taylor: i'm taylor riggs. this is the "best of bloomberg technology," where we bring you all of our top interviews from this week in tech. coming up, ipo woes. wework was supposed to be embarking on its big roadshow this week, but complications delayed the ipo. how the company is regrouping. plus, listening in. is it really the right time for facebook to tout a device that can listen to you in your own living room? we speak with the vp of augmented and virtual reality.

and rapid climate adaptation. billionaire bill gates wants to help invest nearly $2 trillion over the next decade to help the world become more resilient. his thoughts on and potential solutions for climate change. for wework, it was the roadshow that was not this week. one of the most anticipated debuts of the year is now postponed until october. the shared office space provider is looking for time to calm investor doubts about its dropping valuation, governance problems, and financials. remember that, at one point, this was supposed to be a $47 billion company. that number is now $15 billion and could be perhaps even smaller. joining me to discuss this all was phil haslett, cofounder and chief revenue officer at equityzen, a marketplace for pre-ipo shares and bloomberg's crystal tse. crystal: they have a lot to address before they can go out

to the investors and ask them for their money. like you said, they were looking for a $47 billion valuation, and now we are hearing it could be as low as $12 billion to $15 billion. they have actually made a lot of changes to corporate governance, but investors are looking at valuations, whether they will improve financials, and whether more changes are needed to the corporate governance structure for them to be convinced about the valuation they want to get. taylor: this morning, they spoke with gene munster, who cofounded loop ventures. he had comments as a related to the valuation part of wework. take a listen. >> the valuation is really a wake-up call to private investors that the public markets are holding them accountable. and the specific reason i think this report reflected that was the amount of cash burn -- what is a consistent theme and your setup addressed this -- companies that are losing a lot of money, not surprising, are

being held to lower valuations. in the case of wework, it is $1.5 billion in the year, more than what tesla lost, to put that in perspective. taylor: react to these comments on valuation. phil: i would say wework is kind of in a space of its own. having lost $2 billion in 2018. i think of a mix of lyft, uber, and wework planning to come public in 2019, i think we have seen the largest losing companies coming out of the pre-ipo tech space. amongst these types of groups of companies, we also see plenty of companies that are burning only $100 million, $200 million in cash. wework is an exception to the norm, but writing off $37 billion of value over a period of three weeks to four weeks will catch the attention of a lot of capital venture investors. taylor: we can joke about how you value company using a discounted cash flow to evaluate a company that does not have cash flows.

but on a serious note, how do you value this company? phil: sure. with wework, the first thing we looked at is multiples of revenue. the first thing we found, they -- some of their competitors were trading at 1 or 1.5 times their revenue. wework earned $2b revenue in 2018, so to come out at that evaluation seemed ludicrous. the toughest thing for wework is trying to explain and defend itself as a technology company where in reality it is really a real estate company that happens to have some technology bells and whistles. this is a wake-up call for them to recalibrate those expectations may be in q4 or may be in 2020. taylor: talk to me more about that valuation. what did the private market see that the public markets are missing? phil: one of the interesting things we saw in equities, where we see a lot of pre-ipo secondary flow before companies go public is there actually was not that much interest for wework, particularly at the valuations that had obtained

from softbank and other investors in primary capital raises. we saw much healthier markets for companies that went public recently in 2018 and 2019, companies like docusign, slack, that were little bit more popular with investors. we would have expected to see something similar for wework because the brand is so ubiquitous. however, there was a little bit of hesitation at that lofty valuation. when you get north of $20 billion in valuation, you are not talking about hundreds of unicorns anymore. the number of decacorns or whatever you want to call it drops precipitously. in particular when you have that kind of valuation coupled with losses north of $2 billion, it was kind of a recipe for disaster. one thing i think about is we have been in very much a bull market not only in public stocks but also in private companies, and that has led to founder-friendly terms on how they raise capital. at some point, you are going to have the pendulum swing. and i think, when you have this kind of headline, a cut in valuation will really start to

