emily: i'm emily chang, and this is the "best of bloomberg technology," where we being you all our top interviews from this week in tech. coming up, china's big hardware hack. bloomberg reports that china made chips to embed in over 30 u.s. 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. and seattle is home to tech behemoths like amazon and microsoft, but with a smaller venture capital community. can the city set the stage for the next amazon? our coverage from the annual geekwire summit. it is the most significant known supply chain attack ever against u.s. tech companies. china infiltrated the servers of almost 30 u.s. companies, including amazon and apple. a bloomberg investigation conducted extensive interviews with intelligence and corporate sources. both apple and amazon disputed the summaries of our recording, and so has super micro, the company that assembled the servers. we were joined by one of the authors of this exclusive story and from santa clara california, the chief technology officer of

mcafee. >> we cite 17 different sources in the story. these are senior-level officials across the government and also senior-level individuals inside 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. and what happened here is that the chinese government installed malicious microchips on supermicro assembled server motherboards. and 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. it's a very powerful attack. very few countries would have this capability. what has alarmed u.s. officials was that china's control over the manufacturer of computer equipment, 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: one of the things that 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 there is a chain of trust. so, applications need to trust the underlying operating system or cloud software, and then that software has to trust the underlying hardware. so 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: now, given the seriousness of this, i want to read the responses of the companies in full. amazon saying it is untrue that

aws knew about a compromise when acquiring elemental. this is the company that, jordan, you report was the source of the chips. apple saying they have never found malicious chips, hardware manipulations, or vulnerabilities purposely planted in any server. supermicro said we remain unaware of any such investigation. addressing questions of -- meantime, you have the chinese government 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: sure. our response is that the story speaks for itself. the constellation of sources that we've gathered from the story, again, encompasses senior-level officials across the government and senior individuals inside both the named affected companies.

i cannot speculate, it 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 might deny this. that is not really my place. but i can say the sourcing is broad and robust. multiple levels of corroboration between individuals and companies and the government. and the story included the company's denials in full, which is our typical policy for transparency purposes. emily: the extent of the data collected is unclear. steve, talk to us about how difficult would it be to even determine that given this is a hardware hack and not a software hack. steve: one of the challenges with hardware is they are really what we call black boxes,

meaning they perform a specific function, but the underlying implementation of how they work is often only known by the designer. but 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. so, chipmakers license what we call ip blocks, things that could create an artificial intelligence part of the chip or a graphics part of the chip to do very specific functions. even the designer of the chip itself may not have full visibility as to how all of the underlying components work. and 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? because you report that there is still an investigation into this issue that is currently open. jordan: the u.s. government is in a very 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 many conversations with individuals with, 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. so i think in many ways, they could be a model. this approach could be a model for other companies. you have to think of hardware as another way your data centers could be compromised and many companies just do not look at it. emily: does the story make this think that if this happens, what else is out there? steve: absolutely. i think that 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 that were accidentally introduced into 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 extremely effective technique. in this case, the fact this was focused on a hardware component in the baseboard management controller portion of the hardware, that's really a portion of the hardware that is all about making it easier to support machines that are in data centers. because we know we can no longer have humans crawling through data centers to do all sorts of repair. and that means that that type of hardware has immense privilege and power. although we have not done forensics on this specific case, it is a plausible type of scenario that we have a lot of concern about. emily: jordan, we heard the vice president taking aim at china in a speech earlier. we have also are in the middle of a trade war between the united states and china.

what do you expect the fallout from this is going to be? the question really 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. and, you know, it is hard to tell. it's impossible to predict what the administration will do, but what i will say is 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. so would it make sense to bring

them all 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, the company 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. that is next. and if you like bloomberg news, check us out on the radio. listen on the bloomberg app and bloomberg.com. this is bloomberg. ♪

emily: decades after the space race slowed down, it is revving back up. although this time 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 boeing.

we sat down with the ceo of boeing. here is our exclusive conversation on how the 102-year-old company is planning to stay relevant on earth and in space over the next century. david: this is an exciting time in the aerospace 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 transformation in 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 for the future. emily: i know you are an engineer at heart and have been a boeing your entire career. dennis: 33 years. emily: you have lived and breathed this, and you think a lot about the future.

