emily: i am emily chang in seattle for the geek wire summit. technology."mberg seattle is home to tech behemoths like amazon and microsoft, but with a small venture capital community, can they set the stage for the next amazon or microsoft? we will discuss. ons, boeing's ambitions their plans for hypersonic planes, self flying cars, and beating elon musk to mars.

head inrosoft has its the clouds. how the giant is tapping into its longtime partnership to take on amazon in the race on cloud computing. first, to the top story. we are at the geek wire summit here in seattle where more than 900 on particulars -- entrepreneurs have come together to talk about the innovation of the economy. the summit has given rise to giants like amazon and others. can seattle support the next big tech giant? one of the executives that presented here is here with his tech powered brokerage that helps people buy and sell homes based here in seattle area he joins us now to talk about the rapidly evolving landscape and

we have our reporter who covers amazon. glenn, you are seeing market trends in seattle that represent what you are seeing more broadly. talk to us about how the tech scene is related to the things in large. glenn: tech has blown up. many people in the middle-class town here have been priced out and we are probably passed peak seattle for the first time this year. so more people using our website to leave seattle then come to seattle. it is a moment of reckoning for the town. we have always been a destination for people looking for a better life. emily: so the peak is behind us? glenn: more people are leaving then coming in. we have plenty of tech folks coming in but inventory is piling up. some people said enough is enough. emily: what is the impact on amazon for better or for worse? glenn: it has been an overwhelmingly positive impact. every city in america is buying

for hq two. it has created mass prosperity and an entire ecosystem. we are having the same challenge san francisco did trying to deal with that prosperity and making sure it is well divided among the citizens. this used to be a logging town and coffee town. it used to be a middle-class town, but now it is a total tech scene. emily: is it bad for seattle that amazon is looking elsewhere? glenn: i think they will be hiring here as fast as they can as well. there are buildings going up left and right but they had all of their aches in one basket. tension started to build between city and its largest employer. at some point, if you run the company, you have to have another place to go. emily: spencer, you have been reporting on the amazon decision and the minimum wage

company is also taking things away like equity and bonuses upon raising the minimum wage. what is the latest? spencer: amazon give it and amazon taketh away. this is a savvy move for amazon. it jumped from being this poster boy for wealth and equity to being a leader of the $15 and our, living wage movement-- an hour, living wage movement. eliminatingtion is benefits. one is stock options and -- and theonuses other is incentive bonuses. some things are being taken away. the bottom line is that the $15 an hour announcement is good for new workers at amazon.

those are the ones that will see the starting wage go up the most. people that have been there a few years will not see as big of a bump. they will still see a bump but not as big. emily: what do you think the political implications are of amazon setting the minimum wage as opposed to the federal government? i think cooper set the minimum wage before amazon did. we are all competing for talent -- uber set the minimum wage before amazon did. . we are all competing for talent. some of this was conceding ground to bernie sanders and everyone else and some was the reality of a booming labor market. amazon did this in part because wants to advance a kinder sentiment but it wants to staff its warehouses.

emily: will they pay washington a visit? spencer: that is the famous speculation. , hewhere in the d.c. area was asked about in his recent visit a couple of weeks ago and did not say anything that you could read the advantages from. the advantages would be that it has become so large and there is so much of an antitrust conversation around it, some people in amazon feel the biggest threat is misunderstanding. if you have that proximity suddenly, you can evangelize from the nation's capital and thwart some of those concerns. emily: i have to ask about the broader real estate market. we see signs of the slowdown. as t -- is this the signs of a prolonged slowdown? glenn: we won't know for sure. the market has turned, but if the stock market goes up and

people still have a need to live somewhere come next spring, i think we will see prices rise again. it is a real thing. there are houses piling up that you can sell quite easily that have been on the market for weeks, eight weeks. it is not just one or two cities, it is cities across america. it is concentrated in the most coastal markets. september will be softer than august if i had to bet. , thank youn kelman for being here. spencer, thank you. boeing be on the skies. our conversation with the ceo on how he plans to keep the company on the technological edge on earth and in space. news, like bloomberg check us out on the radio. listen on the bloomberg app, bloomberg.com, and, in the u.s., sirius xm. this is bloomberg. ♪

emily: welcome back to a special edition of "bloomberg technology" live at the geekwire summit. decades after the space race slow down, it is revving up. this time it is not just the united states versus the ussr, this race is being run by private companies. we sat down with the ceo of a jetsonsthey set on like future of flying cards. here is our-- cars. here's our conversation on the company is trying to stay relevant on earth and in space over the next century.

