included with your internet. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. ♪ >> i am emily chang in boston, this is "bloomberg technology." tesla is feeling the burn, to senior executives resign and musk smokes pot in an interview with joe rogan. massachusetts is the seven state to legalize marijuana. we will look at the drug being regulated. plus, jack ma is considering life after heading alibaba. don't miss our exclusive interview.

first to our top story, more turmoil at tesla, shares take a dive after to senior executives announced they are leaving the company. one was the chief accounting officer, with test the less than a month, the other was the head of human resources, who has been on a leave of absence and told bloomberg news she will not rejoin the company. that news came hours after elon musk was seen smoking marijuana in an interview with comedian joe rogan in a more than 2.5 hour podcast. musk opened up about the difficulties of turning tesla into an electric car giant, saying, "it is very difficult to keep a car company alive." we have our guests. walk us through the events of the last 48 hours. >> musk went on this podcast, a very long interview, he talked about flamethrowers and

artificial intelligence, he smoked a blunt. this morning, you saw shares down a little bit before the market opened, but then tesla issued a -- that the two had resigned. it has been a triple whammy. the bonds have taken a hit, the shares have taken a hit. the narrative of executive turmoil that tesla cannot continue. emily: morton said he was not prepared for the level of public scrutiny but still believes in tesla. but this does seem like a self-inflicted pr crisis. what is elon musk doing? >> i think he is trying to be himself and use an unconventional roadmap.

despite trying to put some rails around how he interacts on social media. i think there is a piece that he wants to be himself, he will do that whether people like it or not. i think there is also a part, and forgive me for trying to look at the bright side, but i think there is part where he is feeling a confident about how things are going. i would suspect if there was going to be negative news around profitability or production, he would not be out doing these things. i think he is kind of setting up in some ways of signaling to people that in the near term he is feeling good about business. emily: taking a look at statements to other publications, the guardian reached out to musk asking for a comment on the marijuana smoking interview. he called them an insufferable publication.

buzzfeed had a story with an email from musk in which he refers to the person in thailand he's been having a feud with as a child rapist. the same person he apologized for calling a pedophile. what are you hearing from company spokespeople? do they clearly not have control of him? or is this part of a grander plan? dana: i think what people need to realize is that elon musk is tesla communications but also the crisis. people ask me when is tesla going to hire a crisis team? he is the team and the crisis. he is not likely to change. elon is going to elon, he has always done things is on way and has an intimate relationship with fans and followers, customers on social media. i think he probably went on joe rogan because he thought it was a good idea and he likes to

shoot the breeze with people about topics that interest them. it was a wide-ranging interview. i think the optics are not good. the big tell is how the shares react. when the shares plummet because they have all of these things going on, you would think there would be an effort internally to write the ship -- right the ship, but i don't think the board has the power to change him. emily: he can be on the factory floor 24/7, and yet he is sitting more than 2.5 hours for a podcast. we have had analysts and investors on over and over who still say they believe he is the right person to lead the company. do you agree? gene: the civil answer is yes. i believe the company will be

successful. undoubtedly his actions make it harder to support them, but what it boils down to is can they produce more than 55,000 model three's per quarter? if they do that, none of this matters. they will become profitable and get what we call escape velocity. the part that is painful to me as a supporter is there is what i will say a 15% chance that i am wrong, and something does not go right with production they will have to raise money again. the standard for investors, it is different than the standard for a voter. his behavior is reminiscent of political behavior, but investors will not be as generous in giving a pass to this type of behavior. whether it is legal or illegal doesn't matter, it is illegal in the minds of investors.

i think that is the part, i am still an investor and i think the story can be bigger in the future, but the 15% chance i am wrong, my escape plan just got a little more tight. emily: drawing a parallel between musk's behavior and our president, what are you hearing from other analysts and investors that maybe he's not the right person to lead the company? do they share the view that he is with a caveat? dana: i think people want to see a coo. you hear that over and over again. people have asked point-blank if there is a possibility that they could get one. as far as we know, there is not an active search for a coo.

