♪ emily: i am emily chang in san francisco, and this is "bloomberg technology." coming up in the next hour, amazon under scrutiny by regulators in its biggest market outside of the u.s. now german authorities have new concerns about the company's size and scale. a chinese scientist has shocked the world with claims about producing gene edited babies. how they used the same pool to kill cancer, the international and ethical firestorm.

and how posting on instagram can bring in the big bucks. we take a special look at social influencers making a career for -- from marketing their own brands with paying clients. but first to our top stories, big tech stocks in limbo. amidst trade and terrorist threats ahead of the meeting with president xi jinping. apple and amazon could take the biggest beating. this as the wall street journal is reporting some of the top tech ceo's are set to meet with the trump administration next week. here is what the president had to say about prospects of a deal with china moment before he took off for the g20 summit in buenos aires. mr. trump: i think it would be pleasant doing something with china but what we have now is billions and billions of dollars coming into the united states in the form of tariffs or taxes so i really don't know, but i will tell you i think china wants to make a deal. i am open to making a deal, but frankly i like the deal we have

right now. emily: the president has said he is considering slapping tariffs on the iphone. this after apple lost its crown as the most valuable company to an old nemesis, microsoft. the market cap of microsoft and apple has since been no and neck. .- neck and neck apple shares have slumped 20% since an early october peak. here to talk about the months ahead, cathie wood. microsoft and apple are going back and forth all week. do you think it is a sign to come for apple? apple i actually think because analysts are focused afd's andn units and average selling prices, i think it has reached a period of under evaluation now having come down this much since earnings. i think they have pushed the pricing envelope a little too much, but their services business is becoming very

interesting not only the app , store but also all of the ways they are getting involved with health care and augmented reality. i think this is going to become a services model which is a higher multiple or it'll achieve a higher valuation at the end of the day. emily: still there is this uncertainty about trade. how concerned are you about potential tariffs on the iphone? isaac: well, -- cathie: well before i heard , today that peter navarro was back on the invite list to go to argentina with president trump, i was much more optimistic. he is a sabre radler. -- rattler. i thought they would leave him out and let robert lighthizer and larry kudlow do the work behind the scenes. i think a lot of work is going on behind the scenes, and we see movement from china. their own economy is slowing so they are cutting taxes internally. they are cutting import duties, and i have a feeling that when we turn around at the end of the day, we are going to see at the

conclusion of negotiations, perhaps not this weekend, lower tariffs throughout the world. and i actually think this is going to be a very positive result long-term. emily: peter navarro, one of trump's top trade advisers. what about microsoft? do you see microsoft going on a longer bull run from here with the rise of the cloud? isaac: yeah -- cathie: yeah, i think microsoft has done a lot right in the cloud, gaming of course, and i think it has earned its way into the good graces of investors even though its base business, windows and so forth, that we see is having more and more technical problems. i don't think -- long-term, i think apple will continue to lead the charge. it is going through a period of uncertainty because of

short-term thinking about pricing and units. you have upwards of billions of users of iphones and other apple products around the world and that is only growing year-by-year. we are pretty excited about the long-term prospects for apple. emily: what about amazon? because you know this is a , company that has faced verbal and twitter assaults from the president. we will talk about german regulators later in the show. do you think tariffs could have an impact on amazon given their reliance on the third-party sellers? cathie: i don't think so. i think at the end of the day, amazon is all about customer first, delighting customer. the customer. i think that is awfully hard for politicians to fight. when their electorates love a product. and i feel the same way about apple. so if we get temporary tariffs, i do think they will be just that temporary.

