emily: hi. i am emily chang in san francisco, and this is "bloomberg technology." coming up in the next hour, microsoft defies gravity. the company beating expectations with a big lift from the cloud. plus, the congressman who says facebook's cryptocurrency libra "may do more to endanger america than 9/11." we will talk to california democrat brad sherman after blistering hearings for big tech.

stocks died. , $15s fall the most billion wiped off the board. will the streaming giant recover? our top story, microsoft shares topping after fourth-quarter results that topped estimates. strength inontinued the cloud business. the ceo is working to keep up a steady flow of cloud deals to narrow the gap with market leader amazon and offering bundles including office, windows, and other security products as well. to unpack it all, we are joined by cloud reached ceo aaron paynter, who spent 14 years at microsoft in the u.s., brazil, france, and china, where he served as gm for a few years. also, a reporter from bloomberg intelligence. another big order from microsoft as expected. what is the top take away? >> almost every line item was good.

i mean, we did not find any mistake in the quarter so far or anything negative. the digital deal is going to be guidance and seeing how they can -- the big deal is going to be guidance and seeing how they can come up with first quarter numbers and the next fiscal year for them. >> the big question is, can microsoft keep it up now that expectations are so high? can the company continue to deliver in a new economy? >> cloud reach was the first provider for these services and we have expanded it to amazon in the last few quarters because there is enormous demand from customers. i think this is only the beginning of an incredible boom that will continue in azure and other related cloud technologies that microsoft is providing. emily: are you saying the cloud will continue to grow, it is not a zero-sum game? aaron: absolutely. every study tells us we are in the very early lead. microsoft is on the verge of becoming the corporate cloud. after their big employee summit with many partners, the big theme was trust. not just a trust with partners, but in the enterprise

relationships they have and the enterprise reach they have. which frankly is the differentiator for both google and amazon. emily: when you are the most valuable company in the world, and microsoft does now have more than $1 trillion market cap, more than amazon, apple, you have a target on your back. what are the challenges? what are the potential obstacles lying in microsoft way? -- microsoft's way? anurag: macro concerns are the only thing that could prevent any kind of -- that could provide some near-term headwinds. but other than that, completely agree with erin. -- aaron. the market for cloud services is so large and we're just seeing the tip of the iceberg. at this point, the market potential just in the enterprise space is enormous. microsoft is better positioned than any company out there. emily: beyond the cloud, pc sales still a big part of microsoft business.

windows, office. what is happening between the united states and china, a huge issue, given the u.s. china -- given the u.s.-china supply chain. given that you worked in china for many years, what do you think the u.s.-china trade war -- how will that impact commercial sales? aaron: microsoft is very focused on 7 billion. they keep talking about the reach. when you are ou at the amazon conference, you feel like amazon is leading the world in cloud at . at google, you feel like they want to. microsoft feels like they can. they have this incredible reach of every person in the world and how they can tap them into some cloud service. it is hard to ignore china in that context. emily: if you can't ignore china, what could a potential impact of the trade war be? i mean this seems to be not , subsiding anytime soon. so if tensions remain as they are, what does that mean for microsoft? aaron: microsoft's strength in china has been around cloud services. it was very early in that

emily: for two days this week, facebook's stephen marcus was peppered with questions about the social network's

newly-proposed cryptocurrency, libra, but there was one question or statement that seemed to catch him completely off guard. take a listen. rep. sherman: we are told by some that innovation is always good. the most innovative thing that happened this century is when osama bin laden came up with the innovative idea of flying to wo airplanes into towers. that is the most consequential innovation, although this may do more to endanger america than even that. emily: that was representative brad sherman of california's 30th district, who joins us from washington. representative, thank you so much for joining us. certainly a very provocative statement we heard you make. what exactly did you mean? rep. sherman: let me clarify. look zuckerberg is not as evil , as osama bin laden, because the harm that zuckerberg will do is a mere unintended product of his effort to make hundreds of billions of dollars more.

