emily: i'm emily chang in san francisco, and this is "bloomberg technology." coming up in the next hour, intel's board has been searching for a new c.e.o. for more than six months and the clock is ticking. we'll talk about who is in the running and who is not. plus, pg&e's looming bankruptcy, the utility company filing for chapter 11 in california in the wake of last year's deadly wildfires could set off a chain of events. the bike and scooter sharing

industry is booming in asia despite an economic downturn. we'll talk to one bullish investor in beijing. first to our top story, it's been nearly seven months since the ceo of intel has been ousted. another has been filling in for him ever since. the interim ceo says he does not want the full-time job. according to sources, some of the top names that were on the wanted list are no longer in the running names like former intel , president renee james, former qualcomm coo. what challenges are next? to answer that, we have got, of ian king whoberg's , covers intel and the managing director and senior semiconductor analyst. ian, i'll start with you, who are the frontrunners? ian: that's the problem. we should know, prior to intel's history has a regular program of developing talent and bringing people to the forefront and having it all managed effectively.

he left early for reasons that weren't his own and one of the other things he did was interrupt the senior management circle so there was no obvious successor. emily: there is no obvious frontrunner at this point. ian: there are a lot of theories. and not a lot of clarity right now. emily: what are they? ian: well, you have senior executives on the inside, you have people on the outside like renee james, maybe people like kirk or diane bryant who can come back. but again, just theories at this point. emily: what would you like to see intel do here? >> you know my preference is for , them to hire someone externally. i mean i think they have some , great candidates inside the company. ian mentioned the v.p. of engineering. but you know the business that , intel is in, i mean, things are certainly changing, the slowdown, they have several businesses that are subscale and

i think they need, i think some outside perspective would be helpful in terms of deciding whether to jump all in and really scale those businesses potentially the m&a or shuttering some of those businesses and maybe emphasizing for better margins and cash flow. emily: ian, the chairman recently suggested to employees that they might go with a nontraditional candidate. i mean what do you take away , from that hint? ian: that's a good point. there is a snippet, but that is typical from andy bryant. he likes to make assertions and then throw things out just to get people uncomfortable with -- comfortable with being uncomfortable. we can read a little bit, but not perhaps too much. emily: what are the challenges that the new ceo, once he or she is named going to inherit? ,ian: on the one hand, it couldn't be better. numbers are fantastic. intel has all time high in terms of revenue and profit. flip side, if we are to believe what other companies are saying, this is the first final in intel's history that they are facing competition that have

better factories than them. that is important and needs to be fixed. emily: it could be weeks if not months if there is no clear frontrunner. does that concern you? >> not really. you know the premise of the , question is almost like, you know, intel is really struggling and has a lot of problems and they need to bring somebody in to save the company. you know this is a stock that , has outperformed the s&p 500 by 20% over the last 12 months. in 2018, as the numbers will show next week, they most likely will have grown their revenues by more than 10%, and they will most likely grow earnings more than 30% for 2018. so this is not a business that's broken. i think it's an important job.

there are, you know, some long -term strategic things that the company needs to figure out and but you know, let's not forget, , i mean intel is coming off really quite a spectacular 2018 and i think because of that, , they do have -- they have afforded themselves sometime to -- afforded themselves some time to really bring in the best candidate that they can possibly find. emily: interesting. in the meantime, the f.t.c. trial against qualcomm, the trial has started. apple executives have been testifying. the c.o.o. of apple testified that qualcomm wouldn't give them chips to put in their latest phones. qualcomm disputes that. what do you make of that? 's --it's central to apple apple is really behind all of this if you believe all qualcomm said. apple has to portray itself as being weaker and being kind of the victim of qualcomm. it's hard to imagine apple being a victim. but apple entering the cell phone market needed the

technology. it's a sign of how much times have changed that we find something like that being shocking. qualcomm has publicly stated in the past that they would have given apple all of the chips they wanted. emily: i know you're continuing to monitor that trial for us. ian king, bloomberg tech. thank you both. coming up, microsoft wins a massive contract from the u.s. department of defense. does it mean they have the upper hand on future bids? and if you like bloomberg news, check us out on the radio, the app, bloomberg.com, and in the u.s. on sirius x.m. this is bloomberg. ♪

