a.i., what a winner towards the end of 2016. mark: right. they shifted all their attention towards a.i. a.i.st company and it's paid off for them in pretty significant ways. alpha go was an algorithm that was a big win. it was an impressive feat. they beat this game what people didn't think they could accomplish for a decade now. and then they put together a leading library of machine learning and they really have shown they're ahead of the curve there. alphabet the structure, more in 2015 but 2016 really showed investors are seeing a lot more transparency and a lot more confident in google's ad revenue. caroline: and google photos. that's something i have been adopting. mark: yeah. messaging has been a mitt. alo is the app they put out which i don't think any of us use. i am not sure many people use. they're still behind on facebook in messaging. sarah: well, facebook messager, instagram has messaging now. they're everywhere. caroline: alex, the juggernaut that is apple, it's still the most valuable company in the world. we can't take that away from them. what are the misss? alex: can't tak

a.i., not just build a.i. for its own sake. charlie: if you look ahead to where a.i. may go -- everyone talks about personal systems. a.i. going world of to make for your daughter 10 years from now? here's the fun way of looking at it. super celebrities, they walk around with a team of people with clipboards managing everything. we will have technology matching all this up for us. you want to be dialing for an uber. they will know where i am and where i have to be, and they will know where i want to go. andrew: that's right. this idea that we have fancy concierges helping us in our lives, that will be kind of fun. i think the important things somebody slips and falls late at night. a throne will be there to help them almost immediately. charlie: they will know this person has fallen. andrew: exactly. we will have machines looking out for us to make sure we are ok. charlie: is that near? andrew: it's already here in that many people have sensors on the move. the hospital will be called. if i ames next is finding it harder and harder to walk upstairs every day, and i don

a.i., not just building a.i. for its own sake. >> rose: if you look to where a.i. may go, everyone talks about a personal assistant. you have a daughter? >> yep. >> rose: what's the world of a.i. going to make for her ten years from now? >> so here's the fun way of looking at it -- look at celebrities, they walk around with a team of people with clip boards managing everything like let's get the car ready, make sure we have the right kind of drink for you, let's make sure you have time with your friends. so we will have technology sort of matching all this up for us, so you won't be dialing for an uber when you walk out. >> rose: it will be automatically happening. >> it will be ready. >> rose: because they will know what i like, where i am, where i have to be and want to go. >> that's right. so this idea we have very fancy concierges helping us in our lives will be fun. the important things are someone slips and falls late at night, a meter that helps them immediately. >> rose: a.i. will know this person has fallen. >> yes, exactly. so we will have machines, if we

a.i., what a winner towards the end of 2016. mark: right. they shifted all their attention towards a.i. a.i. them in pretty significant ways. alpha go was an algorithm that was a big win. it was an impressive feat. they beat this game what people didn't think they could accomplish for a decade now. and then a library of machine learning and they really have shown they're ahead of the curve there. alphabet the structure, more in a phone but in 2016 showed -- more in 2015 but in 2016 showed they're a lot more confident in google's ad revenue. caroline: and google photos. mark: yeah. messaging has been a mitt. alo is the app they put out which i don't think any of us use. they're still behind on facebook in messaging. sarah: well, facebook messager, instagram has messaging now. they're everywhere. caroline: alex, the juggernaut that's apple, it's the most valuable company in the world. what are the misss? . ex: can't take it a miss apple have had their biggest -- saw revenue decline since 2003. iphone sales declined. and s.b.i. and privacy and their desire to protect users. and the messages. an

a.i. research, funding a.i. basic research, the president released a report. a.i. should be important. and the number was a billion dollars. it is nothing. i mean, we probably need at least 10 times that. >> i agree. and it should be a public/private partnership. we need government, families, all of the institutions, just coming back to you, regarding your home country, for example, romania and other places, you see when i had trouble in the region, i was just in slovenia alone, they have invested heavily in a lot of the artificial intelligence research and people but it's not reaching the markets. how do we bring that talent that right now everybody is looking for talent of specific a.i. talent in data modeling, statistics. how do we bring this talent into the united states to develop market-ready solutions and products? >> so that's a great question. i would say that we have a lot of talent at the top universities in the united states but it's not easy for our students to graduate to remain in our country and give back after their training because they don't get a visa. it's difficult

