taylor: coming up in the next hour, zuckerberg to testify. he will appear before lawmakers this month on the social networks controversial cryptocurrency. we have the details. up in smoke.

some life insurance policies will start seeing vapors as smokers. the e-cigarette health scare continues to pose risks. but first, our top story. mark zuckerberg will get a firsthand look at the growing opposition to facebook's plan to create a cryptocurrency. he will testify october 23. the hearing will examine

facebook's impact on the financial and housing industries. my first question is, how significant that it is zuckerberg? >> it is very significant. anytime the ceo testifies, it is a big deal. i was there in april of 2018 when he last testified and it was a total zoo. everyone wants to see him and asking questions. i imagine this will be the same. i know they had been trying to get sheryl sandberg. we wrote about that a couple of weeks ago. it looks like they got someone even better which is her boss. taylor: what do we know about the content of the hearing? kurt: this committee focuses on financial services. they also do housing stuff. facebook has been accused with issues around its advertising businesses. people are being discriminated for housing related issues. i imagine that will come up. once you get an executive in front of the committee, pretty uch anything goes. with mark zuckerberg being there, i imagine we will hear questions that span the entire gamut. taylor: i think i asked you this before and i continue to be

perplexed, does facebook realize the amount of opposition that would be coming their way about cryptocurrency? kurt: it's hard to imagine they would have seen this level of pushback. if they had, i would hope that they would have gone out and done some of this work before. it is a tough situation. if they went out and had all of these conversations, it would've leaked. people would have said, what is facebook doing? did they anticipate that mark zuckerberg would be testifying before congress four months after this was announced? i have a hard time believing hat. taylor: you mentioned the other times that he and the members of facebook have gone to testify. when you look at the share price eaction during those days,

facebook actually rises. ou see how this testimony goes and antitrust is not a big deal as we thought. it looks like regulators do not have a bigger understanding of how facebook works. do we assume the same? kurt: i don't know what the stock is going to do but what sually happens is that

politicians who spend weeks if not months saying really inflammatory things in the press, all of a sudden they have to ask real questions to these executives. oftentimes they either have a real answer, which is not all that exciting, or they avoid the question altogether. they have gotten really good at not saying things they shouldn't say. facebook survived that and mark zuckerberg looked good while oing it. ♪

prudential is waiting until the health studies came outful federal agencies were highlighting the concerns about vaping and reactive and doing this a few months ago? >> you don't see life insurance companies in particular be very reactive, so i think the fact that prudential is taking it into consideration and what regulateors are saying is interesting. it's my understanding that every life insurance company treats it differently. so it is interesting that prudential is saying we looked at our policy and we are go to go change ours. >> do you just assume that

prudential is the first of many to re-enact this policy? >> someville treated vapors as smokers. i'm not sure it will be a tidal wave but big companies are looking at the policies they have and could potentially change it. >> thank you. to bloomberg's katherine. public safety is the reason power.p gmp and e to cut the move is to prevent wildfires and protect the public. never has they cut power to so many people. oakland and berkeley and san francisco and silicon valley are excluded. we have the latest. so, james, this is seen as a good thing as the prevent tative

measures that they are taking? >> depends on your perspective and has the potential to limit the wildfires and cause less death. but if you are a customer who lost power for a week, that isn't a good thing at the moment. >> what are some of the other solutions for them? do these plaqueouts and technological upgrade. what do they do in this situation? >> the first thing is no cheap solution to this problem. there is a range of thing they can do and will have to do all of them. they could start undergrounding their transmission system and that could take a hong time ap start offering subsidies to ustomers toville storage and something they are already doing that.

and you need significantly more. they could start developing micro grid in certain communities and shutting off powers. and whether that is something hey want to do is unclear or strategic locations. so there is a range of things. all kinds of op shops will take time to implement. >> at the gipping of our conversation you said it is good. who if anyone benefits from this? >> you couldn't come off the cam paper for buying a generator so and ompany is selling them lar storage and backup power systems. they are happy with the situation because this is a major opportunity to sell more

to customers and see a significant boost. we have had news that places like home depot they are running out. customers are responding to this and prevent themselves. whether it is people or read about it in the news and wanted a system to be prepared. >> you mentioned a country. how would they benefit from this? >> there are other sources of demand and your car is not charged. but one interesting area a couple of companies pushing, more vehicles to grid useing the battery in your car as a power source and power your home or sell energy back to the grid. with events becoming more common there may be more interest and

may see that as a phenomenon. >> what tech companies may be if he canned by this? >> and a lot of backups are occurring in silicon valley. a lot of companies across the entire california economy is going to be seeing these plaqueouts. and ming up behind tesla its auto pilot feature. does the company have a long road ahead. and check us out at technology inchollow our network on t ktok. this is bloomberg. ♪

taylor: there's increasing scrutiny on unprofitable private companies. i spoke with an investor of sequoia capital. i asked them about quality topline growth at the expense of profits and the competitive software space. >> it is redefining data anagement. we have great customers. the u.s. air force. orthern trust.

