emily: i'm emily chang and this is the "best of bloomberg technology." coming up, china's big hardware hack. bloomberg reports that china may chips to embed in companies, creating a self store way any networks that use these machine. boeings ambitions, we care from the ceo on their plans for planes, cars, and beating elon musk to mars.

seattle is home to tech behemoths like amazon and microsoft, with a smaller venture capital community, can they set the stage for the next amazon? our coverage from the annuals the choir summit -- geekwire summit. the biggest attack known ever against tech companies. china infiltrated the servers of almost 30 data companies, including amazon and apple. a bloomberg investigation conducted extensive interviews with intelligence and corporate sources. both apple and amazon disputed the summaries of recording, and so has super micro. we were joined by one of the authors of this exclusive story and from santa clara california, the chief technology officer of

mcafee. >> we site 17 a different sources these are senior-level officials across the government and also senior-level individuals inside of the affected companies, aws and apple. this is a constellation of sources that is robust and broad and it is a pretty comprehensive look at what happened in this attack. what happened here is that the chinese government installed malicious microchips on supermicro assembled motherboards. what a malicious microchips is, think about this as an infection hardcoded into your computer. you cannot get rid of it without throwing the machine away. a very powerful attack. very few countries would have this capability. what has alarmed u.s. officials is that china's control over the manufacturer of computer hardware makes this possible.

emily: steve, you have had a lot of oversight over the supply chain over the years. what do you make of this? steve: we recognize a hardware-based implant would be one of the most powerful ways for a nationstate to spy on a data center infrastructure. what is ultimately required is that there is a chain of trust. applications need to trust the underlying operating system or cloud software, and that software has to trust the underlying hardware. if you are able to tamper with the hardware, you are able to have access to all of the other things that sit on top of it and would provide tremendous insight and data to an adversary. emily: given the seriousness, i want to read the responses of the companies in full. amazon said it is untrue that aws and new about a compromise when acquiring elemental. this is the company that, jordan, you reported was the source of the chip. apple saying they have never found malicious chips, hardware manipulations, or

vulnerabilities purposely planted in any of the servers. supermicro said we remain unaware of any such investigation. in the meantime, the chinese government is not directly addressing questions of manipulation issuing a statement reading in part "supply chain safety in cyberspace is an issue of common concern. china is also a victim." jordan, what is your response to these companies pushing back so hard? jordan: the story speaks for itself. the constellation of sources that we gathered from the story, again, it encompasses senior-level officials across the government and senior individuals inside both the named affected companies. i cannot speculate, that is not my position, on why they might deny these allegations but i want to clarify where i did

speculate on the why the companies would deny this. i can say the sourcing is broad and robust. multiple levels of corroboration between individuals and companies and the government. the story included the companies denials in full. which is our typical policy for transparency purposes. emily: the extent of the data collected is unclear. steve, how difficult would it be to determine that given this is a hardware hack and not a software hack? steve: one of the challenges with hardware is they are black boxes meaning they perform a specific function, but the underlying implementation of how they work is often only known by the designer.

what makes this even more challenging in today's world is the way modern semiconductors and platforms are built. there is massive requirement for sub suppliers to supply many of the underlying technologies. chipmakers license what we call ip blocks, a thing that could create an artificial intelligence part of the chip or graphics part of the chip to do very specific functions. even the designer of the chip itself may not have full visibility as to all of the underlying components work. what that means is that if there is any sort of weakness in the supply chain or what i call the design chain, meaning how those components were designed, it is possible for an adversary to implant logic that would allow this type of spying to occur. emily: jordan, what is the u.s. government telling us here?

you report there is still an investigation into this issue currently open. jordan: the u.s. government is in a tricky position. when we started reporting this story, we thought for sure there must have been some private alert that went out and we started reporting or some mechanism for the government to alert people to this attack. we discovered the u.s. government was in a tricky position because if they announced the breach, this is an issue that could potentially damaging u.s. company. and also, this was a u.s. company and this was a problem with no solution. that is what we walked away from in many conversations with individuals. which was what do we tell people if we announce this? what do we say to people? apple and amazon, according to the reporting, found these chips. you're not supposed to find these chips. they were doing a level of analysis that most companies do not do.