a.i. from geometric intelligence that has created a new division to develop a.i. uber says artificial intelligence will make self driving cars become more efficient and will help teach computers to think like humans. the technology aims to more accurately estimate writers locations in travel times and it was only yesterday we are only yesterday we are apple sending a letter to washington to try and get the okay for some autonomous driving. cheryl: i feel safe now getting into a driverless car. let's move over to athletic clothing because the athletic clothing maker under armour has lengthy tenure deal with me to the default. replacing majestic athletic as a supplier and 2020. did you look put the logo at the front of a major professional sports uniform fhe first time. we will be right back. you are watching "fbn:am." .soon. which allergy? eees. bees? eese. trees? eese. xerox helps hospitals use electronic health records so doctors provide more personalized care. cheese? cheese! xerox healthcare services... ...soon to be conduent. and her new mobile wedding business.tte at first, getting paid was tough... until she got quickbooks. now she sends invoices, sees when they've been viewed and ta-da, paid twice as fast! see how at quickbooks-dot-com. 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(vo) hurry, these offers end soon. get the best deals and the best network, only on verizon. nicole: good morning. 5:15 a.m. in new york. president-elect donald trump thank you tours since today. the trump team heads to north carolina for a rally tonight and then moves on to iowa and michigan. trump is expected to officially nominate retired marine general james mattis as the secretary of defense. a day after the obama administration denied a permit for the dakota access pipeline, a spokesman said the incoming administration supports completing the project. spokesman james miller -- jason miller says trump will review the situation when he's sworn in as the president. meanwhile, harsh winter conditions prompted leaders of the anti-pipeline movement to tell hundreds of protesters camped in this camped in the stands and tepees that they should return home. imagine going to the grocery store and avoiding those long checkout lines. amazon says it's about to happen. amazon does the company's latest effort to break into the grocery business. customers will fill up the shopping cart and simply walk right out of the store without leaving the register. the items automatically billed to their account. amazon eventually plans to open more than two dozen grocery stores. u.s. stock market futures another record day on wall street for that doubt after four weeks of gains. dow this morning looking up for combat s&p futures up on. cheryl, that's what's happening now. here's a look at the headlines in today's edition of "the wall street journal." more trouble for blood testing predicting huge growth in revenue and profits in 2015. those projections helped elizabeth holmes raised by the $630 million from investors. the company under criminal and civil investigation to determine if it misled investors. regulators about technology and operations. which you pay 12 bucks for a cup of coffee at starbucks? a starbucks loses core customers and they will bet on luxury coffee sales push into the round of a $12 cup of coffee. swedish retailer ikea going to broaden its provincial parental leave coverage. for months of paid parental leave for u.s. in place regardless how many hours there appeared one of the few retailers to bring benefits to their hourly workers. autozone is one of the stocks we're watching today. the retailer expected to report higher earnings per share for revenue. i decided to release its numbers before the opening bell. last year from toll brothers. analysts looking for the homebuilder to report improved results boosted by home sales. look for the earnings to come amid a stronger job market and a healthier economy. nicole: presidential recount is underway after a candidate just unrequested in three states. rick leventhal has the latest. >> after just nine says this isn't about who won her who won or lost but about the fairness and accuracy and integrity and she says that's why her campaign raised $7 million to challenge the results in three key states in key states and russia filed a federal lawsuit in philadelphia to force the return of pennsylvania. the michigan recount began at noon on monday that caused the hand counting of $4.8 million. prison is a trump one that. the wisconsin recount began last thursday with little change reported so far. mr. cheryl: hillary clinton by 22 dozen votes to close at 50,000 in pennsylvania. of the pennsylvania. vote and has zero chance of winning the says there is compelling evidence that electronic voting could've been hacked as major discrepancies between paper ballots and those using machines. >> these three states were identified because they have indicators that make them more red flags due to than nature of the voting machines used due to break contract irregularities with the high number of blank ballots. due to extremely thin margins. >> press and electronic treated this was a scam to raise money at the republican party in pennsylvania says the green party claims are completely without her but that's a benefit hillary clinton and not that her sign. activists are reversed in those three key states, hillary clinton could have enough electoral votes to win the election. cheryl, nicole, back to you. cheryl: coming up in sports, indianapolis colts crushed the new york jets in monday night for all. and basketball the warriors scored 60 points against the pacers, 40 points in the first half. and then there's this. >> a murder right across the street from where they took the show. i was the closest person to host. cheryl: who is the person jamaican was talking about? we'll have the story. dow, s&p and nasdaq 20 to a higher open. you are watching "fbn:am," your first look at morning markets and breaking news. generosity is its own form of power. you can handle being a mom for half an hour. i'm in all the way. is that understood? i don't know what she's up to, but it's not good. can't the world be my noodles and butter? get your mind out of the gutter. mornings are for coffee and contemplation. that was a really profound observation. you got a mean case of the detox blues. don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. cheryl: jimmy kimmel has been picked to host the oscars. the late post on abc which is the broadcaster of the show presiding over the ceremony for the first time. here is his plan. >> you know, marijuana will be illegal for recreational use in february. maybe you can pass on the out of the red