♪ emily: i'm emily chang and this is the "best of bloomberg technology." we bring you all of our top interviews from this week in tech. coming up, big tech is in the firing line of the u.s. government. big companies could be set to face antitrust probes. and scrutiny overshadowed apple as it rolled out its new hardware. we bring you the key takeaways. drones the key to amazon

locking down its deliveries -- the keyes -- are drones to amazon locking down its deliveries? shares tumbled at the start of the week after news broke these companies could be the target of antitrust probes. are --le's case, they the department of justice is mulling an antitrust probe and has restriction over a potential apple pro. meanwhile -- probe. meanwhile, the ftc is looking at whether apple practices harm competition. google makes up over half of digital ad revenue and their closest competitor amazon has 9% of the market. the digitaldominate ad market but does own up to half of e-commerce. we also learned a potential amazon probe fall under the ftc. the director of the enforcement policy and bloomberg's senior editor for global tech join us for reaction.

>> what we have is a political reality, not get a legal one. the tech environment is big, complex, and intimidating. so our two antitrust agencies have met to divvy up the playing .ield, so to speak emily: does this mean that they will or that an investigation could be imminent? >> i am cautiously optimistic that there will be investigations. ftc and doj do not normally talk about divvying up matters. the process is called clearance and they do not normally have those discussions. clear, you are optimistic because you are in favor of breaking up the company's orbit -- or believe there is a case? >> i think they need to be, at a minimum, investigated.

once all of the conduct is unearthed, that is when you decide the best remedy. whether it is breaking up or bringing in case. i would not take breaking up were unwinding acquisitions off of the table. but the first step is to investigate. i am optimistic. emily: is there any difference in the way any of these companies are being explored? >> they have to be, the cases are different. different strategies and levels of domination in their respective industries. but what we are seeing is a rare political consensus in washington. not just amongst folks like sally at the open markets institute, but on capitol hill. you have senators like josh holly talking in this a way about how tech is bad. not a source of innovation, but a source of peril. there are folks on the right who

think social media companies are biased. folks on the left worry about how foreign entities have used these companies to manipulate elections. very much an overarching sense that something needs to be done. we are seeing the ftc and doj react to that. emily: how much of this is a result of what president trump wants to happen? and how much is it the result of a bipartisan consensus? >> i think it is more of a result of the mounting pressure around the globe. what we are talking about are matters that europe started investigating 10 years ago. the u.s. is late to the game. there are jurisdictions around the world who have been investigating these companies. mountingk it is just pressure from consumers on the left and right side of the spectrum with the political will to enforce antitrust laws.

emily: bloomberg's brad stone and sally covered with the open markets institute -- hubbard with the open market institute. what is the difference between the agency's actions and congress? a former assistant attorney general in charge of the antitrust division explains. >> that process will play out publicly. it is unlikely to have a major impact on what the ftc and doj will be doing if they decide to investigate. those tend to be highly , on thetial, nonpublic merits. and divorced as much as possible from whatever political debate may be going on. emily: for reaction, we spoke with charlotte from the policy counsel for public knowledge, a worked ino that, she the federal trade commission as well as a bloomberg senior analyst for antitrust. procedural, but

also indicates an investigation is likely. this is the type of process they are not going to go through if they are not going to open an investigation soon. but it could happen they end up not opening an investigation. emily: jennifer, how are the agencies different? is the objective ultimately exactly the same? jennifer: ultimately, both would be conducting broad investigations. when i say both, i mean the law-enforcement agencies, the doj and the house judiciary committee. but the difference is the ftc and doj are looking at conduct to understand if these companies have engaged in conduct that goes beyond just aggressive competition and crosses the antitrust line and has harm to the competitive process and consumers. in congress, we look a little bit more broadly. we look at not just conduct, but how our economy has changed with technology and whether or not the antitrust laws can handle policing these companies.

