♪ ♪ caroline: i am caroline hyde in new york, for emily chang. this is "bloomberg technology.' calls to break up big tech getting louder, but can congress really forced change? we will hear from u.s. senator mark warner. ipo,ber files its disclosing that market share is falling in the u.s. and global

bookings reached $50 billion in 2018. and be careful what you tell your amazon alexa device, because thousands of amazon workers might be listening. first, big tech companies have increasingly come under scrutiny from american lawmakers, from calls to make sure that they secure user data to antitrust laws on their business models. it appears some sort of legislation is coming. senators have introduced a bipartisan bill to stop what they say is manipulative designs or dark patterns featured on websites with over 100 million users. virginia senator mark warner wrote that for years, social media companies have relied on tricks and tools to get users to hand over personal data without understanding what they are consenting to. he joins us from capitol hill now. senator warner, thank you for joining us. what do you hope will be brought into force with your bill?

sen. warner: this is the first of a series of bills i will be introducing to try to put ground rules around social media. the bill is focused on something that for many users may just appear to be a nuisance or annoyance, whereby you have agreements you cannot really understand, you might have flashing arrows trying to urge you to always agree, where you can never find the unsubscribe component on a particular site. shown, there'sve actually a great deal of manipulative behavior, for adults and the bill also focuses on children. what we have decided to do is set up an industry-driven standard-setting body that would be quick and nimble enough to move. with larger users, 100 million users a month at the break line. and we would have the ftc as

fallback regulator. from a financial standpoint, a little like the securities, and standpointry group would be towards those dark patterns. i think it is a good place to start. i have other ideas around transparency, content, privacy, where there will be more legislation. caroline: we will dig into those. first, this bill is bipartisan in nature. do you think it will get the committees behind it needed to pass such a bill? at the moment it doesn't seem to have that backing. sen. warner: this is an area where i think many of my colleagues, my background was in technology, so i hope i bring a little knowledge to the floor. i believe all the approaches i will take our bipartisan. i think they are less about liberal-conservative and more about future-past, and there's a growing recognition that the wild wild west days of social media platforms is coming to an lot and i think we are, a

of the commerce committee where this will be referred, deb fischer is my partner on that committee, there is already work around the privacy domain following some of the european models. my hope is that i add these beer pillars that they may ultimately wrapped into a larger piece of legislation. caroline: let's talk about privacy. that seems to be where more consensus is building. would be based upon something like the general data protection rules, gdpr rules in europe? sen. warner: i think there are members in both parties, working bipartisan on looking at gdpr. there's a areas gdpr got right, and certain areas that are a little clunky, but privacy alone i think it will not address the issues we need. i think there are issues around for example rights that we ought to have, knowing when we are being contacted by a human being versus a bot, for example.

if someone says they are posting from new york and are posting from moscow, some indication that may not be true where it originates. and identity validation. i worry about how we grapple with hate speech. having to look at this, some level of identity validation. estonia already does that as the price of entry onto their internet. other ideas we have around transparency. one thing we need to make sure users realize, that these platforms are not free. if we knew how much data they were collecting on us and the value, i think we believe they would be frankly new operators coming to the market. caroline: does it frustrate you have limited the u.s. has been in terms of getting any legislation through? having just made facebook be once again more transparent about terms and conditions so people know their

data is being used. turmoil, hasbrexit managed to put through some issues about hate speech. when will the u.s. be able to play catch up? will day, should they? sen. warner: that is a good point. most of the technology innovation rules of the road over the last 50 years have been set generally by the americans, and i think we are defaulting that leadership. not only did the europeans on gdpr, or a much more bifurcated approach with california taking some of the european models and trying to do them at the state level. i think america acting is frankly in the best interest of some of these tech companies as well, or they will end up with a hodgepodge of regulations all over. just recently, australia put in place extraordinarily challenging rules and regulations around content. these are all issues that will be touched, and if our government can actually step up

to the task and, i do think the good news, most of these don't fall on a partisan basis. as long as we can get focused. there are a number of members who candidly don't fully understand how all these platforms work, so there has been a bit of an education process as well going on. caroline: in some ways, the ceo's of the companies, mark zuckerberg has been out there talking about regulating the company, about regulating privacy, harmful content, election integrity, data portability, saying we need a global consensus. do you think companies like google, facebook, twitter are now more amenable to regulation, and are you discussing with them? sen. warner: we are discussing this with senior-level folks at facebook. they are saying the right words, but the devil is always in the details. i think a great sign would be their endorsement of our bill putting these restraints on

