emily: i am emily chang in seattle for the geekwire summit. this is "bloomberg technology." coming up 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. plus, boeing's skyhigh ambitions. we will hear from the ceo on their plans for hypersonic planes, self flying cars, and beating elon musk to mars.

i sit down with him in an exclusive interview. and microsoft has its head in 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 live at the annual geekwire summit here in seattle where more than 900 on entrepreneurs and executives and investors have come together to talk about the innovation of the economy. this is a city that has given rise to giants like amazon and microsoft. but with amazon putting the second headquarters elsewhere, question remains, can seattle support the next big tech giant? one of the executives that presented here and has an opinion about this is the ceo of redfin, a 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 here is related to the real estate seen at-large. glenn: tech has blown up. over the past five years, we have seen 50% price growth. many people in this middle-class town have now been priced out. we have probably passed peak seattle for the first time this year. we saw more people using our website to leave seattle then -- than to 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 than are coming in. we have plenty of tech folks coming in but inventory is piling up. some people have said enough is enough. emily: what is the impact on amazon on seattle for better and for worse? glenn: it has been an overwhelmingly positive impact.

vyingcity in america is 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. a nordstrom and costco 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? they are creating 50,000 new jobs, not here. 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 eggs in one basket. tensions started to build between the city and its largest employer. and that some find, if you are running that company, you have to have another place to go. emily: spencer, you have been reporting on the amazon decision to raise minimum wage and the

-- you have poked some holes in the plan, whereby the company isn't just raising minimum wage, they are also taking away things like equity and bonuses. what is the latest? andcer: so amazon giveth amazon taketh away. this is a savvy move for amazon. it basically jumped from being for wealth and equity to being a leader of the $15 per hour living wage movement. that isfootnote on there were compensation programs they are eliminating. one is stock options that warehouse workers will see phased out over the next couple of years, and the other are incentive the onus is based on how much time off you have taken and some production bonuses as well. those will be eliminated. 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. some of them are a little frustrated by all the publicity around it. emily: what do you think the political implications are of amazon setting the minimum wage as opposed to the federal government? glenn: i think uber set the minimum wage before amazon did. part of the issue is we are all competing with talent for people who are driving for uber. an hour,e paying $12 lamar workers are walking out of the store and driving a car instead. -- walmart workers are walking out of the store and driving a car instead. 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 advance a kinder, gentler capitalism, but in part because it wants to staff its warehouses. emily: any information on hq

two? to payzos seems washington a visit. spencer: that is the famous speculation. somewhere in the d.c. area, he was asked about in his recent visit a couple of weeks ago and did not say anything that you could read into. the advantages of being in the d.c. region is that it has become so large and there is so much of an antitrust conversation around it, some people in amazon feel the weakness or threat to amazon is misunderstanding. if you have that proximity suddenly, you can evangelize from the nation's capital and thwart some of those concerns. emily: glenn, before you go, i have to ask about the broader real estate market. we see signs of the slowdown. is it the beginning of a prolonged slowdown, and has the market really turned?

>> we will not know for sure. the market has turned at the end of the year. but if the economy keeps booming at the stock market goes up and 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 used to sell quite easily that suddenly has been on the market four weeks, eight weeks. it's not just in one or two cities. it is cities across america. it is concentrated in the most coastal markets. serviced ink it is all the figures yet. september will be softer than august if i had to bet. emily: glenn kelman, thank you for being here. spencer, good to see spencer, good to see you here in person. thank you both. coming up, boeing beyond the skies. our conversation with the ceo on how he plans to keep the company on the technological edge on earth and in space. if you like bloomberg news, 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 in seattle. decades after the space race slowed down, it is revving up. this time it is not just the united states versus the ussr, it is a race largely being run by private companies like spacex, blue origin, and boeing. earlier, we sat down with the ceo of boeing, jeff nolan -- dennis muilenburg, as they set on a jetsons like future of flying cards. here's our conversation on the company is trying to stay relevant on earth and in space over the next century.