and whether legislation is needed, or some sort of changed antitrust laws, to rein in the power of these tech companies. emily: the doj has oversight into an investigation of apple and google while the ftc takes facebook and amazon. charlotte i am curious about the , role of congress here. is that just for the public to have these hearings and do this investigation? or could that lead to policy and regulatory changes? charlotte: i think that is why the congressional process will be crucially important. the agency process as bill baer said earlier, is going to be secret. the public is not going to have a lot of insight into what is going on. but i think there is a good chance that there are additional problems caused by these companies that are not antitrust violations, but different types of problems. we do not have an expert regulator for digital platforms.

having a more public process in congress could build a record to have some new legislation to address these problems. emily: jennifer, are any of these four companies a bigger risk than others or at bigger risk of being broken up or being regulated? jennifer: i think it is difficult to say because antitrust investigations are very fact intensive. really, it depends on the facts and what the conduct is that the federal trade commission and the department of justice finds that they do not like and what the proper remedy is to fix that problem. usually, the remedies are fairly narrowly tailored. but if, for instance, let's say there is legislation like the type of legislation elizabeth warren is talking about where a -- where we ruled that a company cannot run a marketplace and also be a participant in the marketplace.

then a company like apple or amazon would have a bigger risk because they are companies that run a marketplace and compete on that marketplace. emily: what could the possible penalties be? i mean, i know this will take years to play out. but what are the scenarios at the end of a five or 10 year plus road? charlotte: at the ftc, we like to say remedies, not penalties. the goal is to promote competition. it is often not actually intended to be a penalty. with some remedies, of course, divestitures could be on the table. it may even be significant divestitures like a breakup. it is seen in the courts as a -- though that is unlikely. it is seen in the courts as a very severe remedy. another remedy might be interoperability requirements. that is a major way of promoting

competition. these markets are characterized by network effect. the more people connected to the network, the more valuable it is. if you make that network open up and allow other competitors to interoperate, that can address the network effect power and create more competition. emily: that was charlotte of public knowledge and bloomberg's jennifer. coming up, apple showed off the next generation of software and features but the announcements were overshadowed by the threat of government scrutiny. and if you like bloomberg news, check us out on the radio and in the u.s. on sirius xm. this is bloomberg. ♪

emily: apple unveiled a new era for apps and software at its worldwide developer conference. here is apple's senior vice president of software engineering talking about the new version of violence -- of

ios. >> ios 13 is packed with new capabilities, but we know nothing is more important to users that performance. -- than performance. so we worked to make everything faster. things like unlocking face id, now 30% faster. emily: but on one of its most important days in the year, the tech giant was upstaged by a report of an antitrust rope led by the department of justice -- probe led by the department of justice. we got reactions. >> nothing about it. and it was developers, they are the most enthusiastic fan boys there are. so there was a lot of noise and clapping for just about everything. the typical -- particularly for dark mode. emily: they said it looks a lot like the bloomberg terminal. >> there you go.

but it was a classic case of apple showing the glitzy kind of things they do and playing some serious catch-up. maps,t things like apple isn't it like, didn't i see that on android like three years ago? they are trying to do some interesting things and recognize some mistakes. they are pulling apart big products. i think they are resetting themselves in a couple different areas. but all in all, a reasonable about. i am a hardware guy. emily: what about the $1000 stand? >> that is the talk of bloomberg today. is $6,000 andro then there is this new display 5,499$. 5040 999 --

but there is not a stand, so i'm not sure what you want me to do. emily, do you want to come to my house and hold up the stand? emily: i cost more than $1000. changeslk about these to the new era for accessing apps and itunes going its own way, essentially. >> a few highlights, one is ipad ios. you used to have an ios that ran on the ipad and i touch -- ipod touch. they have chosen to rebranded. for all intents and purposes, they are changing the name and adding new features. to bes great, but it is seen in people will ditching macs and pcs for ipads because of these changes. emily: how significant is this? >> mark brings up a great point. toy make these advancements

make the ipad much more computer-like, although missing a mouse tool. become this interesting gray area you have got between ipads and mac os. on the high-end, apple can push mac pros on to those who wanted, it,in the middle -- want but in the middle, they are creating all of these questions. there is a lot of crossover, which some people say is good, others say that is confusing. , now i hadth ipad os to for five the different oss. isn't the idea to make it easier for developers? >> exactly, thank you for bringing that up. [laughter] it is what they are calling project catalyst, the internal name for years. years ago when it was called