if musk steps down, he is so intertwined with the brand, he's the chairman of the board, the ceo, the largest shareholder, the public face of the company. i can't imagine who would fill those shoes. i'm hearing more that people would like them to hire a coo rather than musk step down. emily: with all of this going on, is tesla going to be able to recruit the talent it desperately needs? gene: i think ultimately they will. it is such a big mission and unique opportunity to have an impact on really the world, as crazy as that sounds. the mission statement gets lost in this circus, to accelerate the adoption of global energy. i think it would be willing to -- i think despite the friction people would be willing to work there. this is an important part of tesla in terms of their trajectory in the next 30 to 180

days. i think once they get some stability, the pressure cooker will dial back, and the ability to recruit and maintain talent will it -- will improve the dramatically. emily: all right. always great to have the two of you on the show. thank you both. info wars and alex jones has been banned from twitter. twitter tweeted that they have been permanently banned, they say they have tweaked -- tweets that have violated their behavior policy. alex jones may have been the trigger for the ban. twitter has been measured to

take action against the conspiracy theorist, who has said that the sandy hook shooting was a hoax among other things. coming up, biotech, aerospace, maybe the hotbed for the most revolutionary technology, but the time to bring them to market does not always appeal to investors. now, how mit's venture arms tried to change that. check us out on the radio, listen to the bloomberg at or sirius xm. this is bloomberg. ♪

♪ emily: investors are notorious for backing startups with speedy market turnaround, what about companies with game changing technologies in areas like biotech or aerospace that might need a more long-term investment? katie ray calls them tough tech, and she is attempting to bring more funding to these ambitious technology companies. she joins us in boston. what you mean by tough tech? >> the way i think of tough tech it is engineers, scientists really tackling what i think of as the world's biggest problem. often these things need time to be nurtured, to work out technical risks, but the results can be transformational to the world. that's how we think of tough tech.

emily: how much time are we talking about? how long it will take us to get a rocket to mars or five years? katie: there is a range. i think some of them take between one and four years longer than other types of tech startups and some could take as long as 15 years longer, but some of those really ambitious projects, like what if we had incident energy because of fusion? that could be worth the wait if you think about the impact it could have on climate change, it would be tremendous. or it could -- or could we grow a human kidney?

these are really important things that could change lifespans, how our planet functions, but some of these take longer. emily: give us some examples of these ambitious projects that you are funding and whether they are seeing progress. katie: yes. typically, we are finding people as they are coming out of a lab in one of the major universities here in boston, m.i.t., harvard, etc. what we see is, we try to help form the companies, it is usually three to five people deeply steeped in what ever problem they are trying to solve. these are often accidental entrepreneurs, phd's who never knew they would be entrepreneurs. what we see as they set out a very ambitious technical and business planning cycle. the progress we often see in the first year is to take out some of the most important technical risks, which will give more people more funders, the ability

to see beyond the early risks into how they could develop into large companies. we started a little over a year ago investing. we now have 13 investments in very broad ranging areas. one i mentioned earlier is infusion, a company called commonwealth fusion. they are looking to create the next generation of fusion. it is a wonderful team out of m.i.t. they have two major milestones until they can get to market, and one is three years from now. that for many people is too long, but if you look at the impact, if they prove out the technical risk in the next three years, their company will be much more valuable at that point. or we have things in biotechnology, often there is a 15 month to 2.5 year life cycle the company has to get through. but we are watching our companies, even in the first year, get through important technical and business milestones, raise more capital,

and be on their way to creating important companies. it's not like tough tech takes forever. we are still in patient about the next milestone, but you have to see over the long-term that you have to develop these things with longer vision. emily: is the goal to make money? katie: yes. the goal is to create many very valuable companies that will have worldwide market and very large market capitalization at the end of the day. emily: and are you looking beyond boston? or are you focused primarily on harvard and m.i.t.? katie: we are focused mainly in boston the weekend -- but we get entrepreneurs from all over the world. if they want to come here, we can look at investing in those companies. emily: i'm curious about the

pipeline of the entrepreneurs and scientists you are seeing. technology has a diversity problem and eu are sort of -- and you are sort of at the ground level where entrepreneurs get new opportunities. are you seeing a diversity of talent? is reaching a diversity of talent something you're thinking about? katie: it is absolutely core to what we do. being aligned with m.i.t., they have a rich history of caring about creating a diverse class of students. when you look at their graduate programs, there is a lot of diversity, both people from around the world, many women, people of color, in their graduate programs. this is true of most of our major universities. there is a very diverse talent pool to draw from.

but we still know we need to encourage more women, more people of color to actually found companies. it is a piece of work we do all the time. but i think the great part about where we are starting from is that the talent pool of proto-entrepreneurs is quite diverse. emily: all right, katie rae, we will keep our eyes on tough tech. coming up, jack ma looking beyond his life at alibaba. he will share his thoughts on the future of his business and his own future, next. and bloomberg technology is streaming, be sure to check us out. we're also on twitter. this is bloomberg. ♪

♪ emily: in just 20 years, jack ma went from english teacher to world renowned business leader and china's richest man. he is now laying the groundwork for a future after alibaba, which he turned into an e-commerce giant. tom mackenzie sat down with him to talk about his philanthropic vision. >> we have so much resources, so much talent. we have 600 million people using is almost every month. i worry that if we do not put that kind of love, respect, responsibility into our business model, this giant could destroy a lot of things. do good things, do bad things.

technology is very cold, people say, but you have to make the organization warm. people are warm. >> are you succeeding in that mission? >> six years ago, i said we should put 6.3% of the total revenue of alibaba into philanthropy to protect the environment and education. at that time, nobody cared, 0.3%. we had no revenue. now we have a big revenue. we have to do it. it is not 0.3% of the profit, it is the revenue. >> in terms of technology, how

do you bring that to play in your vision for transforming education? >> everything we have talked to students in the past 100 years is about knowledge, the science, industry. but in the future, what we teach the kids is about innovation, creative, constructive. how can we do the things that a machine cannot do? that is about education. i am thinking all the time about that. >> that would be a big focus for you? >> yes. i could be a teacher and a mentor to many young entrepreneurs. i don't, self a successful businessman, but i am successful in life. i have gone through a lot of tough decisions, tough days. these can be very good for many young people. i'm not going to teach math or english or business in the schools, but i'm going to teach young people how to face challenges. >> when you communicate with your counterparts in the west, can that help bridge divides? >> i hope so i think it will. there is one thing we all have in common, people in china and people in america, we all have the heart of love and respect

and trust. this is the common language we should have. as i have said, the first technological revolution caused work for one, then world war ii, now we have a third technological revolution. we should not have war, but if we have war, it should be against poverty, disease and the environment. it should be together. we should fund the common things we're working together, that builds trust. it is easy to complain, it is easy to figure point, that we have got somebody to say this is the problem. if we work together, it is an opportunity for all of us, and that is something i hope i can do. >> you employ more women than many tech companies in china. how important is gender equality?

>> so important. the last century, it is the competition of muscles. this century, it is the competition of wisdom and experience, of care. we have 50% of the employees in our company are women. 50% of senior management. this is one of the secrets of alibaba. we have a lot of women leaders, there is a softer power in it, not machine guns. the care. emily: alibaba executive chair jack ma speaking exclusively with tom mackenzie. still ahead, cannabis stock fueled by upcoming recreational sales in canada and the growing market in the u.s. we will take a look at the tech in a moment. and we will talk about facebook, can they bounceback? this is bloomberg.

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♪ emily: this is bloomberg technology. pot stocks are heating up. it is not present elon musk. field by upcoming recreational sales in canada and a growing market in the u.s.. bloomberg tv got inside look at the retail sales in massachusetts. >> the next state in the u.s. to sell recreational marijuana is gearing up slowly.

sales are legal in massachusetts as of july 1. by law, it cannot be sold until tested at a licensed lab. to certified products are free from old pesticides. >> the biggest obstacle has been e-labs not being licensed to test it before anything can be sold it has to be tested. testing lab cds analytics has won awards. this ceo runs the leather has been testing is 2016. >> we have 13 or 14 clients in the medical marijuana space. >> clients send flower, concentrates, and edibles to them for testing. before selling to consumers other dispensaries. >> we are testing 60 samples per day. we expect that to go crazy once

recreational comes on board. i imagine we will triple or quadruple our samples in the next year. >> the chief science officer overseas testing in the lab. >> a full profile test will take 4872 hours. >> how last test marijuana is key to their business plan. one technique uses a feature dish to show harmful organisms. cbx is betting millions on a dna-based technique. >> we are cracking the cells open and quantifying the dna. we get a snapshot of what microorganisms at what ratios are present on the canvas on the shelf. >> which technique works better is up for debate. in either case, test will cultivate sales. >> the end of september, the dispensaries that are up and running now will start to be able to sell.