in many ways, they could be a model. if this approach could be a model for other companies. you have to think of hardware as a way your data centers could be compromised and many companies do not look at this. emily: does the story make this think that if this happens, what else is out there? steve: absolutely. one of the things we're thinking about is what are all of the different ways an adversary could tamper with the supply chain. even things like intentionally introducing defects into open-source software components that would then be implemented into products across the industry. one of the ways to think of this is we are challenged already in cybersecurity by vulnerabilities accidentally introduced in the products. if there was an adversary whose goal was to intentionally place a vulnerability such that it could be exploited by them for a long period of time before it was ever found out, that would be an effective technique.

in this case, the fact this was focused on a hardware component in the baseboard management controller portion of the hardware, that is really a portion of the hardware that is about making it easier to support machines in data centers. we know we can no longer have humans crawling through data centers to do all sorts of repair. that means that type of hardware has immense privilege and power. although we have not done forensics on the specific case, it is a plausible type of scenario that we have a lot of concern about. emily: jordan, we heard the vice president take aim at china in a speech earlier and we have also are in the middle of a trade war between the united states and china. what do you expect the fallout of this will be? the question is, what now. jordan: our original information

or tip about this came in the obama administration. what that signals to me is that both administrations were deeply concerned about the security of the supply chain and china. you know, it is hard to tell and impossible to predict what the administration will do what i will say one of the lessons we took away from the reporting, very strongly, is that you will not find hardware manipulation if you're not looking for it. amazon and apple were looking for these things and they found them. the vast majority of companies would not. it makes sense to take all manufacturing and motherboards back to the u.s.. a more practical approach will be implementing some form of hardware analysis and inspection as part of their normal security practices. emily: you can check out this

exclusive story in this week's edition of "bloomberg businessweek." according to a bloomberg spokesperson, we have found no evidence to suggest have been affected by the hardware issues. coming up, boeing beyond the skies. our exclusive conversation with the ceo on how he plans to keep the aircraft maker on the technological edge. and if you like bloomberg news, check us out on the radio. this is bloomberg. ♪

emily: decades after the space race slowed down, it is revving a backup. it is not just the united states against the ussr, it is a race of being run by private companies like spacex, blue origin, and going. we sat down with the ceo of boeing and talks about the future.

here is our exclusive conversation on how the 102-year-old 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. we have more innovation happening in aerospace than ever in our history. it comes in the new products, and services, like our new commercial airplanes, new defense products, but also the transformation on how we design and build robotics in our factories. things like artificial intelligence, autonomous 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 are an engineer at heart and have been

a boeing your entire career. >> 33 years. emily: 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 the front of 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? >> 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 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. all of that is happening now. i would expect within the next five years, we will see initial operational capabilities.

emily: you bought the company making these vehicles. aurora, flight sciences. 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. there are a number of companies involved in developing prototypes and working on this future system. we are working with a company on the idea of 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. it can go back and forth between new york and london just a couple of hours. i keep asking when. when would something like that be commercially available to someone like me? >> i would say this is over the next decade. the hypersonic technology, the propulsion technology is in hand and we are demonstrating that on test vehicles like our x51, but

we need to make sure the business case works, the economics work, that 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 commercial airplanes even more efficient, 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 as a company. we are focused with working with our customers and enabling these

space ecosystems. in some cases, we are collaborating with spacex and blue origin and have great partnerships, and in some cases we are competing. we are building that space ecosystem for the future. our new a starlight or castle, we are testing that 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. in the space lunch system program. this is reality and 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 century because we stay close to our customers and deliver on our promises. we provide capabilities that are safe and affordable. we do it with a great sense of excellence. emily: space acts and musk said they can get to mars by 2020, nasa by 2030. do you think you can beat spacex? >> with our nasa customer, we will put the first person on mars.