we did our first 10 plus million dollar deal. the problem that we are trying to solve is that data is very sideload -- siloed in any enterprise. it brings together data on one platform that spans the datacenter and the cloud. backups happens to be the first one. the movers of tomorrow will be decided by how much value they an extract out of that enterprise data. taylor: what is the biggest change you have seen in the company? >> what we have seen is what he just articulated. and what they announced so they announced today and their recent performance metrics. it is unusual to see a company that is been in the market for only about three years and having a $10 million

software. they are refining data anagement. that is highly unusual for a company at this stage. it is not one customer, it is many customers. we have seen growth in transactions. it is the fortune 100 companies of the world that are employing his. >> one change we have accomplished in the last year is our shift to software. our revenues are completely and oftware. we no longer book hardware on our books. that gives a lot of flexibility

to our customers. they no longer worry about uying one piece of hardware. they have a choice of many different platforms. we have become a software company. >> the thing i was going to add that is very impressive is the ecosystem in which cohesity is uilding around them. if you look at the biggest cloud partners, they have deep partnerships with them. as well as the data centers like cisco. they have done a amazing job building a robust ecosystem. ou don't see that happening at a company of this stage. taylor: as you take a look at cohesity and some of the other companies you are involved in, what is the pressure in the last six months to be more involved on a daily basis? to make sure you are curbing excess spending. to make sure that growth at any cost is not happen under your watch? >> we pride ourselves on being

business partners with all of the companies that we invest in. we are making sure that they are growing because growth is a key metric that everybody looks t. but we want to make sure we are doing it. it is not always profitable on day one but we have a path toward profitability. you see hyper scale growth and some of the numbers we were just talking about. we are also trying to do it in a way where we are mining our expenses. at some point, people do look at profitability of startups. while they may not be profitable today, there is a path toward profitability. that is what we see here at cohesity. we have a path toward profitability. that is what we are focused on is partners. >> we are very fiscally responsible. we have a clear path to

profitability. eventually it is all about unit economics. our unit economics are great. we invest more on the growth side because we know that eventually it will move toward profitability. taylor: tesla tends to dominate the global auto market by building its first self-driving car. customers adore autopilot. they have logged more than 1.5 billion miles. often pushing the limits of the software. the technology still has far to go, given that there have been casualties using the future. what was it like to ride in a esla on autopilot? >> the word i would use is

creepy, in the sense that it feels weird to have the car turned the wheel, accelerate, with no input from you at all. it is very humanlike. it really does require supervision. taylor: you hinted on detention, which is this great technology. but casualties are also coming. is that the internal tension that tesla is facing right now? zachary: their strategy on getting to and anton's vehicle is really different from the other players in the space. people like google or general motors are being very cautious and careful and trying to get to a fully autonomous, functional vehicle before they release t. tesla is taking their semi

autonomous product and trying to put it on the road as fast as they can and sell it to as many people as they can. with that strategy comes risk. people would be out there misusing it. and in some cases dying. but tesla believes they can get to full autonomy quicker that way by having this fleet of cars that have the technology installed. aylor: where is the regulation around this? zachary: to regulators, autopilot right now is simply an advanced driver assistance feature. it is like cruise control. as long as the humans are supposed to be supervising all of the time, regulators are not really, it does not have to pass any special regulatory hurdles. full autonomy is going to be a big regulatory hurdle in most u.s. states. you have to have a license to drive a car. how do you give a computer that

license? tesla has a way to get something quasi-autonomous on the road now without having to meet that regulatory hurdle. taylor: except that tesla has said they want full autonomy by 2020. then what? zachary: elon musk has said that this year, autopilot will be featured completely. you can turn it on on any kind of road condition. by next year, he expects it to be so good that you won't have to supervise it anymore. that is an incredibly ambitious, bold timeline considering weymo has been working on this on 10 years and they are not anywhere close to having a fully autonomous car and they're not making promises.

