baidu,, alibaba, -- alibaba, and tencent. 21.8 million shares apiece at roughly 13-14 baidu, yuan pere unit which is the main assembler for apple. the company unit is called foxconn industrial internet, and clearly baidu, alibaba, and tencent want a slice of the action. it has raised $4.3 billion they will plow into things like 5g wireless and smart manufacturing, and it's not just interest in the unit, but the cloud of these companies when it comes to investing across the tech space in china. u.s. is starting talks with the eu to reach a settlement over state subsidies that would block paid to airbus, according to a person familiar with the matter. a resolution could potentially avoid billions of dollars in actions against investors. now significant is the proposal put forward. >> it came unexpectedly. we were expecting yesterday the dispute settlement body, the to start the process for sanctions against the eu as a result of illegal subsidies to airbus. the result was actually a proposal by the ustr to say, we are prepared to talk. billions oftially dollars in potential trade and ta

tom: baidu, alibaba, and tencent are all buying into this as strategic investors, 21.8 million sharesughly at about 13 to 14 yuan per share. this is the unit which is the main assembler for apple. the company unit is called foxconn industrial internet, and clearly baidu, alibaba, and tencent want to get a slice of the action. they are hoping this company to raise about $4.3 billion u.s. they will plow into things like 5g wireless and smart manufacturing, and again, it highlights not just interest in this unit, but the clout of these companies, baidu, alibaba, and tencent, when it comes to investing across the tech space in china. >> the u.s. is open to starting talks with the e.u. to try to reach a settlement over illegal state subsidies that block paid to airbus. that is according to a person familiar with the matter. a resolution could potentially avoid billions of dollars in sanctions against brussels. now how significant is the proposal put forth by the u.s.? >> it came unexpectedly. we were expecting yesterday at the wto dispute settlement body, that the u.s., the u.s. tr, trade

what he has to say about the company's baidu fallout deal back in 2016.s is bloomberg. ♪ emily: this is "bloomberg technology," i am emily chang in san francisco. ai is everywhere and ibm just added another entry to its chapters of ai history. first watson beating humans on jeopardy, now ibm showing off project debater, taking part in public debate. artificial intelligence is becoming a larger part of our personal and professional lives. according to statista, the global revenue for the ai market is expected to hit $20 billion billion by 2025. one company looking to make its mark is clari, a platform looking to help companies spot risks. its clients include adobe, audi, ge, and more. it is backed by sequoia capital. joining us to discuss is the ceo and a partner at sequoia capital. thank you for joining us. it is basically ai for sales teams to give them an edge. why do you think this is such a big opportunity? >> because we are in the business of helping sales teams predict the future. if you think about that, predictive computing and sales, why is that

why does baidu have a liquid market for securities in the u.s.? >> are you making the case that we should lock chinese companies out of the u.s. capital market? carson: there are different problems and different remedies. when i talk about doing that as stocks, that is something alligators have to think about. if you are running pension money, are you tobacco financing -- >> you are making the case for governance. carson: i want to differentiate here. i am for free trade, competition. you have competition within the rules and competition outside the rules. too often, china is falling well outside the rules. i think that has important dimensions for how you vote with your dollars. are you abetting this, or are you saying we are diving back our allocations? i think that is one view. the regulatory standpoint, pca still doesn't have inspection of auditors in china. this is the bare minimum that can be done. repeatedly gotca the finger every time they requested that. we don't have the ability to bring anybody to justice from china were defrauding u.s.

feud -- baidu.tate companies also took a large part of the pie. tom mackenzie, bloomberg. emily: here to discuss the global supply chain for apple and the foxconn ipo, we are joined by ian king, and we also have garrett with this. you have an apple analyst who says the report is just noise, should we be skeptical? garrett: i think it's worth treating the report with a hefty grain of salt, we have seen reports about the supply chain before, it is an sure what supply chains they are talking about in the report. you can see how investors are reacting on the supplier chain sign, there have been deeper in tech's, but in terms of what to expect from apple in terms of sales, i don't think you can expect concrete evidence that it will be as negative as the report suggests. emily: en, broadcom -- ian broadcom reported orders, and you were listening in on the call. what did you figure out from the call? ian: we're back on the roller coaster we have been on for i don't know how many years, trying to get how mu

ext baidu, alibaba, tencent who do you think has the potential?ly to make it? has the bestably chance. eventually, what company can beat it? maybe on the social app. they can get a large user base quite fast. enough that it is no way to copy. >> tencent and alibaba by far the biggest investors in the start up space in china when it comes to technology. how are they shaping the landscape? >> i think they feel really anxious about the startups. they are really worried about some integrative company beating them someday. make a lot ofy investments to make sure that something doesn't happen. when you worry about something happening, something will happen very soon. capital'hat was panda peter miao speakings to us. we take a look at the stories trending across the bloomberg universe today. we have a story of a leaked chinese government-backed think tank report, which warns the potential financial panic in the world's second-largest economy. a sign of concern over market turbulence and trade tensions. among the stories on the bloomberg, amazon's push in

then you have what i call faang plus names alibaba, nvidia, baidu not just industrial materials but highentum tech names are down you can capture this in an etf several are out there. s sphb, you can see a slow downturn there there's a lot of stocks in this one. that's down 6% in the last two weeks. back to you. >> good setup. bob pisani on the floor. thank you for a look at how tech is performing in all of this we're joined by credit suisse. >> thanks for having me. >> biggest losers on the ndx today, micron, nvidia, all with 80% gains for the year, year on year is today about valuation or fears across m & a >> we get a lot of questions on valuation. trades are 12 times, that's up a little bit versus historically 11 times or so the interesting to look at the valuation of tech is to look at it on a peg basis and the other verticals. when you line them up -- say staples, discretionary, et cetera, tech is the eighth or so most rich vertical you have seven other in front of it when you look at tech relative to market on a peg basis it's basically where it's been. i don't think tech valuatio

. >> a big question is who is going to be the next baidu, alibaba, or xiaomi. which startups in china are likely to make it big? right now, i think hotel has the -- and.nk it is on the social is quite fast. and alibaba the biggest. howard they shaping the landscape? >> i think they are really anxious about the startups. that is why they make a lot of investment to make sure something doesn't happen. , it isu worry about that going to happen someday. here -- that was peter speaking with our own tom mackenzie. >> there are two main focuses for us. the first is the consumption of china going through. likether area is areas artificial intelligence. >> what is the most dangerous area for a venture capitalist? >> one of the models we don't think is promising is buying products from overseas and selling them to domestic consumers. time, almost everyone made an investment in this area but we didn't. we decided to hold our money. longer exist.t no -- we do nothing the model is viable and now front runners are struggling. was worth something like $5 billion last year. ho

names in make a cap the nyse fang index, amazon, alibaba, baidu, they are making up a huge part of thegains over the past few weeks. haidi: heavy lifting for sure. thank you so much. our bloomberg top live editor. let's look at other stories making headlines. the white house once north korea to commit to a timetable to surrender the country's nuclear arsenal when he meets president trump next week in singapore. let's bring in our editor with the latest. about u.s. offering hence what they could be giving in return? the white house advisers are making the pitch to the president that he should offer no concessions going into the meeting. it should be pointed out that president is known for his improvisational style and going with his got when he feels like it. it is unclear what may transpire once they are in the broom and talking. insist the president is ready to walk away if he does not get a firm timetable for when north korea would start dismantling and getting rid of its nuclear armaments. they are dangling the prospect of a second summit meeting and an invitation to kim jong-un to

you mentioned that stat from baidu, 50% of all searches is anticipated to be around voice and image searchple to do this and amazon has integrated visual search, not just into amazon has integrated visual search, notjust into the search but the camera mode of their phones, so you can do it from the phone, from the device itself its going to get more and more people accustomed to doing this and it will become more and more commonplace. it is notjust clothes, it is stuff you can see, furniture, i don't know, if you see something on tv in a tv programme, piece of furniture like that, take a picture and try and look for that as well. i love the furniture use case, well. i love the furniture use case, we work with a number of furniture retailers and you can take a picture of something that you have seen at a friend's house or get a catalogue from a furniture retailer and scan from a furniture retailer and scan from the catalogue and using augmented reality you can see what it would look like in your room which is really cool. really good to talk to you, thanks for coming in. in a moment we'll t

people who cofounded, who were head of baidu research.hey want more and higher valuations. it is people who have been in the internet industry for 10 plus years that are coming out. do you think the silicon valley has been slow to wake up to what is going on in china? this year, i have definitely seen a turn in interest about chinese companies. silicon valley has not seen that much in terms of the renovation in a wild. you also had mike morris's letter earlier. i think there is a lot of interest in people wanting to come and see the companies and understand the momentum. investors in the u.s. are .xcited about what is happening the companies are growing much faster than a lot of u.s. companies. how closely do you will line your decision-making? think i very much agree with that story. it will be sooner than 2025. by 2020, i think we'll see a lot more global company of that are chinese in the tech sector. they are already operating in many other countries. musically how they were one of the top social apps. in southeast asia, usc chinese p

