♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." hour, up in the next salesforce's biggest deal to date. salesforce agrees to buy tableau software in an all stock deal valued at more than $15 billion. plus, president trump signals he wants to investigate the big tech "monopoly." we will speak to a former top u.s. antitrust official about the state of play. and amazon unveiled a secure

credit card, but should the tech giant be building its footprint in financial services? first to our top story. the recent wave of antitrust scrutiny by the u.s. government is not stopping salesforce from gobbling up the competition. salesforce has agreed to buy tableau software for more than $15 billion. seattle-based tableau helps customers turn raw data into easily understandable dashboards and charts. the move will give salesforce even more way to help customers analyze data. the all stock deal is salesforce's biggest acquisition to date and means they have now 60 companies in the last two decades. tableau shares jumping 30%. theirice of premium to last trading price has increased. joining us from new york, a senior analyst at bernstein who currently has an outperform on tableau.

tableau was your top pick for 2019. what is your take on the deal? >> i think it is a great deal. thanks for having me. this makes a ton of sense for companies. tableau has been moving upmarket. they have always had the best r&d and products. what they had lacked until a couple of years ago was an enterprise salesforce. with salesforce's very large ecosystem and massive capacity for driving sales, it is really a huge landgrab opportunity for salesforce to cross sell tableau into their existing customer base. it also makes a lot of sense for the companies in terms of their mission. both want to use data and information to digitize companies, help customers go through a digital transformation. the challenge salesforce has really had is not having existing systems outside of their crm. tableau can really provide that. emily: adam felicity the ceo,

, formerly of amazon. some say that this isn't one of salesforce's core competencies. it doesn't help expand the core business. of course, you have other competitors out there like google who just bought looker. , talk about the range of reaction. nico: microsoft is out there with power vi. they have been very dominant , particularly because they can sell cloud services and then vi at the same time. some people think the deal is quite expensive, a 42% markup from tableau's market cap. but then people say all software stocks are valued pretty richly these days. it shows that marc benioff is not afraid to continue to buy the companies he covets. he says he was interested in this company for a long time.

as you said, even in this antitrust landscape, salesforce is really benefiting because it is not on the government's radar. the enterprise market is so competitive. because consumers are not involved, it doesn't seem like there's a huge power imbalance between this company and its customers. emily: what do you have to say to the skeptics, that microsoft was eating tableau's lunch, they were about to be in competition with google as well. they are now more protected under the salesforce umbrella but this isn't necessarily additive to salesforce's current products. zane: i think the skeptics will say a couple of things like this is a defensive move. i don't think that's true. in q1, tableau landed a deployment with retailers. if you are landing customers like walmart -- they also have exxon mobil, facebook. some of the most advanced tech companies are already using tableau at scale instead of the

microsoft power bi product. i think that shows the strength of their solution. the win rates based on customer conversations remain strong. they are growing current revenue at almost 40% a year. some will say this is expensive, but if you look at the mulesoft acquisition, that was about 10 -- 16 times forward sales, and this is about 10 times forward sales for tableau. you could argue, for something growing recurring revenue 40% per year, they could have paid more. i think this is a really valuable asset. without being able to look at all the different silos where enterprise have data stored, it is impossible to go through a digital transformation. i think it will be synergistic in terms of what they want to help customers to. -- do. emily: mulesoft, another big acquisition, not as big. put this in the context of salesforce's other acquisitions, not all of which have panned out.