the fact is, we are the 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. the space launch system we are working on with nasa is 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 to mars from there. emily: by 2020? >> is possible. emily: our exclusive interview. coming up, tesla's last-minute delivery giant pays off. they post a surge in the third quarter. is it enough to drive the company to profit? and later, amazon may be the leader in cloud computing, but microsoft is on its tail, exploiting its longtime partnerships to bring in business. we speak to a company president.

this is bloomberg. ♪ emily: on tuesday, tesla

reported its first delivery numbers since the sec case and production has surged. the company has rolled out more than 83,000 vehicles, double the number of last quarter. will it be a turn for the better for tesla and ceo elon musk, who has agreed to step down and forked over a $20 million fine. tesla also forked over $20 million. we discussed the numbers. >> the significance is that they delivered more cars that they produced so they have finally gotten rid of some of the inventory. surprisingly, the stock is sort of muted and the big question is demand. is there still a huge demand or is it a multiplier effect?

emily: the stock has surged on the back of the news that must has officially settled, so perhaps some of that was baked in. kathy, is demand plateauing? >> we are not seeing that all. 80,000 is great, but we are similar seeing demand from all of the other automakers as well. as you mentioned, we are the largest provider of the infrastructure in the country. we are building as fast as we possibly can. emily: you are seeing momentum from audie and porsche. talk to us about the competition as other carmakers step up. >> the first quarter of this year, there was a sum of $100 billion in investment announced by the oems. that includes the europeans, the japanese, the american. those are real announcements. since that, every week we get more and more news. you mentioned audi. and the chinese makers are going

great. to me, it seems that if you are not investing in manufactured and menstruating of electric vehicles, you will not be doing a lot of business in a short amount of time. emily: you had owners volunteering in stores, drivers volunteering. tell us about whether tesla can't sustain the efforts to meet these numbers under intense pressure going forward. >> there is always another hill to climb. they were able to get these deliveries because people showed up and were helping. i'm sure everybody is exhausted, but this is seen as a watershed moment. not just for the company, but

for the industry as a whole. i see more and more model threes of the road all the time. emily: of course, the infrastructure has to keep up what can be done to supercharge the development to support what you believe is increasing demand. >> we are doing it, we are increasing our presence in california where most of them are. the uptick is an average 50% above the bay area and the l.a. market to meet demand. we are similarly doing rollouts in austin and virginia where we were rewarded money, but to help virginia, we are seeing this across the country. it is building out fast in places that are convenient for drivers. some of our favorite places to

go are retail outlets, and amenity to have a charging infrastructure. we are doing a lot of work. emily: talk to us about what tesla intends to do to keep this up. they are dealing with these governance issues, finding new independent directors they are turning over $40 million worth of fines but what is happening on the ground to make sure production does not stop, and in fact, accelerates. >> remember, we have not been selling overseas. eventually, they will open up sales in europe. they will have to accelerate building of this factory in china, because the tariffs are hurting and they want to accelerate local production. and they will continue to pump out the cars. emily: we are seeing acceleration of the construction.

>> but they said today that they want to accelerate its because of the tariffs that imports they now face in china. emily: talk to us about the implications of that for the broader market. obviously, it is a huge market, now steeped in controversy. >> it is a huge market and manufacturers are scaling up. what is fascinating is all of the carmakers are all establishing a presence. the thing about the accelerating market is that i have not met somebody who would ever go back to not driving a tesla. the performance of the cars is fantastic, it is fun, it is a great experience. the second, which is important, is that it is now more cost effective. emily: talking tesla. coming up, silicon valley maybe

land of startups, but this venture firm one seattle to get in the game. our special coverage from the geek wire summit in seattle is next. and we are live streaming on twitter, and be sure to follow our global news network on twitter. this is bloomberg. ♪ emily: welcome back, i'm emily

chang. tech behemoths have flourished in seattle, but the venture community remains small, leaving some startups no choice but to flee to silicon valley for more funding. to address the lack of low capital, this startup company has been established. but these investments are just one effort to burnish the city's reputation as a competing tech hub. she joined us from seattle's a geek wire of event on wednesday. >> we really are concerned about that flight. sometimes 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 performing 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. rather than moving to the valley and being miserable.