these dark patterns and manipulative processes. i would love to see them actually endorsed the legislation, as well as others. i think they realize the wild west days are over, but whether they really realize that some other basic, underlying business propositions in some of this might have to be re-examined. caroline: how do you make sure regulation doesn't go too far? sen. warner: that has always been the question, and one of the reasons why for example with these dark patterns, i am not setting up a regulatory body to be a government entity, but first saying, can there be an industry driven standards organization that would be more nimble, with a government backstop and the ftc? that has always been the rub. australian set of rules and european set of rules, in india a different set of rules around data localization,

if you end up with a hodgepodge, these companies are not going to be able to provide worldwide service, so i actually believe the value of having regulation come from the united states, hopefully with a light touch, will allow innovation to take place but also set standards on a global basis. caroline: you are a senator with expertise in technology, and you also sit on the intelligence committee. i want to get your perspective, we have to tackle the mueller investigation. your thoughts on the confidence you have in the attorney general and his role? sen. warner: i have been very disappointed by the attorney general. mr. barr has a great reputation as somebody who is an independent thinker, and unfortunately i have not seen that. i don't think he's approached the mueller report, i'm reserving judgment.

i supported the investigation and will accept its conclusions once i actually read the document. and his testimony recently where he basically impugned the integrity of the fbi and the department of justice by saying he wanted to check whether there on, thatng" going sounded like a white house -- spying" going on, that sounded like a white house talking point. he should know, the u.s. discovered that russia through tools like wikileaks, attacked election security in over 20 states. if the fbi hadn't started a counterintelligence investigation, they would have been extraordinarily negligent. and after the fact, when there is no question in terms of the consensus from the intelligence committee that russia acted, and acted frankly on behalf of trump against clinton, is pretty disingenuous. caroline: calling for transparency when it comes to

alsoueller report and technology. thank you for joining us, senator mark warner. two wall street strategists downgraded technology stocks, saying the rally has stretched values to extremes. jeffries lowered their view on the industry to modestly bearish. reduced theirin grade. uber has finally released its ipo filing. what this means for ride-hailing and other unicorns going public this year. if you like us, listen to us on bloomberg radio, on bluebird.com and in the u.s. on sirius xm -- bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪

caroline: uber has officially filed for ipo, making its s-1 public on thursday to give a look at crucial information. ofy generated net income $997 million, on revenue of 11 billion dollars, but $3 billion of operating losses. uber is expected to be the largest ipo this year in the u.s., and among the 10th largest of all time. joining us is mitchell green in santa barbara, and in new york olivia and eric newcomer. we had almosthat $1 billion net income, but because they sold a lot of stuff. this company is losing significant cash. isc: almost like uber

looking at gap financials. because of assets they sold in accounted for operating losses. $4 billion last year, $3 billion this year, $10 billion in operating losses over three years, so this is a massively money-losing company. caroline: which we are not surprised about. olivia, you watched lyft, another lossmaking company that has been hammered in anticipation of numbers coming out. how much are investors worried about lossmaking companies now, when it comes to these unicorns? olivia: it appears not worried at first. lyft came out at $72, went up and dropped several days later, down 1% today when uber's filing came out. caroline: mitchell, i am fascinated by the fact that these companies can grow so big on such quantities of private

capital and then come to the public market with such fear or. -- furor. anything in the filing give you pause? mitchell: first, we are investors in the company. wanted to disclose that. i have not gone through it in detail. obviously we are existent investors, so we know the business well. they did breakout uber eats, which is a good thing. the core business is still growing 40% plus a year. here is the reality, public market investors, and we do public market investment as growth,e crazed for dying to have companies growing really fast that they can invest in. look today at the software company that just went public, 23 times revenues, growing 46% a year, on the road, zoom communications is one of the hottest software ipo's in the last decade, probably trading at