,these are products that delight the consumer and these are the people politicians want to make happy. emily: now the wall street journal is reporting the trump administration has set up this roundtable with tech executives including the ceo's of microsoft , google, sundar pichai, who is scheduled to testify next week. do you think anything promising can come out of the meeting like this that you know would impact an investment strategy? cathie: well i do think it is , good that they are talking. much better that than arguing in the media. and i think that at the end of the day, president trump wants our innovative leaders to continue to dominate out there. we do see that china has on its set of priorities be a number one in artificial intelligence and all kinds of technology. president trump is responding to

that. i think we will be in a how do we work together mode as opposed to an adversarial mode. i think it is good news. emily: in the meantime, facebook is in the middle of a pr nightmare, and shares are way down since the july peak concerns like all the way to the , top on how mark zuckerberg and sheryl sandberg handled election meddling. fake news. is this going to continue to push -- punish the stock given we haven't seen concrete evidence this is impacting engagement among users? cathie: we got the first signs in the last quarterly report that it has impacted engagement slightly, not as much as many might have thought. what what we are also seeing though in terms of top brands, facebook is losing its status there. when that happens, usually we do have a period of business and stock.

think -- thank goodness they have instagram, whatsapp, messenger, and other properties to monetize. we think they will be continuing to lower the ad loads on facebook proper and trying to right that ship. they have a little bit of work to do. emily: how optimistic are you that instagram, whatsapp, messenger can pick up the slack? cathie: it will be hard. facebook is incredibly important to them. i would not be surprised to see more disappointments. they are coming off a very rapid growth, and we know television advertising is starting to find its way online. there are not many places to go. so facebook is one of the biggest. google of course twitter, amazon , in fact is getting a lot of advertising now that it is effectively becoming a search engine when it comes to congress. i do not think all is lost.

i don't think the advertising is going to disappear from facebook. there just are not a lot of outlets for online advertising at scale. emily: i also had to ask you about tesla. it has been a rocky year for elon musk what a successful year -- but on the other hand a very successful year when you look at model three production. what is the year coming for tesla hold given political uncertainty on how they want to handle electric cars tax , credits, and tariffs and auto -- tariffs on auto imports? cathie: according to our research, we spend all of our time doing research on disruptive innovation. we think that electric vehicles are not going to need subsidies in a few years. in many ways they don't need them now. we are capacity constrained on batteries, so it is interesting that tesla, tesla's model 3 was

the number one selling car no matter whether electric or gas powered in the united states in the third-quarter if you measure by revenue. we think tesla is on its way. it took a long time to get the manufacturing process right, and they still are working out bugs, but we think they are on their way. it is a little bit like an with spacex, it took them a long time to figure out how to land the rockets on barges in the middle of the ocean. once they did it, they have been doing it very successfully ever since almost flawlessly. , we think we are dealing with the same sorts of situation right now. emily: all right, so good to have you back, cathie wood. arc investment ceo. much to talk about in the year to come. coming up, earlier this week, we saw the u.k. crackdown on facebook, now germany is cracking down on amazon. why? european companies are hitting u.s. tech giants where it hurts, next. this is bloomberg. ♪

emily: europe takes a scrutiny of big tech companies. they are now looking at amazon. germany is looking into the country's double role as the biggest online host for smaller stores. the probe piles onto e.u. concerns about whether amazon gathers information on rival sellers to help launch its own products. for more i want to bring in bloomberg tech senior editor brad stone. what exactly are german regulators looking at? brad: as you mentioned, amazon dual role in most markets

where it operates. it administers an e-commerce platform where other smaller sellers can sell and is the biggest seller on the platform. this german cartel office says it has gotten a lot of complaints over the last few years dual role and how it -- about how amazon performs that dual role and how it manages the data from smaller sellers on the site, how much transparency there is around the process when amazon shuts down a seller how reviews work, so it , is going to be collecting information from the sellers, and looking at how amazon administers the dual role. emily: so you know, in the same way we saw the e.u. take a look at google, would this potentially be a multi-year investigation where we would not know potential consequences for many years? brad: you got that right. these things take a long time. the same office is investigating facebook, it has been for 2.5 years. the key phrases dominant position. they are going to be looking into whether amazon has one in germany and if it uses that -- abuses that position.