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. we would have the two excellent companies. emily: at the current rate, is it possible for the next amazon or microsoft to be founded here? >> absolutely. it is getting cheaper and cheaper to found 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. and more increasingly, i mean, our firm and a few others, i was 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. when we started the firm, we always talk about we want money chasing deals not deals chasing money. we are beginning to flip that dynamic in seattle. emily: so how concerned are you that amazon is opening a second headquarters elsewhere? >> it is concerning. 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 satellite office here. the fact that amazon has made the choice to have another headquarters someplace else, that is a knock against the city. it is also a wake-up call. it is also a with a call. i was the first out of the gate to say it is never too late to say we are sorry. emily: did they say they were sorry? >> 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. we 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 the big tech companies can do? these tech companies are being blamed for rising housing prices, transportation, and not playing their fair share. wherever amazon goes, it will get a huge set of state and local tax breaks. is there something the companies can do? >> absolutely. emily: to do their fair share. >> yeah, 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 who are all about worldwide philanthropy. we are probably be philanthropic capital of the world, looking at dollars. leading that aside, what we are seeing with our tech companies, and we just had microsoft on here, 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 being one of the darlings of the industry in terms of being foot forward in philanthropy and civic engagement and helping disadvantaged communities. etc.. amazon with the $15 minimum wage announcement yesterday, that is a big step. the new uber president came from this area. there is a lot of signs 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 and machine learning. what are you most excited about? and what is overhyped? >> interesting. what is overhyped is small companies ability to add materially to the base ai ml infrastructure. that takes a big company. in most instances, but what

isn't overhyped is every company when they start or when they are reinventing their own business, thinking about building a i first. you look at the way we used to think about software is having a transformative effect and ai is having that same transformative effect. ai is going to replace software. it is software, but it is going to replace software as the key competitive advantage. if you look at microsoft completely pivoting their products to ai ml, amazon tearing down their operations and rebuilding them on that foundation, that is important. it is 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? emily: there has been talk about an ai winter. there has been talk that there must be limits. are you concerned?

>> no. it is early days, for sure, but we are seeing very commercial products out today. we have a few in our portfolio that are absolutely delivering with very baseline ai. super compelling. it still 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. emily: flying fish partners. amazon continues to work in the cloud, bring in partners like chevron and coca-cola. they are leveraging strong relationships with large enterprise customers to bring them on board. corporate vice president for microsoft as are joined us from the summit in seattle.

>> our understanding of the enterprise and things like building hybrid, understanding that technology will run across data centers, across the edge in the public cloud and building it from the beginning. it is also about our partnership with several companies to help them with their transformation and not just being a technology vendor or cloud vendor for them. that is an important reason customers are choosing us. 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. >> certainly, 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 platform, to use ai, finding

better drilling processes. it is a much more partnership on the business side and not just the technologies. we have so much history with working with enterprise customers that we have a different point of view. emily: it has been widely reported that amazon is 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. i think we have a great case and great partnership in technology with the government. so i feel great about it. emily: so you have been making the case that it should be microsoft? julia: we certainly engage in appropriate ways. on the bed, you know, and working with 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 two years ago? julia: i don't see a lot in our customer engagements. amazon had the first to market leadership position, but i don't see the other vendor coming up as much.