carpet. and then we'll just see what happens. michael is to somehow get arrested during the hosting of the show. cheryl: the academy awards set to be broadcast live february february 26. train to take a look at the latest from the world of sports. the indianapolis colts and players advance how the moment of silence for running back joe mcknight who was killed last week in new orleans. cheryl: andrew luck returns after missing one game with a concussion first quarter. andrew luck at the wide-open for a seven-yard touchdown. cold nicole petallides-0. they never look back. cheryl: this is amazing. alan wide-open again for a 21-yard touchdown. colts up 14-0. anyway, the head coach lets his defense has been on the sidelines at the offense is bad. ryan fitzpatrick d. for brandon marshall but it's intercepted for the jets. the result the same. the colt stomping the chance for the win. golden state clay thompson played the indiana pacers. thompson has a career night. three in transition have a cement. scores 20 points in the first quarter. thompson polls have been hit south korea jumping around. thompson is 60 points. the most suspect. 1973. the atlanta hawks in oklahoma city to did not. the leak and triple double third quarter. westbrook five minutes with them. moments later he traveled and steps back, knocks down to three again and ends up with six straight triple-double. winning it 102-99. nicole: donald trump continues to hold surprising meetings at trump tower including vice president al gore. >> i founded an extremely interesting conversation and to be continued. trade to the latest the trump transition. just based us and amazon have disrupted every business on the planet. why not the grocery business, too. you are watching "fbn:am." ♪rock guitar ♪yeah ♪(rock music) ♪you can't do this, you can't deny ♪they feed us lines, but i won't act♪ ♪and all good things will come to pass♪ ♪but the truth is all you have to have♪ ♪and would you lie for it? ♪cry for it? ♪die for it? ♪would you? ♪i believe ♪believe we're still worth the fight♪ ♪you'll see there's hope for this world tonight♪ ♪i believe, i believe nicole: breaking news this morning. donald trump has said his cabinet and hold more surprising meetings. yesterday he met with al gore. today is expected to officially announce his pick for defense secretary. i'm cheryl casone and for transport. nicole: good morning. i'm nicole petallides. the dow meant that the financial stocks 14% since the election. u.s. stock market futures this morning. next i get the dow dow down one point. s&p futures up half a point. cheryl: stocks in asia powering higher on the back of those wall street games. the nikkei up half a percent. in china the shanghai composite lower by a fraction. nicole: crude oil for the fourth straight session pulling back a little bit about a quarter. cheryl: the yield on the ten-year treasury back under 2.4% overnight. we are down a fraction when it comes to basis points. nicole: amazon disrupted almost every industry. now it's jumping into the grocery business. cheryl: i'm around march to provide all of the links ). nicole: in sports, indianapolis colts done but many are just in a basketball the warriors clay thompson scored 60 points against the indiana pacers. 40 points in just the first half. cheryl: 5:31 a.m. in new york trade tuesday from december 6th. welcome to "fbn:am," your first look at was living in the markets and the latest breaking news. nicole: donald trump continues his thank you sewer before he holds two more events later this week in iowa and michigan. trend continues to fill out his cabinet. the latest from blackburn man. reporter: president elect starting off another work week with the cabinet selection. mr. trump with dr. ben carson or urban development secretary. the retired neurosurgeon was watch a primary liable rifle of candidate trumpeted since become a close confidant. one of the more surprising meetings today, former vice president al gore made his way to trump tower monday. gore met with the president elect and ivanka tribe to discuss climate issues. he characterized his meeting is like the internet is. >> i founded an extremely interesting conversation another that. reporter: mr. trump will meet with mixed others and under consideration for the price secretary of state role. trump aide said the list of potential candidates has indeed expanded. i'll send it back to you. nicole: fox business will of course carry the speech in north carolina five. lou dobbs tonight 7:00 p.m. eastern time. cheryl: stand with mr. trump, the president elect tweets about cheney's policies have been good officials. officials signaled their displeasure to members of trump's team. the white house taking issue with the phone call last week with taiwan's president. white house press secretary josh earnest says progress in the united states relationship with china can be heard if the issue of sovereignty players out. >> whenever you talk about the president elect of the states and are acting with foreign leaders, is incredibly important. this profound consequences for our country and national interests around the world. nicole: former house speaker newt gingrich speaking on hannity last night defended trump's phone call. >> this is a deliberate, well thought out specific signal. he accepted a phone call from the freely elect the head of a democracy of 23 million people and frankly if it's okay for a president obama to go down and hang out with the castro tater shape, it ought to be okay for donald trump to talk to a democracy. cheryl: president obama's former national security adviser retired marine general jim jones says the phone call should not be seen as quote a big deal. nicole: the income administration supports the dakota oil pipeline that day after the obama administration moved to the project. jeff flock has the latest. >> folks, we are in wizard conditions in north dakota. martin county, north dakota. behind act of know how much you can see, that this is the cant. i don't think you see much given conditions out here. thousands of protesters intense and makeshift