amazon is a minority percentage of online sales in germany, and if you look at market share numbers, it is a small number, but if you look at the impact on small businesses and how many consumers in germany use amazon, then maybe it does have a dominant position. they will have to look at whether it abuses it and if so, what are the remedies. emily: could u.s. regulators make the same case amazon has the same problem here in the united states? brad: yeah absolutely. , it is certainly a line of inquiry. the european union competition commission is looking at the exact same thing. how amazon uses data from its market platform to inform its overall business. but look, i mean europe, with a business foundation of small and medium-sized companies with a , sense they have been outpaced by american tech giants, they are leading this. we're not heard much from the ftc or the department of justice

along these lines, but it is ripe for inquiry. emily: brad stone we will , continue to have you follow that scrutiny coming out of germany. speaking with amazon now, aws revenue is expected to hit $71 billion by 2022, giving the company's cloud business a valuation of about $350 billion. that is according to the latest research just come back from the conference in las vegas. he is here in the studio. that is a big number. how do you get there? >> there are owing to be $26 billion this year and they are 2.5 times larger than microsoft with azure and a six times -- and 6.5 times larger than google. they are a runaway freight train with the cloud. one of the key things in vegas this week was the 2.5 to 3.5 increasing in commitment sizes by the partners. the deals are going larger, and you have these big very complex

organizations like services, government who are not wanting to go to the cloud who are now all in. capital one were right on the showroom floor saying we are not selling credit cards, we are telling you we are going to the cloud. you would never hear a credit card company going all in on the cloud you know two years ago. fortnight, you know the game , that many of our kids play, 8 million concurrent users. you know, so every company, every walk of life is saying this is a great way to put their enterprise compute onto this platform. so we expect that growth rate to continue. $26 billion to $70 billion by the timeframe you mentioned. when you look at software multiples, five to us is reasonable. and that would get you to that number you mentioned, $350 billion. that is roughly half of the market cap now. it is going to keep further compounding the margin and let amazon do things other retailers

cannot do. emily: how much does amazon have to worry about microsoft? we saw microsoft overtake apple as the world's most valuable company, and a lot of that is due to optimism around microsoft cloud platform. >> azure is doing well. that ultimately what is happening with microsoft is that they resonate well in these old-school industries. big banks, big insurance , government, so the thing one amazon did at this conference i thought was the biggest moves -- news from a product perspective was let you take amazon cloud. everyone is speculating this would happen. it is really the only advantage microsoft had against them, and microsoft had the application suite, but now amazon has taken one of the two biggest concerns away. we think microsoft is going to be right now the challenger.

leader,he far runaway and then google is the up and comer. and now oracle on board, he knows where a lot of the oracle workloads are buried. emily: replacing diane greene as the head of google cloud. amazon is facing much bigger picture concerns here. regulatory issues in europe we just discussed, potential tariffs impacting third-party sales on the website. how concerned are you about some of these bigger issues affecting amazon at large? brent: everyone has got the same risk. we cover facebook, google, they are all under duress. the number one question from our institutional investors is what is going to happen with regulatory overhang. and ultimately no one really knows exactly what will happen, but we do think a form of gdpr in europe will come to the u.s. it may not be as stiff because it regulators -- it is going to help companies if there is more regulation. the big platforms win, the

little guys hurt. they will have to be careful because they could stunt innovation. our belief is ultimately they will all have the same playing field, but if there are increasing regulations, it will honestly hurt. emily: all right, interesting perspective that regulation could help the big guys. thank you so much for stopping by. coming up, the l.a. auto show is usually the home of glitzy reveals and brand-new cars packed with technology, but we will see the one start up who is deliberately keeping their ev away from the show this year. this is bloomberg. ♪ ear. this is bloomberg. ♪

emily: the l.a. auto show is a place where traditional automakers in startups put their next and vehicles on display, but one carmaker has decided not to showcase anything at all. lucid is almost two years behind schedule with its air ev but a billion-dollar investment in september has put them back on track. lucid's vice president spoke exclusively with bloomberg about

why the company is keeping quiet for now. >> at lucid it is really, we have to decide who we are going after what is our core , technology our core , capability, market position, and what is the brand personality and character of the company. all of those things need to be decided, so you get to make your own rules in a way. which is a really rewarding and an enjoyable thing. reporter: what is going to be the base price point of this vehicle? who are you targeting? going tohe lucid air be? >> we are coming to market in luxury price point. those vehicles will be most likely in the $90,000 price range and up, and they will be highly equipped. however, over time, we will introduce an entry-level vehicle and price down in the price $50,000 range. reporter: [indiscernible]