. >> a big question on many tople's lips is who is going be the next baidu were alibaba or tencent? do you think has the potential? which startups in china are likely to make it big? hauright now, i think to c probably has the best chance. if you asked me this question, what company can beat the bat? on the social app, they can get large user base quite fast. fast enough that there's no way to copy. >> 10 senate alibaba by far the biggest investors -- tencent and alibaba by far the biggest investors. how are they shaping the landscape? >> i think they feel really inches about the startups. they are really worried about some innovative companies -- and some day beat them. so, that's why they make a lot of investments to make sure that something does not happen. when you worry about that, that is something, going to happen someday very soon. emily: that was panda capital's peter mao. more from our venture china series. and a look at china's unicorns. has invested in 15 startups valued at $1 billion. the founding partner tells us how changing chinese consumer trends are driving his inv

also accding to that report, the entity in china that has the leading development of ai is baidu.s is our strategic competitor. at the end of the day, none of these companies will act solely as private companies. emily: coming up, apple moves to help curb tech addiction. we hear from a leader who has been championing the cause. tony fadell joins us on the show, next. and if you like bloomberg news, check us out on theadio, the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪ emily: at the worldwide developers conference, apple rolled out new features to curb the length of time customers use its devices, including time limits that will switch some off and new printer controls. the man who helped start the revolution has been speaking out about the dangers of tech addiction. tony fadell, a former apple and google executive who is now a principal at future shape, joined caroline hyde from paris. tony: it is a great step forward for the customers, for the dustry t and acknowledge that there may be an issue. going on record saying he was very surpr

could go down the list and mark each one as being affiliated with alibaba, tencent, possibly with baiduat's pretty much it. jd.com, it's in the tencent universe, and google just invested in it. it is a competitor to alibaba. we now see google potential he aligning itself with tencent, which is a big deal. is making a lot of investments in china. they are very much aligned with alibaba, their biggest historical success. alibaba versus tencent is really where the action is in the chinese tech industry. kathleen: isn't that different in the u.s.? david: yes, it is different. you don't have to align 100% clearly with facebook or google or amazon. those companies or possibly to dominant, but you can be independent in the u.s. market in a way that is much harder in china. long-term, you will have to be allied in china. kathleen: david kirkpatrick, thank you for a fascinating conversation, putting so much so much of this in perspective. check out his latest book, the facebook effect. on our interactive tv function. you can dive into any securities and bloomberg function that we talked about. b

watch some of chinese stocks we follow closely, including alibaba and baidu all to the downside.d.com down 5%. netflix, we have several analysts raising their price targets one of which was gbh. they put a $500 target. it crossed 400 bucks first time ever. if it stays at these levels would be a record close. the vix, the fear index is up 11%. trish? trish: thanks so much, nicole. last month i want to let you all know i sat down with former treasury secretary robert ruben, the treasury secretary under bill clinton. this is conference in new york city. we talked about a lot of emerging issues right now in today's market. we see a market off 300 points, secretary ruben said he was very concerned about trade. he is very concerned about china. this is on may 17th. watch this. >> so i think we live in a world there is a lot of uncertainty and a lot of risk and i think the markets are basically underdiscounting risks is. >> in the next year you think things go that that poorly, next 12 months. >> no. so what are the odds given administration animus towards china, trade demand against ch

european banks, alibaba, baidu, brokerage, you tell me where you find any kind of green light here. >> the holiday coming up one of these days, i think that's the only green light. [laughter] yeah, i think the volume looks extremely light today. i'm not feeling a lot of passion, and i think the call by merrill lynch is hyperbole at best. really to protect that kind of a slowdown. you pointed out the members, liz, they're stealing us blind. we're getting robbed blind in this country right now by china because of our intellectual property. we're talking billions of dollars a year, and why is the market so negative that we're calling them out for that? wouldn't that be a positive for these stocks and companies that you're going to allow them to make the profits that were fairly theirs? shouldn't that be good for the market? and, you know, we talked about a trade war back and forth with china, you know, and the g8 is up in arms, oh, my gosh, what terrible things the u.s. are doing, but not one of those countries in the g8 was willing to have a tariff-free zone. president trump said, hey,

stocks were rocketships and now they're boulders >> we're seeing sharp selloffs in alibabawisally as baidu as shanghai goes into a bear market are you seeing opportunities there? >> absolutely. i look at something like alibaba and say i understand all of the backdrop of what we're facing and why it's sold off, and some of it makes sense. this is a stock that technically had an absolute skyrocket run over time. is there an opportunity there? yes. am i in it now no >> what are you waiting for? >> i would lovee thefire up. they did a littlbit the other day, but i would like to see a little more, mel, because this is something that i think going on, when i see the huge volumes that have come in, and we'll talk abo a couple la today, but there has been massive volume in names we haven't seen msive volume in before, and i think when that happens in baba because we don't see that, when we do, i'll be back in. >> you have to be a macro investor to get involved in baba if they devalue the yan, this is going down now there's a big, you know -- >> when you look at the valuation of the name, when you