halves. there are teepees. all of it being battered by high winds and snow now. this is what officials were concerned about when they asked these folks to evacuate that perhaps winter conditions but said in a day would not be prepared. the folks we talked to say they intend to stay even at the army corps of engineers has now said the project should be halted and perhaps rerouted. protesters have no intention of leaving despite the apparent victory because they are concerned the incoming trump administration may overturn that decision. also, they have concerns that they leave they might not be able to get back in, that authorities might keep them out. now they are here by the thousands. if they are able to withstand these difficult conditions and the word is later this week it would get even colder. if they are able to withstand that, they say they will stay until the trump administration takes office and see what the ultimate determination of the dakota axis pipeline is. that is the latest from wharton county. those are conditions. back to you guys. nicole: jeff flock, thanks. cheryl: look at those conditions. it looks like ivanka tribe and her husband shared kushner planned to move to washington from new york city. the couple already looking for a home for their family. ivanka a chariot taking on more responsibility with the inauguration day 45 days away. ivanka i see no an executive who also has a rail line of clothing, handbags and accessories and kushner was a real estate air at one of his father-in-law's most trusted advisers. during the campaign rumored to be making a transition into the white house. nicole: nasdaq ceo bob griese fell at expected to seek economic growth under a truck he was on "cavuto: coast-to-coast" yesterday. >> with the election of donald trump as president, you're going to see greater economic growth. you're going to see more inflationary pressures and as a result on prices will move and yields go higher. but it's different than the internet stock bubble that we come from such a depressed rate. it is not the national order of things to operate in a near zero interest rate environment. you'll see us get back to normal in the u.s. europe will be years behind us. nicole: he also said it did take the market by to recognize that mr. traub would be a pro-business president no doubt. cheryl: record after record for the market. vice president joe biden isn't ruling out a return to the white house. biden told reporters he's going to run in 2020. when pressed, the vice president said he's not committing not to run any learned a lot time ago fates has a funny way of intervening. emotional biden after the senate cleared a procedural hurdle and the decisions of key provisions for fighting cancer for the part of the 21st century carousel is named after his son who died last year after battling brain cancer. nicole: commanders on high alert as the fbi investigates specific and imminent threat steps away from a tourist hotspot in l.a. a man speaking english cause the tip in from an undisclosed location overseas warning of a potential bombing at universal city station today. that is steps away from universal studios. authorities are taking no chances. >> usc is the mayor mentioned in an current of transit stations are we deploy our canine explosive detection teams. the undercover operations underway as well. nicole: nearly 150,000 passengers every day. commander should expect armed police on the train from the canine units and of course random bag searches. cheryl: stayed in california, the death toll for the warehouse fire has risen to 36. prosecutors say murder charges could result from their investigation into the fire that group have driven underground dance party in a building known as the gauche. the alameda county sheriffs believe more bodies will be found in the sleep of building fire in the united states and more than a decade. he cautioned it was impossible to be absolutely positive until the entire recovery effort is completed that could take days today. nicole: the biggest names in technology, facebook, microsoft and her join forces to fight back against propaganda through the company announced they will create a database of digital fingerprints to help them identify videos and images from terrorists. the plan also seems to be a way for them to get ahead the new proposed federal regulations. cheryl: makes sense they are. global market action overnight. in asia the european market is having mixed bag. europe right now down 1.6% to the japan at half a percent. hang seng and three quarters of a percent and cost the 1.35%. that is again. nicole: the italian banks still remain under some pressure. without the markets overall buck the trend of the time referendum vote. here's a look right now the u.s. stock index futures. dow futures down pretty and s&p futures coming to the downside that event and this is after another record for the dow yesterday. the 19th record close. cheryl: oil and gold as you can see on your screen. oil don't her defense. 51.41. pull down as well more than $3, a major fall yesterday for the gold contract. nicole: the fear index. right-hand lane surveys several several embedded on artificial intelligence. the company but the a.idevelop a.i. artificial intelligence will make self driving cars become more efficient and will help teach computers to think like humans. the technology aims to more accurately estimate rendered locations in the travel time. nicole: -- cheryl: under armor but they tended to major league baseball. under armor replacing majestic athletic as a supplier for 2020. the front of the major professional sports uniform for the first time that under armor will decide the jerseys but fanatics is going to make and sell them. coming up, the housing market recovering. other luxury home market and will tell you what to expect. how about 12 bucks for a cup of joe. we'll tell you all about it. you are watching "fbn:am." ♪ [vo] is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. cheryl: 5:45 a.m. in your paper escape hybrid that's happening now. donald trump's teeny mat