interior and exterior, but you have a very deep knowledge of the car. when it comes to the technology inside of the lucid air, what sets it apart from tesla and other vehicles, ev's? >> yeah, what i think really sets it apart is our approach to ev, technology, and integration. so you know if you think about , what it has taken in the past to create high thousand -- horsepower, high torque, and all of the components to make that work, ev is the miniaturization, the digitization of the drivetrain. and so with that miniaturization, we are able to pack into vehicles a lot more space on the inside, more compact on the outside. so all of the dimensional and packaging rules that we know from internal combustion, that is being rewritten, and the lucid air is the first type of vehicle doing that. i don't see that elsewhere in the marketplace. reporter: the timeline for the

lucid air has changed. what is the timeline now and when i we going to start seeing -- when will we see a lucid air on the road? >> we will have our first prototypes running around in early january. 2020. but the actual, the on sale date will be later in the year, so the end of 2020 is when we want to deliver our first customer vehicles. reporter: one of the big things that has jumped out to me from the l.a. auto show this week is the broader industry shift from suv's. you have been working on this sedan, and that is the segment of the market you are targeting but are you currently designing an suv? is that in your thinking longer-term? >> even when we started with this whole program, there was a a lot of discussion of sedan or suv first. we felt the sedan format was the best place to disrupt and show

the true ev capabilities. better handling dynamics, better for performance, better for comfort, better for range of aerodynamics. we wanted to there, but we will follow it up with suv's, crossover type products, after we launch the lucid air. emily: the design chief speaking with our own ed ludlow at the l.a. auto show. will leave his current role to become ceo of the self driving business. another sign the gmc is a future -- sees a future where robots take over the carmaking business. he will continue to report to the ceo. new claims from china suggesting edited babiesgene has arrived kicking off a , worldwide controversy. what are the risks? we will discuss, next. this is bloomberg. ♪

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emily: this is "bloomberg technology." i'm emily chang in san francisco. this week a chinese researcher sent the scientific community into shock, claiming he had created the world's first two genetically-edited babies. using crisper, a powerful gene editing tool, he claims to have tweaked the dna of two human embryos, now twin girls, to be hiv resistant. the claims have yet to be verified am a but reports have prompted widespread condemnation from scientists across the globe, with many calling it an unethical use of technology. the last several years in science and released a crisper frenzy, with the potential to possibly cure and eliminate deadly disease and others

warning of the risk. so far the technology has been used to boost crop production, malaria in mosquitoes and create lyme-disease proof mice. in 2014 a high school or used it to disrupt lung cancer cells multiplication. lee, a student at stanford university, joins us to discuss. -- we are alsor joined by this reporter. drew, what exactly does this scientist claimed to have done? drew: you described it pretty well. he says that he has modified the -- two of the interiors -- embryos that were delivered into two young baby girls who, according to him, have a certain resistance to hiv. it is essentially modifying the genes of a human being, doing it from birth, making sure it permeates all of the dna in their body. it's an exceptionally bold claim. it's the type of thing people thought might be possible at

some point, but a lot of the field has said we were not ready to quite make this leap just yet. it set off an unbelievable controversy in the scientific community. emily: now you have developed a killique using crisper to cancer cells basically and you have continued this research at stanford. you have been involved in the ethical debate about it as well. what's your reaction to these scientists' claims? >> yeah, i was pretty shocked when i first read the article. i definitely think it is a little bit premature, especially considering the fact that, like previous guidelines have said, not to do any gene editing on embryos. i think it is a step forward. i'm not sure it's a step we should have taken this early on. it is going to be interesting to see where scientists and ethicists decide to go next. emily: there is an unofficial international moratorium on using the technology on technology -- on humans even though the coinventor of crisper

said she is disgusted by this. jiwoo, what do we know about the actual risks? this scientist says the babies have been born healthy. are there risks we don't know? jiwoo: yeah, we don't yet know the exact changes that crisper is going to make on the other parts of the genome. if you make one change in the genome, you don't know how it is going to affect any other phenotypes. for example, the particular gene this scientist decided to change to make the babies resistant to hiv, we don't know how that gene is going to influence any other diseases. some people think that gene also can influence your risk for west nile virus and make you more susceptible to other diseases. whether it is going to affect like any other like disease susceptibility, we still don't know yet. emily: jiwoo, the chinese national health commission is investigating. and drew, tell us a little bit more about the chinese government's reaction here because officials are not happy. drew: no, they are not.