emily: the cloud, it is not like you are dominate from finite pie. what do you see that 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. it's about $4 trillion if you took at what is being run today and where it is going to the club. 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. emily: microsoft and several technology companies have found themselves in tricky positions as of late. there was a protest about a contract 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 privacy information around privacy is in the customer's hands and 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, and very much, our approach from the beginning was that ai is an enablement for humans. and using it in those ways, so certainly, that is our investment, our focus, how we

are engaged. we want to be responsible with it. it is also our part playing with the industry on how we shape this moving forward. it is important to do our part but also bring the industry together. emily: julia white, corporate vice president for microsoft azure. transit and trucks are included in the self driving vehicle guidelines. our discussion on the latest revision. plus, a google exec who has written a satire. we hear from jessica powell a bit later. this is bloomberg. ♪ emily: the trump administration

released updated policy for self driving bibles for not just cars, including public transit and trucks. we were joined by gary peters who serves on the senate commerce committee. >> we have to make sure we have a framework to allow this technology to move forward. existing of vehicle safety laws do not allow an automobile

without brake pedals, for example. these technologies will be literally piloted by machines. we have to make sure we have that framework. emily: the administration is saying the dot has authority, that congress does not meet to step in. why do you disagree? >> we want to do this quickly. it depends on how quickly the department of transportation will move forward on this. our act gives flexibility to manufacturers as long as they are certifying they have safe vehicles and they are dealing with things like cybersecurity. this technology is moving rapidly. we want to make sure automakers have an idea of what that framework is. you are looking at some of them which will be putting up a level 4 cars as early as next year in commercial operation. we are looking at our international competitors.

folks in europe and asia are moving full speed. we do not want to lag behind. my experience has been that when you have a bureaucratic organization involved, it does not move quickly. however we get there, safely and efficiently, quicker will be better for international competitive positions. emily: in your view, what should congress have oversight of or input in? sen. peters: this creates the framework and allows companies to have exemptions to current regulations in place now. it will also ask the federal agencies to move quicker. with coming up with a framework, but in the meantime, they can put these cars out on the road provided there is validation as to their safety. not just physical safety and operating on the road, but cybersecurity as well. emily: given you want speed here, do you foresee passing legislation that you introduced anytime soon? sen. peters: we are hoping it will. it is passed through the house and our version passed

unanimously. we are working with a variety of stakeholders related to this issue. we are very close, hopefully, to coming to an agreement and can get it moving forward. we understand the importance, understanding we would like to have this done by the end of the year. this is being done on a bipartisan basis. i'm working with the chair of the commerce committee who has been very focused on this as well. we hope we can get this moving quickly. emily: do you have a sense of whether senators in your own party will come to your side? sen. peters: that is why we work with everyone to make sure we have language people are comfortable with. we understand we need to have a consensus of folks who believe this is the right way to go. as i mentioned, it did pass unanimously in a bipartisan way out of the senate commerce committee. it enjoys a very broad

bipartisan support. we have a little ways for the to go before it gets on the floor or is attached to another vehicle that may be moving in the senate. emily: what is your biggest concern when it comes to the safety of self driving cars? sen. peters: obviously the technology has to be tested. there needs to be a comfort factor that this technology will indeed allow these automobiles to move through a very complex environment, if you're in the city. part of that testing requires these vehicles get out of the road. a fact that has been described to me is that, basically, a few hours on a public highway is weeks of test driving. in order to make sure these vehicles are safe, you do need to get them out on the roads. the important thing to remember is we believe we can eliminate most accidents in this country. 95% of all accidents are human error. nearly 40,000 people die on the highways every year and hundreds of thousands are injured.

the quicker this technology is developed, the more lives are saved. emily: that was senator gary peters joining us from washington. up next, the new satirical novel about silicon valley written by a former google exec. we will speak with author jessica powell next. this is bloomberg. ♪

emily: jessica powell is a former head of communications at google, but wants to make it clear that her new novel, "the big disruption" is not a description of her time. >> i would have loved to do it anonymously. the idea of doing this is kind of terrifying. but at the end of the day, and i didn't want to think it was

about a specific company. but i also realize at this time there are few senior people in tech that speak out about issues like this. a lot of times they are still on the payroll so i thought it was important to put my name on the book. emily: as the new york times says, not long ago, your job was to defend silicon valley. when you look at the plot lines, the sales guy battling with the engineers, the female employees, the unwitting subjects of a social experiment, the vps plotting against each other, and the yoga loving sex obsessed ceo planning a moon colony, i know that will ceos love their lululemon, but is this fictionalized? >> it is inspired. i worked at a startup and other large companies. i feel confident saying larry page is not a nymphomaniac obsessed with the moon. emily: talk to me about the themes here. there is kind of like a me too