shift those kind of numbers over to investors that are going to start to ask for more corporate governance, more reasonable valuations, and other parts within the cap structure that they will get more comfortable with. taylor: when we were talking about bondholders, you mentioned that a $6 billion financing was contingent upon raising $3 billion in that ipo. assuming that doesn't happen, when does wework need to get more cash and where do they get it? crystal: i think the very simple answer to that question is that always need to get more cash as soon as possible. if, say, the ipo does not happen by the end of the year, they may look into tapping through softbank to get more funding. there were some talks about softbank being willing to put in another couple hundred million dollars into the country. but that would not move the needle. they definitely want to do an ipo to recapitalize. taylor: phil, quickly here, any ideas on when is the drop dead deadline for raising more cash? phil: i have to think they want

to push this over to 2020. but with only about $3 billion or $3.5 billion of cash available to them, things could really get messy, starting in q1 of 2020. particularly if lenders have promised capital if they raise their ipo before 2019. it will put them in a tight bind. if i were them, i would spend the next quarter really tightening the belt, trying to overhaul spending, show great numbers after q4, try to renegotiate with some of the banks. taylor: that was phil haslett, cofounder and chief revenue officer at equityzen and bloomberg's crystal tse. apple said in court it was unfairly painted as a tax dodger. in luxembourg, an apple lawyer says, in fact, that the company is the world's largest taxpayer. apple is urging the e.u. general court to overturn an order from the european commission that it pay a record of $13 billion in back taxes to ireland. bloomberg's maria tadeo filed

this report from luxembourg. maria: apple is coming face-to-face with european regulators in the biggest tax case in the world. the company has appealed a 13 billion euro fine dictated by the european commission in 2016. the idea behind it, according to the europeans, is that apple received special tax treatment from the irish government, which allowed the company to pay artificially low taxes. apple says this was not the case and has appealed that decision. and if you were hoping to get a sorry moment from the company, that was certainly not the case. apple said it is a company that pays the most taxed in the world. the actually claimed the decision from the europeans lacked any logic or sense, and they also believe the numbers here were tweaked in a way that presented apple in a bad light in front of the public. essentially, the goal was to portray the company as paying no taxes. when you look at the european side to the story, they will tell you they still believe they are right. they will tell you that it is

pretty obvious that apple has set out a tax structure in europe to pay the least amount possible. and they do believe, if the arguments are validated and they are vindicated by the courts, they can continue to get tough on american tech companies to make them pay more in europe. of course, those tax cases happening as tensions continue to play out between the united states of america and europe over big american tech. the president of the united states, donald trump, has said many times that this is only happening because europeans cannot compete on the innovation so compete on the taxation. when it comes to the e.u., they deny this is the case. they just want everyone to pay their fair share. taylor: maria tadeo from luxembourg. coming up, part of our exclusive interview with ibm's ceo ginni rometty. why she thinks blockchain is all about trust. 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. ♪

taylor: ibm announced wednesday it would open the first quantum computation center in an effort to expand its fleet of quantum computers and further realize the business potential of the next generation technology. the real-world application of quantum and blockchain is something that bloomberg's caroline hyde covered when she sat down with ibm ceo ginni rometty. ginni: we look at the future, technology is coming. we're all about applying them to business, but we build some of the world's leading technologies here. yes, cloud and ai, everyone talks about that. artificial intelligence and cloud. much more to be done on that, by the way. but we will park those for a minute. the next two -- blockchain and quantum. as often is the case with new technologies, people overestimate them in the

beginning and then underestimate them in the long term. but blockchain -- if you said, ginni, what is one word you would associate with blockchain? i would say trust. crypto is a use, put that aside. it has to use the right kind of blockchain. what blockchain should do -- it will put trust between parties who don't even know each other. it would make trusted transactions. and it will do what the internet did for communication between lots of parties. say, for example, if i can, on trust and blockchain -- because what it allows you to do is you and i can share a transaction together. i don't have see anything you don't want me to see. and once the transaction is completed, it cannot be erased. so think of a ledger, right? why do we each keep our own checking accounts? do we trust what the bank says? today, we probably do. in the old days, we would each

balance our checkbooks and the like. if i said to you, hey, $100, you would say i would check my own notes. so it is the same idea. and a big application is food safety. one out of ten people get sick all over the world get sick from food safety, it's a big problem. you have seen it with recalls on the spinach and the like. we started something called food trust. think about this on walmart, carrefour -- these are competitors out in the world all being willing to join on. nestle, unilever, driscoll strawberries and the like -- what they are doing is saying we will all put our data on here about what row on the farm this came from. so from farm to fork. so when there is an issue, and my goodness, we have done millions and millions of transactions already through this, i can pinpoint where the bad spinach is versus call it all back.