a.i. hat a recent round taibl the head of a.i. research said the technology could be used to take down fake news, detect violence on live videos, "this isn't magic. this isn't terminator either. this is real technology that could be useful." the key they say is using the technology responsibly. how much is an empty promise? >> they can do it. i put a tweet up last weekend saying if they're always so smart 364 days a year and when something's really problematic, they can't do it, oh, it's super hard. i was joking about it but i got a lot of responses from technologi technologists. it's a very hard problem. false positives, all kinds of things and whether facebook or twitter or any of these people should be deciding what is news. tame, they pretend they're not media companies. they are creating problems and making money off it. they have to think hard about the technological solutions to deal with it. they can deal with child pornography and all kinds of things in their advertising and fraud. they should be able to do this but it's a little more problematic because of issues around censorship, all kinds of things, but some of the stuff is dead obvious. >> call me a skeptic, but if you rely on technology, algorithms and a.i solve this problem you also get plausible deniability when something gois wro goes wrong. >> absolutely. google did this with the panda update, killed off a lot of companies who had crappy news and elevated the good news. i think the question is can the people who have good news, accurate news be elevated compared to some of this other stuff. you know, it shows how easy it is to game all these systems and that's the issue. the other issue is people want to read this stuff and that's hard to deal with. people want to read the things they believe. so there's some wacky story, i think one about michelle obama kicking hillary clinton off twitter. my mother called me, like, did you see michelle obama -- and i was like, it's untrue. prove it. i was like, it's not true. you spend all this time, like, prove it. >> factual world. >> yeah. and when the president-elect tweets things that are not so true, you know, i don't know how else to put it, some of the stuff around "the new york times" and

a.i., but the importance around a.i. in terms of getting it to work well is having the data and having the training, right? so if you don't do it now, your product or experience is not going to be as good as the next guy's and you will potentially be shut out of the market. so if you look at amazon as multiple to revenues, trades about a third of google's yet both moving to voice, search and areas that are similar. if you look at it to gmv, it trades closer to brick and mortar retailer yet without all of the secular tailwinds amazon has. so i think it's more of an acceptance that investors have to get comfortable with around the investments amazon is making and the general overall horizon you're looking towards. >> what if we see, ken, more america first type economic policies, protectionist policies including in any tax reform we'd get including the import tax, border adjustment x what would that mean for a company that sources so many products from all over the world like amazon? >> you know, i think we'll have to wait and see there. i think that, you know, i'm more focused on what we're seeing as far as technology induced change and how amazon stands positioned within that. i think there's obviously certain macro changes that have happened that i think cause investors to look to other categories and the rotation is certainly a big part of what we've seen recently. but i think over time i think the trends that we're talking about are not going to go away. and i think that, you know, whether or not you can look at some of the recent, you know, selloffs that we've seen within technology as buying opportunities we're in that camp, i feel. we'll just have to wait and see what comes. >> ken, looking at the right of you your top picks, amazon, alibaba, facebook, alphabet, in terms of a.iare going to come into more and more conflict, these four companies, and competition, where it wouldn't always seem that's the case? >> i think certainly. when you look at the players broadly who can provide insights to businesses that they're going to increasingly going to need especially as they focus not just in terms of how they think about going to market but how they reorient back end to something much more demand driven, there aren't that many players who can provide what they can provide at scale. so, yes, they're going to move closer into one another's turf, but i think that all of them are making major commitments to not just the data science but the data infrastructure. and those are going to be very key for businesses i think to operate in 2017 and beyond. >> ken, you've also got netflix as a buy. and you're positive on digital video sort of seems like all the new tech names are things you like. are you therefore pretty bearish on traditional names? likes of say cvs and med

a.i.'s induction into the basketball hall of fame just a few months ago. dr. j will be introducing a.i.half. >> students at williamstown middle school celebrate add special teacher today who was honored by the eagles. >> e-a-g-l-e-s, eagles. >> paul van houten was selected as the 2016 all pro teacher. the 27 year veteran is a sixth grade science teacher. van houten says his $1,000 prize will go towards starting a positive behavior program at the school. where things come from? how they get here? what they're packed in? it's a lot of stuff. and these things add up. that's why we recycle. [vo:]it's nice to know that raymour and flanigan is proud to be a leading recycler- 17 million pounds of recyclable materials every year. turned from trash into treasure. so in the future, we will all have a more beautiful world. ♪ >> so, we've got some serious weather coming into the tri-state area. serious weather already here. >> yeah and it will be a fantastic week for staying indoors by the fire, maybe wrapping your holiday gift, doing some baking. not a great weekend for being outdoors but we'll ha