marzipan. -- ago, it was called marzipan. the idea is it should mitigate it a little bit. and the thing about the mouse, you can connect a mouse as an accessibility feature. but the thing i want to now, some of these gestures and new features are confusing. i will be up to get the hang of -- hang ofuys will it, you guys will apple obviously does, but what about people coming to the ipad for the first time? i think it will be difficult to get a hang of all these new gestures. emily: i wonder if it will be a generational behavioral shift. >> there is some of that. even the demo, the guy trying to grab it, it did not work once or twice. apple used to talk but how you would shake your device. you get these weird changes over time in terms of interactions

that are efforts to overcome the fact that certain pieces are not quite there. on some devices, you have standard means of interacting with them and other devices. they are trying to figure out other ways to move forward. generally, apple is quite good thingsng up with these but it is hard to make these changes. emily: they played up privacy, they played up the evolving health offerings. there is a new, things but it is hard to make these changes. natural, computer-generated series -- siri. what do you think about this antitrust issue? >> i was thinking about this earlier, and apple knows they are in the crosshairs because they are a big tech company. and one of the things they say on stage and i have to believe that they are not a company like the others. if you look at the iphone marketshare, it is way less than 50% globally. looking at the ipad market share, it has come down. share, it ist

technically a flop. looking at the apple tv, that has low market share. the apple watch has high market share. where terms of the general antitrust behaviors, apple does not hit a lot of those boxes. emily: even though they are the gatekeeper for all of the apps used on any apple device. that is true, but they make a good argument given that it is they are store -- their store. they did try to make it more that isopen, coming out with nw developer tools. they could easily say we are going above and beyond any other platform in order to be inclusive. i see why, on the surface, it could be an issue. but i think that apple, on this one, has a good art. -- good argument. up, if amazon gets

its way, you may no longer be looking out your window for the delivery man? . instead, you may just be looking up to the sky. this is bloomberg. ♪

emily: it was about six years ago when amazon was touting its octocopter, a drone that would bring packages to your doorstep. that has not come to pass, but this week, the e-commerce giant unveiled a new ai drone to be used in deliveries of small goods. amazon said it was built with components designed to meet faa regulation. in april, alphabet subsidiary wing became the first drone company to win faa approval to operate as a small airline and is planning its own delivery test. bloomberg's regulation editor, john morgan and tom forte, a senior research analyst, spoke

to taylor riggs. tom: going back in time when amazon first talked about drone delivery on a network television show, our viewpoint was they were trying to basically break the duopoly of fedex and ups, to the extent that we still see the cost of delivery as the achilles' heel of amazon's business model, to the extent that fedex and ups are able to raise rates every year, even during the great recession. the fact it has taken years to get this far, essentially a beta test for drone delivery, suggests that technological and regulatory hurdles are still quite significant for this rollout. but when you think about its ability to empower one-day delivery, that offsets some of the pressure from fedex and ups. this is an important issue from amazon. taylor: jon, you heard tom talk about regulatory hurdles. we do know they need regulatory -- faa approval. any indication of what the

timeline for that might be? jon: they have been working behind the scenes. we know the federal aviation administration give them permission to do testing. they are still a ways off from coming up with the complete regulatory passage that will govern how the business will be conducted. as often happens in the high-tech industries, policymakers let the technology evolve, then set rules for the road. so far, we don't know when that is going to be done, but they are working on it. taylor: tom, talk to me about how this fits in amazon. so often, we talk about their high-growth profit margins, like amazon web services. how does this drone fit into your overall thesis for the company? where do you expect it to start to make money? tom: absolutely. to the extent that amazon is able to deploy technology to materially improve shipping costs, i think this is a big