nico: some have not. wave, the old analytics tool, is something salesforce is implicitly admitting was a flop. i think it really shows that salesforce has been on this trajectory of moving from customer relationship powerhouse to a bit more of a general-purpose information technology company. it is not there in the way that microsoft and oracle is, but it is moving in that direction. mulesoft was a data integration company that seemed far outside of salesforce. -- of sale forces wheelhouse. for this, it is starting to look complementary. one risk or perhaps opportunity is that salesforce is now going to be in customers' data centers far more than before. tableau has a business that is considered on premises, or on customers' servers. salesforce has been all cloud

for a long time, deriding companies in the data center. this is interesting and part of a new era, i think, for salesforce, as it becomes a more sprawling company. emily: we will see if there is an offer from an oracle, but that seems unlikely. thank you both. meantime in japan, finance ministers from the group of 20 nations agreed to find a common way to tax digital companies like facebook and google. those companies may end up paying taxes in a company -- country regardless of whether they have a physical presence there. the goal is to come up with new rules next year. coming up, and insiders look at washington's new taste for antitrust action on big tech. our interview with a person who served in the doj antitrust

division. if you like bloomberg news, check us out on the radio, the bloomberg app bloomberg.com, and , in the u.s. on sirius xm. this is bloomberg. ♪

emily: now to a story that continues to develop. the u.s. government has divided oversight for possible investigations into apple, amazon, facebook, and google over possible antitrust concerns. the enforcement is up the department of justice and federal trade commission. the man responsible for the ftc, bruce hoffman, spoke to bloomberg's westin earlier about tech and monopolies. take a listen. >> the antitrust laws don't

punish companies just being big. when companies have big market shares, that is something that matters, it is often a spring board for antitrust enforcement, but it is important to remember that a company could have big market share simply because it does what it does better than anyone else. our job is to determine if a company is big, successful, does it have a large share because it's good at what it does, or is it doing something improper, anticompetitive, that harms competition, and because of that, is big and successful. >> we talked with paul romer, the nobel prize winner in economics this morning, and this is what he had to say. maybe antitrust laws are not the way to go with some of the issues we are facing. this is what he said. >> it goes beyond traditional economic concerns. one of the questions we should be asking is if mark zuckerberg personally can determine the outcome of the next election. >> whether or not he can in fact determine the next

election, certainly he will have some influence over it. that really is outside of your job, isn't it? bruce: it is. it is important to keep in mind that antitrust enforcement is law-enforcement. we look at a set of specific laws in the department of justice and we enforce those. conductlook for his that's anticompetitive, mergers that hurt competition. we are not price regulators. we don't regulate content. regulators competent and we enforce the law on competition. >> you have set up a specific task force to look at what is going on. the ftc overall has an having hearings. there must be some reason for you to ask the question, does our traditional approach to antitrust law really apply in a world driven by network effects that might have a different effect in the marketplace?

bruce: absolutely. let me give you some context here. network effects where a huge issue in the late 1990's. with the dot com bubble, some there was a tremendous amount of fear or in the network space with people saying we have big effects in this space, and do we need to rethink what we do? even with railroads, when you go back to the beginning of the sherman act. one of the things that antitrust has a century long history of is taking broad commands we have in the antitrust laws, taking the most recent thinking on economics, the most recent developments, and put those together and figure out, how do we protect competition given these new facts? we have hearings that are concluding this week. we have a task force in this space. this is not unprecedented. there were hearings in the 1990's under the ftc for much the same reason. given these new developments, what should we be looking for

and how should we be looking? when i was at the federal trade commission the last time around in the early 2000's, we did a similar job with hostile mergers. the governor -- government had lost something like 11 straight with hospital mergers. the government had lost i think 11 straight challenges with hospital mergers. we put a task force together to handle that issue and ultimately that led to changing the way we handle these cases. since then, we have won quite a number of challenges to hostile mergers. emily: that was the ftc director of the bureau of competition, bruce hoffman. i want to continue the conversation with someone intimately familiar with antitrust enforcement. bill baer was a former attorney general overseeing the antitrust division and overseeing the ftc.r -- bureau at the

he joins us from washington. the consensus seems to be that, since these agencies have divided oversight over possible investigations, that investigations are more likely than before but of course could never happen at all. what can you tell us about what is happening inside the ftc and doj right now, whether or not they launch a formal investigation? bill: as you know, i'm no longer inside of either of those buildings, so i don't have a clear insight on what is going on. but since the ftc and antitrust division of the justice department have jurisdiction over monopolistic behavior and mergers and acquisitions, they have a process called clearance to sort out which agency is going to look at a particular industry or practice or company.