we are still seeing that reaction play out. right now we have seen the chinese health officials say they have put a stop to his research. he was he pulled out of a , conference where he was supposed to speak in hong kong. and the there have been officials saying that what he did appears to have been illegal potentially, and there appeared to be some issues where his university where he was working at in shenzhen said there may have been some signatures forged on permission documents for the university's ethical committee. so i think we are going to see this continue to play out in terms of a consequences standpoint. china has a booming biotechnology industry. it is very interested in being at the forefront of some of these technologies, like gene editing, like new therapies in cancer and a lot of very exciting stuff. i think it also wants to show it is a legitimate industry. parts of china biomedical research in the past have been seen as a little bit of a wild, wild west. and this is an opportunity for

the government there to make clear to the world how it stands about certain research ethics, what is permissible and what is not. i have a feeling that this researcher is going to mark a very pivotal point in the history of how the chinese regulators and government approach the industry. emily: there are three different public companies working on crispr right now. there are folks like you, jiwoo, who are continuing to do research on the future of this technology. what could be possible with crispr in the future with regard to human life? and what are the technological hurdles needed to be overcome to get there? jiwoo: i definitely think that the future of crispr lies with human therapeutics. there are already a lot of clinical trials going on to use crispr for like cancer therapies or blood disorders. one of the main drawbacks or hurdles that we have to overcome

before we can use crispr in humans is the delivery. the delivery of crispr into humans is still something we need to research further, in order to actually use it as a therapeutic. emily: all right, well jiwoo , lee, we will continue to follow your work at stanford. drew armstrong, our u.s. health care editor, lots to continue watching. thank you so much for joining us. now to a case of style becoming substance. the whistleblower behind the cambridge analytic revelations says the now defunct data research firm used the fashion preferences of facebook users to target political messaging. essentially, the company was working out how you would vote based on what you are wearing. bloomberg tech's nate lanxon wrote the story and joined me earlier. nate: a lot of this stems from christopher wiley. anyone who doesn't remember, he was the original whistleblower behind the cambridge analytica

scandal back in march. this is when we saw facebook shown to be -- the data on facebook was shown to be used in election interference. chris was one of the research directors at this firm in 2014 who blew the whistle on how they had acquired data, and how it had subsequently been used. it is something facebook has really tried to distance itself from in the fake news debate that has followed the last few months. but he was speaking today here in england about fashion, fashion brands. he was saying that one of the key pieces of data and information that cambridge analytica used to determine how they should be targeting different people with different political messages was their interest in certain fashion brands. not necessarily just clothing, but also magazines and high street retail stores. they were actually able to work out based on how somebody interacted with individual brands and the number of other

brands how they were politically leaning or could be persuaded to lean politically purely based on those brands. emily: i'm curious how they drew their conclusions. you are a liberal if you like to wear what? you are a conservative if you like to wear what? nate: a few examples that stood out to me if you were someone , who was engaged with abercrombie & fitch, for example, you might be a bit more liberal and outgoing. if you were someone that likes to wear jeans made by wrangler, than you know, maybe you were more on the conservative side. one of the keywords that was used is that they like things to stay sort of stable, stability. so, it is interesting just how important those sorts of associations were between the brands that someone likes and the way they are politically leaning. emily: facebook is under criticism from all fronts right now.

how much do facebook executives and facebook investors need to worry about cambridge analytica going forward? nate: i mean, facebook has spent the last few months either being you know with ceo mark zuckerberg being demanded to speak in front of parliament in britain, so far refusing. even to the extent that earlier this week, when one of his priority chiefs was here giving evidence to a parliamentary committee, they made a point of putting an empty chair with mark zuckerberg's name in front of it, just to show he was supposed to be there, that they wanted him there, and that he refused for, you know multiple times now , to show up. that's not going to go away, probably, until he actually agrees to speak in front of them. and certainly i think we've seen the appearances that zuckerberg has had in front of congress and in front of the european parliament, it is the british team investigating social media's role in fake news that is going to give him the hardest