>> the dispensaries and labs still need to be inspected and the state needs to roll out software to monitor marijuana at all stages. the market in massachusetts is expected to hit $325 million this year and reach one billion 2020. >> there is no profitability because it has been all money going out to get infrastructure up and running. i am hoping that by the first quarter of 2019, we will show a significant profit. massachusetts is the seventh state to legalize sales and recreational marijuana and the first on the east coast. that could prompt neighbors to follow. >> we have a formatted infrastructure in place to be able to duplicate is all over the country. it is just in infancy.

>> a startup known for its work designing made-to-order microbes are customers is getting into the canvas game. through a $122 -- million dollar. they are making marijuana compounds. the company's cofounder joins us now. what do you do and what is this mean for you? >> i'm glad elon musk is keeping cannabis in the news for all of us. we started in the fragrance industry. we would take the genes from a plant ligament -- a meant and move it to brewers east and brew it up.

more cost of goods, stable supply, not subject to weather. we saw that technology is said we can apply it in the canvas industry to produce the key ingredients that people are looking to the plans to get. whether that is recreational or medicinal. that was the original technology that led to the partnership with kronos. >> you have a phd from m.i.t. so i know you can explain this in layman's terms. if marijuana gives you the munchies, you can make it not do that. how you do that? >> or if it doesn't smell great for a lot of people. if you think about what you are getting when you are taking the entire flower from the plant, you are getting all kinds of things in there. some of them don't smoke it or make you hungry.

there are only a few and with kronos we have a list of eight key ingredients like thc or cbd. there are others that are known to have positive effects. psychotropic or medicinal. cbd oil is an example. those are ingredients that if you make them in isolation, you can get what you want without the stuff you don't. this is why you see a lot of interest in this around things like beverages and edibles and when you are not elon musk doing it. people see that as the future more than the technology. this type of approach is that we can make it. >> elon musk smoking even though it is legal in california has a stigma around it.

what are the issues, how will it impact you? >> this is a key question. if you look at the story around steve jobs. he talked a lot about using recreational drugs and them having positive effects for him. it is legal technology. even in the tech industry there has been a history around the stuff. at the same time, there is a stigma seceded with it. after seeing it becoming legalized, people are recognizing what are the other options. alcohol is a popular recreational drug. it is not the safest or

healthiest thing. i don't know if you saw a month ago a constellation group invested money in a canadian cannabis company. you're seeing the big alcohol companies seeing that the corner is turning and seeing the threat and opportunity. maybe this is an alternative for people for whom alcohol is not a safe option for them. >> talk to us about the partnership with kronos and what that means for you and how much money there is to be made. >> if you look at what dingo does, we are a provider of

biotech services. what we had here is a hundred thousand square-foot facility with automated robots that do a lot of the work. it brings the cost down for doing biotechnology. a company like crown knows can turn to us and say do this for me and handed to brewers east that makes cbd oil without having to grow this big farm and then i can have brewery economics instead of pharmacy economics. they farm are research and development work here and we could receive stock. >> in the meantime tesla stock is down. thank you, jason. coming up, facebook's relationship status with the public and investors. we will talk to an activist shareholder next.

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♪ emily: watching facebook after sheryl sandberg testified on wednesday, they have had a rough rocky 2018 so far. shares have been hit hard since the one-day plunge in july. can they recover and if so how? what is your take away from these hearings?

all of this is such fallout from issues. we were hoping the company could get ahead of. it is interesting chasing the issues. being called in front of congress is not a proactive approach to change. you're being called onto the carpet. i was happy to see jack dorsey there. disappointed that larry page was not there. it is interesting that sandberg was there instead of zuckerberg. it got kicked down from the ceo

level. that makes me question if they are a showing it as it was after cambridge analytical. >> what do you make of sandberg's level of sincerity? she said for a lot of things they were asking about, the rules were in place. do think she being sincere? >> i think she is being sincere. i think they are trying. since we started flagging the issues, a lot has happened area a lot of investment has been made. i was concerned to hear her discuss how all and misleading

information is being treated on the platform. she was describing the fact that if something is false information, they move it down the feed. the net present what she called alternative facts. i thought it so curious that that wasn't caught. there are facts and their opinions. there are not alternative facts. i hope we are not bending to the playbook of kellyanne conway. of really rudy giuliani and entertaining the notion. i was disappointed to hear that. from her testimony. >> as soon as she said those two words, my antenna went up. do you think these issues, as is a public image or business problem? analysts have said these are two different issues.