emily: the u.s. defense department has awarded microsoft a $1.76 billion five-year contract to support the defense apartment, the u.s. coast guard, and the intelligence community. microsoft and amazon in the running for another bid. naomi next covers corporate influence for us joining us from washington. what is the significance, naomi, of microsoft winning this contract in the context of other contracts still open? naomi: yes, well it certainly , helps microsoft as it continues to make its case to the pentagon that it's the best company to be a major cloud provider for the defense department. you know what it essentially , means is it's deepening its relationship with the defense

department, with the i.c.s, and those relationships will only help it continue to attract new business within the department including potentially this jedi , pentagon cloud contract. emily: talk to us about the status of the jedi pentagon cloud contract. i mean there was some concern , certainly among tech companies that, you know amazon was a , shoo-in and other companies were not happy about that. in fact, the c.e.o. of oracle actually brought it up to president trump. naomi: yes, oracle and other tech companies have been fiercely opposed to the way the pentagon has been handling this contract. they say the pentagon made the wrong decision when they decided to award the contract to only one provider. so most in the industry suspect that amazon is still the frontrunner for the contract, but actually, microsoft is seen as a solid second choice and has the potential to have an upset here. they have extensive existing relationships with the defense department. this deal will help them but also recently earlier this year, they got another deal with the

i.c. to extend its cloud technology there, and so, you know, we'll have to see where the d.o.d. lands on this. you know, but i think at the , moment, amazon is still looking like a frontrunner. emily: what is the timeline, when is the d.o.d. going to decide? naomi: well, the d.o.d. has decided that -- has announced previously that it was going to make a decision on this contract in april, but we're going to have to see because tech companies are still fighting it. oracle has filed a lawsuit in the federal claims court saying that the pentagon's requirements are unfair and overly narrow in favor of amazon and also alleging that there are conflicts of interest, that people in the d.o.d. had close connections with amazon. so we'll see. maybe a judge will tell the pentagon that you have to change your approach or that there was some improprietary issues here.

at the moment, the pentagon is still planning to make a decision by this year, but whether they'll get stopped by the courts remains an open question. emily: all right, naomi, continuing to track that decision for us. we are waiting for it anxiously, . thanks so much. well, pg&e stock plunged monday after saying it plans to file for bankruptcy in california, . this as a cost of wildfires left it with $30-plus billion in liabilities. two thirds of pg&e's market value has been wiped off since november's wildfires in california, and its debt has been downgraded to junk. meantime the bankruptcy could , have big implications for california's ambitions for renewable energy. we are joined with the director and energy policy program. michael, is this pretty much expected? michael: yes, i think this has been coming since november. after the camp fire, they drew down its revolve credit lines which is a warning sign for a company that they're going to

file. and the reality is that the market has concluded that along with governor brown, has concluded that this is kind of the new normal. and until we can change that market perception in california, it's going to be very hard to finance utility investments. emily: fires are the new normal? michael: fires, catastrophic fires. emily: so pg&e blames the fires on climate change. pg&e's critics blame arrogance and negligence. which is it? michael: i think there is a variety of factors. climate change is one of them. but it's also important to emphasize that pg&e has essentially not tried -- they haven't tried to make big changes in how they run the grid that would create safety in the near term. they focus on long term investment plans that are comfortable and traditional for utilities to make, but which don't provide big changes right away that would have protected them. emily: what kind of changes should the company be making? michael: the key question is the degree to which the company should be shutting off the power during risky times in wildfire areas. and they've talked about that, they did it once in october, but

did not do it prior to the camp fire and in november's catastrophe. the question is how the company is balancing risk and political opposition from rate payers, the puc and the state government. , emily: why not shut down the power? we're talking about hundreds of homes gone, dozens of people who have died? michael: the pushback that pg&e encounters, all utilities encounter when they turn off the power, is pretty severe. there are vulnerable customers that have medical devices in their homes. local governments could have trouble with emergency services . even supplying water to communities. and the solution is to create safety in the power system, but also provide the backup power that is necessary to make it much less inconvenient when the grid is not supplying energy because it's too dangerous to do it. emily: so they don't have those backup plans in place. michael: that's right. that's right.