profit-generating opportunity for amazon. and if you look at their recent performance, what you are seeing is an increasing mix of third-party unit sales on the platform, which have been -- which is then beneficial to their profits as they get higher margin when someone else is on the platform and they collect a commission, rather than amazon itself. to the extent of lower shipping costs, this could be a boost to profitability. taylor: jon, talk to me more about alphabet's wing. back in april, that was the first to get approval. amazon seems trying to play catch-up. what do we know about how different this is from wing and how alphabet has been leading the stage on this? jon: we have been waiting for amazon to pop up. alphabet had been more public. we saw the tests last year where they were delivering popsicles and burritos to customers. amazon, finally, the company we most associate with rapid

delivery of consumer products finally has rolled out this technology, which is somewhat different. i think the video there reflects alphabet's program involved lowering the goods from a hovering drone with a rope and pulley. amazon is taking a different approach. they are actually going to come to your lawn and land, or within a few feet of the ground. that required more technology. they have included some artificial intelligence they say will allow them to spot clothes lines, pets and things, and land safely. taylor: tom, i finally want to ask you, in the last conversation we were talking about the probes and some of the antitrust and breaking up some of these monopolies. this, of course, seems to be amazon's foray into helping gain on pricing power and insulate themselves from pricing pressures. is this the right move at the right time? what sort of backlash do they face now? there are some concerns about a monopoly.

tom: definitely. in one paper we just published about the convergence of tech and retail, the death of amazon one of the things we talked , about was regulatory risk. specifically, would the company be required to separate the aws unit from retail? we don't think that would affect the long-term performance of stock. to the extent that -- i think as long as amazon -- for example, they recently dropped the practice of requiring third-party sellers to offer products at the lowest price point. that was something they may have been caught on antitrust. to the extent that this is about enabling sales on amazon and to the extent that they offer good opportunities for third-party sellers on the platform, i don't think this would trip antitrust. emily: that was bloomberg's john morgan and tom forte. coming up, google announces a multibillion-dollar deal to buy a data analytics firm looker. is it the time for m&a as

antitrust scrutiny ramps up in washington? and we are live thing on twitter. be sure to follow -- live streaming on twitter. be sure to follow our breaking global news network tictoc. this is bloomberg. ♪

emily: welcome back to the "best of bloomberg technology." i am emily chang. google announced $2.6 million expanding and offering to help customers manage data in the cloud. the deal is google's biggest. we have all the details. if i would call this a big acquisition in terms of google's size. million is a lot of money, but when you're talking but the cloud world where we have seen

acquisitions in the last seven to eight months, this is pretty small. there was a lot of pressure on google to do something to expand its size, at least from the analyst community and investor community. we can debate whether google cares what they have to say, but this acquisition was not as big as a lot of people were hoping for or expecting. as you explained in the intro, this is an incremental change. it is a product that a lot of google cloud customers are already using and they will be able to sell them together. emily: we were just looking at graphics showing past acquisitions, and one of their biggest acquisitions, motorola, didn't turn out so well. some would argue that the nest acquisition has not been a success. otherwise, double-click, youtube, waze for sure turned out to be phenomenal. i wonder if google is scared of its own track record. gerrit: google generally believes that it can solve its own problems. this is an engineering focused company. this is a company full of

essentially the smartest people in the world who think they have the right answers for things. a lot of the products they have developed that have been successful, chrome and search as, which is potentially one of the most successful tools ever developed in history if you look at pure profit. generally, the attitude within the company is to build rather than buy. not all solutions you can build on your own. emily: google is third to amazon web services and microsoft in the cloud. they've got a new ceo, who you spoke to today. he told you people asked us for months, are you rushing to do acquisitions? we have been very disciplined in building sales, market capability, and have chosen complementary technology that a lot of customers will find value in very quickly. what did he have to say to you about buy versus build when it comes to gaining share in the cloud market? gerrit: obviously, he would not tell me what his acquisition

strategy was going forward, but it is true. most of what he has been talking about, despite being asked about m&a to his own admission has been about building his own sales force, focusing and narrowing google cloud's focus on a few industries, and getting good at selling into that. google is an engineering organization, they have not always had a strong sales culture. that is what he is trying to build. i think if we take them at their word, that will be their focus. maybe these more bold on, smaller, incremental acquisitions will be the norm rather than a large transformational one. emily: meantime, you could call it a more incremental acquisition, but washington is turning the screws on big tech, examining potentially google and alphabet for antitrust issues. is now the right time to be doing this? gerrit: this deal was under works before this weekend when we saw the latest news about a department of justice