>> it is an exciting time in the earth space business. there is more innovation happening in aerospace than ever in our history. ,t comes in the new products but also the transformation on how we design and build robotics in our factories. things like artificial autonomouse, aircrafts, high-speed aircrafts, so the time of innovation is incredible right now. it is a great way for us to draw talent to the future. emily: i know you have been a boeing your entire career. you have lived and breathed this, and you think a lot about the future. do you think self flying cars will be here sooner than we think? >> we see the whole brunt of what i call urban mobility transforming before our eyes. we are building prototype

vehicles and we expect to fly them in the coming year. emily: so in the coming year, self flying cars? >> absolutely. we are working with the authorities like the faa on the regulatory framework. it's important when you think about these dense, urban environments and a future where you have three-dimensional to help people operate more efficiently. not only do we need new vehicles, we need an ecosystem allowing that to happen safely. we are working on the framework and the new vehicles. i would expect within the next five years, we will see initial operational capabilities. emily: you bought the company making these vehicles. when will we see uber deploy these? >> we will see the flying prototypes next year. part of that will be their work with uber and the interface of what candidates of what uber is thinking about.

--re are a number of company oning with a unmanned traffic systems to make sure the ecosystem is safe. the amount of capital investment happening there is significant. you will see rapid progress over the next several years and you will see boeing with our partners at the forefront. emily: you are also unveiling a concept for a hypersonic plane. i keep asking when. when would something like that become marshall he available to someone like me? -- commercially available to someone like me? >> i would say this is over the next decade. the propulsion technology is in hand and we are demonstrating that on test vehicles like our make suree need to the economics work and there are enough passengers to pay a premium to get anywhere in the

world in two hours. we think that will mature over the next decade. you will see the technology come together. imagine a future that has today's commute role -- commercial airplanes combined with hypersonic airplanes connecting any two cities in a couple of hours. emily: you are one of the main contractors building a nasa space system that may take the first astronaut to mars, yet boeing does not get nearly as much attention as spacex or others. is that an oversight? >> it reflects our approach is a company. we are focused on working with our company -- customers and enabling these space ecosystems. we're collaborating and have great partnerships, and in some cases we are competing. we are building that space ecosystem for the future. we are testing a vehicle for a first lunch next year helping us creating a low orbit ecosystem.

we are building the first rocket to mars with our first customer today. this is a reality. these are things we are working on today and we will be flying shortly. emily: have you thought about stepping up the tweeting like elon musk? >> i prefer to stick with getting our business done. boeing has strived for century because we stay close to our customers and deliver on our promises. capabilities safe and affordable -- that is safe and affordable. we do it with a great sense of excellence. musk: facebook and musk -- has said he can get to mars by 2030. do you think you can beat spacex? >> we will put the first person on mars. only ones building a rocket today that is capable of going to the moon and to mars.

not something on paper, we are building it today. we are working on a 38 story tall rocket being built today and doing initial test flights next year with nasa. we will return to the moon, set up a presence on the moon, and we will step tomorrow's from -- step step tomorrow's e. mars from ther it in theill to do capital funding to make it happen. we will be at the leading edge here. get the firstill person to mars on the boeing rocket. emily: how has the trade war impacted boeing? >> we are keeping a close eye on it. airspace is a growing business. the world needs 40,000 new airplanes over the next several

years. 20% --%, less than it depends on free movement of people to be successful. we are very engaged in the tray dialogue. the good thing about aerospace is that if you take u.s. and china, both economies thrive on a healthy industry. grows, they need 7000 new airplanes over the next 20 years to create their increasing capacity. we have a mutual impact to find a trade solution that is balanced. long is it before that solution is reached? >> it is not clear what the duration is. we are very much engaged in the dialogue and we are at the table. we are having conversations with

leadership in u.s. -- the u.s. and china. we are focused on finding solutions benefiting both countries. emily: our exclusive interview with the boeing ceo there. still ahead, amazon may be the leader in the cloud, but microsoft is on its tail. it is bringing in new business. we will speak to the company's corporate vice president for microsoft azure next. "bloomberg technology" is livestreaming on twitter. check us out @technology, and be sure to follow our global news network, @tictoc, on twitter. this is bloomberg. ♪ ♪

emily: welcome back. we're live at the geekwire summit. microsoft continues to find the deals taking on amazon in the cloud. labeling on -- they bring on

