coming up shots have been fired and the global trade. who is poised to win and lose. together a putting supreme court. it will review controversial decisions about what goes up and what must come down.

strikes. iran has a cyber strategy of its own. how they are attacking u.s. banks online. the continued back and forth between beijing and washington has put text squarely in the crosshairs of the trade war, impacting companies like apple, huawei and more. a new article details how china's tech sector is insulated from exposure to the u.s. on many fronts. china has seen a surge in chip imports. now more than $300 billion. for more on the trade war's ongoing impact on tech in both countries, we spoke to bloomberg tech's ian king and our global executive editor brad stone. ian: esoteric parts like broadcom's switch chip, more common parts like an intel

microprocessor or an amd graphics chip, china really can't replicate those yet. they have been trying for years and it just has not come close. emily: why not? ian: it is difficult. when you are arranging tens of billions of transistors on something the size of a postage stamp, you kind of have to know what you are doing. and making them costs so much money. they have just never been able to develop that skill set. emily: which companies in particular in china are the most vulnerable? ian: you name it. it is the biggest pc market. it is also home to some of the largest pc makers like lenovo. they need these products. huawei, it goes without saying. you cut huawei off, they wouldn't be able to make their core routers. they need memory chips, all kinds of things. things that we don't know about that are absolutely essential. emily: brad, you have a piece out about how u.s. tech giants, even though they may be complaining about the trade war, are in the best position to weather it.

brad: of course, big companies like apple, they have the cash and negotiating power. apple supplier foxconn has already talked about moving production to other companies in southeast asia. india, malaysia, thailand, taiwan. of course, the trump administration would like to see it here in the u.s. that is unlikely to happen. but i do think they are worried -- we saw a bunch of letters go to the u.s. trade representative last week. apple sent a letter saying these tariffs are going to hit, iphones, ipads, macbooks, air pods. they are saying it is going to hurt apple's global competitiveness. emily: this was right after a meeting between tim cook and president trump. as you mentioned, they do have the negotiating power and we don't know yet if that negotiating power will pay off. brad: it has worked in the past. some of these product categories were on previous lists of tariffs as early as last year. they got off the list at the last second. i think the tech companies are hoping for that kind of reprieve. of course, we will see what happens at the g20 early next

week. emily: meantime, ian, huawei, they are dependent on u.s. chips somewhat. they do also make two thirds of their own chips, right? ian: for smartphones. the key component of the smartphone is the nickel processor. they have been arguably the most successful company outside of apple in weaning themselves off qualcomm's technology, so they can supply themselves in that particular market very, very strongly. emily: brad, there is a line in your piece where you say "laptops, phones, my drone -- have these people no compassion at all?" [laughter] brad: they are coming for our drones. emily: how would you break apple versus amazon, for example? amazon is shutting down its entire china marketplace next month. brad: that is interesting, right. you would think amazon might not be that exposed. actually, they have a huge

business there among the small third-party sellers that sell on the amazon marketplace. our colleagues have a great story out today. these companies have no negotiating power, they are one or two-people shops, they sell everything on the amazon marketplace. really, it is the uncertainty that is impacting them. they have no idea what is going to happen. they have to get their holiday orders in now. it is not that easy for them to go look for another factory in india. emily: so what is their plan b? brad: i think their plan b is to cut orders and raise prices. that will have an interesting impact on amazon's holiday quarters this year. if selection is going down, prices are going up, it is another way the u.s. consumer is going to be hurt by the trade war. emily: if prices rise, how does that ripple back and impact china? because china also depends on a lot of these companies in china. ian: apple is an example of that. yes, we by not need that many iphones, maybe we can go buy them from xiaomi or somebody else, but so many people are employed directly as a result of the manufacturing chain. that cannot help but impact the