time. that is definitely something that people think is a reason why he is not showing up to some of these hearings. emily: do you think we will hear any more from cambridge analytica or christopher wiley? it seems like the scandal that just won't give up. nate: i think it's less likely we will hear anything specific from cambridge analytica itself, i mean partly because it is now a defunct entity. chris, i speak to chris relatively regularly. you know it always feels like , there is something else around the corner something else around , the corner. i think this fashion topic is one that maybe has been coming for a little while, because of is, you know, large personal interest in fashion. he was studying a fashion phd i think before he worked at that company. so you know, maybe this is the sort of the last big thing, but , it always seems like whenever you think it is done, there is something else that keeps coming. it wouldn't surprise me at all. emily: bloomberg tech's nate lanxon from london.

coming up, companies are expected to spend close to $1.6 billion this year on influencers. but what does it take to turn a social media platform into a full-time career? our special report is next. this is bloomberg. ♪

emily: megan young goes on outdoor adventures for a living. her job: to post on instagram when she gets home. she is a new kind of celebrity, a social media influencer. and to many, her career doesn't seem like a career at all.

but as businesses increasingly recognize the value of social media marketing, it's become a -- becoming a business that is bringing in billions of dollars each year. our reporter headed to washington to investigate. >> the orange sky at dawn. snow-dusted peaks. this is the kind of beauty many of us only see on instagram. and this instagrammer delivers these views to you for a living. she's a new kind of celebrity, and she makes money by promoting things to her fans. it's a lucrative world with billions of dollars rushing in. >> my name is meghan young, and i'm an influencer. all right, we are heading out for our river cruise.

reporter: at first glance, meghan's job doesn't seem like a job at all. >> check this out. whoo! for a living, i go on outdoor adventures, take photos of it, and then share it across social media platforms when i get home. reporter: but unlike you and me, meghan gets paid to share some of these photos. she has almost 200,000 followers on instagram and all kinds of companies pay her to endorse their products on her feet. -- her feed. >> it can be things like tactical gear from raincoats to payouts to boots. it can be different snacks that keep me going on the trail and also travel destinations, which are honestly my favorite things to do, because it is really fun to explore new landscapes. ♪ reporter: meghan's on track to earn between $50,000 and $100,000 over the next year. about 10% of her feed is sponsored. ♪

>> for a story's post on instagram, that usually starts around $200 per day. and the for posts to a social feed channel, about $1500 or more for one post. reporter: right now, much of that income is helping pay for this home. >> hey! [speaking simultaneously] reporter: tomorrow, meghan's taking me on one of her signature mountaineering adventures. >> i have to make sure that all the gear is cleaned, it is repaired we are safe. , everything is ready to go. reporter: we are planning a 4.5-mile hike up the cascade mountains, climbing around 2500 feet. we will be camping overnight and then hiking down. ♪ this was supposed to be a mild hike. and it's a total breeze for

meghan, but not so much for me. this is not easy. meghan: i always want to make sure we are as safe as possible, but there are always these moments when you are on something exposed or your -- you are climbing something, and you think what if there is a rockfall and we plummet to our death? those fears are very real. ♪ so warm outside, you guys. it is crazy. reporter: finally, four hours behind schedule, we arrive at the campsite. are we here? meghan: yeah. [laughter] whoo! we did it! [laughter] ♪

reporter: and after the coldest night of my life, we wake up to this. it's the window of good weather meghan was hoping for, and she uses it to stage a sponsored photo for an energy bar she brought along. meghan: i'm always trying to think about, how do i take something and make it look at home or natural or normal in these wild landscapes. ♪ reporter: i think a lot of people will be watching this and think -- [laughter] why does she do this? why do you do it? meghan: i am so happy out here. it is a little ridiculous. you wake up with mornings like this, and you sort of forget the sweating, and the heavy bags, and you sort of live in that moment. it's a pretty good office. i'll take it. ♪

reporter: meghan's post of the energy bar has now been seen by 16,000 people. and since our trip, she signed sponsorship deals with three new clients, making the $1.6 billion market for instagram influencers just a little bigger. but the world of social media changes fast, and meghan knows there are plenty of things that could derail her newfound career. it's not a stable job, and it is certainly not an easy job, but for now she can't imagine living her life any other way. >> the sun came out. so beautiful. i've had young women reach out to me, and say that they found inspiration, or they've gone on a hike or climbed a peak. that's the upside to social media. you have this ability to inspire people and to actually touch their lives offline. and that's pretty cool. ♪

bloomberg's aki ito. up next, going private? private plans, the former qualcomm chair at the summit. this is bloomberg. ♪