a.i. and not the year of driverless cars. it will be another year of waiting for a.i.rless cars. >> a lot has been happening on those fronts. >> of course there is but not in the way you can invest successfully. you can invest the dream. you can invest in the sales pitch, but the fundamentals aren't there yet. what we've learned in silicon valley is these things always take longer to start than you think, and once they start they happen much faster than you think. we just -- i don't think any of those big things kick in in 2017 but i would love to be proven wrong. >> we'll have you back in 2020 to talk about it. roger, happy new year. >> great to see you all. take care. we'll see you next week. >> when we come back, more on the latest from washington, d.c., following putin's wait-and-see response. then the final trading day of the year is upon us and we're breaking out the 2017 cnbc playbook. and recode's kara swisher on why silicon valley should actually be looking forward to a trump presidency. all that and more when "squawk alley" returns. ♪ thita leak in the roof.t

a.i. can peacefully coexist and we'll take a look at the biggest tax break news from 2016, from personal a.i. assistance to reusable rockets becoming a reality. but first to our lead the obama , administration has imposed sanctions against russian officials and state institutions in retaliation for hacking democratic party emails. it's the first public retaliation for what u.s. officials said was an unprecedented attempt to interfere with the 2016 presidential election. we spoke with former cia analyst and now senior policy adviser for the counter extremism projt. >> there are nine people and entities mentioned on this sanctions list. crucially there are two really big names. one is the fsb, the inheritor for the kgb, so russia's prime intelligence agency. the other is its military intelligence service the gru. , so, i mean, we've been speaking to analysts all afternoon who say, you won't necessarily see individuals at the gru targeted as a result of being mentioned as part of the of being mentioned there, though individual members of the gru are actually mentioned as among the nine. but it's sending a huge signal from the obama administration saying, pointing out the sort of seriousness of their intent to name and shame russian individuals and entities as they press ahead looking for ways to punish russia for the election related hacks. caroline: the name and shame approach has been used by the obama administration before, but could there be any culvert actions going on as well? >> absolutely. you see this move today. this is the obama administration's parting shot against putin. this is the diplomatic sanctions, the expulsion of diplomats and sanctions. having said that, that does not close the door to covert coverts or potential cold cyber measures and we may or may , not know about those if and when they happen. obama did imply this may not be the last of the retaliation from the united states on this which would seem his days in office are waning so if he's going to do anything else, if this administration is going to do anything else we're probably not , going toe so it. the russians today came out saying they are likely to retaliate so one thing to watch, , is to see if the united states faces any additional cyberattacks from the russians in upcoming months and whether or not the trump administration rolls any of this back when president elect trump takes office later in january. caroline: the fact that we're hearing already from the fact that russia might bring these countermeasures as soon as tomorrow, what are the people you're speaking to reacting to, potentially bracing themselves from russia? i mean, what we would likely know about in that case would be an expulsion of american diplomats. these things tend to operate on a tit for tat basis. you expel my diplomats. i'll expel yours. so that would be a very public move. one of the things that the obama administration was weighing in the last couple of months, these are discussions they have been having for some time, is how far down this path they want to go because if they continue with , covert actions as well and press ahead with action that is would perhaps attack russian infrastructure or wipe hard drives owned by hackers or delete their bit coin accounts, or what ever it is, then you are really getting into almost a cyberwar type of situation and that could escalate much more quickly. this isn't why you the sort of expulsion of diplomats which has history. there is a long historic precedent for that over years and years but when you come to , really escalating cyber war between two major world powers, you know, that's something the obama administration and the trump administration would want to consider very carefully. caroline: interesting you mentioned the trump administraon. we've heard that, of course, these sanctions were in many parts bipartisan. we saw across the benches either side wanting to push for such action, but it looks as though donald trump himself perhaps has been a little cooler to want to see any rapprochement with russia. we heard him speak yesterday. let's have a listen. >> i think the computers have complicated lives very greatly. the whole, you know, age of computer has made it where no one knows exactly what's going on. we have speed. we have a lot of oer things but i'm not sure you have the , kind of security that you need. caroline: he sort of says everything and nothing there the , fact that he wants people to get on with their lives. what do you think is going to be the reaction of donald trump when he moves into leading the country? will he unwind all of this? >> i think what you saw today is a move that needs to be taken seriously. it's sort of unprecedented, an executive order was revised to include deterrence against anybody messing with any of our election infrastructure. that's now included in the executive order. so if any individual in the future is to take any sort of cyberaction that affects the election