emily: how will this bankruptcy impact the state's energy ambitions? michael: well i think the first , place to start thinking about that is in terms of the impact on affordability of energy. right? and california has some of the highest electorates in the country. this is going to make them significantly higher kind of no , matter what happens. whether pg&e is able to avoid bankruptcy or not. emily: we're going to feel this as consumers. michael: absolutely. emily: we're all going to pay more. michael: yes, unfortunately, yes. then the question is, how much more can we afford to make the investments we would like to make to achieve our climate and clean energy goals? we are going to have to be even more careful, even more crafty , about how we achieve those objectives over the next 10 years, how we electrify transport, how we electrify buildings. all of that requires investment in grid infrastructure and that infrastructure just got a lot more expensive. emily: so the state has a goal to be, for all of its electricity to be 100% carbon -free by 2045.

how likely are we to make that? michael: i actually think that we can still achieve that goal. 2045 is very far in the future. the goals that are more pressing and that are going to be more challenging to achieve are the 2030 clean energy and climate goals, right? the renewable portfolio targets for 2030 and the state's greenhouse gas emissions targets which basically require a , significant fraction of vehicles to turn from being gasoline-powered to being electricity powered. emily: so what does it mean for investments in electric cars, in solar, in the shorter term? michael: well the ecosystem is , threatened by this. the whole clean energy ecosystem that operates in california . because so many of the providers of solutions have signed long -term contracts with pg&e at fixed prices. and if those contracts are apart of the bankruptcy process and are marked down, we could see many companies in big trouble. utility solar providers, battery storage companies, perhaps electricity vehicle charging,

the kind of infrastructure companies that are part of the electric vehicle ecosystem, that all is threatened by this bankruptcy. emily: like tesla or -- michael: tesla is fine. it's more of the companies that you plug your car into. the companies more closely associated with the grid and with pg&e. emily: so there is no doubt there will be high winds again this year, dry conditions. how well prepared are we or is pg&e if this happens again this year? do you think they have learned a lesson? michael: i would hope they have learned a lesson. i would hope that the new management is thinking about this from a risk management perspective that is a little bit different than they were prior to last year's fire season. but the reality is that power shutoffs are still controversial. the october shutoff in the napa valley area prevented something like 25 ignitions that were caused by trees falling into the infrastructure.

emily: wow. michael: luckily, the infrastructure hadn't been turned on. had it been turned on, we would have seen a bunch of fires started. at the same time, customers were really upset about that safety-related shutoff. so the question is how aggressive is the company, the new management, going to be in the context of bankruptcy, in the context where they're negotiating with the state about systems, about this safety-related program. the reality is they are not going to be able to harden the grid was they can't invest right now. emily: michael wara, stanford university, thanks for stopping by. michael: pleasure. thanks for having me on. emily: coming up we will give , you a front row seat to shenzhen tech boom. how the southern china city became the silicon valley of the east. we are live twitter. you can check us out on @tictoc onand twitter.

this is bloomberg. ♪

emily: 40 years ago, shenzhen was a small fishing village in the shadow of hong kong. today, it is china's very own silicon valley, packed with more than 20 million people. the mega city has become the biggest consumer manufacturing base in the world, bursting with hundreds of factories. bloomberg business week's ashley vance traveled there to experience the factory life firsthand. ashley -- factories inbout china all the time. today i'm lucky enough to go , visit one that is located about an hour outside of the center of the city. they're going to let us see what life is like inside one of these factories. there are grim factories, there are decent factories, and then , there is this place, run by grantson electronic. it's safe to say, this is not what i expected.

the plush surroundings are intended to make customers from all parts of the world feel comfortable. but inside, it's more like you would expect, dozens of workers moving at shenzhen speed, making fancy head phones for an australian company. how did you guys end up here? i guess that's the thing to do? shenzhen is known as a place that people come to make things. you don't come here to mess around. you come here to get things done. they have the supply chain here, a supplier can make any component of the headphones you need, and of course, there are labor costs, which are not as cheap as it used to be but still reasonable. the production line is running at capacity since we started, and yeah, we can do 500 a day normally. >> what are the little noises we hear in the background? [laughter] [whistle noise]

