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 secondary

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 it had obtained from softbank and other investors in primary capital raises.

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 they 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. in this exclusive interview. 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 - 600 million - 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 cryptography, 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 hd 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 do 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 the wake word, like "hey, portal," it sends the recording of the voice clip up to the servers to get an answer back to you. if you have storage enabled, which is the default, 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 we 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 diversify? 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.

♪ taylor: welcome back to the best of bloomberg technology. data analytics company splunk made is last wednesday as it entered the venture capital world. the company announced two investment funds totaling $150 million. the first is $100 million and it is an innovation fund, while the other is an innovation fund while the other is a social impact fund. splunk ceo doug merritt touted the move. >> it really is a classic corporate fund. we are passionate about data and the power that the data can bring to solve some of the world's problems. two funds are

constructed to help investment companies that have more of a commercial purpose on using data to solve different issues around the world from health care to consumer issues to privacy issues. leveraging this blanche platform -- the splunk platform we are , open to investing outside of the splunk ecosystem. the other is a more social fund. the transformation from an industrial economy to the more services and data driven economy. it can be dislocating. there are a lot of great organizations helping with everything from reskilling populations all the way through to different beneficial programs in areas like human trafficking that would not necessarily be commercial entities but doing aszing good using data again a back bone. taylor: analysts are bullish on the stock. they are really bullish on the future growth opportunities. where do you see that growth?

>> we classically focused on technical departments within organizations because they are fully digital already which means they have overwhelming amounts of data at their disposal and they need to craft a signal versus a noise phone, where president obama's comments came from. the genius of that data is it can also be used for manufacturing optimization, supply chain optimization. but our current focus on the technical buyers is so early in the journey, we look at that market as being less than 5% penetrated. so the bulk of our focus remains on cybersecurity, i.t. resiliency, developers, and then helping those buyers serve the rest of the organization by taking that same data and using it for other revenue-generating or customer saving or cost-saving activities. taylor: on wednesday post market shares of splunk rose as much as 2%. this was on news that cisco had tried to make an acquisition of data dog. data dog then rebuffed the

offer. the point is the broader m&a landscape. do you assume splunk makes cloud acquisitions or do you get bought out? >> [laughter] control, whocan't we focus on. we are actively always looking at additional technologies that could add to our full and help our customers. i would anticipate more for the future. we had to relatively big ones. we see so much opportunity. we are at the beginning and end of this data era, so whatever it toes, organic or inorganic make sure customers' needs are solved and make sure data can be turned over into doing rather than being overwhelmed by it is what we are doing. taylor: within the cloud space how you compete with the big guys amazon and oracle who not , only have a cloud but then they also have their own

analytics company? >> right now we are adding value to the different data services those vendors provide. we are enhancing and enriching the offer. the reality that any of us live in when you are participating with google, microsoft, and amazon is you have always got to add value to that stock. that is going back to acquisitions and maximum investment in r&d. they keep coming out with really compelling services, and we find ways to add more effective values to those services, and then also draw from the multi-cloud horizon and operate data centers and then taking that value up even higher for organizations that have these very heterogeneous landscapes. taylor: as we dig downtaylor: into your business a little bit, you should know jp morgan analyst upgraded the stock today on advance bookings or future bookings, really strong going out into the year. how do you forecast future bookings? how do they look? doug: we -- the economy is an

interesting state. what we have seen in the last few quarters is while people are -- there is a lot of change, and they are trying to digest the change. this digital transformation we have been talking about for a decade remains top of mind for leaders. when you are facing cloud vendors that bring new business models to their customers, you must keep investing in the digital transformation journey. taking advantage of data. so far we are not seeing any big impacts in our outlook for our products, and it is always quarter by quarter outlook on back. taylor: how is the broader tech spending environment? do you at all fluctuate with tariffs, trade, internationally versus domestic? how has that consumer spend felt? doug: we are a secondary impact. as organizations bear the burden of tariffs that takes a budget then they have to reevaluate

budgets and what they want to spend money on. we do trade internationally, we do sell internationally, and currency is an issue for us there. we tend to be in u.s. dollars, and that has had an effect on us because now they have to quantify what the new price is based on their own currency fluctuations. it is not the same impact as manufacturers shipping physical goods house but ultimately we , are at the service of our customers and trying to drive them forward, and their budgets translate back into what they can spend on firms like us. taylor: finally you introduced some recent price changes. how much more of a tailwind is that for you going forward? doug: the main focus we were driving is serving customers. customer success is our number one business criteria. this was a key element we felt was critical for customers being evaluated. within our modeling we think it is a tailwind that provides a lot more leniency for what they can do with the 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 more value out. taylor: that was doug merritt, ceo of splunk. now splunk's rival data dog also joined bloomberg tv this week. the new york based enterprise software company went public on thursday. hammond caught up with the ceo at the nasdaq. solve the problem for customers and that is what we do. the way we spend all day is we focus on how to make things simpler as they run applications. ed: how do you actually grow in terms of market share? it is a very crowded space. how do you compete with the big companies here [indiscernible] all it's a very big , market. it's a market that's very fast. there is room in the market for many companies to be successful.