extremely rich valuation. investors are dying for growth. three months ago, if we all sat here and said lyft would be a $21 billion company a couple weeks after the ipo, i think all of us would consider that a wild success. caroline: what you mentioned, you talked about uber eats growing crazy fast. i am surprised how tiny it still and$165 million of revenue, the bulk of the $2.5 billion in the last quarter was just the ride-hailing business. is that not a shock or a surprise? mitchell: i haven't gone through all the numbers in detail. it was filed one hour ago. thei noticed in q4 of 2018, or volumefrom a gmv perspective was about 2.6 billion. i only know that because i knew

that before and i know it was disclosed in the s-1. was surprised, i by how dominant ride-hailing is for uber when it has so many other parts of the business. eric: uber wants to sell this platform vision. of focus is the suite services. but you dig into uber, it is very small relative to the ridesharing business. it is growing on a gross bookings basis, but if you dig into net revenue, it almost looks like it reverses because of the subsidies around growing that business. if you are grubhub right now, you sort of have to laugh for the time being. uber is able to operate the food delivery business sort of unsustainably while trying to grow market share, but it looks small compared to business overall. caroline: this is a company

focused on growth and growth also spending about $1 billion on driverless cars. can you paint the picture of the future of driverless and how important it is to uber overall profitability? at the moment they say they may never be profitable. mitchell: every company that is not making money says that. some economists say autonomous is two years away. i have a hard time believing i will get into a uber or lyft driving me with no one in the car into to three years. i think it is longer away than people think. eric: another important thing in terms of the ability to make money. uber is one of these companies, lyft would be one, amazon would be one and alibaba would be one where they have upward-sloping

cohort curves, where customers spend more and more money over time on the products. think about everybody who joins uber or alibaba or amazon in like january of 2015. over time, those people spend a lot more money over time, and why that is so important, they don't have to reacquire you as a we getr, so every time my guessber or lyft, is they are profitable, because they don't have to reacquire us. one of the most interesting that someone s-1 texted to me before i got on. over 50%, around 50% of people eats, it isr their first time being on the platform, so i think the ridesharing business still has a long runway.

caroline: so able to grow off of that user base continually. i will get your perspective, olivia. we are hearing from mitchell about what this says about the other companies coming forward zoom is, i think a making profit to a certain extent. how much oxygen is being sucked out from these from uber? olivia: it is a stampede of unicorns crossing to the public market, and the appetite is insatiable. then pinterest next week, postmates if they don't end up selling. caroline: i want to ask about international growth. did any numbers surprise you? u.s. and canada dominant. i was surprised how big latin america is versus europe. eric: one amusing thing is the

contrast uber draws between market share and category position. in market share, it says it is small because it sees a huge amount of growth opportunity for ridesharing, but category position relative to competitors, it says in a lot of regions we have over 65%, whether that is u.s. and canada, latin america, europe. uber is both saying we have a dominant position around the world, and yet we think we represent a small share of what's possible, and that is certainly the messaging coming out of uber. being able to confidently say they either have a strong position in the countries they operate in or they own a stake in major players in those regions is a compelling international position. caroline: mitchell, briefly on international growth? mitchell: i think international is very strong. dara is aone, i think

master chess player. he understands that from expedia, which had done some international stuff. they have big investments in southeast asia, russia, china, exciting businesses. latin america. which willth kareem give them a monopoly in the middle east. australia's very profitable for them. back of the envelope, lyft is worth 20 $1 billion, meaning uber's business in the u.s. is worth $40 billion. caroline: we have to leave it there. great to get your perspective on the growth to come. lead edge capital partner and of course investor in uber, mitchell green. olivia and eric with the details. coming up, the man behind wikileaks formally charged for hacking in the u.s. what is next for julian assange,

just ahead. this is bloomberg. ♪

caroline: julian assange's lawyer says the wikileaks founder will fight extradition to the united states, after a sans was arrested at the cuadorian embassy where he pleaded asylum. foraces up to 12 months bail convictions in the u.k., and serious charges in the u.s., , where the justice department charges him. denying a dutch newspaper report companyemiconductor com of espionage. asml says they can still do business in china.

coming, alexa, the ai in your smart speaker is listening to your commands, but is somebody else listening? we discussed next. this is bloomberg. ♪