>> you're hearing them make sure they assemble the speaker correctly. >> the test noise? >> exactly. >> but what is life like for the people who make these wonderful toys? to get a taste of the factory experience, i join the mad dash for lunch. cafeteria food. how is it? good? how is the food? it's good? [laughter] >> how long have you worked here? >> for three years. >> ok. it's tough to say anything terribly new about the life of the chinese factory worker. most of these people have come

from china's hinterlands, often behind ineir families their rural home towns. they'll spend two years busting their butts working overtime to save up as much money as they can. is it a step up from hard scrabble subsistence farming? probably. are there still safety nets? yep. but i can tell you one major lifestyle advantage the chinese us. over >> when we first started working here, after lunch, we couldn't really get anyone's attention. eventually, we caught on that everyone is sleeping at that time of day. that said, we embraced it very quickly. [laughter] >> what is your preferred sleeping apparatus? >> i am pretty spartan, so you know on the desk or under the , desk with a bit of bubble wrap preferably is good.

[laughter] emily: bloomberg's ashley vance taking a little nap in shenzhen. you can watch the full episode of "hello world" at bloomberg.com. well samsung unveiled a set of , inexpensive smartphones for india, seeking to regain ground lost to chinese rivals, including xiaomi. the 3m series devices are about $283 u.s. they'll launch february 5 on the samsung india online score and amazon india. atexact -- at sam's exec samsung says they are aimed squarely at the millennial market. authorities have opened an investigation into tidal. it follows reports by a norwegian newspaper that the streaming service falsified numbers for artists including beyonce and kanye west, that was jay-z's wife. the norwegian arts association claimed the potential loss of income due to data manipulation. the company has denied the

reports. coming up, competition in bike sharing on overdrive, but is the market oversaturated? hello-bike's cofounder says the industry has developed too fast, and our conversation with him is next. plus slack may be taking an , unconventional path to the public market. will other expected tech companies follow suit? this is bloomberg. ♪

emily: this is bloomberg technology global link. i am emily chang in san francisco. >> i am shery ahn in new york. >> and i am haidi stroud-watts also here in new york. ,emily: there is new pressure on chinese negotiators to reach a trade agreement with the united states. china trade slumps at the end of the year, exports were down while most imports fell almost 8%. both the worst fall since 2016. i want to ask you, does this chinese trade data just pile onto concerns about a macro economic slowdown this year? shery: we have seen usi us a manufacturing at a two-year low and we got their data from germany showing that they are on

the brink of a technical recession. chinese data really not boding well for the global economy. in fact we have seen u.s. , markets take a hit in this session. tech stocks falling the most in a week. this gtv chart on the bloomberg just showing that analysts have been cutting their eps to as forecasts. global companies by the most in 2009. i have got to say, today the , u.s. markets were under pressure. but as soon as we heard president trump say that he thinks the u.s. will reach a trade deal with china, we did pareee those risk assets emily: -- declines. emily: what about the reaction in asia? does this data put more pressure to cut a deal with the u.s. the additional set of tariffs kicks in? haidi: we had these lowered expectations already. they were worth even what those estimates were expecting. sometimes a bad starter means good news in markets.

you get a higher level of monetary stimulus, perhaps. on the other hand, it does kind of calling the question how much leverage beijing had going into potentially a high-level round of trade talks. because the problem is, emily, as you would will now it's low , hanging fruit when it comes to opening up and amplifying trade deals and trade volumes has already been picked. and remaining issues when it comes to this trade war are the longer term structural issues. like institutional reform, tech transfers, and intellectual property protection. i want to bring up this chart. it goes to the latest kind of overture made by beijing to open up its national markets. the qualified institutional investor quarter doubled. the problem is investors, foreign investors, are just not getting into chinese stocks. this is a look at turnover when it comes to domestic chinese markets, a-share markets.

so for these days we've had a , 10th of daily volumes trading in china. so there's a question mark over whether foreign investors really want to be involved in domestic markets, and i know, emily, from your perspective, when it comes to the trade war, it is certainly affecting animal spirits and sentiment when it comes to tech investors that do business in china as well. emily: absolutely. meantime, the chinese bike sharing start up, hello-bike, which is backed by billionaire jack ma, has confirmed it is considering an ipo. the company says it is well-positioned to dominate in this sector at financial woes mount for its competitors. the cofounder spoke exclusively with tom mackenzie in shanghai. has been the number one in this industry since april 2018. our daily rides are equal to the combined rides of our competitors.