inthis is an exciting time the aerospace business. we have more innovation happening in aerospace than ever in our history. it comes in the forms of new products and services, like the new 737 max and new defense products, but also transformation in how we can design and build robotics in our factories. things like artificial intelligence, autonomous aircrafts, high-speed aircrafts, new spacecraft. so the time of innovation is incredible right now. it is a great way for us to draw incredible right now. it is a great way for us to draw talent to the future. emily: i know you are an engineer at heart. you have been at 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? how fast? >> we see that whole front of what i call urban mobility transforming before our eyes. we are building prototype vehicles today. we expect to be flying those within the coming year.

emily: so in the coming year, self flying cars? >> flying prototype vehicles, 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 highways to relieve traffic congestion and 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 , the ecosystem, and the new vehicles. all of that is happening now, and i expect in the next five years, we are seeing additional capabilities being built. emily: you bought the company making these vehicles. when will we see uber deploy these? >> we will see aurora building and flying the prototypes next year. part of that will be their work with uber and the interface of what candidates of what uber is thinking about.

there are a number of companies involved in developing prototypes and working on the future system. we are also working with a company called smart cognition on on -- unmanned cognition to make sure the ecosystem is safe. you are going to see rapid progress over the next several years and you are going to the boeing with our partners at the forefront. emily: you are also unveiling a concept for a hypersonic plane. you can go back and forth between new york and london in just a couple of hours. but whenking when, will something like that be commercial 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 x51, but we need to make sure the economics work and there are -- the business case works, the economics work, and that there are enough passengers to pay a premium to get anywhere in the world in two hours.

we also think that will mature over the next decade. you will see the economics and technology come together. imagine a future that has today's commercial airplanes even more efficient, combined with hypersonic airplanes connecting any two cities in a couple of hours. emily: you are at lead contractor for the international space station and 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 customers and doing the real work, and enabling a space ecosystem. in some cases, we are collaborating with spacex and blue origin. we're collaborating and have great partnerships, and in some cases we are competing. we are building that space ecosystem for the future. our new star liner capsule, we are testing a vehicle for a first launch next year.

that will help us create a low -- low orbitce space 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 thrived for a century because we stay close to our customers and deliver on our promises. we provide capabilities that is safe and affordable. we will continue to do that for the future. we know people's lives depend on what we do and we should do it with a great sense of excellence. emily: spacex claim they can get by 2020. nasa says by 2030. do you think you can beat spacex? >> we will put the first person on mars. emily: when? >> the fact is that we are the only building a rocket today ones that is capable of going to the moon and to mars. not something on paper, we are building it today.

the space launch system we are working on with nasa, 838 story tall rocket, it is 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 to mars from there. emily: can you get it there in the 2020's? >> i think it's possible. it will require continued reliable funding and continued success on our programs. it's the will to do it in the capital funding to make it happen. we will be at the leading edge here. i still firmly believe the first person that steps foot on mars will be there on the combined nasa and boeing rocket. emily: you have a very long supply chain. how has the trade war impacted boeing? >> we are keeping a close eye on it. thriving, growing industrial business, i would argue the strongest in the world. the world needs 40,000 new airplanes over the next several

years. 18%, less than 20% of the world's, has ever taken a single flight. the amount of growth still ahead of us in the airplane business is extraordinary. it also depends on free global trade and free movement of people to be successful. we are very engaged in the tray -- trade dialogue. the good thing about aerospace is that there is a lot of mutual dependency. if you take u.s. and china, both economies thrive on a healthy aerospace industry. it's a great generator of manufacturing jobs here in the u.s. as china goes, they need about new airplanes over the next 20 7000 years to create their increasing capacity. we have a mutual interest here to find a trade solution that is balanced. emily: how long are you bracing for this to be prolonged before that solution, if it is reached? >> it is not clear what the duration is. we are very much engaged in the dialogue. we are at the table. we are having conversations with leadership both in the u.s. and

china. we are focused on finding solutions that benefit both countries. emily: our exclusive interview with the boeing ceo, dennis muilenburg. still ahead, amazon may be the leader in the cloud, but microsoft is on its tail. it is now exploiting its longtime enterprise partnership to bring 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. this is a special edition of "bloomberg technology." we are live from the geekwire summit in seattle, a gathering of investors, entrepreneurs. microsoft continues to find the deals taking on amazon in the