but the fact is, in creating a tool for drug dealers, that is going to result in debts on the streets of america every day. by creating a tool for tax evaders, that is going to mean that the federal government can't fund cancer research or can't fund the defense of the united states to the degree that we would like to. and by providing a method for sanctions evaders who are going to make it much more difficult for the federal government to prevent iran and north korea from developing nuclear weapons. now zuckerberg doesn't intend , any of those objectives. he is just intentionally disinterested in whether that occurs. the fact is that the power of the dollar, our ability to control our banking system, is a key to the economy of the united states, which saves at least $100 billion per year in

costs,ing because we are the reserve currency of the world. it is key to our sanctions program, which is most effective when we control dollar transactions. it is effective in our efforts to prevent drug kingpins and human traffickers. the intent of this libra, which i call aman's baby -- zuck-buck -- the intention is to undermine that whole effort. i know zuckerberg is under attack because he undermines american privacy. his response is to become a privacy advocate for tax evaders, terrorists, sanctions evaders, drug dealers. i think those are the folks who shouldn't have financial privacy. emily: we will get there. hough, on the t 9/11 statement, obviously what you got our attention. some americans might have been offended, some might have

thought it was a bridge too far. what is your reaction to that? rep. sherman: the number of deaths that will occur in america if this is successful in playing the role it is intended will exceed what we lost on 9/11. the additional heroin debts, the inability to fund cancer research, the lack of success of our sanctions will be very important. but they will not be all of the sudden. they will not be one big picture, one big day. i had to be asked by a reporter, does that make a zuckerberg as evil as osama bin laden? clearly not. bin laden was trying to cause american deaths, zuckerberg is just disinterested and whether -- disinterested in whether they occur. emily: speaking of zuck-bucks as you call it, you have said you want mark zuckerberg to testify. what do you want to hear from him that you did not hear from david marcus? rep. sherman: we are getting a confused and contradictory report from marcus.

he is telling us they are going to abide by the anti-money laundering and know your customer rules that we impose on our banks, but then he is saying that there will be others who create separate wallets that will be formed in other countries and one wonders whether a company creating a sk, moscow, or tehran is going to follow the anti-money laundering rules. marcus makes a promise, then paints a picture in which facebook would be incapable of carrying it out. likewise, marcus promises that there will be no printing of additional money, they will have a 1:1 reserve, but describes a system for governing the libra zuck-buck, in which facebook will not be in control, so who knows what they will be able to do? we need to iron this out. when we get contradictory information from the employee, we need to hear from the ceo.

emily: what do you think congress's role here should be versus facebook and zuckerberg himself? what should the government be doing? rep. sherman: we should be prohibiting cryptocurrencies. they disempower the federal government, and there is an anarchist strain, a libertarian strain that says every time the federal government is disempowered, americans should be happier. it is funny. i have got republican colleagues who want america to be strong , and the u.s. government to be weak, and that doesn't actually work. it feels good, but it doesn't work. emily: are you saying you think cryptocurrency should be illegal? rep. sherman: absolutely. i have advocated that for a long time. emily: all right, so -- rep. sherman: think of it. the purpose of cryptocurrency serves no function unless somebody is engaged in various -- in nefarious transactions. that is why 46% of bitcoin transactions are from people who are doing things illegal under u.s. law, according to an

academic peer-reviewed study. that's whether they are evading sanctions, evading tax laws, or dealing drugs. so we already know -- and bitcoin is a small baby here. you can't buy a pack of gum for bitcoin. it has to have an offramp that you can then convert into a sovereign currency. this proposal solves that problem and will allow drug dealers to go seamlessly from drug deal to money they can spend on luxuries. this is a chance to liberate those who hate federal laws, whether it be antidrug laws or anti-human trafficking laws, tax laws, or a sanctions regime. this is a chance for them to get around on the most effective controls that we have and that is why it is popular. emily: so facebook's crypto issue is just one of many issues that facebook is dealing with, along with fake news, misinformation, election hacking by foreign countries.

do you think facebook should be broken up? rep. sherman: i think, first and foremost, facebook has to be kept out of the cryptocurrency business. they say they want to provide services to the unbanked. the place where we have the most unbanked is india, and if they did this system using u.s. dollars or using the local currency in india, they could be successful. they could help people, but by going to cryptocurrency, they are prohibited from doing business in india. zuckerberg doesn't want to help poor people in india. he wants to make huge amounts of money and create a circumstance where he can do the one thing he can't do now, and that is print his own money. you know the u.s. government , used to have a 1:1 reserve rule for the dollar. we got away from that over the last 1.5 centuries. and if zuckerberg can do the same thing, he can do what really only the u.s. federal government can do to the extent

that we do it, and that is print money. he has got what seems to be all the money in the world, but he wants to print more. emily: what about the broader argument about big tech in general? that big tech is too big? elizabeth warren is calling for the breakup of facebook, apple, amazon, google. do you agree with her? rep. sherman: i am on the financial services committee. i focus on the financial system. these other antitrust issues, i think elizabeth warren has some good arguments, but i come onto the show to talk to you about things that i have really thought through and can add something to the discussion. and cryptocurrencies serve no purpose that cannot be met by the u.s. dollar, except for drug dealers, human traffickers, tax evaders, and sanctions evaders. emily: all right. message received. congressman brad sherman, thank you so much for joining us. congressman sherman good to have , you.

coming up, customers hitting pause on netflix. behind the streamer's underwhelming second quarter, losing subscribers in the united states for the first time since 2011. what it means as competition turns up the volume. bloomberg tech is live, streaming on twitter. you can check us out at technology and be sure to follow our global news network at tictoc on twitter. this is bloomberg. ♪

emily: the smartphone app faceapp went viral this week with its popular aging filter. now democratic leaders are calling a national security risk. in a letter to the fbi and the ftc wednesday, senate minority leader urged the agencies to look into privacy risks posed by the application. his concern is that americans' personal information may end up in the hands of the russian government. the app's founder is russian.

rumor wrote, "faceapp's location in russia raises questions -- schumer wrote, "faceapp's location in russia raises questions regarding how and when the company provides access to the data of u.s. citizens to third parties, including foreign governments." the democratic national committee has sent in email to all campaigns with a warning not to use the app. the founder has denied sending any user information to the russian government. and netflix shocked investors by reporting a drop in u.s. customers and much slower growth overseas. the decline raising fears that the streaming giant is losing its momentum just as competitors prepare to pounce. the second quarter represents the biggest black eye since 2011, when the company split its dvd and streaming businesses. to discuss we are joined by e-market analyst eric. what went wrong and can that looks recover? eric: thanks for having me. they raised prices and at the same time had a fairly weak content slate. according to netflix, that is what caused the under hit on subscribers. -- subscriber growth.

now, when you look at their contents late in q2 it was very , weak, particularly when you compare it to competitors like hbo, who had the final season of game of thrones, which is a big cultural moment. emily: can netflix get back to growth this current quarter and through the rest of the year, just as disney, apple, warner , all plan their own services? eric: netflix has a strong content slate, so that is good for them. also helping them is that a lot of people who left netflix , you know looking at numbers , that they released in earnings and compared to guidance, it seems a lot of people who left were on lower tier plans, so not the people who are most engaged with netflix. so netflix will need to gain these people back, but at the same time, that content slate should be able to draw a significant amount of people in, specifically when you have hit shows like "stranger things,"

the final season of "orange is the new black." that is great for netflix. when you talk about other services like disney plus, hbo max, and others, they don't hit until the end of this year or early next year. when you talk about netflix and their 60 million u.s. subscribers, you are comparing them to other subscriptions that have zero subscribers. emily: they currently have zero, but which of those do you believe will pose the biggest threat to netflix? once they are launched? eric: i think disney ultimately will pose the biggest threat by far. disney, they currently own hulu, which is the number three largest streaming service in the u.s., when you take netflix as number one and amazon prime as number two. so disney already has a lot of experience in this field. second, they are price competitive, and they are already a household name. when you compare disney plus, they're pricing at around seven dollars, and rumors of a bundle

with hulu as well. hulu currently has 30 million u.s. subscribers. that is a very competitive package and they should be able to scale up relatively quickly. emily: all right. thanks so much for stopping by. eric: thank you. emily: customer data is at the heart of a controversial new medical plan in the u.k. former u.k. science minister is proposing to sell patient to offset rising debt, but for english national health service, which provides free medical care to more than 55 million residents, some are sounding the alarm. bloomberg's john lauerman explains. john: england's national health service provides free care to everyone who walks into the hospital or doctor's office. as costs rise, that puts the system under increasing pressure. the system has a resource worth billions of dollars in that they are trying to put to better use. after taking care of everyone in the country for seven decades, the nhs has lifelong medical records of practically all of

its residents, some 55 million people. that is exactly the kind of data that companies want to run through ai algorithms to answer questions like which drugs work in which patients, when are people with a chronic illness most likely to get worse, how can we tell whether two patients with similar symptoms have different illnesses? that is just the beginning. the problem is that as valuable , as this data is, it is very private. and it belongs to patients. how do you make sure that they benefit from the research it enables and are not harmed if it gets into the wrong hands? that is an issue that has come up again and again, especially when hospital records have been hacked. a former u.k. science minister began at aerience very young age after he was born , blind in one eye. health care entrepreneur, he believes the nhs has an obligation to share its data with companies that want to analyze it. his company is signing up nhs hospitals to put patient records

into a database that he brokers to health care companies. companies have to use the -- have to prove that their use of the data will lead to patient benefit. companies only get the results of data analysis, not any patient data. the nhs division called trust s get a financial return. time will tell whether the company can help the nhs turn patient records into gold. john lauerman bloomberg news, , london. emily: bloomberg john lauerman from the u.k. coming up, this week on capitol hill, all eyes on big tech. we are going to talk with a firm ceo about a possible big tech breakup, his thoughts on facebook's libra, and more. this is bloomberg. ♪ hey! i'm bill slowsky jr.,

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emily: this is "bloomberg technology." i am emily chang in san francisco. it is a question that has been asked all week on capitol hill. is big tech too big? one representative says yes starting with facebook. ,>> you think what he was getting at is this. is facebook in your view a monopoly? >> no, congressman. it is not. >> ok, so i assume the reason is because, in your view, facebook has a number of competitors and a number of products that the company offers. would that be a fair characterization? >> yes, congressman.

that is correct. >> what is the largest social media network platform company by active users in the world, do you know? >> congressman, i don't. i do know that we have 2.7 billion users. >> i can tell you it is facebook that is number one. emily: joining us now, a tech industry veteran, who cofounded paypal and invested in startups. he joins me now in the studio. so that exchange went on there. he went through whatsapp, instagram, facebook messenger, all platforms under the facebook umbrella. do you think facebook is a monopoly? technicalort of answer i am sure is relatively nuanced, but i'm sure there are pieces of the market that they are, in fact, the dominant player, to the point where they can't be displaced. in other areas, i am sure they

cannot. if i was arguing facebook's side, china, zero facebook there, plenty of their own companies. i'm not sure that is the most relevant question is, is it too big? i think that is the underlying dynamic. emily: is it too big? max: you know that is a much , harder question to answer. i think it is very, very big. it is bigger than most nations. so in that sense, i think they are right. it is hard to say it is too big ask who do back and they compete with? if you compare them to chinese companies they go up against in a world of ad spend, companies like tencent are gargantuan, and they are not at risk of being broken up by the chinese government, from last i checked. if you wanted facebook to compete with tencent successfully, i think breaking them up seems like a counterintuitive thing. emily: do you buy the argument

facebook has made that if chinese companies will not be regulated or broken up, so if you break up facebook, you will hurt u.s. competitiveness? max: i buy what you said except for one very, very important thing. i think facebook and all u.s. companies should be regulated. there is a huge difference between being regulated and abiding by the federal laws and regulations antitrust, all the , things the u.s. government has amassed of how to behave in a society in a capitalist with the rule of law. but breaking it up does hurt its ability to compete especially , internationally. breaking it up is a terrible idea. regulating it is what the u.s. government should be doing. and doing a better job, by the way. emily: as somebody who cofounded paypal and dealt with money fraud issues in the early days of flood protection on the internet, what you think of this whole libra thing? max: that is a wonderful

wonderful collection of super , interesting questions. i think i agree with david marcus, from his testimony, where he very aptly pointed out technology is inevitable. it is a hammer looking for a nail for quite some time. we are seeing real applications to the blockchain tech, just the idea of a public ledger. it is a very powerful idea. it will get put to good use. good example is a of good use. i think the most obvious application of libra brought down to an individual level is cross-border payments. you could make cheap remittances happen. if you look at the costs from companies to send money back home, from wherever you are you , will see an enormous spread. plenty of startups are trying to attack that. transfer rates. they did a wonderful job in europe. i think libra could massively compress fees in that market. that would be very good. so i think, in general, libra is

a force for good, so really interesting experiment. i'm glad they are doing it in a way that is not just facebook. because of all the headwind that facebook has experienced with the regulators -- but there are many other questions to ask about the practical applications. for example, if you are buying into libra, does that create more opportunities for money fraud or not? i think that is going to be a set of open problems for quite a while. emily: what about the issue of trusting facebook. can we trust facebook to do this? i know david marcus ran paypal for a long time, long after your time at the company, but facebook has showed that in many situations, they can't be trusted by the public. max: i go back to the standing adjusted about facebook in the ad market. it is the job of u.s. regulators to not trust large companies, or any companies. i think that their job is to audit, regulate, and provide

equal treatment under the rule of law for everyone. libra is interesting. it is not just a company. it is facebook initiating this thing. there's a giant group of other companies coming together to govern it. it is perhaps more complicated to regulate it. the government should take an active stance in regulating this thing that libra is and will be. within that, they should not rely on facebook being a good company. i'm sure they will act in their best interests. that is the assumption of a smart regulator. companies will do the thing they need to do. our job is to protect consumers and make sure of equal competition. emily: i have to ask you about your old friend peter thiel, who made news again this week with a very controversial speech. he is on the board of facebook. he also called out google for being "seemingly treasonous in its work or efforts to get back into china." facebook has tried to get into china as well, but openly questioned whether google has been infiltrated by foreign spies. what is your reaction to that?

max: i have yet to ask him what he meant. i am far from being able to comment. peter is no stranger to saying controversial things to attract attention to an issue. i think the questions around how do we interact with china at a trade level, policy level, is an important question. i think of all the things i like , or dislike about the current administration, the one thing they did do is they brought up how do we deal with china in a world where intellectual property, for example is treated , as a different thing by different countries. that said, i think peter was trying to attract attention. i will stop there. i do not want to reinterpret his work. emily: he certainly got it. he also called elizabeth warren the most dangerous presidential candidate. she has called for the breakup of big tex. he called the other democratic -- big tech. he called the other democratic candidates equally unimpressive. what do you think, speaking of

politics? max: i am the last person who gets involved in politics. i think thethink -- most sensible thing i have heard from some of the candidates, not just elizabeth warren, said they fundamentally believe in capitalism, i think that is an important thing for a future u.s. president to believe. whoever that is. they need to believe that capitalism is the way this country will maintain, and an enlightened version of capitalism, empowering entrepreneurship, which to me is what capitalism is all about. you come to the country with $600 to your name like yours truly, and you build a couple of good companies and do more of that. that is what this country at its best is all about. if candidates treat that as an -- a presidential candidate who speaks to that as an american ideal, i am supportive of whatever party they are from. many other things they can say will not matter as much to me. that said, i do maintain, let's