because a third of food is wasted in this world. can you believe it? to me, that is one. and quantum. to jump over to quantum. just like with blockchain, i said think about the word trust, quantum will solve problems today that traditional computers, no matter how fast they are, cannot solve. because traditional computers are 1's and 0's. quantum bits have infinite states. they are for the kinds of problems that, even if you had the best computer, you could never model it. it would run forever. i am exaggerating a little bit on that. there's a reason -- let's take wetlands in biology as an example. it is an approximation. they can't get an exact simulation done. so what quantum will do is -- the very first things will be drug discovery, material sciences. risk management, logistics. these are incredibly different.

if you were to want to truly model a molecule of caffeine, you would need a computer a 10th the size of this planet. if you actually wanted the actual simulation. so we are ready with our quantum systems. we have made commercial ones available through the cloud. because they operate at colder than outer space, that is what quantum is. things like daimler working on new materials like batteries in cars. jpmorgan is working on things like how to price different kinds of options. how to look at risk differently. and drug discovery. so we have got a huge network of clients, and now is the time to start to get used to it. now you say the word trust. i would add one other side of quantum. there is a dark side. one dark side of it is that quantum can break traditional encryption that has protected most of the world. we announced to some new systems last night that are prepared for

quantum already. and already, our security that runs all of those mission-critical systems are quantum-safe. and so we have been equally building something called lattice photography, a kind of encryption that quantum cannot break. in this, to me, goes back to responsible stewardship. if i'm going to build a tool that is that powerful, i owe it to society to make sure that i also address the downside. so we put as much effort into that to then prevent that thing from being that powerful. taylor: that was part of bloomberg's exclusive interview with ibm ceo ginni rometty. then, coming up, listening in. facebook confirms it will resume collecting and transcribing some user audio clips from its in-home video device portal. we hear from facebook's vice president for augmented and virtual reality andrew bosworth. and later, corporate ventures data analytics company splunk.

we will get details with the ceo. this is bloomberg. ♪

taylor: facebook confirmed this week it will resume collecting and transcribing some user audio clips from its in-home video device portal. i spoke to the vice president for augmented and virtual reality, andrew bosworth, at the launch of a new generation of portal devices. take a listen. andrew: we are so excited about our new products. we have a 10 inch and an eight inch screen. they are oriented towards connecting people with the ones they love the most through video calling. these were designed to look like picture frames, so they can fit into anyone's home as naturally as if they were picture frames. they will even show pictures when not in use. taylor: and another cool thing

you guys are launching is the tv portal as well. tell me about that. andrew: yeah. portal tv takes advantage of the biggest screen in most people homes, the tv, and turns it into a really immersive video calling device. taylor: one thing that stuck out to me was the price point, which at about $149, feels like you're really trying to push into what is a competitive space. you have roku, appletv. how do you stand out? andrew: the most important thing is connecting people together. all of these devices are focused on connecting you to content, which is great and useful. but when it comes to connecting with the people you care about, that is what was missing. with portal, you can use facebook messenger, whatsapp to connect with the people you care most about in a rich, immersive way with cameras that follow you around the room and our hands-free and you and your kids can connect with your grandparents or your friends

without having to worry about holding a phone and your arm getting tired and trying to fit everyone into the shot. taylor: you mentioned cameras. i have to bring up, on the portal, there was that button where you could turn the camera off. privacy has been a huge concern. was that the focal point of making sure it was very easy for me to turn the camera on and off? andrew: yeah. when you are introducing new devices -- people have never experienced anything like portal. it has a camera and a microphone. we wanted to make sure everyone felt really comfortable and in control of the experience. so these generation of portals not only have controls to turn on and off the camera and microphone, they have integrated shutters that cover the camera so you can see that it is not seeing you. taylor: what about the microphones? andrew: the microphones have an active light so you know they are disabled. alternatively, you can leave it on if you want to use assistance like alexa or "hey, portal." taylor: so if i say, "hey, portal," am i still being recorded? andrew: if it hears "hey, portal," it sends the recording of the voice clip up to the