cloud. bringing on partners like coca-cola, chevron, and most recently, volkswagen. microsoft is leveraging strong and large enterprise customers -- 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 feel that azure beats it? where do you feel that azure still lacks? >> i think that what you talked about, it is really understanding that technology will run across the edge in the public cloud and building it from the beginning. i also think it's about our partnership. these aren't just customers. like volkswagen, coca-cola, chevron, we are partnering deeply with them, not just being a technology vendor or cloud vendor for them. those are some important reasons customers are choosing azure. emily: what does it take to win a big partner?

amazon is a market leader. i'm sure customers 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. we talk to our customers on a long-term strategy about not just selling them technology or getting them into the cloud, but how you are changing your business and what does it look like to have a connected car platform? what does it mean to use ai and practices? drilling it's much more of a partnership on the business side, not just technologies. we have so much history with working with enterprise customers for over 40 years that we have a different point of view. emily: amazon's favored for this big contract with the pentagon. it is widely reported. are you concerned microsoft does not have a shot? julia: we are doing everything we have to bring to that. i think we have a great case and great partnership in technology with the government. i feel great about it. emily: so you have been making the case to the defense department that it should be

microsoft? >> we>> are certainly engaged in inappropriate ways on the bed and working in the area on that. emily: what about google? it has progressed over the years to number three. are you seeing more competition from google? is it more of a threat than it was two years ago? >> i don't see them a lot and our customer engagements, to be honest. i think amazon has the first to the market leadership position, but i do not really see other vendors coming up. emily: the cloud, it's not like you are dominating -- expanding to dominate. 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 pie is so big, it is almost like unlimited total opportunity. it's about $4 trillion if you look at technology run on premise to stay 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 that? it is an interesting time in

this moment with this technology of having effectively no thresholds for growth. emily: microsoft and several technology companies have found themselves in tricky positions as of late. there was a protest about contact you had with the u.s. and aggression in the family separation policy. 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 belief that privacy is 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 that the privacy and information around privacy is in the customer's hands. and that all the capabilities are appropriately taken. 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 and ai for good. our approach from the beginning was that ai is an enablement for humans. certainly, that is our investment and focus, that is how we are engaged with that technology. we want to be responsible with it. it is also our part playing with the industry on how we shape is moving forward. it is super important that we do our part and also bring the industry together on this. found microsoft has evidence that groups affiliated with the russian government are already trying to hack the elections. we discovered facebook hack was the largest in history. this is a challenge for a cloud company. really equipped to handle these kinds of security issues when they have such major consequences, including potentially threatening our economy? -- democracy? reasons i'm sohe passionate about cloud with our

customers is because we are actually best set up to deal with these anniversaries. we have 3500 security engineers. that is all they do. it is their lifeblood. compared to any organization, even a large well-funded organization, does not have the kind of resource to keep up with the threat. it is not people in basements trying to embarrass executives anymore. it is these nationstate threats. that's why we invest at the level we do and why i so am passionate about getting our customers to take advantage of cloud-based security because it is better. ultimately, security is a data game. who has better data? who has better insight? across all microsoft, we have signals coming in from our billion window imports coming , from our email system that gives us unique insights on good and bad intention. emily: julia white, thank you for joining us. great to have you here on the show. coming up, silicon valley may be the land of startups, but flying fish wants seattle to be more in

the game. about seattle's growing venture scene next. , this is bloomberg. ♪

emily: i'm emily chang with a special edition of "bloomberg technology." we are from the geekwire summit in seattle. tech behemoths like amazon and microsoft have flourished in seattle, but the venture community remains small. to address the lack of local capital, investor heather a venturefounded capital firm. seattle's now from

declare summit, heather redmond, cofounder of flying fish partners. startups, at a certain point in the lifecycle cycle, have not been able to get the funding they need, so they go to silicon valley. are you still seeing that? >> i don't think it's too strong. we are concerned about that flight, and sometimes it is the companies we are most excited about that decide they need to go to the valley because they can't get the resources they need to go fast. myths ithe midst -- think we are trying to bust is that 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. and if they see an opportunity that they can only pursue in the valley because they want to be sure they've got the capital to back their idea, then they are going to go do it in the valley. yet, the lifestyle here is much