do you think that self flying cars will be here sooner than we think? how fast? dennis: we see the front of urban mobility transforming before our eyes. we are building prototype vehicles today. we expect to fly them in the coming year. emily: so in the coming year, self flying cars? dennis: 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. think about a future where you have three-dimensional highways to relieve traffic congestion and to help people operate more efficiently. not only do we need new vehicles, we need an ecosystem allowing that to happen safely and reliably. we are working on the framework and the new vehicles. all of that is happening now. and i would expect within the next five years, we will see initial operational capabilities being fielded.

emily: you bought the company making these vehicles for uber. aurora, flight sciences. when will we see uber deploy these? dennis: we will see the flying prototypes next year. part of that will be their work with uber and that interface as candidates for 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 small company on the idea of unmanned traffic systems to make sure the ecosystem is safe. so, the amount of capital investment happening here is very significant. you will see rapid progress over the next several years and you will see boeing with our partners right at the forefront. emily: you are also unveiling a hypersonic plane that can go back and forth between new york and london in just a couple of hours. i keep asking when, but when would something like that be commercially available to someone like me? dennis: i would say this is over the next decade.

so, a little longer timeframe. the hypersonic technology, the propulsion technology is in hand and we are demonstrating that on test vehicles like our x51, but we also need to make sure the business case works, the economics work, that there are enough passengers who would 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 the technology come together. so imagine a future that has today's commercial airplanes even more efficient, combined with hypersonic airplanes that connect 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 blue origin. is that an oversight? dennis: it reflects our approach as a company. we are focused with working with

our customers and doing the real work in 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 starliner capsule, we are testing that vehicle for a first lunch next year helping us creating a low orbit ecosystem. we are building that first rocket to mars with our first nasa customer today. in the space lanch 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? dennis: i prefer to stick with getting our business done. boeing has thrived for century because we stay close to our customers, deliver on our promises. we provide capabilities that are 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: space acts and musk said

they can get to mars by 2020, nasa is looking at 2030. do you think you can beat spacex? dennis: with our nasa customer, we will put the first person on mars. the fact is that we are the only ones building a rocket today that is actually capable of going to the moon and to mars. not something on paper, we are actually building it today. the space launch system we are working on with nasa is a 38 story tall rocket being built today. we will do initial test flights next year with nasa. we are going to 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 by 2020? dennis: it is possible. emily: our exclusive interview. coming up, tesla's last-minute delivery giant pays off. they post a surge in the third quarter. will it be enough to drive the company to profit? and a bit later, amazon may be the leader in cloud computing, but microsoft is on its tail, now exploiting its longtime

enterprise partnerships to bring in new business. we speak to the corporate vice president. this is bloomberg. ♪

emily: on tuesday, tesla reported its first delivery numbers since it settled its case with the sec and production surged in the third quarter. the company has rolled out more than 83,000 vehicles, double the number made last quarter. will it be a turn for the better for tesla and ceo elon musk, who has agreed to step down as chairman of the company and forked over a $20 million fine. tesla also forked over $20 million. we unpacked the numbers. >> i think the significance is that they delivered more cars than they produced so they have finally gotten rid of some of the inventory that was hanging around.

surprisingly, the stock is sort of muted today, and the big question is demand. is there still a huge demand or is it a multiplier effect? emily: the stock did surge on the back of the news that musk has officially settled, so perhaps some of that was baked in. kathy, is demand plateauing? is that what you are seeing in these numbers? >> 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 in the opening, we are the largest provider of the infrastructure in the country. we are building as fast as we possibly can. emily: so you are seeing momentum from audi and porsche. talk to us about the competition that tesla will face in coming quarters as other carmakers step up. >> the first quarter of this year, there was a sum of about $100 billion in investment announced by the oem's around the world.