theme, the misogynistic ceo, and the woman who buys into the company entirely. how should we interpret that? given the diversity problems today. >> i thought a lot about that. i eliminated much any women or people of color from the book because i wanted to make a point, that we are dramatically underrepresented, and when we are there, we are not given the same opportunities. the one female character in the book is a female receptionist with a phd who basically saves the whole company with her invention. by the end of the book, she's back to being a receptionist. emily: i can't have you here without asking you about some of the challenges google is facing now. number one, trying to get back into china. the public, many people don't seem happy with this. the u.s. government doesn't seem happy with this. is it the right call? >> i am really torn on the china

issue. on the one hand, i believe in moral imperatives. i think what google did is admirable. i felt proud at the time. at the other hand, i think it is a fair question to ask what tangible good did it do other than making us feel really good? in that censorship is worse in china, information access is worse in china. there's an argument to be made that more search competition, from google or someone else, could actually be a really good thing for chinese users. i'm willing to give them the benefit of the doubt of seeing actually what they want to do and how they would plan to build in safeguards for chinese users. i think the devil is really in the details. emily: google did not take an opportunity to testify before congress. now they are sending sundar pichai. if you were working at google, you would have been a part of that decision. was that a mistake? jessica: i wasn't there, so i don't know what the thought process was, but you kind of answer the question in the sense that they didn't go, and now they have to go anyway. so, you know. emily: so when you say at times you had to defend the indefensible, what is indefensible? jessica: across the industry,

there is just a real problem that we have of black and white thinking, that we lead with data all the time. it lends itself to a moral abstractionism. you say 2 billion users here it may be a small percentage of that is bad actors. when you look at it like that, this tiny percentage, it's easy to forget that is thousands, or millions. that is electoral interference, livestream suicides, myanmar, it is really horrific stuff. but it gets abstracted to a data point where it looks so small that you don't look at it in a human way, and think, how can we solve this in the best way? not just how do we solve this with machines. emily: we are entering an era where tech is really unpopular. you are right, it is not just google, it is facebook announcing 50 million accounts were hacked. all of these companies tied into the facebook blog in which could also be affected. do you think this is the beginning of a prolonged era of tech hating? if you were on the inside of google, how would you be handling it?

jessica: i think in terms of the question around the cycle we are in, absolutely. i don't think the valley has enough interaction with the outside world. instead, they build what they want and impose it on the outside world. the outside world is increasingly angry about the power dynamic. i think it will come to a head in some way. if i were at google or any of the large companies, i would really want to have a heart to heart and some level of self interrogation around, are we always approaching, first of all, asking ourselves at the very start what the potential unintended consequences are? if you build a platform for free speech, you are building a platform for free speech, then anyone can say anything. it's not just all roses. what does that mean? second, the other thing i would do is say, the starting point in so many companies whenever a problem arises is my let's solve it with machines, or solve it with ai. the truth is ai may solve these problems someday, but not today.

just throwing your hands up in front of regulators and saying the machines will get there at some point is a unsatisfactory answer. emily: why medium? jessica: i thought it was appropriate a book about tech will be on a tech platform. i loved it was free. it is globally accessible immediately. there's none of the traditional publishing turnaround times, which made it a pretty exciting opportunity. emily: former head of communications at google and author jessica powell. that does it for this edition of "best of bloomberg technology." we are live streaming on twitter, check us out and be sure to follow our breaking news network tictoc on twitter. this is bloomberg. ♪

caroline: coming up on "bloomberg best," the stories that shaped the week in business around the world. trump gets a new deal on nafta. >> modernizing the treaty to recognize the new economy we have today is the most important aspect. caroline: britain's tories are still fractured over brexit. amazon announces a wage hike for its workforce. a new jobs report suggest the u.s. economy may be cooling. >> this suggests we are pretty close to full employment. caroline: how fast should the fed move along its tightening path?