put simply, we take half the market share. tom: what is your strategy for monetizing what is essentially a capital-intensive business? >> relying on daily revenue is enough. we have proven this. in over 100 cities, we break even from the daily rides. tom: people started off by viewing the center with great excitement and they saw it was able to solve that last mile problem and then he started to get pictures of mountains of bytes piling up and stories about these bike sharing companies earning through cash, and then very quickly collapsing, so you have done something you would claim right to avoid that. what is the strategy you have taken to ensure you manage to stay above some of those issues? >> in the first one or two years, this industry and our industry peers developed too fast without following basic is this rules. they put too many bikes into the market, which is a waste of resources. are your future

funding targets and what do you see your current valuations sitting at? li: in the short-term, we do not have fundraising plans, as we are very well capitalized at the moment. if needed, perhaps in six months, we might consider a new round of fundraising. we are valued at $5 billion right now. tom: there has been some speculation that softbank might be looking to invest in your business. is that a conversation you have been having? have you at least entered into discussions with softbank? li: we had contact with softbank, but there is no substantial developments or anything that gets us closer to a deal yet. tom: is an ipo an eventual objective for the company, and if so, what kind of timeframe might we be looking at? li: we will definitely go public at the end of the day. we do not have the timetable yet. our business is still rapidly growing. when the time for an ipo comes, i believe our company will be valued at tens of billions of dollars, much more than it is now.

haidi: that was the hello-bike cofounder and executive co-founder li kaizhu. , a partner at dcm joins us in beijing. they can have you. the growing pains of the bike sharing sector in china, the level of consolidation we have seen recently, are pretty well documented. it has not been an easy year in the past. are you still positive on the sector? >> yes, i am. i think that, you know in the , u.s. in particular, we see the rise of the scooter share market. it's really nothing we haven't -- we have seen before. in the u.s. market, it will be electric. in china, there's obviously been lots of growing pains, but hello-bike is proving they

executed very well. emily: it's interesting to hear you say that, kyle, because we've had tech predictors on the show saying that's just one is not going to be as big and some people think it could be. and of course in asia, you have , the threat regulation from the chinese government. have run into some growing pains there. who's to say they are wrong? kyle: well, i think that in the , u.s. market, the cities have been very proactive about regulation. and that has actually helped to limit, you know the oversupply , we've seen in china. i think the chinese market is obviously the biggest in the world. the other scooter share markets are really focused outside of china. if you take the u.s., europe, the middle east, and latin america, those markets combined are comparable if not bigger than china. haidi: how much is the broader success in china and across the border? you seem pretty bullish and

in other markets. how much does that depend on a , regulation, as emily pointed out and for infrastructure to be , compatible with that vision of the future? kyle: i think, longer-term, certainly the scooter companies , will have to work actively with the cities to introduce better bike lanes, safety to to really educate the public. , we are starting to see early innings of that now. if you look at santa monica, for example, they now have dedicated scooter parking. they have much better bike lanes. they have areas where scooters are restricted in terms of the speeds. and so i think in the u.s. and , in other parts of the world, you're starting to see the scooter companies working much closer to governments now. emily: kyle we've just gotten a , raft of disappointing import/export data from china. we have is revenue forecast cut -- this revenue forecast cut from apple, from samsung.

is any of this concern about a more meg ryan economic slowdown, a slowdown in china more specifically changing your investing strategy? kyle: not necessarily changing our investment strategy but we are certainly , worried. i mean the data that's coming , out, i think are lagging , indicators of things that global venture capitalists, like ourselves, have been aware of in the past prior months. it certainly does concern us and makes us very selective about the types of investments going forward. haidi: what about the trade war? does that impact animal spirits and the way you invest or what you are hearing from early-stage investments in terms of impacting the level of confidence you are seeing, and potentially impacting, given one of the main issues is intellectual property in this battle for tech supremacy -- does that play out negatively? kyle: i think it really depends on the sector. as early-stage investors, we've