based on the reports we heard last week, it sounds like they have worked out an arrangement where doj will have an opportunity to look at google and apple issues if there are any and the ftc will look at facebook and amazon. emily: once they decide those clearance issues, what would you imagine would happen next? is there a giant fact-finding mission? bill: if there's going to be an investigation of any of the four companies, and we don't know, to say giant probably understates the scope of the investigation. looking at a company like facebook, trying to understand if there is behavior that is problematic involves a lot of fact gathering, economic analysis, interviews with third parties. these investigations take a long time. because they are nonpublic, they are confidential investigations, we don't know a lot for quite a bit of time.

emily: president trump spoke to cnbc earlier and talked about the eu investigations, the various eu investigations, into big tech companies. he said, every week, you see them going after facebook, apple and all these companies that are great companies, but something is going on. we should be doing that. there are -- they are our companies. obviously there is something going on in terms of monopoly. if there is one word to describe this, it is uncertainty. what do the president's words signal to you about the desire of the white house and how would that influence the actions of the doj and ftc? bill: it is, as you imply, a little unusual for the president to be taking an apparent law enforcement issues. the tradition under republican and democratic presidents at the justice department and federal trade commission, when it comes

to law enforcement, they need to do things on the merits based on the fact, and not be subject to outside influence. if law enforcement becomes a political tennis ball batted back and forth, it loses credibility and respect in the courts. my assumption would be that these two agencies with very talented people in the leaderships will do something on the merits and decide whether there is a problem after a thorough investigation, and then if they think there is a problem, make recommendations about what to do about it. emily: all four of these companies, in part due to what has happening to them in europe, have been building their own legal teams for years. many of the people on these legal teams might have been your former colleagues in government. they are experienced and they seem to have a deep bench. how effective do you think the

companies will be at fighting this, perhaps even before you get to a formal investigation, given the legal teams in place and the aggressive lobbying they have done on capitol hill? bill: these companies have experienced antitrust lawyers. they should. but so do companies who may believe they have been injured by the behavior of one of these successful platforms. this is what our legal system is about. people will go in and advocate. the fact that you have someone with prior experience at one of the antitrust agencies means that person probably has a good sense of what the questions are that will be asked. it enables there to be a more direct, complete, candid conversation. that is good for law enforcement agencies, too. emily: the doj and ftc had some successes and failures of late. the ftc, success in a case against qualcomm.

the doj, success in a case against aetna. anthem losing in a case against at&t and time warner. what do you think that says about the likelihood of success should investigations be launched? bill: launching a formal investigation doesn't necessarily mean there will be a case brought. there needs to be a factually rich pattern that would warrant antitrust enforcement. as a general matter, both the antitrust enforcement agencies have had a lot more success than failures in the last five or 10 years. part of that is that they don't bring stupid cases where they don't have facts to support the theory of federal harm. the theory of injury to

consumers. my assumption, knowing a lot of the talented people at those agencies, is that they are not going to jump without a good sense that they have a parachute to land safely on the ground. emily: bill baer, partner at arnold and porter, formerly worked at both the ftc and doj, really important to have your perspective on the show today. thank you. coming up, our exclusive interview with the ceo of nokia. what he has to say about 5g. this is bloomberg. ♪

emily: nokia is continuing to push its 5g contract despite

delivery delays. our own caroline hyde spoke to the ceo. he says the company is winning contracts " quite despite the risks to rolling out 5g. has nokia been impacted by huawei being blacklisted. rajeev: i would just say that, yes, there is some uncertainty and unpredictability. on our part, we have been thoughtful with, if you are a customer who wants to swap out your existing 4g, how are you going to do it? we have come up with alternatives so you don't have to delay your rollouts. caroline: the arguments made by german company deutsche telecom, you think it is not correct? rajeev: i don't think on a european level there will be any

delays with regards to security concerns. i think if any, there might be delays on account of spectrum not being available or the economics not making sense for a particular operator. we have four solutions if you want to swap out. they are all doable. they all have pros and cons, but they are doable. caroline: what about the cons that some have paid lip service to that through the trade differences, we will see two different ways of delivering 5g that will be incompatible in some way? do you think that is a risk? rajeev: no. i don't think that is a risk. caroline: what is the key risk when it comes to security? is it a relevant risk to have huawei as a provider? rajeev: it is going to be critical national infrastructure so the focus on security will be there no matter what. it has to be there.

the second is, where is the intelligence on the network? is it at the edge? is it throughout the network? there is no one particular place where intelligence fits. emily: nokia ceo rajeev suri there with caroline hyde. megamerger monday continues. a deeper dive into the biggest acquisition yet for salesforce. is the $15 billion deal for tableau software worth it? and sticking with deals, united technologies and raytheon strike a deal in the biggest transaction ever in the industry. a conversation with both ceos coming up next. this is bloomberg. ♪

emily: this is "bloomberg technology." i'm emily chang in san francisco. back to our top story of the day . it is adamant a monday with salesforce striking its biggest deal ever. the tech giant has agreed to buy tableau software for $15.3 billion. it is a major bid to build out its analytics offering. to discuss, we are joined by michael gordon, ceo of mongodb, a database ecosystem that helps businesses transform the industry by harnessing the power of data. it is all about data of late. what is your take on this accusation of tableau? michael: thank you for having me. the database market is incredibly strategic.

you think about all modern businesses today, data is at the core of what they are trying to do and it is the lifeblood of the modern organization. this acquisition makes a ton of sense for salesforce and tableau given that companies are trying to increase leverage to gain insight about their customers and to drive action from a business perspective. you need a modern data platform in order to do that. in this case in particular, tableau provides data visualization which is helpful, another way of leveraging that on. emily: how does this change the hierarchy or the shape of play in the cloud when you have microsoft with a very competitive offering. you've got apple, amazon of course. how does this change? michael: obviously, a lot of the large players are increasingly

getting into competition and people want to compete against each other in a more robust way. salesforce is one of the pioneers in terms of cloud computing and offering cloud as a service. it does not offer direct cloud services the way microsoft, google and amazon do, but they are trying to control the customer and the customer insight. it is another way to leverage your data and that is what tableau provides. emily: your databases serve companies big and small. you have been on a tear. the stock is up 200% year-over-year. what is driving that growth? michael: the market we are going after is one of the largest markets in all of software. there are three core things about our business. the first is the market, which is incredibly large. $64 billion in 2019. very large market. growing to $98 billion in 2023. the reason why the market is so large and why it is so strategic is when you hear these phrases

eating there is world, or every company is becoming a growth company, what that is really signaling is that every company is increasingly competing for customers and trying to drive competitive advantage from their software applications. at the heart of every one of those software applications is its database and that is where we come in. the second thing is we are disrupting this incredibly large market with modern technology. incumbents have been around for more than 40 years, using legacy technology that was developed and pioneered before the internet, before social media, before the cloud. have come along with a modern , a better mousetrap, that is the most popular database for developers to use. third, what investors are seeing is we are executing well in the market. the platform has been well received. we are over 14,000 customers with household names like morgan stanley. her majesty's revenue and

customs in the u.k., which is like their irs. also, newer companies like coinbase and slunk, really incorporating mongodb. emily: the databases have been the target of various hack attacks which have been going on for a couple of years now. where you've got hackers coming in, stealing data and then essentially holding it for ransom. deleting it on the company's server and leaving a note saying if you want your data back, you have to pay us. what is the status of that and what have you been doing to restore user trust and remedy the situation? michael: all of those incidents are not from our customers but one of the ways we make our software available is the freemium version. users who downloaded our software and who are not following our recommended security protocol.