just break them up because they need to be small and less competitive is goofy idea. because then, you are just setting them up to be hammered capitalizedetter companies on an international stage. emily: a firm opened a new headquarters in pittsburgh, why? max: it is a great city with a surplus of talent that can be hired to help us build a better customer experience. we are launching customer service there. typically, you think that pittsburgh is a place where you hire scientists to do machine vision. self-driving cars type applications. we are opening a center to do customer service and other operational functions. 500we plan to hire people there, so a huge office for us. emily: what is the vision for a firm in this changing world. there's cryptocurrency and all

of this controversy around that. how does a firm fit into all of that? max: we take a very practical point of view. one of the key trends we have seen since 2008 going forward is people are looking for simpler, easier to understand, just more honest way to handle their money, and buy things, and budget their lives. you can think of it as america has wanted to deleverage. 2008 was about overleveraging, getting too complicated, and getting hurt with it. we have been building tools for americans to deleverage. you still need to buy things over time, but if you are not careful, you will pay interest the rest of your days. all we do is say let's simplify that. if you want to buy a bicycle, a mattress, or anything in between, we will help you pay for these things over time in a way you understand. we have expanded into things that are much less expensive than bicycles. in, expensive like home improvement. fundamentally, it is just tools to lead a simpler, less leveraged financial life while

still accomplishing your life goals. emily: i have been seeing a ffirm in more and more places. thank you for joining us, always good to have you here. max: great to see you. emily: still ahead, the slightest genetic mutation can have devastating impacts on a person's health, but there are -- genetics counselors are hoping to catch those problems before they are too late. we will take at a preventative counselor, next. this is bloomberg. ♪

emily: the deadly software glitch aboard some boeing 737 planes is not the only thing to be concerned about. there is now word that cell phone can pose safety hazards.

a new faa report says potentially hundreds of planes are flying around the world with cockpits that are vulnerable to interference from wi-fi. mobile phones, and even things like weather radar. the new report said passenger cell phones could pose a crash threat to some models of boeing's 737 and 777 models. honeywell, which makes the screens, says it is unaware of any issues. boeing says it has not seen any issues on aircraft. that is frightening. genetic counseling could be key to good health. several commercial labs already offer genome sequencing for sick patients. a new trend is focusing on health. boston's brigham and women's hospital opened its own genetic clinic to catch conditions early while they are treatable or to prevent conditions from ever developing in the first place. bloomberg spoke with a genetic s counselor about her role in the latest edition of

bloomberg's next job series. >> from the moment we are conceived, our genes encode in us every instruction our bodies will ever need. these genes build our organs, our muscles, our brains. they help us grow and keep us healthy. but the tiniest deviations often -- also make us sick. many of us are carrying these deviations without ever knowing it. and this woman wants to find those problems early, before it becomes too late. out.y name is kerry blo

i am a preventive genetic counselor. s, in the early 2000 scientists decoded the first human genome. since then, we have discovered the genetic footprint of thousands of illnesses. and if you have a health problem or come from a family with doctor maylems, your order a dna test to diagnose or treat you. >> in our studies, we are finding that there are 10% of people walking around that we would expect to have symptoms of a condition now or to develop it in the future. >> she has a masters degree in genetic counseling. four years ago, she joined the research program affiliated with brigham and women's hospital and harvard medical school. the program has been screening the genomes of healthy people, and through her research, she has helped more than 100 patients make sense of the ir results.