really not seen the impacts of the trade war yet from a number of our companies. but we are certainly very conscious of the regulations that continue to evolve. and that has made us very thoughtful about how he look at cross-border investments. emily: tom asked the hello-bike cofounder about softbank. how much competition are you seeing from a mega fund like that? and is that impacting how you do business? kyle: dcm has a long-standing relationship with softbank that goes back decades. we know them very well. net-net its a positive development for the -- it is a positive development for the ecosystem. we are not really that impacted. their focus on series a, series b, softbank is really at the later stages. but what we have seen our companies that typically would going to are now

softbank for sort of the softbank ipo and staying private much longer. shery: your two themes for 2019 are -- and cannabis. cannabis, they are saying this is the year for it. i would also say the year for it last year in terms of how much hype it had. what do you expect to happen this year for it to be more profitable? kyle: i think 2019, for the year of cannabis, we really do need to see positive growth and extraordinary data come back, particularly in the markets in have full realization, canada being one. i think everybody looking to the canadian market to see if the numbers really do come back where they are. otherwise those valuations will be troubled. haidi: kyle, really great to have you on with us. thank you for spending your time with us here on bloomberg television. kyle lui joining us. this is bloomberg.

♪

emily: while a slew of companies prepare for ipo's this year, slack may choose a less traditional route. the platform said that platform -- but the volatility and government shutdown may lead to some delays. here to discuss, gain site ceo. gain site gives them unique insight to a host of how well, these are performing. -- how well companies are performing. so what do you make of slack's potential decision here? >> none of us know exactly what

slack is planning, as you know, but what i think is unique about slack is they are not your average company. people talk about companies being unicorns, and that term gets used a lot. slack is the unicorn's unicorn. the most is one of special private cloud companies out there. they have got a brand that is unbelievable. every other cloud company looks up to them, not just their revenue growth, but their product, their culture. and they are a company that has raised so much money that they don't need more capital. if anybody can do a direct us income it is slack. emily: airbnb may be considering -- direct listing, it is slack. emily: airbnb may be considering a listing as well. do you think this could be a trend order trending for other companies to get out the gate? there are some companies that have built so much power and so much brand over many years, like airbnb and uber and others, spotify was private for so long.

most companies don't have the ability to do that. they are behind the scenes, like a b2b company. most companies need more capital as they go into the ipo. emily: gainsight is one of those companies that comes out, people expect you to come to market. what is your timeline, is it causing you to reflect on how you decide to do this? nick: as you know, we're kind of behind this cloud trend, moving and subscriptions. we think there is a whole opportunity for gainsight and our whole customer success long-term. we are here to build a long-term company. emily: what is your timeline to go public? nick: we are focused on being around for a very long time. emily: i want to talk about your business because customer success management software, -- what is interesting is linked-in named customer success manager the top three most promising jobs of 2019. what is driving that? nick: if you think about customer success being a buzzword in the cloud world, it is because of this one metric that every cloud company reports. that metric is net dollar retention.

if i start the year with $100 revenue in my existing customers, how much are the same customers spending at the end of the year? are they growing or leaving me? customer success is about how do i get customers to stay with me longer and spend money over time? you know the cloud businesses, they lose money up front, they lose money getting new customers. if those customers do not stay with you, it does not work. customer success is about making the cloud business model work. emily: so who is winning in the cloud? nick: customers are winning first and foremost because they have this ability to then come in whenever they want to, use the software anytime they want but also leave if they want to. , the number one winner is the customers. but on the vendor side, the winners are the ones who are able to keep their customers longer. i will pick an example. twilio. if a customer is spending a dollar at the beginning of the year, that same customer is spending $1.70 at the end of the year. twilio is growing with its existing customers.