in any way, leaking of emails or attacks on election system themselves, that's part of u.s. policy and president obama's executive order is that we'll retaliate with sanctions. it remains to be seen how trump will react. to say that computers complicate our lives doesn't seem really like a policy response. cybersecurity is one of the foremost threats the united states faces in terms of cyberattacks on our infrastructure, cyberattacks in terms of economic espionage on private companies, on our facilities like the pentagon, on our nuclear facilities potentially. this is a serious issue so to , just brush it aside with the remarks last night doesn't really demonstrate a clear cyberpolicy and it will be interesting to see what donald trump does in response to this russian activity when he takes office, and also the action taken by the obama administration is not just about russia. part of imposing sanctions, diplomatic or economic, in response to a problematic behavior, in this case, a cyberattack that impacted dnc servers and emails, is to deter future nonstate actors, future state actors, from doing this sort of activity again. so taking a position on this is , key to prevent that. not just in terms of punishing russia, and i think, you know, this might actually help the trump administration because perhaps we'll see less nonstate actors meddling in terms of hacking into email servers like this. caroline: just to take it global for a moment. of course, we've got french elections, german elections, netherlands elections. to name but a few next year. we know that russia's actions are not just limited to the united states. there are reports from the u.k. press over the weekend that may be the uk is exposed as well. how much do you think this is a global issue? will other countries come in behind the united states? >> it will be interesting to see whether or not, particularly with the administration sanctions that went into effect, if european countries will follow suit and also designate those individuals and entities and not engage in financial transactions, trade and what. whatnot. so again, you might see europe take action if they are the victim of the cyberattack. i'll be curious to see if europe jumps on-board with the u.s. they may well. it's in everyone's best interest to make these multilateral and take a firm stand on this together. caroline that was senior policy : adviser for the counterextremism project and bloomberg's foreign policy reporter. this week, the u.s. accused three chinese hackers of making more than $4 million in illegal profits after hacking the servers of several new york law fis. it is alleged that they bought shares in at least five companies before deals were announced. some of the transactions involved chipmaker intel and a drugmaker. the sec filed a parallel civil complaint and is pushing to freeze their assets. coming up, holiday cheer echos for amazon. why tech gadgets won out as shoppers got mobile. and a reminder that all episode of bloomberg technology are live streaming on twitter. check us out at bloombergtechtv. this is bloomberg. ♪ caroline: the consumer came roaring back this holiday season making its biggest gain in more , than a decade. could the boost in sentiment pay off for the retail sector during the crucial holiday season? well certainly there were signs , of consumer strength in the online space. amazon reported its best holiday season yet, having shipped one billion items. we dug into the online retailer and its record sales of alexa devices. with consumer reporter sean and bloomberg editor at large cory johnson. >> amazon is very fast and lse with theumbers they throw out. the fact that this was the biggest holiday ever. if it wasn't, it would be a disaster, because the expectation was for 25% year over year sales growth. we don't know how many they sold last year so we don't know what , that number means and the , company is reticent to release actual figures. rbc capital markets estimated about midyear the company sold about a billion dollars of alexa products for perhaps very little profit, but the motion that it could be a much larger number coming in. let's say three times that number, it starts to be a significant number, maybe not on amazon's scale where they are expect to do about $45 billion in revenues for the quarter. profit, but the motion that itbf things is good, not just because it works for amazon, it creates an effect. one of the things we found out with a study earlier this year, the more they use amazon echo devices the more they use amazon. in the same way amazon prime customers become more frequent customers of amazon. caroline: shannon, great to have you on the show. give us a sense of the mobile element that you're covering, how much? there used to be a buoyancy. >> well, yeah, and i think before the big brick and mortar , people talked about the app, it's the battle of aps. they know consumers are only going to be using a couple of aps on their phone. amazon is really dominating that space. maybe there e a couple of other retailers who can make a dent to have the app on your phone, that you're using, in real-time or things while you're lying in bed at night, price checking from your app. so i think more and more, the debate is not going to be around who has the best website but who , has the best app and best mobile platform because that's where consumers are moving in the retail space. caroline: so all brick and mortar are playing catch-up. are they managing to lock in some of this payment? >> i think they are obviously doing better than they were a couple of years ago, but when you listen to cory talking about amazon and the sales of alexa and the way amazon just continues to dominate the space and is drawing more and more consumers into their eco-system with prime, with alexa, and excellent, the harder and harder it gets for brick an mortar retailers. it's sort of like amazon is always two, three, four steps ahead of them. as soon as they get a great website, amazon has a great mobile app. as soon as they get two or three day shipping amazon is