investigation into google regarding antitrust. it is important to note that in the cloud, google is not dominant at all. they are far behind amazon and microsoft. they have had trouble closing that gap and they are far from meaningfully catching up to those two companies in the cloud space. truly looking at cloud is not going to be the approach that regulators will take. but of course in this political environment, facts don't matter much and i am sure that there will be some people who use this as another political point to show that google is getting too big. meantime, google is leading the way in the business of streaming games to the internet, introducing pricing for its titles ahead of its competitors. i spoke to the vice president at google. are offeringat we is incredible value for gamers.

remember, they don't have to buy any hardware. there isn't a custom game console or high-end pc that normally costs hundreds of dollars. for $129, you get a controller, limited edition controller, you get a 4k streaming chrome cast, you get the full "destiny 2" experience and three months of stadia. it is an incredible value. gamers can play the games they want to play without having to go through the hassles of downloading and installing and patching and updating and all the rubbish that sits around traditional consoles and pc's. emily: don't you think we are facing a subscription overload with all of the entertainment streaming subscriptions? certainly there are many other gaming alternatives. what is going to convince gamers to choose google? >> what stadia represents is a phenomenal value. the games that gamers will get to play they can use on any screen. their tv, their pc, their laptop, tablet, and phone. no other service does that.

so, the value is incredible. but we also recognize that not everyone wants to subscribe. in addition to the stadia pro, which is $9.99 a month, there is stadia base, which is free. they can buy the games and play them when they want to. emily: are you trying to get exclusives? gerrit: of course. yes. we have recently announced the formation of stadia games in entertainment, which is our game development organization led by a renowned industry veteran, jade raymond. she will be building out our exclusive content for stadia. plus, we are working with a number of third-party companies to bring their games to stadia exclusively right now. emily: game streaming is on the rise. you have microsoft and sony doing something together. you have got apple arcade. potentially your price could impact the price they decide on their service. what are you expecting from the competition and how are you positioning yourself relative to them?

>> first of all, i think this is a general trend in the industry, as we move toward the streaming future. the technology is there now and obviously google has some extraordinary capabilities in this area. we have been investing in data centers for 20 years, so stadia is standing on the shoulders of giants of the technology that built and created youtube and other high-performing services that serve billions of users. the timing is ready now to deliver a very high-quality experience to gamers. stadia allows you to stream at up to 4k, 60 frames per second. that is only possible because of the innovations we have made. emily: do you think game streaming will take over before there is a new generation of consoles? >> i think game streaming gives players an alternative, and it is a future direction for the industry, but it is not going to happen to everyone overnight. i think that the good news is that the innovation means better

games, it means better content for players. so, what a great time to be a gamer. emily: does the innovation work with multiplayer games? there is skepticism that streaming will not work on a multiplayer experience, be any better than a console or a computer, and can you do it better than microsoft and sony? >> the great thing is when you have a streaming technology, the multiplayer experience is even better, because all of the players are on the same technical backend, the google back end. all of the players are connected via the same proprietary google technology using our own fiber networks, on which there are hundreds of thousands of kilometers worldwide connecting all of our data centers. actually, the experience of multiplayer will be far better than you can get on traditional, historical platforms. emily: how would you rate the experience now? this is a technological problem that you have been working on. how much of the kinks have you worked out? how seamless is this? >> we have been working on this for a number of years. we have been testing privately inside of google for a number of

years. we tested publicly last year with project stream, partnering with ubisoft to bring "assassin's creed: odyssey," which is a demanding, graphically rich title. we learned a lot from that experience testing with hundreds of thousands of people, and now what we are able to do is to innovate even more in the way we compress the data and bring the high-quality experience into people's homes. emily: phil harrison, google vice president. coming up, the rise of digital in china, how they are testing beijing's great firewall. we will discuss next, this is bloomberg. ♪

emily: the regime of china's president xi jinping is one of the most restrictive the internet has ever seen. beijing spends about $180 billion a year on surveillance and censorship tools like the great firewall. the controls are tested by a new