economy. you have all these relatively high paid jobs, all of that tax revenue, if that starts to go away, that fundamentally undermines the chinese economy. emily: so what is their plan b? ian: their plan b, what we try to show in the story to an extent is that a lot of people don't recognize just how powerful they are. when sanctions have been used in the past against countries like korea or countries like japan, they are relatively small domestic economies. we use this statistic all the time. china mobile has more subscribers than the u.s. has people. to an extent, they are their own center of gravity. there are people who have never looked at google search because they never needed to. there are people who are not using apps supplied in the u.s. because they are never needed, because there is enough in that gravitated market on its own terms. emily: we don't know if the tariffs will go into effect at all. we are still waiting for this meeting to happen between presidents trump and xi at the g20, but you wonder, even if these new tariffs did not go into effect, if the uncertainty has been so intense for these

companies that they are already moving to plan b and start making new arrangements for the future? brad: everything we have heard from our own reporting and that in asia and others, big companies like apple are looking at other sources of manufacturing outside china. it makes a lot of sense. the one thing i would say is that if you look at the market lately, i get the sense that maybe the market thinks there will be a resolution to this. because otherwise, we would see a lot more volatility in the stock prices than we have seen. emily: are your sources optimistic or scared? ian: it depends whether you are talking about the market or whether you are talking about the companies. if you talk to executives, they are not keen to go on the record about this topic, but they are saying look, this is the wrong way to go about things. we have so much to lose here. we want a resolution. emily: bloomberg's brad stone and ian king. coming up, the competitive video

streaming market is getting another player. meg whitman tells us why her mobile-only platform quibi will stand out from the rest. and if you like bloomberg news, check us out on the radio. listen on the bloomberg app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

emily: former hp and ebay ceo meg whitman has taken her expertise to hollywood as the ceo of quibi, a new short form video platform startup. founded by jeffrey katzenberg, quibi will launch a mobile only subscription service in april of next year, promising hbo quality episodes under 10 minutes. the company has already raised $1 billion from alibaba and major studios like disney, sony, warner media, lionsgate and more, and plans to raise another half a billion soon. we spoke at a tech conference on thursday. meg: first was to explain what we are doing and attract talent. the talent was like, we don't know what it is.

how do you know this is going to work? it is harder to attract talent now. now we have our own space, it is much more accepted and understood. the second was we have done things differently from hollywood typically doing them, in terms of the deals and how long we have to make content. it is a different cadence so we have been able to get that done. that was harder. emily: right. i definitely heard folks say april 6, 2020? that is like a lifetime from now. meg: yes, but in hollywood but when you have to make all of this content, remember we are the first ott streaming service where you don't buy a library. there is no library to buy. you can't take an hour show and chop it into six 10 minute segments. it has to be written and shot for mobile in this format. emily: because of that, you have told me in the past that disney and netflix are not really competition. you are trying to do something different but you are fighting for mind share whether it is them, youtube, instagram, snapchat.

do you think that turmoil social media is facing right now, is it good for you? viewers will want to turn away? meg: i don't know about that. what we are doing is creating a nap that is designed to give you alternatives in those in between moments, commute, waiting for coffee, in a doctor's office. what we want to do is give you something that is fantastic in that 10 minute time slot. you know, our target audience, 25 to 35-year-olds, spend five hours a day on the phone and the average session length is 6.5 minutes. so i think we have an opportunity to give them alternatives that they don't have today. emily: what about kids content? youtube, for example, has been under the gun, criticized for exposing children to horrible things. what do you think they are doing wrong? meg: we are not doing any kids, kids are not going to really be on quibi. this is 18 and up and we are going to make it clear this is an adult app.

maybe over time when we do something later, but right now this is adult, 18 to 44 with the target of millennials. emily: what about in general? clearly you have to think about how healthy your content is. who the audience is. do you think that youtube is making some mistakes there? meg: listen, it is hard to argue with youtube's success, the most democratized platform in the world. we would not be here without youtube. they are doing the best job they can in enormous uploading of video. and i remember from ebay, listings were 100,000 a second. so you have to have all kinds of things, and i am certain they are taking responsibility to make it great. emily: you raised $1 billion. meg: yes. emily: there were reports for another $1 billion, but you denied those. maybe closer to half a billion. how far along are you and those conversations? meg: we have not started yet. we think we will probably go raise in the fall, early part of next year, but $500 million is what we think we need. we don't need it before we

launch but i do think it is wise when you can raise money and the are good, and we should do that. ultimately, we will need that money to break even. we will start in the fall and look for an anchor investor to price this around. and then i think a lot of our existing investors will want to keep their share. emily: have you sensed any uncertainty or discomfort from investors given the political uncertainty? the trade war and what is happening? meg: not so much for the investors in quibi but the business community in general is somewhat unsettled. you can see it reflected in the stock market and bond deals, there is no question there is an unsettled element around the world today. what business leaders like more than anything else is predictability and certainty. that is not our world today. emily: if you were still ceo of hp right now, how worried would you be?

meg: i would be worried about a trade war with china. these companies that make things, much of the supply chain is in china. that quarter of trade is incredibly important and the ability to be competitive selling to other countries depends on being able to manufacture in low-cost locations, like china? emily: how vulnerable you think these companies are right now? meg: what i know is that tech companies, they adapt, and you can see people trying to figure out what they will do in terms of a trade war. everyone adapts and it is easier if there is more predictability. i can tell you that. emily: you have got a lot of chinese investors, partnerships with folks in china. do you have any concern that it could affect you should things continue to go south? meg: yeah, so our joint venture partner in china is alibaba, and they are an investor in the platform. we have a great relationship with alibaba. we don't think that will affect us. remember, a company like ours cannot go to china without a china partner. and alibaba, we think, is one of the best we can be with. we are not worried about that at the moment but we will see what happens. you never know how this could

escalate, but we've got a lot of confidence with alibaba. emily: traditional tech companies have struggled to break in to china. facebook, twitter, google left china -- ebay, as you know well. [laughter] emily: do you think entertainment could be a new way into china for u.s. business and industry? meg: american entertainment exists in china today. there are quotas on how much foreign content can be imported and there is censorship, but there is no question that i think the chinese entertainment industry is coming of age and growing. and i think there will be more opportunity for worldwide content into china over time. maybe not in the next couple of years, but listen. the china economy is growing, there is a whole middle-class that is emerging in a very major way, and we know that they like entertainment. emily: that was quibi ceo meg whitman. coming up, facebook is building its own so-called supreme court for content moderation. but will that solve all its problems? we'll discuss facebook's plan

for an oversight board, next. and a reminder, the boston pops fire spectacular is the country's largest and oldest fourth of july event. here is a taste of what to expect. [bombastic orchestral music] >> best day of the year! ♪ >> 3,2, -- [music crescendos] [applause] emily: do not miss the boston pops fireworks spectacular, live july 4 at 8:00 p.m. eastern time, only on bloomberg television. ♪

emily: facebook is looking to create a new content oversight board. the social media giant is hosting a series of simulations across the globe as it plans an independent board to review controversial content moderation decisions. the board will provide a final ruling on posts that have been appealed or may have been removed in error. this as companies continue to criticize their control of global speech. zuckerberg has mentioned the idea for independent appeals process "almost like a supreme court." we spoke to our guests about how it would operate. kurt: they want to be independent but we don't know exactly who will be picked for this court, even how big it will be. they say it will be around 40

people, that is the idea for now, and then they would break up into small groups of 3-5 to review individual cases. but how do you pick a group of 40 people that accurately reflects a 2.4 billion person community? that is one of the biggest challenges they have to deal with. emily: how do you do that if facebook is doing the picking? shira: yeah, it is going to be very hard, and obviously, facebook is paying for this board so independence will be the question. that is inevitable in the situation. the point that kurt made is a good one, that facebook is now a global platform. they have many users in places like india, indonesia, other places that have different values than facebook in the united states that was founded largely by american executives. and the question is, will the board draw from people from those countries that are now

basically facebook's future? emily: so, kurt, talk to us about these simulations that facebook is conducting. a controversial decision comes to this group of people and then they debate. kurt: correct. i actually sat in on one that was at facebook's headquarters here in california. and it was interesting, about 30 employees. they presented them with a post that was controversial. someone had listed 70 different academics and accused them, kind of, without any proof, of being sexual harassers. they left the list up and said add more names to the list if you know someone else who is a sexual harasser. obviously, that is a dramatic and severe claim to make. so facebook wanted its employees in the simulation to discuss, is this the kind of post that should be left up or taken down? it was two hours long and they went through all of the different questions. and what they are really trying

to do is to get at how do people think about this stuff, what kind of questions do they ask so that when the real board has to make a decision like this, facebook wants to be prepared for how it is going to operate. emily: and many of these decisions are cultural. who are these people? are these all english-speaking people? how will they understand the nuances of the situation with the rohingya in myanmar? shira: yeah, i think that is going to be really difficult. what facebook has said as they have talked about this out loud, and to their credit, they have sought input on this oversight board. and i think what they have said is that this board would kind of tap outside experts. so if they are dealing with an issue that is culturally specific to germany or indonesia, they would seek out people who are experts in those particular territories. but let's not gloss over the fact that the vast majority of content decisions, judgment calls about facebook and what is ok to leave up on facebook, are made by this kind of low-wage contract workforce. not by this kind of high gloss supreme court type authority. emily: and there has been more reporting on this from the verge recently about the often-horrifying situations that these content moderators have to go through day in and day out.

i mean, does that jive with your reporting, your conversation with some of these moderators? kurt: yeah, yeah, it is a really terrible job. think about policing the internet from the most violent and graphic stuff you can imagine and seeing that consistently all day, every day. that is what these folks do. this board, to be clear, would not replace that job, unfortunately. what this board would do is say, hey, this is a decision our content moderators made, let's review it and see if we agree with it now that we have a little more time to look at the facts or discuss it amongst the group. what they are doing is speed -- something pops up, they have to watch it right away. does it violate the policy, yes or no, and make a decision. emily: there's a question of whether facebook should be doing this at all. facebook has made the argument that perhaps regulation is needed. perhaps this should be a government decision. nick clegg, their new head of

policy, spoke to the bbc earlier and said i don't think it is in any way conceivable and i don't think it is right for private companies to set the rules of the road for something as profound as how tech serves society. and so you wonder, would they be better off having governments make these decisions? is that even plausible now? shira: it doesn't really feel plausible, does it? i understand the position facebook is in. they created this platform, these platforms where many billions of people congregate every day. and facebook set the rules of the road. it turns out that facebook is a reflection amplification of the best and worst of humanity. and now that the genie is out of the bottle, they want to basically turn over a little bit of responsibility. i think what facebook wants in this engineering mindset is to give us a formulaic solution, where if x and y happen, we do z. and i don't think we are going to be in a position where that is feasible, given that the

internet reflects people and people are -- you know, they can't be reduced to formulas. emily: so, kurt, how comfortable is facebook and facebook insiders with this formula? proposed formula. kurt: i think they are very comfortable. they want this. mark zuckerberg does not want to be the one at the top of this foodchain saying, this is taken down, this stays up, ultimately that is my call. i don't think he wants that responsibility -- actually, we know he doesn't because he has said so repeatedly. so i think they see this as a very clean option for solving those problems that no longer puts it at their feet. emily: bloomberg's shira ovide and kurt wagner there. speaking of facebook, on wednesday, mark zuckerberg spoke at the aspen ideas festival in colorado. he talked about election interference on social media and

how the company has spent billions of dollars on security. he also talked about how facebook made a mistake in how they handled the infamous altered video of u.s. house speaker nancy pelosi. take a listen. >> it took a while for our systems to flag that and fact checkers to rate it as false. once the fact checkers saw it and rated it, they were able to rate it within an hour, but it took more than a day for our systems to flag it. during that time, it got more distribution than our policies should have allowed. that was an execution mistake. i think what we want to be doing is improving execution. but i do not think we want to go so far towards saying a private company prevents you from saying something that it thinks is factually incorrect to another person. emily: still, facebook chose to leave the video up. they did flag it, but simply de-prioritized it.

coming up, a new report from a cybersecurity firm detailing new attacks from iran in cyberspace. how vulnerable is u.s. infrastructure? we will discuss. and bloomberg tech is livestreaming on twitter. be sure to check us out and follow our global breaking network tictoc on twitter. this is bloomberg. ♪

emily: welcome back to the "best of bloomberg technology." i am emily chang. u.s. intelligence says russia, china, and iran al tried to sway u.s. public opinion ahead of the elections, in some cases, through social media. this as tensions continue to mount between tehran and washington over the recent downing of a u.s. drone, and the u.s. has ratcheted pressure up on iran with new sanctions and a cyber strike. according to a separate secure firm, iranian hackers have stepped up against the u.s. in turn in recent weeks. that includes attempts to

infiltrate banks and government agencies through their computer systems. we spoke to sandra joyce, the head of that global intelligence firm about those attacks. sandra: what we see is a barrage of spearfishing emails from multiple threat actors eminating from iran and targeting multiple sectors, financial, government, but also media, education, and likely others. emily: what are the objectives? to cause disarray? sandra: spearfishing emails, the objective of most of them, is to establish a hold in a network. this could just be to collect information and intelligence. what is disconcerting here is that these tools and techniques were precursors to more destructive attacks we saw in 2018 by the same actors. so this could be a look at just trying to get information, but it is likely that this is also a precursor to a secondary action. that is why companies and

organizations around the world need to be at high alert, with a high level of vigilance. emily: this is just days after the iranians shot down a surveillance drone. we have heard from the president himself that he called off a physical attack in retaliation on iran but did approve a cyber attack on iran's missile and defense capabilities. could that slow some of these other cyberattacks coming from iran down? sandra: what we know is that cyberattacks are not an ends, they are a means to carry out the national security objective of a nationstate. what we can expect to see, going forward, is iran continuing to use cyber means as an asymmetric method in the face of escalating tensions between the united states and iran. emily: so the group you call out, apt33, what do we know about them?

sandra: apt33 is the same group that launched destructive malware that we saw against international industrial control systems in 2018, in december of 2018. they are a group that has a history of using destructive malware to carry out the nationstate objectives of iran. now it is not just apt33 that we have been looking at in this recent activity. there have been other groups, also from iran, that are carrying out the same type of spearfishing attacks, things that will help them get a foothold into networks to possibly take it to the next level. emily: so how vulnerable would you say u.s. infrastructure is right now? and which part of u.s. infrastructure are most vulnerable? sandra: u.s. critical infrastructure spans 16 different industries. each one of them has different strengths and weaknesses.

what we are looking at is the dhs -- the assistant director put out a warning to all u.s. executions, saying they should be on the lookout for heightened activity stemming from iran in response to a lot of the tensions going on now. emily: now recently do not know everything that the u.s. government does in cyberspace. but who has better capabilities? iran or the united states? sandra: clearly, the united states has more mature capabilities, more sophisticated capabilities. but that is not to say that other nationstates, and with their capabilities, couldn't make a real dent in the infrastructure of other countries. so we should not consider it less of a threat. what we're are looking at is increasing sophistication from iran and the willingness to use cyber tools for destructive and for espionage purposes to carry out their end goals. emily: how concerned are you, based on the activity you've over the last just few days, escalation, given that that we are going into a really pivotal

u.s. election cycle? sandra: well, what we are seeing is a great interest, russia, iran, et cetera, into the outcome of elections. even china has taken steps to look at elections within asia itself, from what we have observed in cyber activity. so the intent to keep tabs on election activity is certainly present. whether or not that interferes with the outcome is another thing. we recently saw that iran was trying to impersonate u.s. candidates, trying to create inauthentic accounts to sway public opinion. and, in that way, they are attempting to influence the outcome of elections. emily: that was sandra joyce, head of fireeye global intelligence. an aclu freedom of information request has revealed that the nsa was improperly collecting records on u.s. calls and texts that it was not authorized you in october of last year.