several partners. microsoft is leveraging strong relationships, large enterprise customers to bring them on the azure train. joining me now to discuss is julia white, the former vice president for microsoft azure. when you look at amazon web services, where do you think asurour beats it -- -- azure beats it? >> understanding technology will run across the edge in the public cloud and building it from the beginning. it is also about our partnership several companies to help them with their transformation and not just being a technology or cloud vendor for them. emily: what does it take to win a big partner? amazon is a market leader in i'm

sure your customer say amazon is more experienced and has a better track record. >> amazon has been around longer but they have much more of a technology provider approach. on alk to our customers long-term strategy about not just selling them technology or getting them into the cloud, but how you are changing your business and how it -- what it looks like to have a big platform. a much more partnership on the business side and not just the technologies. withve so much history working with enterprise customers that we have a different point of view. emily: amazon's favored for this big contract with the pentagon. are you concerned microsoft does not have a shot? julia: we are doing everything we have to bring to that. andink we have a great case great partnership in technology with the government. emily: so you have been making the case that it should be microsoft?

julia: we certainly engage in appropriate ways. emily: what about google? progressed over the years to number three. are you seeing more competition from google? is it more of a threat? lot in ourn't see a customer engagements. amazon had the first to market leadership position, but i' don't see the other -- i do not see the other vendors coming up. what do you see the high looking like in five years? how different does it look in five years than today? julia: so many people are about competing but the pot is so big it is almost unlimited total opportunity. trillion if you look at technology run on premise today and where it is going to the cloud. i'm not worried about the other competition versus what are we doing with customers to take advantage of that and help them embrace it.

it is an interesting time in this moment to visit technology and having effectively no threshold for growth. several technology companies have found themselves in tricky positions as of late. there was a protest about contact you had with the u.s. immigration. how do you balance not knowing how the technology will be used and whether or not to offer that technology to an arm of the u.s. government? julia: it comes back to the fundamental principles around trust and believe around privacy as a human right. as we provide technology, making sure we are putting in the right securities or doing things within the laws in meeting compliance requirements and making sure the d information around privacy is in the customer's hands. emily: does that mean it does not matter how the technology will be used, or does it? julia: we want to see technology used for good.

our fundamental principle, we spend a lot of time around ai's ethics. our approach from the beginning was that ai is an enablement for humans. that is certainly our focus. we want to be responsible with it. playing withr part the industry on how we shape is moving forward. it is important to do our part but also bring the industry together. emily: groups affiliated with the russian government are already trying to hack the election. this is a challenge for companies. quit --loud really equipped to handle these issues when they have such major consequences, including potentially threatening our economy? julia: i'm so passionate about cloud with our customers because we are best set up to deal with

theseadvertisers -- people. organization,y even a large well-funded organization, does not have the kind of resources we have to keep up with threats. that is why we invest at the level we do and i'm so passionate about getting our customers to take advantage of cloud-based security because it is better. ultimately, security is a data game. across all microsoft, we have our emailming from system that gives us unique insights on good and bad intense. emily: julia white, thank you for joining us. coming up, silicon valley may be the land of startups, but flying

fish once seattle to be more in the game. we will talk more about the growing seen in seattle, next. this is bloomberg. ♪

i'm emily chang with a special edition of bloomberg technology. we are in seattle. tech behemoths have flourished in seattle but the rest of the community seems -- stays relatively small. to address the lack of local guest is with flying fish cove errors. -- flying fish cove.

fleet might be a strong word but traditionally startups at a certain point in their life cycle haven't been able to get the funding that they need. they go to silicon valley. are you still seeing that? >> i don't think it's too strong. we are really concerned about that flight. it is the companies that we are most excited about the decide they need to go to the valley because they can't get the network and resources that they need to go fast. one of the myths that we are trying to bust up here about this region is, we have big company people and our engineers do not want to start companies at the same number they do in the valley. we think they are really smart and they want to do everything in an a plus kind of way. if they see an opportunity that they can only pursue in the valley, because they want to have the capital to back their idea, they will do it in the valley. the lifestyle here is much better so you see companies all the time not get warmed because

you have a superstrong engineer who would be an entrepreneur and they look at lifestyle versus ultimate desire to start a company. they say they want to stick with lifestyle. we don't want that trade-off. impediment to what we could unleash here on the west coast if we could make the lifestyle better in the bay area or the startup funding better in seattle. the current rate, is it possible for the next amazon or microsoft to be founded here? >> absolutely. it is getting cheaper and cheaper to bound companies. the cloud has enabled companies to start on a more bootstrapped basis.