even if it doesn't get any new it's going to grow really fast. ones,emily: i know there are different battlegrounds within the cloud, and it's not a zero-sum game. but when you look at amazon versus microsoft versus google, do you see amazon always in the lead with the first mover advantage? nick: if you look at the public cloud one of the amazing things , is that power and recent success of microsoft. you know microsoft is showing up , so much more as people think about where to put their infrastructure. emily: and the dod just awarded them in almost cloud contract. $2 billionnick: amazon is amazing, too. amazon does a great job with all this innovation. there is so much competition now, which is so much choice for customers, not to even mention google. emily: does this become a commodity? nick: no, there is so much innovation in the cloud that it is not about commodities. it's about all these companies taking the trillions of dollars

and moving it into the cloud. emily: i know salesforce used to be one of your customers, but what about on the salesforce side and that kind of customer management software? nick: salesforce has been an amazing partner. one of the things that salesforce customers recognize is that when you are getting new customers, you get those clients, how do you get them to stay? many, many salesforce customers have chosen gain site. emily: we seen a lot of consolidation in this space. do you expect to see more of that? would you be interested in m&a? nick: we want to build a big long-term business ourselves. although we certainly may acquire companies in the future, but we think there could be tons of consolidation with the cloud. one thing that would be unique is there are a lot of ipos. it's amazing how many late-stage very at scale companies, maybe not as well-known as slack, but they are ready to go public in the next couple of years when the window is good, so you are going to see a huge surge. emily: does the market

volatility and the shutdown concern you? nick: it concerns everyone in general, but flax business model is one of the most -- slack's business model is one of the best. ight,: ceo of gains great to have you on the show. still ahead new drone proposals u.s. faa could dramatically expand civilian flights. what it means for the future of commercial deliveries next. , this is bloomberg. ♪

emily: the u.s. federal aviation administration revealed a series of proposals monday that would, for the first time, allow drones to fly over crowds at night. the long-awaited proposal

would dramatically expand drone flights, which could be a launching pad for companies like alphabet and amazon exploring commercial delivery. bloomberg's alan levine joins us from washington to discuss. so alan, so many questions. what is the significance of this? alan: well, from the industry standpoint, this is huge. they've been waiting for this for years. it's actually been delayed. the fbi and homeland defense folks tried to figure out how to prevent against terrorists. and all that. it finally moved forward. they came up with a framework that will allow flights over people. it's actually pretty straightforward. you know if it's really small , and won't hurt people, then basically that's ok. then as you get larger, you have to take steps like limiting the speed or putting padding on it and covering the propellers and that sort of thing. but you know this could have a , huge impact going forward. emily: so it's interesting in

the context of over the holidays both gatwick and heathrow airports closing down. police could never find evidence of drugs. they can't rule out the fact that they were never drones at all. what actually happened there? alan: the fact is, we don't really know. police near london arrested a couple and then had to release them, admitting they didn't really have any thing to do with it. we are sort of left with not knowing. and frankly, though, that really i think says a lot about the risk -- the security risk of drones. you know there are various , technologies that can help you track these devices, but they are not all that reliable, at least not 100% reliable. and so you're sort of left with , this situation where this sort of thing can happen. now, i would say that the faa action today is trying to address this. they are moving forward on

parallel tracks, and they are going to require tracking drones, just so that sort of thing at airports doesn't happen. emily: just to be specific, that allow peopled to fly drones over crowds and at night. what is the latest? alan: well, the impacts began to really mushroom today. hartsfield jackson airport, which is the busiest in the united states, we saw i guess volume increasing today. but that triggered long lines at tsa. the airport had to shut down a couple of entry points, tsa security entry points. and so people were being funneled into -- i'm sorry. they shut screening lanes, not entire entry points. but that created long lines, lines of people waiting over an hour.

tsa tries very hard to keep that wait down to 20 minutes, maybe 30 minutes in some cases. that could really be disruptive. we saw things spreading to houston as well as here in the washington area at dulles international airport as well. emily: important information there for anyone traveling in and out of washington. thanks so much. and that does it for this edition of "bloomberg technology." be sure to tune in to bloomberg radio tomorrow. theresa may making a last-ditch attempt to win lawmakers over to her brexit deal. our coverage start 6:00 a.m. local time in the london area. you can check us out at technology. you can follow us on twitter as well. i'm emily chang here in san francisco. this is bloomberg. ♪

yousef: this is "bloomberg daybreak: middleast." manus: race for the brexit vote. brace for the brexit vote. what comes next? china promises larger tax cuts to help support the slowing economy. manus: mike pompeo tells saudi rulers to expect the kingdom to get to the bottom of the jamal khashoggi killing and hold those responsible. yousef: