust articles, how might kavanaugh's appointment and kavanaugh way on an issue like that? but it's interesting in the context of all the senate judiciary committee weighing in at doing some grandstanding today, both sides will paint him as either too extreme for the supreme court, when you look through his record, he has reached across the nomination i'll.

-- across theer nomination aisle. is been ever to work with judges who have shown both conservative and liberal biases. is been on the same side as merrick garland and number criminal cases. itseems to take things from textual perspective, looking at the letter of the law in trying to apply that strictly. that is somewhat agnostic as to conservative or liberal view. what we have seen from a lot of his jurisprudence, he tends to rules, he likes it if there is a bright line rule as to what contents or behaviors crossed the line, what is rules, he likes it if there ispermissible like in n employment law context. i guess it is yet to be seen how it will play out. some judges when they get in the peer group of the supreme court

may start to view things a little bit differently. leaning conservative but also by the letter of the law or the agency regulations that are set forth, that tends to be how kavanaugh has ruled in the past. david, great to have you here. coming up, we'll talk how morgan stanley might be leading the data mining company to a knife the oh, next. -- two and ipo. plus, the investigation into elon musk. we'll look at how extreme a penalty he could face. this is bloomberg. ♪

emily: 14 years after entering seen, nearing an ipo. morgan stanley may be taking the lead. the bank is emerging as the advisor of choice, having earned about 60 mean dollars in fees, ranging but funding and that could be doubled in 2019 or early 2020. what do we know? colleagues and i dug into this and found that in helping delay palantir going public, morgan stanley i'd only deepen their relationship with palantir but came up with 60 mean dollars in extra fees, about the same amount that would be able to generate by taking it public. if the valuation state as it was back in 2015. emily: there is a question about

the valuation, right? greg there are a lot of questions about the valuation. since the peak in 2015 it has been revalued multiple times by public private and investors including morgan stanley, who slashed their valuation after series of reductions down to $4.4 billion from a high of $23. so this is a massive and steady decline in value which would force -- would reduce the amount of fees should morgan stanley decide to take it public. , whichwhich one is it way is the wind blowing? >> this is a challenge and from an excitement around privately traded companies. we reported before when some of the markdown star started happening, it involves not only palantir but companies like dropbox and snap and others

where perfectly reasonable assessors of these values disagree on how much it is valued at because they are liquid shares, they trade in large blocks infrequently and the people assigning the value's don't describe what they are using to base it on, although it their ownto what internal projections are light for the whole market they are attempting to address. emily: what palantir does has been controversial given who they work for in the perceived values that they add. how do you think investors will see that? >> that's a good question. providing its service, it has been consulted heavy for a long time. can pull allis it sorts of information in from financial transactions to last known location of the roadside

who'so status of someone attempting to immigrate, and pull it together in one spot, and pull outeaning certain patterns that someone can dig into at a later date it's like microsoft or ibm or other products that do that, and very easy toit use. that gets to the second part of your question, which is how is this being viewed. there are some concerns right of itsut the half business that services government agencies, including the department of defense, department of homeland security, the irs, and other groups. will be know you walking us through every step of the way on the road to potential ipo. thanks so much for joining us. apostatead, elon musk the parsley in the hands of

sec. lieses -- his fate partially in the hands of the sec.

emily: investors may be buterned about elon musk, some say the probe about taking tesla private is unlikely to lead to his ouster. here to tell us more, our guest from washington, d.c. what does the agency have the power to do and what is it likely to do? greg what we know so far is the sec has not acknowledged that it is investigating tesla. we have reported there is a pro looking into elon musk's tweets early last week. the sec has power to do fininging from

individuals or companies up to the ultimate guilty, some type of temporary or permanent ban from serving as a director or executive in a company. we understand just talking to people who pay attention to these types of cases, what we know so far, it doesn't seem that that's the kind of direction the sec might go. all that said, we don't know where this will go. this is a pro that the sec has not even acknowledged. that thet seem likely sec would go there because as you mentioned, shareholders would bear the ultimate bright and there's no suggestion at all benefitedusk financially from insider information and what he did by tweeting out that finding was secured in early august. emily: what about the bigger picture?

we been told us the that which the sec moved when they issued that subpoena was quite fast and meant that clearly had another open inquiry or open investigation that we believe could be related to model three production. so what about the bigger picture of what the sec is interested in? >> they are already looking into the company statements about production goals and performance metrics, even before mr. musk's tweet. it's kind of like a black box. we ultimately don't really know where things are going to go. there's a lot of back-and-forth between the attorneys for the company and the agency, they will be requesting lots of documents, lots of information. eventually if they decide to go

to work this, we will get a better idea, but it could be months or years away. emily: i know you will keep us posted. that doesn't for this edition of "bloomberg technology." -- tune in tomorrow, we will have full coverage of those hearings from capitol hill. this is bloomberg. ♪

>> emerging markets continue to sell off, sparking fears of contagion. south africa injures the recession and the raffia -- rupiah is at an all-time low. declines andeads the lear is falling on fears the central bank will disappoint. >> president trump says the deal will happen with or without ottawa. >> and amazon joins