you don't have to buy all of your own servers. there is nothing holding back companies from having a customer first bootstrapped attitude. there is an fcc here. , i wasm and a few others on the phone earlier with a great one. they are looking here more and more. we have to accelerate that. it is less about absolute dollars and more about signal. people have to believe the capital is there. wantways talk about we money chasing deals not deals chasing money. we are able to let that diagonal -- dynamic in seattle. we should be the place that every company wants to be in seattle. i think we are. every company in the bay area is opening a's seattle -- satellite office here. has madethat amazon

the choice to have another headquarters someplace else, that is a knock against the city. it is also a with a call. out of the gate to say it is never too late to say we are sorry. i said i was sorry. has been a lot of relationship building between the powers that be and amazon and all of that is going much better than it used to. to work oncontinue that. this region needs to always be open for business and we need to be sure we are the best place to start a company. >> is there something the big tech companies can do? housing prices and transportation, it will get a huge set of state and local tax breaks. is there something the companies can do? >> absolutely. we have an opportunity to show the way and lead here as well.

i think it was reuters that the siliconle valley of saving lives. that was based on the gates foundation and what paul allen does. institutions here who are all about worldwide philanthropy. aside, what we are ,eeing with our tech companies maturing and learning here. we are seeing the social eq develop. microsoft has gone from being a company that we all hated to being one of the darlings of the industry in inms of being foot forward philanthropy and civic engagement and helping disadvantaged communities. amazon with the $15 minimum wage announcement yesterday, that is a big step area that over president came from this area.

tech is ready to grow up and take responsibility. we will see that increasingly from amazon and other tech companies as well. >> you are investing in ai and machine learning. what are you most excited about? overhyped is small companies ability to add materially to the base ai ml infrastructure. that takes a big company. what isn't overhyped is every company when they start or when they are reinventing their own business, thinking about building a i first. the way we used to think about -- ware is having a ai is having that same transformative effect. ai is going to replace software. as the key competitive advantage. if you look at microsoft completely pivoting their ml, amazon ai

tearing down their operations and rebuilding them on that foundation, that is important. looking it as you would cloud or mobile or any other enabling technology and saying how do i drive performance with this as my base? >> or has been talk about in ai winter. there has been talk that there must be limits. are you concerned? >> no. are seeing very commercial products out today. we have a few in our portfolio that are absolutely delivering with very baseline ai. takes a lot of work and you have to have smart data scientists, but if you have them you can deliver a product that is different for the end user and much cheaper for the company. that is what drives innovation. >> i want to ask you about

diversity venture capital and entrepreneurship. how much actual progress are you seeing? >> we have a very long way to go. i appreciate your work in this area as well. there is a major impediment and it is an impediment related to funding. a startup thinks about i need money from a venture capitalist area for a new venture to arm you need money from a foundation or institution. those people do not like to fund things that are new. they like to fund things that are proven because they are managing what is an orphan's money. to get new entrants into venture is very difficult. that is what we have to do to

move the needle because the , i thinktnerships people like melinda gates have done a good job in bringing that bell. pronouncing that to the world. we are not seeing very old very conservative initial institutions move closely -- quickly enough to fund new firms that are founded by women etc.. that's what will change. we need to see some venture women.hat are founded by >> thank you for stopping by. to getnia's recent push more women on corporate boards may barely impact the states businesses.

of california's 88 largest companies, only one has zero female directors. some people have already done a lot of the hard work area ebay has accused amazon of poaching sellers from its marketplace site by infiltrating its internal messaging system. it launched an internal probe after a seller claimed they had been contacted by an ample -- amazon employee. ebay sent a cease and desist letter accusing amazon of reaching california's copperheads of computer data .ccess and fraud act area looking for as chief investment officer to oversee more than $10 billion of his ellen topic giving. had anerg and his wife

initiative. it has the goal of eradicating disease improving education and reform in the criminal justice is done. cook takes on facebook. he says that apple would not get hacked like facebook did. is he correct? is hollywood as we know it over? this is bloomberg. ♪

this is a special edition of bloomberg technology from seattle. we are looking at the facebook hack that compromise to the accounts of 50 million viewers. tim cook is touting the way that apple does business. hackld vice news that a like the ones who hit the facebook accounts wouldn't happen at apple. he says it's because your personal data remains stored and encrypted on your phone and your phone alone. is he right? this is a line that tim cook has been giving since -- for the whole year. is he correct? >> iphones are known for their high level of security. the thing that i would push him on is that there is an entire developer network that apple does have where it really allows people who use iphones and apps

to give as much information as they want to developers. sometimes even beyond ways that they truly understand. if apple is going to be out there talking about how good it security,acy and there is more that they could do. if they want to lead here, they could take a few extra steps in that direction that could really help go a long way to improving user privacy area >>. apple is different than facebook and google. one of the things that tim cook talked about was that it is bunk that companies need your data in order to operate. >> facebook needs the data in order to do the personalized targeted advertising.