taylor: we know that elon musk does make bold, grand predictions. why does he think he can beat out the competition? zachary: the theory is this huge install basis will essentially give them the competitive advantage that they can take data and use all of those cars to train their algorithm to get smarter. the data advantage full actually use them to get to autonomy better. taylor: creepy is the word i will take away from that interview. thank you for joining us. coming up, whistleblower is the word du jour in washington. before ukraine, there was cambridge analytical. why someone spilled the secrets of the data mining company. this is bloomberg.

taylor: this is "bloomberg technology." facebook is appealing a ruling that says users can sue the social network over the cambridge analytica data scandal, saying the court decision does not line up with other verdicts by other courts including the u.s. supreme court. plaintiffs argue facebook improperly share data with third parties without permission. more than 80 million user ccounts were involved in the scandal. who better to talk about cambridge analytica than the man who blew the whistle on the company? he is also the author of the new book that details the whole series of events.

he joins me from new york. also with me, "bloomberg businessweek" columnist max chafkin. i just wonder as you sit here and reflect, what has your experience been like? >> it has been intense. i'm not going to lie. writing a book actually helped me really reflect on everything that happened. i talk about my journey from getting recruited at a military contractor to working on modeling and data work that helps identify people who are more prone to paranoid ideation and extremism with the idea of trying to mitigate that problem to having that work completely inverted after an outright billionaire named steve bannon acquired our company to in effect the same thing in america, targeting people who

are more prone to radicalization, but in this case, for the alt-right. max: coming forward the way you did, blowing the whistle on facebook, which as we have set on this program many times, and incredibly powerful media company, maybe the most powerful media company in history, what was that like? did you get any pushback, any threats? as you moved to publish the book and tell the story in full, have you heard from them at all? >> oh, girl, where do i begin? before the story emerged, i had een working with law enforcement and regulatory agencies months and months before the story broke. when facebook found out that, you know, the story was emerging, something they knew -- you know, they knew about ambridge analytica well before

any of this was published. the first thing they do is threaten the journalists of "the guardian" with in my view, a serious accusation. it turned out it was true. in my case, they banned me from facebook and for some reason, instagram. after that point, working day in and day out with regulatory authorities in the eu, the u.k., the united states, all over the world, one of the things i really thought is just the power this company has to hide, too obvious get their work, and things that -- one of the things i came to understand is that, you know, when you go and blow the whistle, you see something that is wrong, and you report that to an authority, you think there will be some guy somewhere in some federal agency building that knows what to do. one of the things i realized is that there is not that guy. that guy does not exist. i have talked to governments, regulators, congress, arliament.

people do not know how to handle this problem. for me, the real concern is that we have a completely unregulated digital landscape that companies like facebook take advantage of. even though companies like cambridge analytical now have dissolved and no longer exist, the capabilities are still there. one of the reasons i wrote the book was to serve as a warning. even if this company no longer exists, what happens if china becomes the next cambridge analytica? what happens if north korea becomes the next camp agenda litter ca -- cambridge analytica? currently, there are no rules. we are entrusting our data to private companies, and i don't think that is a good idea. taylor: i wonder if you think the current regulation and current lawmakers are doing a good enough job handling the problem that you described. >> one of the things going to congress i realized was the power of lobbyists, particularly to define narratives. one of the questions i would always get at congress is -- can the law ever keep up with technology? i would say we regulate nuclear power plants.

we regulate airplanes. we regulate medicine safety standards. there's all kinds of technologies we regulate in the name of consumer safety. just because somebody uses software or is on the internet does not mean that we cannot create rules that require companies to consider if the products they are putting out into the public will be safe for people to use. the united states is one of the only oecd countries -- i think the only oecd country that does not have a national privacy law. when you look at, you know, the language and the way a lot of silicon valley companies talk about themselves -- they say we're a service, this opt in, terms and conditions, all this stuff, get when you look at the types of people who work at the company, right, they are called an engineer or architect, right? they build ecosystems and environments. these are things people are going into. these are architecture. when you look at how we regulate physical architecture or when you look at how we regulate physical architecture or

ngineering, where if you build a building without fire access and say it's ok because people opted into my building, they walked in and there was a book of terms and conditions over there, and if it burns down, that was their choice -- people would not stand for that. i think one of the things i hope people, particularly lawmakers if they read the book, one of the takeaways is we need to really understand what is social media? hat are these platforms? max: we have obviously 2020 elections coming up. the data that was at issue with

the cambridge analytical scandal that we have been talking about for years -- is that data still around? is it possible or conceivable it could actually come into play again for years later? i guess in a larger sense, how worried should we be about foreign interference going forward? >> i don't know. i don't know what happens with that information. i don't know what happened with that data. a lot of the same people who worked at cambridge analytical now work on the trump campaign. this is a company that had regular contact with russian officials. the ceo shared vodka with the russian ambassador. you had its clients regularly meeting with the russian mbassador during 2016 and also going and meeting with the trump ampaign. the people exist, the capabilities exist. if the data still exists, i don't know. facebook presumably has tried to

contain the problem. when i dealt with them, they did not really do much, but that is exactly why i think we do need to take a step back and go, should there be some kind of consumer safety watchdog when it omes to digital platforms? because no one is watching, these are the things that can happen. in this case, you know, we had people come forward and talk to the media, but what about the cases where that does not happen? taylor: i think we have talked a lot about the 2016 election, and i wonder, is it inevitable that it begins again with 2020? >> yeah, i think we are sort of -- this is a new norm. one of the things i talk about in the book is how does information warfare work, particularly online. we have created an open door to the minds of every single voter in the united states. currently, we are trusting a company to protect people from interference. we talk a lot about pressure, but my real concern is what

about the other countries that ave now watched what you are able to do? china, iran, you name it -- these are countries that have strategic motives to interfere in the election, and currently, no one is protecting it. we are literally entrusting mark zuckerberg to do the right thing. max: the candidate who is i think closest to where you're talking is elizabeth warren. she has talked a lot about regulating or even breaking up facebook. have you been in touch with anyone at the warren campaign or any other presidential campaigns and terms of advising them on policy? >> no, i have not, but i'm definitely open to chatting with people. any opportunity, i will talk to people who are in decision-making positions, but i think, you know, what elizabeth warren is doing is great because if you love or hate her, she is mainstreaming a conversation that we all need to have, if you are democrat or republican, we need to talk about the impact of

the internet on our political process, and this is something that everybody is a stakeholder in. one of the points she makes is we are literally relegating the role of referee to a private company. just today they are saying, you know, we are not going to take down provably false information if it is political advertising. it's like why does a company get to decide that? something so vital and so important for how an election runs? i am heartened that she is talking about it. other people are talking about it also. andrew yang, for example. i'm happy that it is part of the conversation. taylor: we are pushing forward their two the 2020 elections, says christopher wiley, the man who blew the lid off cambridge analytica and bloomberg's max chafkin. next, we look into what went down. this is bloomberg.

aylor: top trade negotiators are set to resume talks with china thursday in washington and vice president mike pence says the u.s. will demand beijing open markets. speaking to reporters in iowa wednesday, pens that the trump administration will demand a china deal with intellectual property and forced tech transfers. wiring the world for high-speed internet and underwater to boot, there are competing projects trying to accomplish this engineering feat, but one in

particular stood out. it started in alaska with a cable nearly 9500 miles long promising to be faster and shorter than rivals. but there is a catch -- it was a scam, and a billion-dollar one of that. the writer of an article all about it in "bloomberg businessweek" joints me now. austin: this is the big story about quintilian and their founder who spent the last couple of years selling the world on this vision of building a northwest passage for the internet. it would speed up the web for much of the planet and close the digital divide. he raised hundreds of millions of dollars from investors and convinced state and government officials, she convinced population of alaska, a bunch of telecoms that this would change the game for the internet as well as for the telecom space. as was revealed in recent years, it turns out she forged one billion dollars in sales contracts from customers and

just went to jail for that last week. this is really unraveling. this is the story of how she committed that fraud and what the future is for this network in the arctic. taylor: how did she do it? how did she get away with it for so long? >> and a lot of people describe it as coming down to her tenacity. this is someone who not only is just ferocious about her project like any silicon valley entrepreneur would be, but she was also incredibly defensive. whenever people looked into the project or provided scrutiny, he would always push back that she kept her sales contracts in a google clout account only she had access to. she kept direct contact with her sales partners just one-on-one. she was very secretive about the whole project, but at the same time, you could only sell investors on these large-scale services contracts until the bills start going out to customers. that's when a lot of red flags kept going up in alaska. taylor: what happens now in alaska with fiber-optic cable? austin: i spent a lot of time up there.

they eventually built this alaska pipeline. it's pretty magical when you see t. if you think about how difficult with all the ice of their to build something like this in the arctic, they have actually built it around the coast, but they have not yet connected it to asia and europe, which is the goal. a lot of analysts believe that could lower latency and speed up the web, which would have huge applications for high-frequency traders and cloud players. taylor: thank you for joining e. still ahead, a sneak preview of wednesday night's "studio 1.0." this is bloomberg.