servers to get an answer back to you. if you have it enabled, we may review the voice recordings to improve the quality. but you can also disable those on the device itself or your facebook activity log. taylor: privacy, data, all of that has been a big focal point of facebook. is now the right time to be launching new products where there is a camera, where there is a microphone? right now there is so much scrutiny and arguably the least amount of trust in facebook. andrew: i think now is the best time to launch a product like this. connecting with someone you care about is the essence of what facebook does, and that's what the portal devices are centered around. video calling with the people you care most about. we have taken every precaution we can to make sure people feel comfortable with the devices in their homes and the control they have over those devices. but i think, when they have the experience of connecting with somebody they care about who does not live nearby, they will experience something special.

taylor: it also comes at a time when antitrust scrutiny is at the highest, looking at big tech. when you think of facebook, a lot of people think of the app and software. is now the right time to expand your tentacles and showing regulators how big you are, going into tech, homes, and tv? andrew: the smart display category is so new. smart displays have only been in the market for two or three years now. i think it is really early. everyone wants to experiment and see what kind of value can create. it is not very big yet, but it is growing year-over-year. if people decide they are excited about video calling, and we think they will be, portal will be a great fit for them. taylor: joining me to discuss this further is "bloomberg technology" reporter kurt wagner, who covers facebook. first, i wanted to talk about the privacy issues that are going on. frankly, that opt out button is not an opt in. does that go far enough to quell our concerns about privacy? kurt: the big issues we have seen so far with the transcription happenings that

have been a big issue with tech is that people just did not know about it. people were not aware that the audio they were giving these companies were being transcribed at all. i think, at the very least, facebook is at least acknowledging this. they made the opt out thing in their presentation with the press yesterday. so while it is not necessarily they say that hey, privacy is important, you think they might make this the default. if that is how they truly felt. at the same time, they are acknowledging this in a way that a few months ago none of these companies were doing. taylor: what do you make of launching in your living room cameras and microphones when a trust in that company is at an all-time low? kurt: you asked him this. i asked him this as well. it seems crazy. the timing for facebook to be adding not only a device to your home but one that has a camera and a microphone on it. it just does not feel like the right time. at the same time, when is the right time for facebook?

a year ago, it certainly would not have been any better. a year from now, is it going to be any better? i understand why they are pushing forward with this, because you never know when will be the, quote, "right time." but more than almost any other company they have been dealing with this privacy and trust issue. it is hard to get into someone's living room when people don't trust you. taylor: this is a competitive space. you have comcast making an announcement, facebook, you have companies like roku, apple, name it. this is very competitive. how does facebook stand to differentiate themselves? kurt: they were very clear about this. they said the differentiator is the video call. we think people will use portal for what you may call a facetime call on your phone, but this would be through their hardware, and, in some cases, even through the tv set. do a video call through your tv. they think that differentiates them from all of the others. we asked about what about the idea of having netflix or hbo, other entertainment apps on these devices.

they kind of said, listen, there is a ton of places you can already go to do that stuff. our differentiator is the video camera. i think it would make sense if they had both, but that is what they are leaning into. taylor: when would we see facebook come out with a version of the google home or the amazon alexa, an actual device you can talk to? kurt: you can talk to this one. you can either talk through alexa, or you can say "hey, portal," and that would wake it up for basic commands or requests. those are the things that they are actually starting collecting and transcribing. but the bigger question is when will they have their own assistant? the software where you would say "hey, portal" and it would give you a bunch of different options versus basic commands. right now, they don't have any plans to remove alexa and build their own thing. but clearly with the "hey, portal" software, they are getting started on that. taylor: coming up, what does a $17 billion data analytics company do to diversified? if you are splunk, you enter the vc world.

and "bloomberg technology" is livestreaming on twitter. check us out on @technology and be sure to follow our global breaking news network at @tictoc on twitter. this is bloomberg. ♪ devices are like doorways