♪ caroline: this is "bloomberg technology." estimated approximately 74 million americans will use a smart speaker at some point by the end of 2019. those people asking the digital ,ssistant to do something nearly 47 million will do so using amazon's alexa, but while amazon is a is listening to them, it takes the question -- who is listening to a alexa? it turns out thousands of amazon employees are in an effort to .mprove alexa's ai

what does that mean for that technology, and more importantly, your privacy? the ceo of an ai venture working to improve machine learning language joins us. he sold a voice recognition technology company to amazon. and our bloomberg reporter who broke the school. talk about who is listening, how they are listening, why they are listening. scoop.rter who broke the >> they are sent a batch of audio files, a small batch of things people say to a alexa and their role is to transcribe in some cases the data, annotate, pick out what people are saying bigin it, and feed that pile of stuff into the system in an effort to make us smarter and better respond to commands going forward. caroline: many have wondered, thought, joked, then concerned

alexa is listening when it should not be. when someone is building a business like this, how integral is it you listen to humans to be able to build ai? >> great question. the business we are building is focused on enterprise applications and data. as a result, this different checks and balances that come into play because many of these environments and industries are highly regulated. by their very nature, there's different safeguards associated with business applications than there would be for consumer applications. caroline: so the business you are doing has different standards, but how important is it you are able to take clips of humans speaking to be able to improve and adapt on the ai so they learn and enterprise turn of phrase in different languages ? >> we talk about different ways of doing that. one is supervised training and the other is unsupervised

training. unsupervised is when all of it is a completely automated learning process and there are no humans in the loop to make those corrections, as you previously detailed. in the last company, we were betting ourselves on doing it as automated as possible and completely unsupervised because of the issues relating to people's privacy, as are well documented now. caroline: how different is what amazon is doing compared to google? they have google home. you've got siri. have they been listening to perhaps parts of your conversation you would rather wish they did not? >> google and apple, the other major fielders in smart speaker's also have programs where humans review some portion of the transcripts. we do not have quite as much detail on exactly what they are up to, but those companies say ofy strip that voice data personally identifiable

information soy transcriber cannot go in and say find that person. that is something amazon has said as well. caroline: meanwhile, amazon has responded to your story, saying they take the security and privacy of customers' personal information seriously and they only annotate an extremely small sample in order to improve customer experience in a have strict technical and operational safeguards and have zero tolerance policy for the abuse of the system. when you are building a business much do you, how need to win hearts and minds? how much does there need to be more transparency on what data ? being used >> right, so, i think it gets to the fundamental genesis of the business itself. as i stated before, we bet our company on privacy last time, whereas several other ai providers at the time were using humans to correct transcripts before they would return voicemails or phone calls back

to you. it is something that you make an early decision on when you form these companies as to what style of training you are going to be doing, what style of architecture you will be doing. is a point of differentiation. where a think the market will correct itself towards providers that have that as one of their core architectural decisions -- will i think the market correct itself. one of the things i would have preferred that they did a better in is the question of opting versus opting out. it is one thing to state that you can get early access to features or certain enhanced capabilities if you opt in to helping improve the service. it is another to make it a default selection. caroline: paint us a picture of how easy or hard it is to realize someone might be listening to an argument or us singing in the shower, as you

mentioned someone had had on one transcript. >> amazon is not specific at all about humans being in the loop. they kind of mentioned it in language familiar to folks in the technology industry, so that is something i think privacy advocates have suggested they could definitely do a better job of. get your i want to sense of where this technology can go. in many ways, the consumer out there has not really cared about the rumors and speculation and now the evidence that this is actually happening because the usefulness of the case in point is so much there that we'll still buy google home or amazon alexa or echo, and indeed the apple products as well. how can this help when it continues to grow the enterprise? >> from that sense, we have to start before even asking that

question. in some cases, the eu has delivered judgments against technology companies because their privacy policies were not even understandable, let alone what they are actually doing. we have to start were people have a very clear sense of what is happening behind the scenes, and at the same time, as i mentioned, people have different capabilities they are expecting us checks and balances in the enterprise, but i firmly believe market will correct for this because it is something .eople are now very aware of caroline: how big can this type of technology become? how dominant a force will he be in our work and play? you will have more conversations with these technologies than your own friends and family members. that is how dominant and prevalent it will be, and it will be driving trillions of dollars of productivity. it, more sobe