it is kind of like driving your car in the middle of times square and leaving the keys in it and asking someone to watch it for you. what we have done though, it has not affected any of our customers. it has been a catalyst for sale as people realize the value of the security offering in our commercial product we sell. we have also changed the default settings to make it even harder for someone to unintentionally or intentionally expose themselves. emily: right, so if i understand this correctly, the default settings were more open. you turned those settings on to protect yourself or take the keys out of the car, if you will. do you think the openness of the company was a little naive or that you did not necessarily fully grasp the aggressiveness of the cyber criminal underworld? michael: we are really built as a developer tool. part of what a developer tool is is allowing free flexibility and utility for developers to build what they want to do. originally, the thought was a

a lot of these sort of overly-aggressive security features would inhibit adoption -- or development from engineers' perspective but people would follow the best practices when putting applications into market. as we said earlier, we have adjusted those settings and now the default is more definitively and more in a restrictive mode. emily: michael gordon, thank you so much for stopping by. michael: thank you. emily: another deal made this monday, united technologies has agreed to buy raytheon, creating an aerospace and defense behemoth. $74 billion in sales in one of the industry's biggest transactions ever. ed hammond spoke to united technologies ceo greg hayes and raytheon ceo tom kennedy earlier at the new york stock exchange. greg: this is not about re-creating the conglomerate. we have spent a lot of time actually deconstructing the united technologies we had a few years ago. this is about creating a focused

a&d company with outstanding technology. ed: just comment on this, tom, because if that is the case, if these companies are similar, and it will be a pure play, that shouldn't the regulators be concerned about overlap? tom: they should not be. there is less than 1% overlap in our businesses. at all in those areas. this is a synergistic combination and not a competitive issue. ed: talk to me about the connected play. this nose to tail concept. how is the combined company going to be better positioned to serve the market? tom: i think the combined technologies comes a bit against a major technological challenge. integrating an entire airplane together, the ground system together and the communications between those. one of the things raytheon brings to the table is the area of cybersecurity, providing that solution to their customers.

greg: i think it benefits the entire aero ecosystem. if you think about it with raytheon radars in air traffic control systems, with gps systems, this is more about the connected aircraft. this is about the connected aerospace ecosystem from the time you book your ticket through the flight and departure. it is about controlling the information to make flying safer. ed: you did the rockwell deal a couple of years ago. today, announced raytheon, not of new largest deal. what is it about this environment that is conducive to these sort of megamergers? greg: timing in life is everything. as we thought about technology, the next steps for our aerospace business, i could not imagine a better partner to merge with than raytheon.

when tom called me last summer, we were a little busy trying to close rockwell but the merits to bring these technologies together was so clear. there was never a question that this was the right thing to do. ed: one of the big customers is the department of defense. what will you have to do to convince the government and president trump this is a good deal for america? greg: three points. this is good for america, good for defense because we will bring unparalleled technology. we are also going to save the government money. half of that goes back to the dod on cost reduction. half $1 billion every single year. third, we will create a ton of jobs. 20,000 jobs a year between raytheon and united technologies. unprecedented job creation and high-value, high technology spaces. ed: have you spoken to the government already? greg: we have had some conversations and a look forward to having more conversations later today.

we will have an opportunity to explain to everyone why this merger makes so much sense. it will increase competition, not hurt competition. ed: talk about the headquarters being in boston. that is where raytheon is based. what does that mean from a tax perspective? tom: the tax perspective will remain the same. we don't see a major area there. we do see the ability to leverage technology that resides within the boston area in terms of the engineering folks and sciences we can hire and bring into the company. -- scientists we can hire and bring into the company. we will be hiring over 20,000 people a year with this new company. we need as much talent as we can get. boston is one area we can bring that talent. one other element is that the department of defense is going through a major modernization of all of their systems. this allows us to tap into the technology that utc had and join that with our defense-related technologies in a way we can deliver better solutions to the department of defense and in a way we could not do before. ed: we are in this environment