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taylor: this is "bloomberg technology." data analytics company splunk splashed wednesday as it entered the venture capital world. the company announced investment funds totaling 100 $50 million including 150 million dollars in its innovation fund while the other is $50 million. spunk ventures touted the move. >> it is a classic corporate fund. they are super passionate about data and the power it can bring to solve world problems. those two funds are constructed to help investment companies

that have a commercial purpose on using data to solve issues around the world from health-care to consumer issues to privacy issues. leveraging the platform, and keeping it open. the other one is more of a social fund. it is more of a data and service driven economy, and there is a lot of great work positions that are trying to help with everything from rescaling of populations all the way through to different beneficial programs in areas like human trafficking or areas that would not be commercial entities. do it in using data as a backbone. taylor: analysts are bullish. the last time we checked, they are really bullish on future growth opportunities, where do you see the future growth? doug: we have focused on the technical departments within

organizations. they are fully digital already which means they have overwhelming amounts of data that they need to craft a signal versus the noise from. the genius of that data is that it can be used for manufacturing optimization, supply chain optimization, but our focus for the technical buyers is still early in the journey that we look at the market as being less than 5% penetrated. the bulk of our focus remains on cybersecurity, resiliency, and then helping those buyers serve the rest of the organization by taking that data and using it for other revenue-generating or customer serving, or cost-saving activities. taylor: it was interesting in post-market, shares rose as much as 2% on news that cisco had tried to make an acquisition for data dog.

the point is the broader m&a landscape. do you get bought out? doug: the thing is, we cannot control who we focus on, and we have made over 10 acquisitions across four years. we are actively always looking at additional technologies that could help customers. we had two relatively big ones over the past three weeks and we see so much opportunity and we are at the beginning innings of this data era. whatever it takes, organic or inorganic to make sure that our customers' needs are solved and data into doing instead of being overwhelmed is something that we are committed to. taylor: within the cloud space, how do you compete with the big guys? amazon, oracle, and et cetera

who not only have the cloud but also have the data analytics company. doug: right now we are adding value to the different data services. we are enhancing and enriching. the services they offer. the reality that any of us live in when you are staying with google, microsoft, or amazon is that you have to find ways to add value. that is going back to acquisitions and massive investment. they keep coming out with really compelling services. we find ways to find much more effective value, and also draw from the multi-cloud horizon, and data centers to take that value up higher for organizations that have very heterogeneous landscapes. taylor: as we dig down into your business, we should note, j.p. morgan analysts upgraded the stock today on advanced or future bookings really strong going out into the year.

how do you forecast future bookings? how do they look? doug: the economy is in such an interesting state. there is a lot of change. we had data initiative and a digital transformation that we have been talking about remains top of mind for leaders. when you are facing the cloud vendors that bring new business models to their customers, you must keep investing on a digital transformation journey. fnd in taking advantage od data. so far, we are not seeing any big impacts in our outlook for our products. it is always a quarter by quarter outlook. taylor: how is the broader tech spending environment? do you fluctuate with tariffs, international versus domestic, how does that felt? doug: we will try a secondary impact, as organizations have to bear the burdens of tariffs, they have to determine what to spend the money on.

we do trade and sell internationally and currency is an issue. we tend to be in u.s. dollars and that has an effect because they have to quantify what the new price is based on their own currency fluctuations. it is not quite the same impact as shipping physical goods, but ultimately we are at the service of our customers and trying to drive them forward and their budgets translate back onto what they can spend. on firms like us. taylor: you introduced price changes. how much more of a tailwind is that for you going forward? doug: the main focus that we were driving is around customers. customer success is our number one criteria. this was a key element we felt was critical. within our modeling, we think it is tailwind. it provides a lot more leniency for what we can do with software and there is so much data that with an easier pricing metric, they are able to put a lot more

data in and get value out. taylor: that was doug merritt. , ceo of splunk. spunk's rival data dog also joined bloomberg tv this week. the new york-based enterprise software company went public on thursday. ed caught up with the ceo at the nasdaq. >> you have to solve the real problem for real customers. that's what we do. the way that we settled this and focus on this. once they run their infrastructures and applications. ed: how do you grow in terms of market share because you have a lot of competitors. it is a very crowded space and cloud. how do you compete with the world? olivier: it is a very big market. there is room for many companies to be successful. really, the way we compete is

that we focus on cloud and companies moving from public to private clouds. we build on that from day one. we focus on getting to the maximum level of reach that is being used by many engineers. that is what makes us different. ed: what is the point of differentiation? olivier: we are trying to make data more accessible. we started between teams that did not see eye to eye or look at the same data and we focused on to get all of the data from these sources into one place and make it accessible to different teams. we can get more users and compete with the other companies. more teams get more users. ed: everything the public market at the moment is overshadowed. wewhat's going on with work and their travails.