this public image problem can -- but the business in my view. >> absolutely. they are not separate. businesses do not exist in a bubble. a lot of the negative things that have happened over the platform we might consider externalities of we were thinking about big oil company polluting the oceans and the air. these externalities of fake news, election interference, hate speech, violence and harassment over the form, these are business issues and when cambridge analytical scandal hit and the public was aware of how their data was compromised, that has had reputational impact and

the fallout from that, there was a recent study that showed that 44% of young americans have deleted facebook. 25% of americans in general have deleted it. 75% have either deleted it or changed their privacy settings or gone on a hiatus. that is where we get concerned because it is on the revenue side. their brand matters and whether the users trust the brand matters. sheryl sandberg said trust is the cornerstone of our business. clearly, that has been eroded given the numbers that we saw come out. woman look at what is happening right now, operating margins are going down, we think those are necessary investments because they have to fix facebook.

they need to make investments to do so but on the revenue side. that is right you can go from king one-day to no longer. that is were we are concerned. >> you are still shareholders in facebook. why? >> would like to see the company turn around. we think there is value there. they have an almost monopolistic position in the space. we think that is under threat. because it is a risk, we are under weighted versus the benchmark. while we are still participating in facebook, we want to be active shareholders. we want to engage our clients capital to get the company to change. not only on this issue which is a content issue, we have engage them on the gender pay equity for the last three years. we think that there is

opportunity for the company to turn it around. i do think it will take more than being called to the carpet. they need to start engaging their investors in a more meaningful way, having conversations. it is a bit of an ivory tower at facebook much like a google. the insiders control over 50% of the vote at the annual meeting so what happens, it tends to be dominated by insiders and there is little interest in really engaging in a meaningful way with investors. >> thank you. this weekend we will bring you our best interviews from the week. we'll hear how the silicon valley genetic testing site has high hopes about a partnership. this is bloomberg.

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♪ emily: twitter has banned alex jones from the platform. this is his tweets and videos have come to light which reach their policy. alex jones was at the hearings this week. what has changed? >> the timing could not be more interesting. it comes one day after he testified for eight hours in front of the senate and the house. now twitter says that alex jones's account went to the standard processes. he had several warnings. you remember he was required to

delete some violating tweets. he was suspended for an entire week. after the violation, from a post yesterday twitter decided it was time for him to receive a permanent suspension. none of his accounts can be reviewed globally. he is not allowed to make new accounts and he is permanently kicked off the platform. >> what do you make of the timing? is there a possibility that they didn't want to do this before jack dorsey was about to testify to lawmakers about shadow banning conservatives? >> what is interesting is that when i talked to the company, they say that jack dorsey played no role in this decision. it went to the regular process of their global review team. their trust in safety staff. this was the next step for escalating action for him. we cannot see the video that he posted anymore that was violating their rules, but he was harassing a cnn reporter

just outside of a congressional hearing. twitter decided that whatever he said was terrible enough to violate their abuse policies. it is interesting that it comes at such a critical time for this company area they have people on the far left and far right and everyone in between scrutinizing every action they make. during the hearings yesterday, the house didn't touch on alex jones very much and the testimony focused on trying to understand twitter's enforcement policies and heather algorithms work. it is also important to remember that this is not the first high-profile account that twitter has banned. they banned others in the past. >> how is the world responding to this?

>> twitter is all over the place as it is. one of the challenges of being an employee is that every little movement they make is heavily scrutinized. twitter has tried to become more transparent and post the play-by-play of how they are drinking through these issues. i was scrolling through twitter right now looking at the latest commentary. i just saw someone tweeted that she had removed her block list and was very excited that twitter was taking this ethical and moral action. on the other hand, the twitter spare is up in arms that they are silencing conservative voices. a lot of voices are harkening

back to what trump said that he has called out social media specifically on this issue for deplatforming these accounts. >> it will not be the last explosion i am sure. that does it for this edition of bloomberg technology. that is all for here. i'm emily chang. this is bloomberg. ♪

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