where we are seeing, as well as antitrust, national security concerns, posturing around sovereign issues when it comes to letting big deals through. any concern you will see pressure from europe or china? greg: fortunately, we don't need to get chinese approval. there are 10 countries, the rockwell deal had 17 countries including china. because there is such a small overlap here, we don't see any competition issues as relates to the eu, u.s. or any other countries we compete in. we are going to create a company that can compete internationally on a level playing field with all of these countries. emily: ed hammond with united technology's ceo greg hayes and raytheon ceo tom kennedy. coming up, customer expectations are changing dramatically as businesses move to the cloud. how customer platform gainsight is helping companies close that gap, next.

this is bloomberg. ♪

emily: it has been a busy few weeks for the cloud market. last week, google announced plans to take over looker. just today, salesforce agreed to buy data analytics platform tableau. as competition in the cloud stays hot, customer success is becoming a top priority for companies. in fact, customer success managers is one of the fastest-growing jobs, according to linkedin. joining us to discuss as part of our work shifted series, ceo of gainsight nick mehta.

it is a customer success platform. salesforce is an investor in gainsight. tableau is one of your customers. what is your take on this deal? nick: i heard about it this morning just like you. it felt perfect for both sides. tableau is one of the most respected companies in general. salesforce is obviously proven they can buy companies and put them to the distribution channel. i think both companies are committed to customer success. emily: how does this change your business? there is obviously a shifting landscape within the cloud and lots of different companies that own parts of the cloud and bigger companies that are trying to own more and more inside the cloud. how does that change your position within it? nick: it keeps accelerating. if you look over all, a subscription economy index and shows companies in subscription businesses are growing five times faster than the average company.

subscription economy is taking over the world. it shows up for consumer lives netflix, uber, etc. , it shows up at work as well. because of that, all of those companies cannot afford to sell to those customers and move on. they've got to make them successful. emily: people want subscriptions, but in a way on a consumer level, it is something customers love to hate. maybe you forget what you signed up for. maybe you don't want it anymore. you don't even realize you are paying for it. how does that translate into enterprise and how do you make sure that those customers stay happy? nick: you nailed it because subscriptions are great for consumers. we get to choose what we want. we get to turn it on and in most cases, we can turn them off. sometimes a phone call to make it happen. the phone call is annoying. but, we have a choice. in the business world, that is happening now. before they used to buy things, , install them and no ability to switch. you were just stuck. in this new world, customers have choice and all the vendors, whether it is salesforce or tableau, have to proactively make sure you are using the stuff you buy.

you are getting more value than any other alternative. emily: let's talk about slack, a company that is going public in the near future. another one of your customers. filing for a direct listing which could happen as early as next week. what do you make of this moment slack has chosen to go public in given all the market volatility, the uncertainty in the economy? and some ipo's have not been doing so well. nick: we talked about it before, it is a very special company because it is this triple threat of customers love it. we run our whole business on slack. the numbers are amazing in terms of growth rate, efficiency net retention. the customers keep spending more money. they are a great culture. it is one of those businesses built for the long-term and can go public in any market. emily: paint a picture of the future for the because the business you are in is trying to make the customer experience more seamless for the customers of those businesses.

what does the enterprise offer in five years? nick: there was a huge turn that is happening. we have dissidence where -- dissonance where technology is taking away more and more of the humanity and the people in business. on the flipside, all of us are longing for a more personal and human connection to the businesses we work with. we are not ready to turn the whole world over to machine learning. we need that human connection. companies are saying i need to treat my customers more like human beings. i need to be proactively focused on customer success in making sure they are getting value. they're also saying i need to treat my employees like human beings. i need to give them great technologies that are helping employees be more successful. there is this big approach, we call it human-first business, that is changing the way people think about work. emily: fascinating. nick mehta, thank you again for stopping by. nick: awesome to be here. emily: coming up, amazon is opening its awards program to a new group of shoppers.