taylor: in the latest episode of bloomberg's "studio 1.0," millie

chang -- emily chang sits down to discuss some of the biggest projects to come out of the x lab including google glass, waymo, and project loon. take a listen. >> it was certainly an experiment. there were aspects of it that were absolutely a failure. i want to be fair to glass -- having learned a lot of lessons, some of them may be more painfully than we needed to, glass is still very much an ongoing business and quite successful. it is just not much in the public eye. family: that's right, glass is back. >> glass never left. it turns out the right place for this for now in society are the parts of society that are less fashion conscious and that have real, practical needs. these are doctors and nurses,

people who work in manufacturing environments, who work on oil rigs, who are maintaining airplanes. the irony is this is one of the technologies from silicon valley that the digerati said no thank you too, but the heartland of america is super happy to have. family -- family -- family -- emily: do you think glass will ever be back in this form? >> i think it definitely will e. emily: when? >> three to five years? x has worked harder. as we get out into the world, we are not putting it anywhere that is not safe, but we are not pretending we are done when we are not done. mily: you have sort of created

culture of failure or a culture where it is ok to fail in the hopes that you will succeed. tell me about that. >> the secret is i hate failing, but i want to win in the long run. i want us to win in the long run. we have to create a culture -- if we want you to be honest, if we want you to fearlessly run the right experiments and be honest about the outcomes that says we embrace the quality of the experiment, not the outcome. emily: what are some of the epic ailures? i would love to hear how this works in practice. >> we built a system that could turn seawater into methanol using clean energy. that is real, save the world kind of stuff, and we got it working, and it turned out the

heapest we believed we could get it was a $15 gallon of gas equivalent, and this is one of these honesty moments where we said we want to save the world. we are incredibly proud we built this machine, but if the cheapest we are going to get this any time soon is $15 gallon of gas equivalent, that's not going to save the world. no one is going to buy that. we published the business failure and published the science learnings we had in the international journal of greenhouse gas control and said, here's what we learned. can anyone build on this? emily: let's talk about the projects you're working on that ave potential. >> wanted the ones that i think has a lot of potential, the self-driving car business. -- one of the ones that i think has a lot of potential. waymo has helped everyone around the world get serious about this particular space. waymo has done a great job

making cars drive safely. waymo is already charging people as a transportation service in arizona, so that is going exceptionally well, and we are really proud of waymo. emily: waymo has spun out of x. it is in a unit under alphabet. morgan stanley says it is worth 175 million dollars, but skeptics are asking when they will see a self-driving car, it's taking too long. who is right? >> these things are going to take time. you can see one of those if you just walk outside our building, if you go to arizona. there are no many hundreds of cars on the road. emily: when does it hit the mainstream? >> regulatory reasons, it is going to take a while. the world has also already paid for a lot of cars. as those are retired, more self

driving cars will be pulled into the mainstream. loon is doing well. here was recently an emergency in peru, and we got to jump in and help connect people who had lost internet people there. this is the third time we have been able to do that. that one is making good rogress. like each of these things, it is a long process, but we have increasing faith that loon is actually the right way to bring conductivity to several billion people in the world who do not have it today. emily: where are you focusing currently? automation, farming, agriculture? >> yes, we have all of those. every single thing you just named we have at least one exploration in, but there's some i'm feeling particularly good about right now. agriculture is an example. humanity's ability to produce enough food to feed everyone in

the world and to do that in a sustainable way, we are topping out, and it's pretty scary. e now have several things here at x that are looking at food production from several different avenues and we are excited about those things, so i feel really good about that. emily: health care. hat about health care? >> this is an early thing we are exploring, but there are spaces in which the innovation went like this because there's a simulator for the thing people are innovating on. if you could go into cell biology, for example and simulate how a cell works, you could run experiments at thousands, maybe even millions of times the rate that humans can run those experiments in the lab, and that would cause an enormous explosion in the innovation in the life

ciences. being able to simulate a cell accurately in a computer -- who knows if we can do that? that is an example where we have some interesting progress. taylor: that does it for this edition of "bloomberg technology." "bloomberg technology" is livestreaming on twitter. check us out and be sure to follow our global breaking news network at tictoc on twitter. this is bloomberg.

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates or employees. >> the following is a paid presentation brought to you by rare collectibles tv. >> in a letter dated 1904, to the secretary of treasury, president theodore roosevelt wrote a short letter. and this was in typical theodore roosevelt's direct, bravado style. "my dear secretary shaw, i think our coinage is artistically of atrocious hideousness.