as you remember, the secretive government agency began covertly gathering domestic phone and text data after september 11. that bulk collection ended in 2015. so to figure out how this new wave of surveillance happened, wednesday, we spoke with jamil jaffer, the vice president of strategy and partnerships at ironnet, cyber firm started by a former director of the nsa. prior to that, he was in charge of oversight of nsa surveillance for the house permanent select committee on intelligence. jamil: it was modified in 2015 by the usa freedom act. what happened here was that the phone companies were put in charge of giving data to the nsa under this program. they sent to much data, the wrong kind of data, to the nsa in the aftermath of this legislation. we have an error in over collection, an error made not by the nsa but by the phone companies. emily: how do you do this by accident? jamil: the nsa is seeking

specific information about terrorist threats. the phone companies are producing records. sometimes, they pull a certain set of records, and that records come attached with other records in their database. unintentionally, they provide this thinking they are providing the right stuff, and it turns out they provide too much. what happened, interestingly, that the nsa itself identified that this was over collection and took steps to stop the over collection and center phone companies that you need to fix the way you produce this information. do not need or want this data. give us the stuff we are allowed to have under the law. emily: can we trust, given all these issues, this error, that the nsa is not still doing this? that the phone companies are not still doing this? and that this could not still happen again in the future? jamil: i think what is important to note here is that this is not

an intentional over collection or an effort to go over the law by the entity or the phone companies. it appears to be an unintentional error. we have seen a lot of these over the course of this program, and that weighs in the calculus of whether the government continues the program. as you know, there's an ongoing debate within the trump administration about whether to seek reauthorization of the program from congress. under both the bush and obama administrations, it was seen as a very productive program. in the sense that it was an early warning system against terrorism. so there is an ongoing debate, as there has been, about overall value and cost of the program. that will continue going forward with congress in the public eye and with the administration talking to congress about whether they want to reauthorize it. emily: there are still folks out there saying that this data is valuable and that this collection should still be happening. tell us about this argument. jamil: part of what is going on is the data being collected is what is believed to be phone calls between terrorist targets overseas and people in the united states. as you can imagine, those are probably the most important calls you want to know about. if that happens, you want to see are these people involved in terrorist activities in the united states and what should we do about it? it limits the scope of content collection, which is the really privacy intensive stuff. it looks just at metadata to see who the good targets for collection are and who should not be collected against.

there are some privacy enhancing elements that limit the scope of what you might do on content collection. that being said, there has been some debate about how valuable the program is, did we get enough people, was it just additive to other collection things? part of what that reflects is an understanding of how data collection works. intelligence collection doesn't always give you the obvious answer right here. it is bringing you an amalgamation of a lot of data to identify who might be doing bad things in the united states against americans. that is the key to this program. it's one element of a much larger argument. it is an effort that aims to protect us against threats. emily: but there is also a larger effort, in this particular case as an example, to reduce the power of u.s. surveillance. and in your view, as someone who had oversight over the nsa's actions, is that a good thing? are we more or less vulnerable

than before? jamil: well, we are seeing all sorts of huge threats out in the world today. we know about the efforts by china to conduct cyberattacks against u.s. companies and the like. we have seen what iran has done in the physical space, with oil tankers in the persian gulf and shooting down a u.s. drone. we know north korea is involved in major cyberattacks, including wannacry. and russia, with the notpetya attacks which anniversary is tomorrow, my birthday, we know they engaged in attacks on ukraine that had a huge effect on international companies including mersk. we know people are getting aggressive in this space. if we are going to reduce our collection capabilities, whether they are against foreign terror targets or foreign nations, that will make us more vulnerable. the trade-off between how vulnerable we are and whether we

get these benefits from cost savings or privacy benefits is a hard one to make and one that the government is constantly looking at. but we shouldn't just say that there are not very real threats against our nation, which there are, and it shouldn't be that we always reduce collection capabilities. that can have negative effects, too. emily: that was jamil jaffer of ironnet. coming up, tapping into a unique consumer market. why vice ventures is not shying away from controversial investments like psychedelics and alcohol. next. this is bloomberg. ♪

emily: traditional venture capital funds usually stay away from controversial products. things like nicotine, cannabis, gambling, psychedelics. but one rising venture firm is tapping into these moral gray areas. founded in 2018, vice ventures aims to be the premier partner for early stage companies operating in vice categories. seeking to grow good companies that operate in what some might say are not so good industries. the firm announced thursday the close of its first $25 million fund, backed by high profile investors, including marc andreessen.