group of tech savvy activists. bloomberg businessweek editor jeff muskus joins us. jeff: some like the folks at greatfire.org, a collection of activists that have been up and running since 2011, they do their best to provide a jumping off point for people who are in china and want to use -- either through browsing tools are or social media -- a different kind of site they don't normally have access to if they abide by the rules of the road. but we also spoke with folks including laborers that may be planting trees and spraying pesticide, they are unlikely activists as it gets tougher and tougher to speak up online. emily: i was living and working in beijing for the 20th anniversary for the tiananmen square massacre. it was about the same time

facebook got shut down and twitter got shut down. and any time we aired a story about tiananmen square or showed a video, that would be blacked out in china. how has that restriction -- how has censorship changed or increased under xi jinping? it has always been there, to a certain extent, but it has gotten more restrictive and not less. jeff: he certainly made good on his annual promises to crack down harder and harder on most of the ways that people are allowed to express themselves online in china. some of the biggest tools at his disposal to do that include very publicly cracking down on apple to force them to remove hundreds of virtual private network apps from their app store. if not counterproductive, it has been unsuccessful.

emily: there was a sense when i was there, and it is 10 years ago, young chinese students were much more concerned about getting a job and more concerned about the economy than they were about political freedom. do you get the feeling that is changing? or that there is more of a push back against xi jinping's regime? jeff: you are probably right that there are a lot of people that are still very happy to sort of put their heads down and not become targets. the lesson of the story is that it can be a very lonely fight. and so the folks like the great fire people operating from the shadows or these laborers that are willing and have spent time in jail for complaining online about things their local government officials are doing,

they tend to argue that the case they are making is to try to slow the sensors down or get people to think twice about the compromises they are making. they are not turning the tide just yet. mountingg tech started defense long before the federal trade commission decided oversight of the biggest tech companies. the big four have been spending big on lobbying and staffing the legal teams with numerous antitrust lawyers who served in the government. in the first quarter of this year, amazon, facebook, google spent a combined $11 million on lobbying. is there a sense these companies foresaw what could happen given what was happening in europe, and started to prepare years ago?

david: you definitely get a sense talking to people close to the companies down here in washington, outside lawyers in their policy shops, that something like this was almost inevitable. there was sort of a feeling that some of these companies were resigned to some action in one form or another. you had some of the companies that are pointing at one another about who is most at risk for investigation. a lot of this comes down to the fact that there is so much in the atmosphere in washington, so much criticism of the companies both on capitol hill among antitrust lawyers and at conferences. you can go to conferences almost once a week where this is a subject that is being talked about. emily: what are the companies themselves officially saying? we are getting dribbles from outside counsel, sometimes from sources within the company, but do we have an official party

line? max: no, i think officially, these companies are very conscious of the ways in which they have let people down. we have seen that messaging come out of facebook and google most clearly where, you know, you have a lot of talk about responsibility and a renewed focus on our role in society. just to build on what david was saying, a couple of years ago, when we saw mark zuckerberg going around the country on this weird photo tour where he was posing with iowa farmers, everyone was kind of scratching their heads and saying what is he doing? in retrospect, it was clear. he was preparing for this coming storm. when you look back and think about tim cook stepping out and becoming more of a voice. a lot of tech leaders years ago started to realize that this was coming and started preparing and started working in the public relations levers. emily: there was speculation of zuckerberg running for president

back then. that now seems a lifetime ago. talk about the people joining these legal teams. who are they? they are coming from the doj, former doj folk and elsewhere within the government? david: many of these companies have hired over the last year, well before this week's news, a number of antitrust lawyers who worked at the ftc and the justice department. and these are people who have experience in conducting investigations into conduct as well as mergers. they also have very large public relations and policy shops here where they conduct their lobbying on capitol hill. in addition to that, they all have very prominent law firms, armies of lawyers who would be ready to go to work if this

thing, this scrutiny turns into real investigations. emily: in addition to industry trade groups. max, the idea we seem to be getting from officials talking about the company's positions is that these companies will try to make the case that they are actually better for competition than not, that they support small businesses and competition between small businesses. do you think washington is going to buy that argument? max: it's hard to say. it depends on how you look at it. it's 100% true that online advertising has created opportunities for smaller businesses. the other thing about this from an antitrust perspective, antitrust laws are mostly focused on consumer harm. all of these companies are -- google and facebook are offering services for free. amazon is offering lower prices.