augmented intelligence where it becomes practically a doppelganger to represent your interest in your personal life and in your professional life. caroline: great perspective. thank you for joining us. matt, you will be sticking around to discuss our next story. we're sticking with the theme of amazon and jeff bezos has a dinner for his company's rivals -- a dare for his company's rivals to match employee benefits and $15 minimum watch. -- minimum wage. it benefit everyone? everyone is worried about gross margins to a certain extent. are you surprised by the challenge, given that it took them time to meet the $15 requirement? matt: certainly, and the $15 in wage less year was only after they were criticized for years and years for working conditions

in the warehouse and treatment of the full set the bottom of amazon's letter. it is interesting that amazon can make a policy of not talking too much about competitors. they have preached that night and day, and here is jeff bezos openly challenging the rivals. caroline: and also throwing the challenge in a way weather -- rather more guardedly down to potential regulation coming his way. he seemed to respond in particular to elizabeth moran's perspective trying to show that amazon is helping third-party vendors. can you break down what he said? matt: he opened his shareholder letter, which is closely followed, with and explain should've the growth of amazon's third-party marketplace where retailers and independent sellers can essentially rent space on the company's website and sell their own goods. it has been growing steadily a mix of the company's sales. this is seen by folks as a response to the criticism that amazon is harming folks on its

marketplace. it can compete against them and sell again for with white label goods or sort of forced them to take out ads to compete .ffectively it goes to the antitrust critique of amazon recently and jeff bezos came out swinging saying they are good for marketplace sellers. caroline: there was a great these out today. it's a potentially we are sailing -- we're seeing a scaling back of growth desires to a certain extent, with jeff bezos admitting growth will slow at some point. matt: amazon has been on a tremendous run. i cannot remember how many straight quarters of 20%-plus so you growth for years, run into a problem of large numbers. they are very well known and have great market penetration in the core markets in the united states and some european countries and games are -- gains

are getting harder. once you're at the scale of amazon, it is hard to keep up that pace may be. caroline: sometimes you get almost too big. with a wonderful scoop. so well red across the bloomberg and online. we thank you for breaking it down for us. coming up, 15 companies raised more than $5 billion in ipo's on exchanges in the past three weeks alone. next.s this is bloomberg. ♪

caroline: the past three weeks

past- if you thought the few weeks were a busy time for initial public offerings, just wait. partial government shutdown slowed the start of the year, and since then, companies have rushed to join the markets. bring this into perspective, the sheer flood of unicorns, the stampede, or even companies smaller than that coming to the public markets. >> as you mentioned, we did have a slow start to the year. we did welcome 20 new listings in the u.s. public markets in the first quarter, 19 of those on nasdaq. we had a couple of large offerings right at the end of q1. q2.ing forward to a busy caroline: let's talk about lyft. their first day of trading was a great success. share price popped. since then, the share price has

been under treasure. is that a concern for you in terms of tempting more companies to list on the nasdaq? >> we look at the performance of all ipo's. of overseen u.s. ipos 10%, so that attracts a lot of new investors. one thing we talk to every company about is how the ipo is just a moment in time and the start of an endless series of quarters, and it's all about delivering on your promises to investors. caroline: what about what you re seeing in terms of optimism are we rushing because we are worried about volatility? >> one thing to do from a number of companies as they look would love to get out this year in advance of the 2020 presidential election, which will obviously take up some -- take up a lot of

airwaves and may produce additional volatility. had uber we just choose the nyse, but lyft chose the nasdaq. ft still has a lot of control remaining with the founders. when you talk to corporate or potential clients, how much are they worried about this sort of shareholder control? >> we are big supporters of dual offerings. we are very supportive that companies choose the share structure that is right for them. when founders are the reason investors are investing in those companies, we think it is appropriate for them to be able to offer multiclass share structures. while investors may beg to differ, we think it is about giving companies the choice so they can come to market with a structure that works for them. caroline: these companies are old. when you think about the certain turn of phrase that was coined