, ousted chaircobs of qualcomm, is still thinking about taking the chipmaker private. he sat down with selina wang to explain at the bloomberg's year ahead summit in new york. take a listen. paul: things that qualcomm can do it's a big company. , it was hard to focus in on some of the leading applications. they are a lot smaller. it's a big company. billion chips in a year.

we are able to focus in on the leading edge customers, drive the whole end-to-end system. qualcomm is becoming increasingly just focused on building the componentry that actually deemphasized the development of new technologies. so that's the reason why i've been able to get a number of the really good system engineers, because they are not able to do -- they are not seeing that they are able to do that kind of deep innovation. the wireless industry in general has disinvested from fundamental technology innovation. really it is huawei and samsung are the key leaders at this xcom point. is trying also to do that. we are small. i get it. but we have partners as well. we will work with partners closely to bring these innovations to market. selina: speaking of deep innovations, that was one of you primary theses, but went on long-term bets. i have to ask you, are you still working on that? paul: i don't have any updates now. basically, we continue to watch what the company is doing. obviously, there have been not

great developments on the legal side for them. the stock price is down, market cap is like half of what it was when i was there. we are watching it. one of my favorite saying is luck is where preparation meets opportunity. so we are prepared. we watch. and in the meantime, you know as there are resources that are leaving, and they are great resources, and we want to retain a critical mass, we are able to hire those people. selina: how would xcom fit into a potential take private theoretically? paul: it could have gone back in and then the corporate r&d -- and been the corporate r&d department. it could've been some leading-edge application. there are lots of ways that xcom could work in a take private. selina: when you first discussed it, it was sort of largely dismissed by analysts and observers. now there have been a lot of market fluctuations, as you said. even around $55 a share, it is still $65 billion to $70 billion company. how exactly would it work? paul: ok, so there is data and

equity. you have to go and put together the whole thing. the question now is, if you look at the ebitda of the company, it has come down. if you look at the financial results through a number of one-time events, there have been stock buybacks to make it go up, but the debt is based off of ebitda. the market cap comes down, but there is cash now off the balance sheet. there are all these things that have gone on with the company. so like i said, no updates. i don't want to give any updates. we are watching the company. we are prepared if there is an opportunity that arises. emily: paul jacobs there, the former ceo of qualcomm, current chair and ceo of xcom, with our own selina wang. keep in mind paul jacobs is the son of one of qualcomm's cofounders. here to tell us more, ed hammond. ed. you were listening to that conversation very intently. he kept saying no updates. no updates. did we get anything new in terms

of whether or how he would be able to pull this off? ed: it doesn't sound like it. there was no indication he is close to doing any kind of deal. look, we know this is something he is interested in. he said it is something he is interested in. the big challenge, as always, is finance. he is trying to do one of the biggest, if not the biggest take private deal in history. the financing -- is it there? difficult to say. there was rumors early on that potentially some of it was coming from saudi arabia. you would be pretty bold to think that saudi arabiand money coming into the u.s. in that quantity at the moment would be an easy thing to achieve. with what is going on there. i think probably no updates is actually a fair statement for him to make. it's very unclear how this situation would have progressed from where he initially kicked it off just a few months ago just by saying he was interested. emily: and quickly, ed we only , have about 30 seconds left. from my conversations with their current ceo, it sounds like they don't want this to happen. he thinks a private company could be even more constrained. ed: yeah, and this is about the

opposing theses they have. he thinks this is a good company, he wants to make profit, then you have paul jacobs sees r&d as the future. emily: bloomberg's ed hammond. thanks so much. see you back here tomorrow. this is bloomberg. ♪ bloomberg. ♪

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