the issue, the vulnerability for these companies is they all have these big, dominant networks, so if you want to buy a search advertisement, there is only one company, google, that will sell you search ads, pretty much. there are smaller players, but their market share is tiny. if you want to be in social media, there is one company. the fact that they have these dominant platforms is going to be the focus of any antitrust criticism or inquiry. emily: still ahead, how one company is bringing ai to organ transplants. this is bloomberg. ♪

emily: matching organs to donors is a challenging progress.

there are currently over 113,000 americans waiting on the national transplant list. finding a donor is not the only obstacle. one third of organ transplants are rejected by immune system. a molecular diagnostics company is improving that process by bringing ai to transplant care. the company has developed a genetic test to match organs with recipients developed technology to monitor the immune system post operation. joining us is caredx ceo peter. peter: there are two big issues in organ transplantation as you were mentioning. you need to match an organ to a recipient. then after transplantation, you need to care for the patient throughout the lifetime of the patient. we are applying novel sequencing technology to match the organ with the recipient. after that, we are using the same sequencing technology to care for the patients, detecting rejection episodes early. taking sure conditions have the -- making sure physicians have the information to treat the

patient. emily: how does the sequencing technology work? how is it different from a matching process without your technology? peter: this is next-generation sequencing. it is the future in diagnostics. we are applying this technology to match an organ with a recipient on a very granular level. we do that with transplantation overall. in the post transplant area, we can actually detect the dna of the transplant in the bloodstream of the recipient. that is a very novel technology. it is revolutionizing how we can care for patients because it can detect rejection episodes earlier. add on the artificial intelligence platform that can allow the clinician to have a deeper insight aggregating all of the various data streams. it allows them to make better decisions in potentially detecting issues earlier than they can today.

emily: how are you improving success rates? what are the numbers? peter: we have a clear goal to improve the patient's life or three years. we are aware of the ability to impact this and we are building an amazing platform in order to do so. we can focus on immune modulation, focusing on compliance. making sure patients are taking their medication and seeing their doctor on a regular interval. we can focus on standardization and precision medicine. individualizing the care for that patient is what we are all about. we have a tremendous platform to deliver and partner with the transplant ecosystem to make that available for transplantation.

emily: your revenue grew 85% year-over-year. how does this scale? how does this become accessible to more recipients? peter: this is really an amazing growth story. we have built this amazing platform. over the last 18 months, we have achieved 5% patient penetration for kidney patients in the u.s. we see this $2 billion market opportunity. when we talked about it for her -- four or five years ago, people were wondering why that is. they live for 10 to 15 years and there is a recurring revenue opportunity. caredx has a model that follows these patients over a long time and is financially very attractive. but more importantly, we are changing patient's lives by detecting rejection episodes early. scientifically very interesting. emily: how do you expand this

technology? is there any ability to expand beyond organ transplant? transplantation is unique opportunity being at the pinnacle of medical science. you called it the miracle of medicine. and it really is. innovation happens at the top of the innovation curve. this will allow us to learn a lot for other areas. we are doing transplantation for the top 200 medical centers in the united states. once we have built an ecosystem that allows us to have artificial intelligence and augmented intelligence, we integrated into electronic medical records and we can roll the platform out to many other areas. emily: that was peter maag. that does it for this edition of the "best of bloomberg we will bring you

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jonathan: from new york city, i'm jonathan ferro. bloomberg "real yield" starts right now. coming up, payrolls friday delivering a big downside surprise, feeding growth anxiety. uncertainty lingering over the administration's next great cash trade move. pressure building on the federal reserve to cut rates. the treasury market rally continues. some constructive advice after a big downside surprise. >> overreacting to one number can be dangerous. >> you are not supposed to panic over one number.