better, so you see companies all the time not get formed because you have a superstrong engineer who would be an entrepreneur and they are working at amazon, and a look at lifestyle versus ultimate desire to start a company. they say they want to stick with my great job where i can build products at amazon rather than move to the valley, be miserable, but start a great company. we don't want that trade-off. it is a real 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. emily: at the current rate, is it possible for the next amazon or the next microsoft to be founded here? heather: absolutely. for one, it is getting cheaper and cheaper. the cloud itself has enabled companies to start on a much more bootstrapped basis than they used to. you don't have to buy all your

own servers and do all of that heavy lifting from a capital perspective. there's nothing holding that companies from having a customer first, bootstrapped attitude. here are enough vc's increasingly. our firm and other firms have come out of the woodwork, great ones that are looking here more and more, but we need to accelerate here. it's less about absolute dollars and more about signal. people have to believe the capital is there. when we started the firm, we talked about, we want money chasing deals, not deals chasing money. we are beginning to put that dynamic in seattle. emily: let's talk about that. how concerned are you that amazon is opening a second headquarters elsewhere? heather: i think it is very concerning. we should be the place that every company wants to be. in fact, i think we are. we are seeing every company in the bay area open a satellite office here and grow this office faster than the home office in

the bay area. but the fact that amazon in particular has made the choice to have another headquarters somewhere else is a knock against the city. it's also a wake-up call. i was first out of the gate with a quote, saying it is never too late to say we are sorry. emily: did they? heather: i did. [laughter] i said i was sorry. i think there 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. however, we do need to continue to work on 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. emily: is there something also that the tech companies can do? certainly they are being blamed for rising housing prices and overcrowded transportation, not paying their fair share. wherever it goes, it will get a huge set of state and local tax breaks. is there something the companies can do? heather: absolutely. emily: to do their fair share? heather: yes.

i think we have an opportunity to show the way and lead here as well. i think it was reuters that called seattle the silicon valley of saving lives. that was based on the gates foundation and what paul allen does. a lot of our other major institutions here that are all about worldwide philanthropy. we probably are the philanthropic capital of the world, if you look at dollars. leaving that aside, i think what we are seeing now with tech companies, and you had microsoft here very recently, we are seeing companies maturing and learning here. we are seeing the social eq develop. microsoft has gone from being a company that we all hated to and was under all the antitrust pressure to being one of the darlings of the industry in terms of being foot forward in philanthropy and civic engagement and helping disadvantaged communities. amazon with the $15 minimum wage announcement yesterday, that is a huge step forward. the new luger president -- uber

president came from this area. there's a lot of signals that tech is ready to grow up and take responsibility. we will see that increasingly from amazon and other tech companies as well. emily: you are investing in ai, machine learning. what are you most excited about? what is overhyped? heather: interesting. i think what is overhyped a little bit is small companies' abilities 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 ai first. so you look at the way we used to think about software as having this transformative effect on every industry. ai is now having the same transformative effect. i think ai is increasingly going to replace software. of course, it is software, too, but it will replace software as the key competitive advantage.

rebuilding microsoft that, and amazon rebuilding on foundation. that is really important. if you are looking at it like cloud or mobile or any other enabling technology and saying how do i drive performance with this as my base? emily: there has been talk of an ai winter. there is a concern some companies will be able to ai,ver on the promise of and also there might just be limits to what it is capable of. are you concerned about that? heather: i'm not. it is early days, for sure, but we are seeing very commercial products on the market today. we have a couple on our portfolio that are absolutely delivering with very baseline ai. super compelling results. it still takes a lot of work and you have to have smart data , who are not always easy to find, but if you have them, you can deliver a product that is markedly different for the end user and much cheaper for the company. that is what drives innovation. emily: i want to ask you about