that includes the europeans, the japanese, the american automakers. those are real announcements. since that, every week we get more and more news. daimler promoted an em to run the company. you mentioned audi. and the chinese makers are going great. saudi investing in lucid. to me, it seems that if you are not investing in manufactured ing and making of electric vehicles, you will not be doing a lot of business in a short amount of time. emily: you had tesla owners volunteering in droves, 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 for tesla to climb. they were able to get these deliveries because people showed up and were helping. i'm sure everybody is exhausted, and they are going to have to do it again in the fourth quarter. but this is seen as a watershed moment. not just for the company, but

for the mainstreaming of the industry as a whole. here in california 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 of the infrastructure across the country to support what you believe is increasing demand. >> we are doing it, and not just in california. 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. markets to meet demand. we are similarly doing buildouts in austin and virginia where we were awarded the volkswagen dieselgate money as penalty, but to help virginia, we are seeing this across the country. it is building out fast in places that are convenient for drivers. so again, some of our favorite places to go are retail outlets, which is actually an amenity to

have a charging infrastructure. we are doing a lot of work. emily: talk to us about what tesla intends to do over the next quarter to keep this up. they are dealing with these governance issues, finding two new independent directors, musk is stepping down as chair, 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, tesla has not been selling model 3s 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 need to pump out the cars.

emily: we are seeing acceleration of the construction of the shanghai factory. >> 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 china is a huge market, now steeped in controversy because of the trade war. >> it is a huge market and manufacturers are scaling up. what is fascinating to me is all of the carmakers are all establishing a presence there. the thing about the accelerating market is that i have not met somebody driving an electronic vehicle would ever go back to not. the performance of the cars is fantastic, it is fun, it is a great experience. the second, which is important as well, is that it is now more cost effective. emily: kathy and dana talking tesla. coming up, silicon valley maybe land of startups, but this

venture firm wants seattle to get in the game. our special coverage from the geekwire summit in seattle is next. and bloomberg tech is live streaming on twitter, and be sure to follow our global news network on twitter. this is bloomberg. ♪

welcome back to the best of bloomberg technology, 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 -- local capital, this startup company, flying fish cove earners, helped seattle companies. but these investments are just one effort to burnish the city's reputation as a competing tech hub. while maintaining local talent. she joined us from seattle's geek wire event on wednesday. >> we really are concerned about that flight. sometimes it is the companies that we are most excited about

that decide they need to go to the valley because they can't get the network and resources they really need to go fast. one of the myths that we are trying to bust up here about this region is that we have big company people, and our engineers do not want to start companies at the same numbers they do in the valley. re-think instead -- we think instead they are just 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, then they are going to go do it in the valley. 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, they are working at amazon and they look at lifestyle versus ultimate desire to start a company. they say i am going to stick with my great job rather than move to the valley -- and 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 we could make the startup funding environment better in seattle. we would have the two excellent companies we have today. emily: at the current rate, is it possible for the next amazon or microsoft to really be founded here? >> absolutely. for one reason it is getting cheaper and cheaper to found companies. the cloud itself has enabled companies to start on a more bootstrapped basis. you just don't have to buy all of your own servers. all that heavy lifting is used to have to. there is nothing holding back companies from having a customer first bootstrappy attitude. there is an fcc here. and more increasingly, i mean, other firms have come out of the woodwork. i was on the phone earlier with a great one. they are looking here more and more. we just need to accelerate that.

it is less about absolute dollars and more about signal. people have to believe the capital is there. so when we started the firm, we always talked about we want money chasing deals not deals chasing money. we are beginning to flip that dynamic in seattle. emily: so let's talk about signal. 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. , every company in the bay area is opening a satellite office here and increasingly grow this office faster than the one in the bay area, but the fact amazon in particular has made the choice to have another headquarters someplace else, that is a knock against the city. it is also a wake-up call. i was sort of first out of the gate to say we are sorry, and that is definitely -- emily: did they say they were sorry? [speaking simultaneously] heather: i said i was sorry. i think there has been a lot of relationship building between

the powers that be at 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? certainly these tech companies are being blamed for rising housing prices, overcrowded transportation, and not playing their fair share. wherever amazon goes, it will get a huge set of state and local tax breaks. like is there something that is companies could be doing more to -- you know? heather: absolutely. emily: to do their fair share. heather: 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. and that was based on the gates foundation, what paul allen does a lot of our other major , institutions here who are all about worldwide philanthropy. we probably are the philanthropic capital of the world if you look at dollars. leading that aside, what we are seeing with our tech companies,

and you just had microsoft on the air right before me we are , seeing companies maturing and learning here. we are seeing the social eq developed. microsoft has gone from being a company that we all hated to really 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 huge step forward. the new uber president came from this area. there is a lot of learning here that is occurring that shows that tech is ready to grow up and take responsibility. we will see that increasingly from amazon as well as every tech company here in the region. emily: you are investing in ai and machine learning. what are you most excited about? and what is overhyped? heather: yeah interesting. ,i think what is overhyped a little bit is small companies'

ability to add materially to the base ai ml infrastructure. that really 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 ai first. you look at the way we used to think about software as having a transformative effect and ai is having that same transformative effect. i think ai is increasingly going to replace software. it is going to replace software is the key competitive advantage. if you look at microsoft completely pivoting their products to ai ml. you look at amazon tearing down their operations and rebuilding them on the ai ml 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. this concern that some companies

will not be able to deliver on the promise of ai, and there might be limits to what ai is capable of. are you concerned? heather: i am not. it is early days, for sure, but we are seeing very commercial products out in the market today. we have a couple in 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 scientists who are not easy to find, 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, you know, really drives innovation. emily: heather redmond, flying fish partners. microsoft continues to work in the cloud, bring in partners like chevron, coca-cola and recently volkswagen. microsoft is leveraging strong relationships with large enterprise customers to bring them on board the azure train.

the corporate vice president for microsoft 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 -- and in the public cloud and building it from the beginning. i also think it is also about our partnership with several partneringwe are deeper with them, helping with their transformation and not just being a technology vendor or cloud vendor for them. those are some of the important reasons customers are choosing azure. emily: what does it take to win a big partner? amazon is a market leader and i'm sure your customer say amazon is more experienced and has a better track record. julia: 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? what does it look like to have a connected car platform? what does it mean to use ai to find a better drilling process? 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 that we can bring to customer engagements. emily: it has been widely reported that amazon is favored for this big contract with the pentagon. are you concerned microsoft does not have much of a shot? julia: we are doing everything we have to bring to that. i think we have a great case and also you know great partnership and 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 are certainly engaged in appropriate ways. on the bed, you know, and working with the d.c. area on that. emily: what about google? it has progressed over the years . they are number three. are you seeing more competition from google? is it more of a threat than two years ago? julia: i don't see them a lot in our customer engagements.

amazon had the first tier market leadership position, but i don't see the other vendors 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: i am glad you said that because 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 to the cloud. i am not so worried about the other competition versus what are we doing with customers to kind of take advantage of that and help them embrace it. it is an interesting time in this moment with this technology and having effectively no threshold for growth. emily: microsoft and several technology companies have found themselves in tricky positions politically as of late. there was a protest about a contract you had with the u.s. immigration in the family separation policy. how do you balance not knowing

how the technology is going to be used and whether or not to offer that technology to an arm of the u.s. government? julia: yeah. it kind of comes back to the fundamental principles around trust and belief around privacy as a human right. as we provide technology, making sure that we are putting in the right securities, doing things within the correct law 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 certainly 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 of humans. and using it in those ways, so certainly, that is our investment, our focus, how we are engaged with that technology and being responsible with it.

it is also our part playing with the industry about how we shape this moving forward. important weit is do our part but also bring the industry together. emily: julia white, corporate vice president for microsoft azure at the decoy or summit. -- deke wire summit. 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 about silicon valley. we hear from jessica powell a bit later. this is bloomberg. ♪

emily: the trump administration released its updated policy for self driving cars and not just cars but including public transit and trucks. we were joined by gary peters who serves on the senate commerce committee. gary we have to make sure we : have a framework to allow this

technology to continue to move forward. existing vehicle safety laws do not allow an automobile without brake pedals, for example. you have these new technologies which will be piloted by machine learning, literally piloted by machines. we have got to make sure we have that framework. emily: the administration is saying the dot has authority, that congress does not meet to -- need to step in to manage emerging technology. why do you disagree? gary: we want to do this fairly quickly. it depends on how quickly the department of transportation will move forward on this. our start act gives flexibility to manufacturers as long as they are actually certifying they have safe vehicles, and they are dealing with things like cybersecurity. this technology is moving very, very 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 -- putting out level 4 cars as early as next year in commercial