having just done an ipo and been a very successful in day one pricing, what would be your advice? olivier: i do not have much to say. we work in a number of cities. it is a real business. the best to do is always focus on your customers and having a business that is healthy in terms of the metrics and profitability. that is what we do and we keep doing that. i guess others should do that too. ed: you have the stock that is common among tech companies. it has been a subject with some controversy if should companies have so much control over companies going public. what was there any discussion on potentially pulling back? olivier: for us, we are building for the long term. casent that to remain the as a public company. that is why it was important for us to serve investors, we get returns to investors, we represent investors, and it is

healthy. time, we wanted to work with our long-term on that. ed: another story that has been much in the news is interest from cisco. talk to us about that. why does it make sense for a company like datadog to be public and independent? olivier: i cannot really comment on any of the rumors that we have heard, but what i can tell you is that the market that we are in, there are many more problems that we can solve for customers and there is a much more important way for the where weo build than are today. we have been very successful. the founders acquired this. we will certainly do more in the future.

taylor: that was datadog ceo. olivie pomel. coming up, and internet unit spinoff as south africa traded publicly for the first time in europe this week. we will check in on their performance and its tencent stake with the ceo. the world's second richest person on climate change. bill gates's thoughts on the adaptive action that we can take now. this is bloomberg. ♪

taylor: just last week investors piled into the newly listed internet unit from south africa. shares initially jumped as much as 32% above its reference point before declining. prosus holds assets that include

a lucrative stake in the tencent holdings. i caught up with the ceo and asked what he sees that investors should be open to. bob: the start was positive, and we expected it to be volatile in the beginning. it is a new listing, and the shareholders have not received their shares. they will only get them on monday. there will be more activity going forward, and generally i think people are excited to have a large group listed in europe, and we are the largest consumer internet group in europe. investors are very positiving about it. taylor: is now the right time to be ipoing? bob: it is profitable in classifieds and payments, and we are also growing very fast organically. taylor: you mentioned classifieds. what is next business you would list for ipo?

bob: we are focused on prosus at the moment and we want to get the right investor base into the listing and that is the first priority. taylor: what sectors are you investing in? bob: there is so much that we are excited about. we are investing in food delivery in the u.s. that is rapidly growing. every wherescially in the world. people are really ordering in at work or home, so we think that is growth opportunity. taylor: talk to me more about food delivery because competition is heating up. in that space. you have more companies coming out that is trying to invest in the market. how do you stand out and differentiate? bob: what we see is it is really important to have local operations. what we have seen in markets like india, what it requires to be successful there is what it is different than what it is required to be successful. operatoran excellent

who has a very efficient and scalable operation. taylor: you mentioned india. talk to us about being in the local market in china. bob: in china we are an investor in tencent and we have 31% of the shares. as a market, it is the most attractive into that market, the biggest internet market and users. i think tencent has a fantastic market, in that probably the best leadership team and we are happy to be active with them. taylor: you talk a lot about food delivery. i know you are a big investor in ai. all the rage these days. cloud products, software, and outside food delivery where do you see the next frontier? bob: if you look at technology that will make a difference, i would say machine learning is the one that stands out. i think it is going to be transformational, even more in

than mobile phones have been over time. it is changing how people interact with the internet, and it will be relevant in all the businesses that we have. machine learning is a huge topic of interest. taylor: a big thing has been finding the path to profitability. as you look at companies and individual markets that you do or do not like, looking at the front sectors that you want to be involved in, how important is to a cede that roadmap profitability? bob: the way we think about it is if you understand the business model well, and you have grasped the details, we are fine with investing. we did that in classifieds and it turned profitable. as long as you know the model well and you are comfortable with a number of years of losses, but in the end you need to make money.