diversity venture capital and entrepreneurship. we have seen great momentum in silicon valley, the formation of this group of female venture capitalists together to get women funded. how much actual progress are you seeing? heather: i think we have a very long way to go. i appreciate your work in this area as well. work youe fan of the have done and the reporting you have done. there is a major impediment and it is an impediment related to funding. everyone who is a startup thinks about, i just have to get money venture capitalist. for a new venture to form, you foundation orm a institution, a pension fund, something like that. those people do not like to fund things that are new. they like to fund things that are proven because they are 'anaging widows and orphans money. to get new entrants into venture

is very difficult. that is what we have to do to move the needle because the small partnerships -- emily: it is limited. heather: it is. i think people like melinda gates have done a good job in ringing that bell. pronouncing that to the world. we are not seeing very old very conservative financial institutions move quickly enough to fund new firms that are women, by underrepresented minorities, etc., and that's what will change things. a 10%n't add 11 into partnership and expect that to move the needle, and particularly not a woman who is not an investor. we need to see some venture firms, and we have some, but we need more, that are founded by women. emily: heather redman, cofounder of flying fish partners, thank you so much. california's recent push to get more women on corporate boards may barely impact the states largest businesses.

bloomberg analysis found that of california's 88 largest companies, each of which has a market value of at least $10 billion, only one has a female director. including broadcom and palo alto networks have at least one. some people have done a little hard work, but a lot more has to be done. accused rival amazon of poaching sellers from the marketplace sites buy into -- infiltrating the internal messaging system. the online auction site said it launched an internal probe after a seller claimed they were contacted by an amazon employee attempting to recruit the person to switch platforms. ebay sent a cease-and-desist letter to amazon monday, accusing the bigger rival of breaching california computer access and fraud acts. facebook ceo mark zuckerberg is looking for a chief investment officer to oversee more than $10 billion of his philanthropic

giving. zuckerberg and his wife had an initiative. they launched in 2015 with the goal of eradicating disease, improving education, and reforming the criminal justice system. coming up, tim cook takes on facebook. he says that apple would not get hacked like facebook did. is he correct? we will talk about that. and is hollywood as we know it over? we have tech giants like amazon and netflix to thank for that, according to the next guest. all he has to say about consolidation in the media industry in this half hour. this is bloomberg. ♪

emily: this is a special edition of "bloomberg technology" from the geekwire summit in seattle.

the ftc has announced it is looking at the facebook hack that compromised the accounts of 50 million viewers. they are not the only ones talking about the breach. tim cook is touting the way that apple does business. he is taking a shot at companies that make their money off of users' free personal data. he told vice news that a hack like the ones who hit the facebook accounts wouldn't happen at apple. why? he says it's because your personal data remains stored and encrypted on your phone and your phone alone. is he right? let's bring in sarah frier, who covers facebook. this is a line that tim cook has been giving over the last year, perhaps slightly upping the ante here, but is tim cook current. ? -- correct here? reporter: iphones are known for their very 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 is at privacy and security, 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. emily: apple's business model is very different from a company like facebook and google. one of the things that tim cook talked about, and he used the word bunk -- he said it is bunk that companies need as much of your data in order to operate. isn't that what his model is predicated on? reporter: exactly. facebook needs the data in order to do this kind of personalized, targeted advertising.

apple is starting to build an advertising business but it is not significant for the company's overall revenue. so they can get away with saying that they don't need people's data in order to personalize ads or anything like that. but they have other businesses that run on data like the developer business. emily: that said, now we know that facebook hack may be even worse than we thought. you have companies who tie into facebook, via facebook connect like airbnb, modify, pinterest. those could also be impacted. what is the latest? reporter: 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 gdp are. the ftc says it has not escaped their attention.