those with a low credit score. why the e-commerce giant is tapping into nontraditional cardholders, next. this is bloomberg. ♪

emily: amazon is launching a new credit card specifically for those with bad credit. the e-commerce giant has unveiled amazon credit builder that lends to shoppers with not just poor credit history, but even no credit. users can build up credit and eventually graduate to another amazon card. joining me to discuss is an industry analyst for creditcards.com, ted rossman, and our spencer soper. how exactly will this work? spencer: if you are 18, you apply for the card online. if you are accepted, you need to a $100 deposit to that bank. i'm still unclear on how that happens.

from there, you basically got a secured credit card. i am not sure exactly what the value proposition is other than the credit building aspect of it. and what differentiates this from a gift card. emily: ted, is this a good business for amazon to be getting into? obviously, this means taking on more risk. ted: i'm actually a big fan of this because the bank is taking on the credit risk, but with a secured card, there is no credit risk because the customer is putting up a deposit that equals the credit line. for me, this is about amazon expanding its audience. there are 79 million people with subprime credit according to fico. 53 million, many of them young adults, who don't have a credit score. they don't have enough information about them. i think it is more for amazon to -- i think it is smart for amazon to tap into this. emily: what do you make of the fact that not only is amazon getting into the credit card business, but also apple?

is this part of a larger trend? ted: it is definitely a part of a larger trend. i would also throw ultra fico and experian boost in there. these are services geared at getting people into the system. people that have bad credit, people have no credit. in those two cases, they will look at your bank account and give you an alternative credit score. it speaks to the strength of the economy and lenders one more people in the pool. emily: what's in it for amazon? spencer: amazon is trying to lock people in this huge e-commerce giant and it's had so many prime members. but those members skew affluent, higher income. if it wants to keep growing, it has to drill down into the lower parts of the economic spectrum including low-income people, people with bad credit and this will help them peel away more business from walmart, target and stores where people are using cash if they don't have credit cards.

a lot of it is expanding the customer pool for amazon. emily: over the longer-term, how disruptive will this be to the credit card giants, mastercard, visa? ted: this does process through the existing rails. apple card works much the same way. right now, these technology companies are getting in on banking but are doing it through the partner model. they are not totally revolutionizing it like we have seen in china where some of the social media companies like tencent and alibaba are actually becoming the rails. they are becoming visa, mastercard, amex. there's a lot more regulation in the u.s. so really right now it is more of a partner model. emily: spencer, when does this get underway and how fast? spencer: you could do it right now. it is live.

again, the big question is if you have bad credit, do you want to send that bank $100 so you can spend another $100 on amazon? that would be the downside. it is locking you into the amazon card where a lot of people are better off going to their bank or credit union or pursuing some other secured credit option that is more flexible. emily: we will be interested to see how it all evolves. spencer soper, for bloomberg, and creditcards.com's ted rossman. thanks to both of you for joining us. microsoft says its next-generation xbox gaming console will be four times more powerful than the current one. it will be released in time for christmas 2020 with the new version of halo. microsoft also announced the upcoming debut of its xcloud streaming platform for games. we will be covering much more in gaming tomorrow on "bloomberg technology" as the e3 gaming conference is underway.

that does it for this edition of the show. as i mentioned, more of the videogame industry coming up from us on tuesday. highlights from e3 in l.a. we will talk to the take-two ceo. and "bloomberg technology" is livestreaming on twitter. follow our global breaking news network, tictoc, on twitter. this is bloomberg. ♪

>> this is "bloomberg daybreak: middle east." manus: preterite -- president trump wraps up the rhetoric on china. we are live in tokyo this hour. >> u.s. stocks may be headed back towards record highs. but they are flashing warning signs. a veiled threat. iran's foreign minister warns the u.s. cannot expect to stay safe after it lamonica and economic actions. -- diplomatic and economic actions. america says, behave or your economy will crumble. yousef: pmi numbers show