taylor: we talked about india and china, but not the u.s., why do you focus on emerging markets and would you consider big investments in the u.s.? bob: it is a good thing that we speak about that because we are a growth company, but not necessarily a growth market company. we have invested quite a bit in the u.s. in a company that is trying to let people sell things that they do not need on a mobile phone. taylor: tell me more about that. bob: it is founded by alec who founded our classified businesses and this company. what it does well, it makes something you do not need anymore as easy to sell as throwing it away. it is super simple now. taylor: we need another question about being in the midst of the u.s.-china trade war. have the tariffs or trade war impacted any of your relationships?

bob: if you look at the investments that we have in china, in tencent, it is mainly operating domestically. it is a strong franchise. i would say the operations of the business has not been impacted. it obviously has impacted investor sentiment, and that has had an impact. astheir share price and ours well. taylor: are you purposely focusing on companies that do not have the internationals exposure and are subject to the trade headlines in the u.s.? bob: we take a long-term perspective on the world, and it has served us well over time. when we do an investment, we take a 10 year horizon. we would not worry about what here andoday in the now. taylor: coming up, clearing the fog on climate change. we will talk sustainable

investing and hear how the world's second richest man is helping those hit hardest. ♪

taylor: the united nations climate action summit is due to be held next week and most americans agree that climate change is something that needs to be addressed. bloomberg is part of the covering climate now project which includes 100 news outlets. cbs news recently conducted a poll, which found 56% of americans think that we should be invested in climate change. bill gates has invested in clean energy to tackle climate change. his latest strategy is not to prevent it, he wants to help with adaptation. the world's second richest man recently spoke to bloomberg's

eric in seattle. bill: if you do not have a savings account to get past the one year in eight and your children are not having enough to eat, if you live near the equator where the absolute temperature is far higher than it is in a temperate zone, climate change is caused by middle income and rich people, and the people who suffer will be the poor. it is very unjust, even eventually for the wealthy people, the problems will be bad. for the next 30 or 40 years, most of it will hurt the subsistence farmer. eric: why focus your efforts on mitigation and adaptation to climate change instead of combating the root problem? carbon emissions. bill: mitigation is not an area that the foundation gets involved in, when you are trying to switch to green energy or electric cars, or meat made

without cows, that is big private sector stuff. i invest billions in those things including nuclear reactors and all sorts of things to help. adaptation, which is taking the fact that there will be climate problems, and we need to help those who are hurt by it by giving them better seeds that can deal with a drought or are more productive that you can save more money, those things the foundation is very involved in. most people think about this mitigation of reducing emissions, and the idea of how you minimize the damage, which they call adaptation, that gets little attention, which is why i and a few others created a commission about this issue that, later this year it will

make it more clear that there is work to be done. eric: do you think climate change is stoppable, or reversible? bill: we are not going to have the year where the world is cooler than it is today. the average global temperature is going to go up a lot, and in the next 50 years, it will not go down. deciding how much it goes up, by two degrees or four degrees, that is in our hands. if we ignore the problem you are going to aim to something that is like a four degree scenario, in terms of natural ecosystems, forest fires, days that humans cannot go outside if you live near the equator, it is extreme. knowing how seriously people will take it, and what type of innovations will come along will

determine where in that range we are by the end of the century. i certainly hope we do not run the experiment of being higher than two degrees, that it will take a lot of commitment, and a bit of luck on the innovative breakthroughs to be able to get there. eric: there are a number of different ways to fight climate change, renewable energy is one of them. do you think government should subsidize noble energy or take up by market forces alone? bill: the cost has come down dramatically, and some of that subsidization has helped drive the volume which drives the learning curve. the prices come down. now they are not going to come down much more, so the tax benefits should be shifted into things like energy storage, offshore wind which still has a huge premium price.

lots of places that we need the market to get going. progress on solar and wind is very helpful, but the sun does not shine 24 hours a day if you are far away from the equator in the winter you cannot get as much. that is just for the electricity piece, that is only 25% of the emissions. we need a lot of effort, but that subsidization and accelerated rollout is one of the few advances that we have had. it is less than 10% of all energy generation, because the global economy has a lot of energy generation. it is one of the good things that has been developed. taylor: that does it for this edition of the best of bloomberg technology. we bring you all of the latest in tech throughout the week. tune in each day. bloomberg technology is

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