but really, the way we compete is we focus on the cloud, and on companies that are moving to public and private clouds and we build from that from day one. we focus on getting to the maximum level of reach with those companies, being used by as many of their engineers as possible and that makes a -- makes us difference. ed: what is the point of differentiation for this company? >> we started the company to reconcile between teams that we started to bring on titles between teams that didn't see eye to eye and didn't look at the kind of data. our focus on day was to bring one all the data from various sources into one place and make it accessible to teams. we get deployed by more teams and get more users. in the end compete with other companies. ed: obviously everything in the public market at the moment is overshadowed by what is going on with wework and their troubles. painful route to market. having just done an ipo, a fairly successful one in terms of day one pricing, what would

your advice be to someone looking to go public? we actually use wework in a number of cities for our offices. it is a real business. the best to do is always focus on your customers and focus on having a business that is healthy in terms of the metrics and profitability i guess, that is what we do and we keep doing that. others should do that too. tech --have stock among tech companies. it has been a subject where there has been some controversy recently in terms of should companies have so much control -- was there any discussion around potentially pulling back on that? for us -- olivier: for us what matters and what is important is we are

building for the long term. we want that to remain a case as a public company. it was important for us -- we serve investors. we deliver returns to investors and run a business that is healthy for investors. i want to make sure that we focus on the long-term. ed: another story that has been in the news overnight is interest from cisco. talk to us about that and why does it make sense for a company like data dog to be independent versus under the auspices of a big company like cisco? see there aren many problems to solve for our customers. there is a much bigger and more successful company we can deal. from that perspective it makes sense to be in a public company. m&a down thee road? either you as acquiring yourself or selling it to someone else?

olivier: we have seen acquisitions in the past. we might in the future. taylor: that was the ceo of the data dog with ed hammond. coming up, an internet unit spinoff of south africa's naps berg traded publicly for the first time in europe this week. we will check in on the performance of their and with is tencent stake with its ceo next. the world's second richest person on climate change, we will hear from bill gates and his kind of the action we can take now to protect the planet. this is bloomberg. ♪

taylor: just last week investors piled into the newly listed internet unit from south africa 's naspers. shares jumped as much as 32% above its reference point before declining.

prosus holds assets including a lucrative stake in china's tencent holding. i caught up with the ceo and asked what he sees in prosus that investors should be open to. >> the start was quite positive and i think what we expected it to be somewhat volatile in the beginning. it is a new listing and the shareholders have not received their shares. they will only get them effectively on monday. there will be more activity going forward. generally i think people are excited to have a large consumer internet group listed in europe, we are actually the largest consumer internet group in europe. it is very positive. taylor: is now the right time to be ipo-ing? >> the core business is very profitable in classifieds in payments and we are growing very organically so i think the timing is great. taylor: you mentioned classified. what is the next business you would direct list or ipo? >> we are focused on prosus. an important thing for us is we

are a growth company and want to see this next wave of growth happen and get the right investor base into the process. taylor: what sectors are you investing in next? >> there is so much we are excited about. we are investing in food delivery and i think that is also in the u.s. a very rapidly growing sector. see it everywhere in the world. people are working in homes, so it is a growth opportunity. taylor: talk to me more about food delivery. the competition is heating up in that space. you have more companies coming out that are trying to invest in that market. how do stand out and differentiate yourself? >> what we see is that it is really important to have local operations. what we have seen in markets of fromindia, it is different what it requires in other markets. operators on the ground who

really understand, what restaurants need until they are very efficient and scale of operations. local: you talked about a market in india. talk about china. we are an investor in tencent and have 31% of the shares. at the market it is the most in the world. the biggest internet in users, growing very fast. tencent has a fantastic position in the markets, and we are very happy to be active in the markets. taylor: you talk a lot about food delivery. you are the investor in ai, cloud products, software, and outside delivery where you see , -- where do you see the next frontier? >> if you look at technology that is going to make a massive difference in our lives, i would say machine learning is the one that stands out. i think it is going to be as transformational maybe even more

so than mobile phones have been over time. it is really changing how people interact with the internet and i think it will be relevant in all the businesses we have. so machine influence -- machine learning is a huge top influence for us. taylor: a big thing in the market recently has been finding the path to profitability. as you look at what companies in individual markets do or don't like, looking at different sectors you want to be involved in how important is it to be , able to see that roadmap to a path to profitability? >> it is an excellent question. if you understand the model well, grasp the details, we find we have had losses for a number of years. we did that in classifieds and now we turn profitable. as long as you know the model you are investing and you are confident with a couple years of losses, but in the end you need to make money. taylor: we talked about india and china. what we have not talked about is the u.s. why do you continue to focus on