there is going to be a lot more to come. of course, we still haven't heard from facebook, what the motivation was of the attackers, and what kind of information they actually got. emily: right. and there's a chance we will never know. part of the problem is the hackers could have looked around without leaving a trace. sarah frier in san francisco, as always thank you so much. , it is not just data security that is an issue for facebook and other online media. face videos and audio keep faster, ander, easier to make, increasing tech potential for harm if put in the wrong hands. so-called how good been in the have past few months and what is 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 fake video of president obama to demonstrate how easy it is to

put words in someone else's mouth. >> moving forward, we need to be more vigilant with what we trust from the internet. reporter: not everyone thought it, but the technology is rapidly improving even as worries increase about the potential for harm. this is your bloomberg quick take on deep fakes. they are realistic looking videos or audio, gaining popularity from major actresses in pornography scenes. despite bans on major websites, they are easy to make and find . they are named for the algorithms that make them possible. input audio or video of a real of a specific person, the more the better, and the software tries to recognize patterns in speech or movement. introduce a new element like someone else's face our voice, and a deep fake is born. >> it is extremely easy to do this. there were just some breakthroughs from academic researchers who worked with this particular kind of machine learning in the past few weeks, which drastically reduced in the amount of video you need to create this.

reporter: programs like fake app, the most popular and widely available, need dozens of hours of human assistance to create a video that looks like this rather than this. in august, researchers at carnegie mellon revealed software that accurately rendered not just facial features, but changing weather patterns, and flowers in bloom. this advance is not yet available to the public, but with increasing capability comes increasing concern. >> this kind of fake news on steroids, potentially. we do not know of a case yet where someone has tried to use this to perpetrate a kind of fraud or any information or warfare campaign, or for that matter, to really damage someone's reputation, but it is the danger that everyone is really afraid of. reporter: in a world where fakes are easy to create, authenticity also becomes easier to deny. people caught doing genuinely objectionable things could claim evidence against them is bogus. fake videos can also be difficult to detect. researchers around the world and at the u.s. department of

defense have said they are working on ways to counter them. our bloomberg quick pic on the explosion of deep fakes online. coming up, a media mogul saying the entertainment industry could be in big trouble if it continues to consolidate. part of david rubenstein's conversation with the iac chair is next. this is bloomberg. ♪ this is bloomberg. ♪

the latest episode of "the david 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. >> today, the internet is still 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 over as a cultural institution of any great value. the movie business is now about primarily making sequels and big huge mega-movies that are more marketing than anything else. i think movies have receded. television is having a great period because of the incredible optionality and -- of television, and the craft. orare you worried that four five technology companies could control our culture and our lives? >> i have always thought that too much concentration is bad, and that goes against the consolidating principles which are forcing consolidation everywhere, and will continue to. i think that's not a good thing.

>> do you expect the movie companies and television companies will ultimately be bought by these technology companies? >> i'm not so sure they will purchase them, i think they will supersede them. the thing is, the two companies that are really dominating right grown totallyx , outside of the infrastructure of the entertainment business, and amazon, whose business model is absolutely antithetical, in a way, 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. as a subsidiary, they give you good stuff on the side. >> it has worked out pretty well. >> yes. emily: david rubenstein there with the iac chairman barry , diller. you can catch david's full

conversation with barry diller wednesday at 9:00 p.m. eastern. tesla's model three is driving toward another record. first, it was america's best-selling electric car, then it became the best-selling luxury car. now it is one of the country's best-selling sedans, period. after quarterly earnings reports tuesday, tesla delivered more model three and all but four of the top sedans in the u.s. it included some deliveries to canada, but their third quarter is showing unprecedented growth an electric car and a remarkable turnaround for tesla, which has struggled for much of the year, as we know, to mess reduce -- mass produce the sedan. tesla isn't the only car company thriving. gm just received a self driving car investment. the second major investment in months. honda committed to spending $2.5 billion. $2 billion will be spent over 12 years to jointly develop autonomous cars. the exclusive partnership with ingives honda a 5% stake

cruise, which has become a competitor to waymo. hp just gave a profit forecast year 2019, signaling the world's largest maker of personal computers will continue to see robust demand. profit will be $2.12 to $2.28 a share this tops analyst , estimates. they had climbed to the top of pc markets by overhauling the product portfolio. that does it for this edition of "bloomberg technology." tomorrow on the show, we will be joined by jessica powell, the former head vice president of global communications and public affairs at google. she is out with her first book on medium. it is a satire about silicon valley. you don't want to miss that. i'm emily chang. this is bloomberg. ♪ mberg. ♪

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