back in 2013 of unicorns, one of , and companies was uber now we see a list six years later. does it frustrate you that companies are waiting so long, getting so much venture capital or private capital coming their way that they perhaps do not list earlier in their lifespan? >> i think you hit the nail on the head. companies today have unprecedented access to private capital. one of the reasons we launched nasdaq private market five years ago was to help these companies provide liquidity to shareholders on the long march to being public. last year, we executed 79 different secondary transactions versus in the u.s. public markets, we welcomed 186 new companies that raised when a $7 billion in capital. the private market is now getting to the scale where it rivals the public market offerings. caroline: is the private market driving up valuations too high? in many ways, we worry about the

fact that the likes of certain companies do not actually meet their recent round of private funding. i think you have pinterest coming to the market at a valuation lower than what it raised in 2017. >> any time you have liquidity in the market, it helps define that proper evaluation. as you point out, these companies are waiting up to 10 years to go public. that is a real impact on these companies' employee shareholders. 2/3 employees participating are current companies are looking to incentivize to attract and maintain talent. caroline: how difficult is it to compete against the nyse in terms of listings? who were always the go to for technology. we know the story of what happened with facebook and how you have had to win back hearts and minds to a certain extent. you have a lot of the key unicorns this particular year coming toward you. how much do you have to fight

for your territory? >> i think competition is always great and every market. last year, we were pleased to and the72% of all ipo's public market. while we compete vigorously for every deal, we think ultimately, that serves the companies best to have a couple different options in the u.s. market. caroline: we look forward to seeing how the battle continues to unfold and how new companies continue to come to the nasdaq. we thank you very much. still ahead, will humans merge with machines? elon musk may be close to developing the technology to do so. we will discuss that next. this is bloomberg. ♪

caroline: softbank is increasing its that on insurance leading a funding round. a company which uses ai to speed up claims to process rent from homeowners based $175 million from softbank and others. from says it plans to use the money to expand globally and s.fer new product meanwhile, santos may have, one step closer -- may have come one step closer to connecting your brain to computers. a team with links to elon musk have outlined a system that plugs electrical wiring into the brains of rats. joining us to explain more, sarah mcbride in san francisco. talk to us about this amazing discovery. scientists say they have

done is invented something called a neural sewing machine. that means a needle which can go inside your brain rapid fire just like a sewing machine needle and plant lots of electrodes even to your brain, one every few seconds. they have done this on rats so far. doing it on humans is still a long way off, but it is exciting. caroline: we just that they were in some way associated with narrow link --neurolink -- n eurolink. >> when he started it, elon musk hired a way a lot of top intellectuals from universities. it is a small community, and they all work together in some way. caroline: the sort of picture of a sewing machine is a strong one

when we talk about the brain. what exactly is the process that they claim this piece of academic writing suggests is accomplished of all -- accomplishable? >> they did little tiny ies -- in other words brain surgery -- on these rats. they put the rats under so they could not feel pain but made these incisions in their skulls, put the electrodes in their brains, attached little tiny circuit boards to the back of their head, and every time the neurons near those electrodes fired, those pulses were recorded, so they have a good picture of what is going on on the individual narrow -- the individual neuro level.

carolyn: to be honest, it sounds like something out of "silence of the lambs." what is the positive here? what does it do we could not do before? >> the idea is this will be able to help us with brain-related illnesses like dementia, parkinson's disease, and then long-term, it may be able to withhumans merge computers, which sounds like a very scary technology that elon musk argues we are already almost there, that our smartphones are already part of ourselves and why not taken a step further. caroline: this sort of cyborg theory he holds. >> right. he says computers are getting so smart, we have three choices. one of them good. the other not so good. the good choice is to create a symbiosis with artificial intelligence and the last good choices will either become less good -- the

choice is we will either become irrelevant or the worst choice is we are destroyed. he tweeted about this saying we run the risk of becoming like house cats or worse. caroline: on that happy note, we are going to leave it there. it is a wonderful piece. i urge those viewing to go and read it. that does it for this edition of "bloomberg technology." we are livestreaming on twitter. be sure to follow our breaking news network that tictoc on twitter -- at tictoc on twitter. this is bloomberg. ♪

haidi: welcome to "daybreak australia." counting down to asia's major market open. ♪ haidi: uber shares prime to go public. the ipo will be the biggest in the u.s. this year. worldrnings about the economy. the global outlook is really