rishaad: do you see alibaba or baidu coming home? >> potentially.lish the --mework and ground walls ground rules, we should see these companies list back in china. haidi: is the regulatory oversight or the policymaking occasionally knee-jerk reactions from beijing a major risk when it comes to buying tech in china? >> not necessarily. if you look at buying technology companies in china, there is no issue with cdr's. there are companies are delisted in shenzhen, so we don't believe there is any risk whatsoever when you invest in those companies. there will be corporate governance risks, and we do e about it. any companies that do better, that would be a step in the right direction for us as an investor. most people say you have to do your research when it comes to a-shares. how much transparency are you getting into the governments of these companies? >> it will take time. there is no way to sugarcoat this. it is somewhat of an untapped situation. that is where there will be good opportunities. time withend more management and get to know them and un

it is getting in bed with baidu to explore new technology.n looking at these internet stocks and how they pan out, and all of this space, with the julia weighing in the next nextnutes -- wang in the 10 minutes, looking at home prices fairly shortly out of the chinese economy. .e have that plus, it is the start of the trading day in hong kong commission jen, and shanghai. kong, shenzhen, and shanghai. looking to a flat start in shanghai and hong kong. the ecb rocking the dollar, one of the big stories. the greenback set for its best week since 2016. there we have it. the hong kong and shanghai open is next. ♪ ♪ rishaad: 9:29 a.m. in hong kong as we count you down to the last trading day of the week. not many tailwinds. butnasdaq hit a record, lackluster elsewhere. thatig news from the ecb they will not be raising interest rates for more than a year. it could mean mario draghi could not be there and it will be his successor that institutes the first rate hike. that statement sending the dollar higher, the yen 110.50. trading there. the pound at

you already have partnerships with alibaba and by do -- and by do -- and baidu,. >> i moved to asia earlierhly $700 billion industry. advertising grows roughly at double the gdp. all the gdp growth in the world is coming out of asia for the most part. if you look at the middle-class growth in china expected in the next 12 years, it is impossible for a company like ours to be a global company as we are without focusing on asia. and in order to do that, especially in china, you have to partner with the biggest players, like those you just mentioned. yvonne: another charge where china's tech giants orbiting apple. but if you look at the far right-hand side of this chart, you can see how everybody's price is down. how big of a threat is a trade war to the kind of companies you want to work with now? a trade war isk good for anybody's business. but one of the things that is great about our business is we are almost a perfect hedge in the sense we are all around the world. so any single country's actions sort of steer our efforts to some place else. having 23 offices around the world and doing bu

and then what they're going to say is, well, aren't these our champion companies against baidu and ten cent and alibaba. i think this is going to get wrapped up in this digital cold war we have with china. i think there's going to be a growing reluctance to do anything, which is going to be able to be portrayed, and i'm sure the companies are very aware of this, but to undercut companies that will portray themselves as being america's national champion companies and sort of this global, technological race. i'm not sure that's necessarily the only factor, but something to consider when you're talking about not just anti-trust, but future regulatory actions. >> can we pull up that clip from ted cruz? and while we're getting that pulled up, i want to open it up to any questions. let's start back with teddy there. why don't we watch this cruz clip real quick, if they've got it cqueued up. we can wait until after the question. oh, there it is. >> just recently in "esquire" that pointed out that facebook and google together are worth $1.3 trillion, which you could merge the company's top-fiv

we compare them to baidu, alibaba, tencent. they have less than 10% of internet sales.have more than 80%. look at growth margins. they are at 14%. look at user base. alibaba has 500 million users. user loyalty to hardware seller is relative to software. rishaad: they are also content providers, too. they talk about loyalty and user base. guest: if you think about eechat, for example, it's cor -- they aren selling the operating system of the phone. when you change the phone, you stop using the operating system. the loyalty is much lower. rishaad: we are going to have dickie back. thanks for sticking around. maker, a hardware effectively, which is trying to sell itself as being an internet software play. guest: you can call it a high-growth company, but it's definitely a hard where company -- hardware company. there's no question. they smell the -- they sell smartphones. no matter of valuation or market cap, is definitely lower than two or three months ago, where people anticipated. phone just buying a smart if you ask me to pay 2000 hong kong dollars to buy a samsung gal

baidu, alibaba, tencent. >> they have been incredible you know that my view on alibaba was an accounting view and i still hold that view, by the way, even though we're not short the shares you know, the most amazing statistic about alibaba i keep pointing out to people is that if you look at alibaba's tangible equity, right now less external share offerings, less any capital they've raised in the markets, their tangible equity is lower now than when they went public from all their profitability, they've taken back eitr affiliated companies or made further deals. it is a financial perpetual motion machine it's quite a marvel to behold. but because of my view that the s.e.c. and others probably aren't going to be too worried about a chinese company's accounting even though it trades >> weryou surprised about the valuation that ali pay got with the previous funding market capitalization -- implied market capitalization of over a hundred billion dollars. >> that's exactly to my point. we're inhis game now where all these companies who are affiated with each other or investors who are affilia