>> early findings like this prompted brigham to open the genomics clinic last year. >> why does she want to be tested? really what is her motivation? it is led by geneticist dr. robert greene. she has seen her first few patients. it is one of the world's only clinics offering dna testing for preventative purposes. i am here to become its seventh ever patient. >> hi. >> hi. >> nice to meet you. >> nice to meet you. >> she is trying to guide patients through the complicated world of dna testing, and that starts with helping patients choose the right tests. you might have even tried one of them you can take at home with 23 and me. but 23 and me looks at less than 1% of your genome, identifying

your risk of developing 13 conditions. the workup i am getting will sequence virtually my entire genome, placing focus on 3700 genes associated with more than 2500 conditions. for all this, my bill today will be just over $4000, which includes this hospital visit and the cost to sequence my dna and analyze it. it is a lot, since most of it is not covered by insurance, but take a look at how much the cost of sequencing has come down over the last few decades. this is why genetic testing has become so widely available and why the professionals who help patients make sense of them are now in such high demand. salaries have soared, with genetic counselors earning an median $80,000 last year, more than twice the median pay in the u.s.

machines extracted dna from the nuclei of my cells, then more machines read the base pairs that make up the dna, which geneticists analyze for clues to disease. before this goes mainstream, she and her colleagues still have much to prove. will the price of these tests be worth the lives they save? will uncertain results make patients anxious? will they lead to unnecessary procedures? but with enough research, this technology could become standard for all of us. allaybe one day, we will get sequence, maybe even at birth, and have that information to inform our health care over time.

>> then, we will have a lot more genetic counselors, helping us prevent what we can and plan for what we cannot. they will guide us from one milestone to the next, through childhood, adolescence, and adulthood, all the way to old age. aw.y: coming up, more of "bloomberg technology" after this quick break. this is bloomberg. ♪

emily: what smartphone slump? that could be the thinking of

the world's largest contract chipmaker. tsmc has projected current quarter revenue ahead of estimates. could this be allaying fears of a persistent global downturn in washington and beijing continue their trade war? to answer that, let's get to beijing where bloomberg's selina wang is standing by. how do we explain tsmc defying gravity? emily, it is certainly causing investors to breathe a sigh of relief. it is seen as a bellwether for the global tech economy. it has major tech bunnies as its clients. it is also the world's largest manufacturer. the first half of the year was difficult for this company, the worst performance since 2011, hampered by the trade war and geopolitical issues. thought what they were expecting, which was a bit of a bottoming out and we are seeing a revival. part of that is that tsmc has continued to sell and work with

huawei. part of that is because they are not really being hampered by u.s. trade restrictions, though they did get that indirect impact from the overall dampening of demand in the smartphone industry, but geopolitical risks remain a key concern for the company, especially with the japan-south korea dispute continuing right now. we heard from the chairman that that is the key uncertainty for the company. it is so uncertain, that they cannot even pinpoint what products will be impacted the rest of the year. emily: given the geopolitical issues obviously between the u.s. and china, japan and south korea, how is that impacting the regulatory situation? for chinese companies? what is the position that the -- of the chinese government? selina: it has been a really interesting contrast. as you mentioned in the u.s., we , are seeing antitrust issues, concerns that these tech companies are getting too big the techg to hit companies in the u.s. with , comic is going very hard with them.

but in china, a different situation. the trade war, tech war has caused a lot of nationalism, and at least, anecdotally, when i stick to people as well, there is a sort of patriotism that comes when they learn with what is going on with huawei and how the trade war is hurting their companies. there has been a regulatory let-up. we used to see regular headlines against the likes of censorship, safety, and we have not seen the same clip in frequency of regulatory crackdowns. of course, it is always very opaque, but it seems to be beijing wants to give their tech companies breathing room as they are already dealing with a bunch of hampering issues given the broader geopolitical issues. of course, there is huawei, zte. indr, whichen gr is owned by a chinese tech company. we have seen the overall economy slow. we have seen it more difficult for companies to make mergers and acquisitions given the increased step up of regulations. there are factors hurting the

tech companies. the thinking is the last thing beijing wants now is to further hurt their tech industry. and they want to champion it instead. emily: all right, a lot to digest. bloomberg's selina wang for us in beijing. thank you for joining us. your early-morning. that does it for this edition of "bloomberg technology." we are live streaming twitter. you can check us out at technology. be sure to follow tictoc on twitter. this is bloomberg. ♪

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