investments in emerging markets and would you ever consider big investments in the u.s.? >> yeah, it is actually a good thing we speak about that. but not growth company necessarily just a growth market company. we invested quite a bit in the u.s. in the last few years. a company called letgo, which is helping to let people sell things they don't need any more on their mobile phone. taylor: tell me more about that. >> it is actually founded by the founder close to our hearts. and this classifieds company and what it does really well is make something that you make it asanymore, easy to sell is throwing in a way. taylor: a broader question about being in the midst of the u.s. china trade war. you know you have been focused , on china. have the tariffs or trade war impacted any of the relationships between the u.s. and china? >> so if you look at the

investment we have in china, i think tencent is mainly operating domestically. it is a very strong chinese franchise. franchise in different markets. the operations of the businesses have not been impacted, but i think it has impacted investor sentiment. that has had an impact on their share price and ours as well. taylor: are you purposely focusing on companies that are locally operated with china that don't have that international exposure that are subject to the trade headlines between the u.s.? >> one of the things that we do is we take a long-term perspective on the world. it has served us well over time. when we do an investment, we take a tenure horizon. horizon.r we would not worry about in the here and now, we look ahead. taylor: that was the nasper's ceo. clearing the fog on climate change. we talk sustainable investing in here how the world's second richest man is helping those hit

hardest. that's bill gates and he is next. this is bloomberg. ♪

taylor: the united nations climate action summit is due to be held next week, and most americans agree climate change is something that needs to be addressed. bloomberg is part of the covering climate now project that includes more than 100 news outlets. cbs news, part of the project recently conducted a poll that , found 56% of americans think we should be addressing climate change right now. bill gates has invested billions in clean energy to tackle climate change but his latest strategy is not to try and prevent it. gates wants to help those hit hardest by climate change, and that is geared towards adaptation. the world's second richest man recently spoke to erik schatzker in seattle. >> if you can't afford air

conditioning, if, when your crop fails. you don't have a savings account to get past that, and your children don't have enough to eat, if you live near the equator where the absolute temperature is far higher than where it is in the temperate zones -- climate change is caused by middle income and rich people, but the people who suffer by far the most will be the poor. it is very unjust, even eventually for the wealthy people the problems will be very bad. but in the next 30 or 40 years most of it will hurt the subsistence farmer. erik: why focus the efforts of the foundation on mitigation and adaptation to climate change instead of combating the root problem, carbon emissions? bill: well mitigation is not an area where the foundation gets involved in. that is where you are trying to

switch to green energy or electric cars or meat that is made without cows. that is big private sector stuff. reporter: you invest in vat. bill: i invest billions in those things including nuclear reactors and all sorts of things to help there. 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 the drought or that are more productive so you can save more money, and those things, the foundation is very involved in. most people think about this mitigation of reducing emission, how you minimize the damage which they call adaptation, that gets very little attention. ,hat is why i and a few others really great group of people, created a commission of this

adaptation issue that later this year, it will make it more clear that there is work to be done there. erik: do you think climate change is stoppable or maybe even reversible at some point? bill: well, we are not going to have the year where the world is cooler than it is today. the temperature the average , global temperature is going to go up a lot, and in the next 50 years, it won't go down. now deciding how much it goes up, by two degrees or three degrees or four degrees, that is in our hands. if we ignore the problem, you are going to head to something like a four degrees, an area which in terms of natural ecosystems like forest fires, days that humans cannot go outside if you live near the equator. it is a pretty extreme case. knowing how seriously people

are going to take it and what types of innovations will come along will determine where in that two to four degree range we are by the end of this century. i hope we don't run the experiment of being higher than two degrees, but it will take a lot of commitment and a bit of luck on the innovative breakthroughs to be able to get there. erik: there are a number of different ways of fighting climate change. renewable energy is clearly one of them. do you think government should subsidize renewable energy or should take-up be dictated by market forces alone? bill: the cost of wind and solar has come down dramatically. some of that has helped to drive the volume that drives up the learning curve and the prices go down. now they are kind of -- they are not going to come down much more. so the tax benefits there should be shifted into things that are more limiting like energy

storage, offshore wind which still has a huge premium price. lots of places that we need the market to get going. the process of solar wind is very helpful, but the sun does not shine 24 hours a day, if you are far away from the equator. actually in the winter you can't get as much. and that is just for the electricity piece that is only 25% of emissions. so we need a lot of efforts. ,ut yes, that subsidize asian -- subsidization that , accelerated rollout that is one of the few advances that we have, it is less than 10% of all energy generation because you know 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 the latest in tech throughout the week. tune in each day at 5:00 p.m. new york in 2:00 p.m. in san

francisco. and bloomberg technology is live streaming on twitter. and bes out @technology sure to follow our global breaking news network @tictoc on twitter. this is bloomberg. ♪ devices are like doorways

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paul: welcome to daybreak australia. i am paul allen. shery: i am shery ahn in new york. beijing.elina wang in we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering. as investors weigh signs of progress. china that negotiations are constructive. violence returns to hong