we spoke with vice ventures founder catharine dockery thursday. catharine: we are mostly interested in brands, so vice brands, whether it be cannabis, nicotine, alcohol. emily: so, why? it is hard to even get someone to come on and talk about the e-cigarette industry, let alone invest in it. why do you think this is an opportunity? catharine: i see these as an opportunity and i saw that as i was interviewing at venture firms. we pitched all of these industries, and now them were allowed to invest because of these vice laws. for me, i saw it was a whole market that was overlooked. it was a great opportunity to create a committee around vice and a vehicle to invest in it. emily: how much money can you make on it? as you mentioned, they are recession-proof. but what is the business? catharine: the businesses we are the first check into these businesses. so if they sell to any private equity funds, to consumer

retailers, to canapes, to anyone. emily: so marc andreessen invested in your find. i wonder how hard it was to raise that find from traditional investors. catharine: it was extremely difficult. i called and emailed over 550 people in order to get in touch with every one. emily: so how did you get there? what was the sell? catharine: the sell is that we are doing something no one else is doing. we can get in there when the valuations are low. you see that valuations are high upon exit for vice companies. emily: san francisco isn't ignoring the e-cigarette market, per se. in fact, the city has just banned e-cigarettes. we are still waiting for the mayor to sign that bill. but, in the hometown of juul, the biggest e-cigarette maker in the world, those are the regulatory issues you will be up against. what is your take on that? catharine: i tend to think that

binary solutions tend not to be the best long-term outcome. i said that because you look at substance bans historically, they tend to cause unwanted consequences. it does not make me worry about an all-out ban of anything. emily: we had the mayor of san francisco at the bloomberg players tech summit earlier. take a listen to what she had to say about e-cigarettes. >> the biggest problem i have is how many young people use this product, and we still -- again, we don't understand the impacts of this product. so i think that until the fda provides the facts and the appropriate regulation of this product, then we should not allow those things to be sold on the market. emily: we don't know about the health impact of e-cigarettes. they just haven't been around long enough. are you concerned about backing things that could actually be unhealthy or leading to a new generation of addicts?

catharine: no. we believe the e-cigarette market is really mature. we don't think there is a lot of space for new companies to start there, so we are not focused on that. emily: what about the social considerations for your investments? are you thinking about the social implications of whether or not you are doing social good? catharine: of course the that is why we only back truly intellectually honest founders, who understand the effect of their products and don't fail to communicate any of those fx. emily: how do you decide if someone is intellectually honest or not? catharine: you spend a lot of time with them. you get to know their family and their friends and how they want to operate a business. emily: where do you draw the line? 3-d printed guns? there is a lot of vices out there. drugs? where do you draw the line? catharine: we draw the line -- we believe we don't invest in products who are intended to hurt somebody else. for example, we would never invest in guns or bombs or pepper spray. we only invest in products that

are intended for single use. emily: what is next? where do you see the most opportunity? where are you going to put the money in your first fund to work? catharine: we are super excited about harm-reducing nicotine. we see massive issues around e-cigarettes. we think there is a way to solve that without creating a lot of harm for consumers. emily: like what? catharine: like a gum business, a nicotine gum business that started recently. they been doing a great job in communicating the effects of nicotine, which actually are not as harmful in its purest form. emily: you got $25 million. how quickly do you think you will go through that and need to raise more from traditional investors who might be skeptical? catharine: i thing it will be a five-year period. emily: that was vice ventures founder catharine dockery. when you are one of the three richest men the world, you may not have a lot of regrets. but microsoft cofounder bill gates says his biggest regret came from mobile phone software. monday, gates told david rubenstein that microsoft lost

out to google in launching a mobile operating system to compete with apple. bill: we missed being the dominant mobile operating system by a tiny amount. we were distracted during our antitrust trial. we didn't assign the best people to do the work. so the biggest mistake i made, in terms of something that was clearly within our skill set, we were clearly the company that could have achieved that. and we didn't. emily: gates added that mistake cost billions of dollars that went to google for its android operating system. coming up, the high-stakes world of plant heists? find out how the hot new theft isn't diamonds or gold but redwood trees. that's next. this is bloomberg. ♪

emily: when you think of poachers, you might think of people illegally hunting rhinos for their horns or the massacre of elephants for their ivory tusks. but in california, there is another insidious side to poaching. one you might not expect. we are talking about thieves who plunder exotic trees and plants from national forests. while it might be hard to abscond with a giant redwood, poachers are targeting flora