apple is starting to build an advertising business but it is not significant for the company's overall revenue. they can get away with saying they don't need data in order to personalize ads or anything like that. they have other businesses that run on data like the developer business. >> now we know that facebook hack may be even worse than we thought. who tie intoanies facebook, facebook connect like pinterest.ify, what is the latest? >> facebook has seen no evidence of that direct impact, but this is just the beginning of the story. the irish data protection regulators said they are starting an investigation to how much it affected european citizens which are now covered under a new rule.

there is going to be a lot more to come. we still have not heard from facebook. what the motivation was of the attackers and what kind of information they got. >> there is a chance we will never know. the hackers could have looked around without leaving a trace. thank you so much. it is not just data security that is an issue for facebook and other online media. videos and audio keep hitting better faster easier to make. increasing the potential for tech. good this has become in the last few months and was being done to counter them. >> we are entering an era in which our enemies can make it look like anyone is saying anything at any in time. >> jordan peele created this video of president obama.

>> we need to be more vigilant with what we trust from the internet. likes not everyone thought it but the technology behind such fraud is increasing. quicks your bloomberg pick on deep fakes. video orrealistic fake audio. despite bans on major websites, they are easy to make and find area they are made -- named for the algorithms that make them possible. input audio or video of a real person, the more the better, and patternsare remembers in speech or movement. >> it is extremely easy to do this. there were just breakthroughs from researchers who work with this particular machine learning in the past few weeks. it would drastically reduce the amount of video you need to create one. needograms like fake app

dozens of hours of human assistance to create a video that looks like this rather than this. melon --is a konica show that it is possible to make similar videos for other uses. >> this is fake news on steroids. we do not know of the case yet where someone has tried to use a fraud ortrate toormation warfare campaign really damage someone's reputation. it is the danger that everyone is afraid of. >> and away -- world where fakes are easier to create, people doing objectionable things can claim that evidence against them is bogus. worldchers around the have said they are working on

ways to counter this. coming up, the entertainment industry could be in big trouble if it continues to consolidate -- isof david rubenstein conversation coming up. this is bloomberg. ♪

davidtest episode of rubenstein show talks about the current state of the movie and television business including the rise of netflix and amazon. here's what they have to say. is stillthe internet very much a part of our lives. what about television and motion pictures? do you think they will continue to be important parts of our

lives? >> i think the movie business is institutionltural of any great value. the movie business is now about and big huges mega-movies that are more marketing than anything else. movies have receded. television is having a great. because of the incredible optionality and television. >> are you worried that for five technology to companies could control our culture and our lives? >> i am more about that. concentrationht is bad. that goes against the consolidating principles which are forcing consolidation everywhere. i think that is not a good thing. >> do you expect the movie

bypanies will be bought these technology companies? >> i think they will supersede them. the two companies that are really dominating right grown totallyx outside of the infrastructure of the business, and amazon. model isiness antithetical to what the business model of entertainment has been which is you put on a show and people like it and the audience comes and they pay you. their business model is to sell subscriptions to prime. a subsidiary they give you good stuff on the side. there withbenstein barry diller. you can catch the full conversation wednesday at 9:00

p.m. eastern. tesla's model three is driving toward another record. now it is one of the country's best selling sedans. tesla delivered more model threes. it included some deliveries to but their third quarter is showing unprecedented growth for the company. tesla isn't the only car company thriving. gm just received a self driving car investment. honda committed to spending $2.5 billion. to jointlypent develop autonomous cars. stake ins honda a 5%

cruz which has become a competitor to waymo. gave a profit forecast say melon of the world's largest maker of personal computers will continue to see robust demand. this tops analyst estimates. they had climbed to the top of pc markets. for bloomberg technology. tomorrow, we will be joined by jessica powell. she is out with her first book on medium. about silicon valley. this is bloomberg. ♪

welcome to daybreak australia. we are counting down to asia's major market open. here are the top stories we are covering. treasury turmoil amid further evidence of the u.s. economy stocks. asust payrolls and services the fed indicates it will press on with gradual rate hikes area