operations. we are looking at our international competitors. folks in europe and asia are moving full speed. we do not want to lag behind. certainly it has been my experience 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 our international competitive position. emily: in your view, what should congress have oversight of or input in? startwell, this is our av act. it 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? gary: well we are hoping it , will. it is passed through the house . now our version, the senate, 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. so we understand the importance, we are understanding we would like to have this done by the end of the year. this is being done on a bipartisan basis. i am working closely with senator thune, who is 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 any sense of whether senators in your own party, whether senator schumer or feinstein will come to your , side? gary: that is why we are working with everybody 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.

so it enjoys a very broad bipartisan support. we just have a little ways for -- further 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? gary: obviously the technology has to be tested. there needs to be really a comfort factor that this technology will indeed allow these automobiles to move through what could be a very complex environment, if you're in the city. part of that testing requires these vehicles to get out on the road. in fact it has been described to me is that, basically, a few hours on a public highway is equal to weeks of testing on the test track 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 that we believe we can eliminate most accidents in this country. 95% of all accidents are human error. 40,000 people 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. stirring up a lot of debate about real-life silicon valley. 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 at the search giant. this is the first full-length novel for medium. >> i would have loved to do it anonymously. you are usually behind the scenes in pr.

doing this is kind of terrifying. but at the end of the day, and i didn't want anyone to think it was about a specific company. i also realized at this time there are few senior people in tech that speak out about issues like this. a lot of times they move to new companies or 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. and when you look at the plot line, the sales guy battling with the engineers, the female employees, the unwitting subjects of a wild social experiment, the vp's plotting against each other, and the yoga loving, sex obsessed ceo roommate -- rumored to be planning a moon colony, i know that will ceo's love their lululemon, but is this fictionalized? jessica: it is inspired. i worked in a start up too 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. jessica: 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. and so this 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. some employees don't seem happy with this. the u.s. government doesn't seem happy with this. is it the right call? jessica: 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 really 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, whether it is by google or someone else, could actually be a really good thing for chinese users. so 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 i think 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 do you think is indefensible? jessica: across the industry, there is just a real problem that we have of kind of black and white thinking, that we lead with data all the time. it lends itself to a moral abstractionism. you say, oh you know, 2 billion users, maybe 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 actually thousands or millions. that is electoral interference, that is livestream suicides, that is myanmar, it is really horrific stuff. but again, it gets abstracted to a data point where it looks so small that you don't actually 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 just announcing 50 million accounts were hacked. not knowing the extent of it and all of these companies tied into the facebook login which could also be affected. do you think this is the beginning of a prolonged era of tech hating?

and 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. you know 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. so i think that, i think it is going to 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 first -- platform for free speech. anyone can say anything. it's not just all roses. what does that mean? second, the other thing i would do is say, are -- the starting point in so many companies whenever a problem arises is my

-- arises, let's solve it with machines, or solve it with ai. the truth is ai may solve these problems someday, but it doesn't do a good job 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? what does that say about the publishing industry? jessica: i thought it was appropriate a book about tech will be on a tech platform. i loved that it was free. it is free for anyone, on your e-reader. it was globally accessible immediately. there's none of the traditional publishing turnaround times, which just made it a pretty exciting opportunity. emily: former head of communications at google author jessica powell. that does it for this edition of "best of bloomberg technology." we will bring you the latest throughout the week. 2:00 in san francisco. bloomberg tech is live streaming on twitter, check us out and be sure to follow our breaking news network tictoc on twitter. this is bloomberg. ♪

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haidi: welcome to daybreak australia. i am haidi stroud-watts. shery: i am shery ahn in new york. sophie: i am sophie kamaruddin in hong kong. we are counting down to asia's major market open. haidi: here are the top stories. -- reserve ratio in china amid the slowdown and worsening trade war. market focus is on china after the golden week break. japan closed