like segura cacti. park rangers are turning to high-tech to thwart the thieves, using hidden cameras, sensors, and rfid. tuesday, we spoke with bloomberg tech's sarah mcbride, who wrote all about it in this week's heist issue of "bloomberg businessweek." sarah: there are so many thieves now, heading up our national parks, and they are taking everything from the redwood to ginseng in the southeast. now rangers have no choice. they have to use whatever they can to fight back, and that includes tech. so i just wrote a story about some redwood thieves in northern california who were caught using a network of hidden cameras in segura national park in arizona. they are injecting microchips into the cacti to try to deter thieves. and in those parks in virginia and north carolina, they are dying the roots of ginseng, so that if they find ginseng for sale, they can identify where it came from. and the craziest -- i had no idea trees have dna.

emily: right, i was going to ask you about dna testing. sarah: right. so, some three years ago, some people were apprehended and convicted of stealing maple trees in the northwestern united states. convicted in federal court based on evidence of the trees' dna. they can take a tree or a piece of wood and match it to, say, a tree stump in a forest thousands of miles away. and they know this piece of wood came from that tree stump. emily: so then how do they track down the thief? sarah: whoever was trying to sell it. so that person still has to somehow be attached to the wood. in the case of maplewood, it is often sold for guitars and things like that. emily: segarra cacti, i had to look it up. these are the cacti you see in pictures of the desert. sarah: the iconic woody woodpecker cactus. emily: exactly. so what is happening with these? sarah: a few years ago, there was a theft of those cacti in arizona.

and actually, you can get a surprising amount of money -- $100 a foot is apparently the going rate for those. so if you have a 10 foot cactus, that's $1000 right there. so rangers decided to implement a program of micro-chipping the cacti. they go around with these special guns, inject chips into the cacti, and then they can swipe an rfid over any cactus and see if it came from the park. they think that has been enough of a deterrent that people have stopped -- or not on the same scale as it was, poaching those cacti. emily: there's even a real for social media here. sarah: yes, there is. in a way, that's hurting the parks. in california, there has been a spate of thefts of little succulents that grow on cliffs. they have caught thousands and thousands of those that people are trying to smuggle to asia. where they have become a big thing, and that is because of

things like instagram feeds, where everybody now wants these little succulents. but they can also catch people more easily thanks to those social media feeds, too, so it cuts both ways. emily: should we assume that big brother is in the national parks, watching us when we go on our peaceful and leisurely hike through the redwood forests? sarah: unfortunately, the surveillance state even reaches into our national parks. so yes, yes, we should. emily: what's next here? obviously, we are talking about the national treasures. how well do park rangers think that technology can help in cracking down on these practices? sarah: it's a cat and mouse game. with the redwoods, if they didn't have the hidden cameras, unless they caught somebody in

the act of actually trying to steal these pieces of wood, which are hundreds, sometimes thousands, of years old, there was no way they could get that person. now, they have a decent chance of getting them. so i think the odds are good. emily: that was bloomberg's sarah mcbride. you can hear from more of the magazine's editors and reporters on businessweek on bloomberg television. and a reminder -- do not miss the boston pops fireworks spectacular july 4, live, 8:00 p.m. eastern time, only here on bloomberg. that does it for this edition of the "best of bloomberg technology." we bring you the latest in tech throughout the week. tune in every day. 5:00 p.m. in new york, 2:00 p.m. in san francisco. we're live streaming on twitter as well. you can check us out there, @technology. be sure to follow our global breaking news network, @tictoc, on twitter. this is bloomberg. ♪ we're the slowskys.

we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not.

emily: as a young black girl in dallas, texas, in the 1980's, arlan hamilton quickly learned she could not fulfill her dreams without breaking some rules. the daughter of a single mom, she talked her way into the music industry, becoming a tour manager for a norwegian punk band and learning the art of the deal backstage. she found her way to silicon valley. by day, she pitched her big idea. by night, she slept on the floor of the airport, living on food stamps. luckily an angel investor , recognized her grit and cut