doing , one-hour shipping. they get a good app, now they have got something like alexa to compete with. they are trying, obviously, but -- and they are making some progress, but i don't know if there are any signs of slowing amazon down. >> it's also interesting if you went to the press release, amazon released, again without any numbers, they went through category by category top selling products, and they were wonderfully random and weird. i went through probably 30 of those items. what i noticed these are cheap items. it was a power cord for $7.99. a bathtub baby toy for $6.45. the prices were so low that the expectation might be that amazon has virtually no margin, but by driving so much volume and having tiny bits of margin they are taking money away from other retailers as shannon is pointing out and that changes the nature , of retail to push it more towards amazon. caroline: >> that's fascinating, the way in which -- who has one +++ , shannon, consumer confidence, best in 15 years i was really intrigued by not only the breakdown from a generation point of view, nsumers seem to be positive, if they are over 35, millennials, they aren't sounding too confident but if you're a closed seller, it's not a pretty place to . >> to mention cory's point, amazon is now getting into apparel, one moring retailers have to compete with. yeah this year for apparel, i , don't know if it will be catastrophic, but it won't be awesome. and give wherein the consumer is at it could be awesome but the , consumers are just not wanting to spend on apparel. there is not innovation going on. there is a lot more excitement happening in other areas like tech, where they would rather be spending their money. so the retailers were forced to offer bigger discounts than ever this year, so maybe able to get the same number of presents for the same number of people but , you paid less and the retailers got a smaller margin. so i don't think we're going to see -- nothing really has changed, at least this holiday season compared to last season. maybe an incremental benefit but not a huge boost. >> 63% of millennial voters voted against donald trump. so that may have actually a big weighting in terms of the optimism that those people feel. if 63% of the populace votes against someone and that person wins, they aren't feeling good about anything right now, so the time period in which they were polled was during the trump transition team coming together and that may have had an effect on consumer confidence for millennials, maybe not affecting the way they are actually spending money. caroline: bloomberg editor at large cory johnson and bloomberg consumer reporter shannon. as we just discussed, the echo has proved to be a massive success for amazon. the a.iwered smart speaker shows there is a lucrative consumer market for voice activated system in the home. something apple can no longer ignore. ♪ >> the top five most valuable tech companies in the world are all betting big on the success of virtual assistance that respond to voice commands. the race really started with amazon's surprise hit, the echo, powered by a digital assistant named alexa. >> alexa how many championships , has dan morino won? >> dan marino has won zero championships. >> alexa, how many oscars has alec balance win won? won zeroaldwin has oscars. >> alexa, stop. >> echo debuted in mid-2015 and by april 2016 consumer researchers reported that amazon had already sold more than three million devices. and it was cheap, selling for the relatively low price of $180 a pop, but the real pay-off was in amazon's core e-commerce speakers. >> more importantly it actually , adds into the echo system that amazon has where they only have a bunch of traffic coming to their website bu

a.i. versus human for control of humanity. we are already very mixed up with it. we don't have one or two in the world. we have several billion of them. these are a.i. is connected to the cloud. we create these to expand our reach. who here could build a skyscraper? we have machines that leverage our physical abilities. a kid in africa with a cell phone can access all of human knowledge of the few keystrokes. we will connector neo cortex expanded and add to the top of the hierarchy and not as where we do design a new fashions and other creative work we do. that doesn't mean conflict will go away. worthy of conflict in the road between different groups of humans augmented by our machinery and artificial intelligence. that is going to continue. we will basically expand our creative. >> when you think about the future of the economy and add augmented world that you just described, there are some people who think this'll be great for society and others who think most of us are not going to have jobs. >> first of all, jobs is an economic system that we use to meet our needs. penny pritzker mentioned 3.2% economic growth picked economic growth statistics ignored the increased value of the dollar. i spent a few hundred dollars for this device and that counts as a few hundred dollars of economic activity despite the fact that it's a billion dollars in immediate or a trillion dollars in 1965 the computation in vindication. millions of dollars of economic activity. a $7000 by encyclopedia britannica appeared encyclopedia britannica. that is $50,000 of economic dignity. i have a much better one that counts because it's free. they say okay, but show the strange world of devices and so on but you can't wary. you can't live in it. all of that is going to change. we will be able to print our closing the 3-d printers in the 2020s. we are not quite there yet. that's improving at a rate of 100 per decade. we look at there by 2020. >> drill down on map for a second term and the idea that we will print that for pennies on the dollar. >> sophisticated increasing varieties of project will become feasible. >> what about the commodities? i've still got to pay for the cashmere. >> we are going to be able to increase the types of products including the types of materials that were used. clothing already is a lot less expensive than it was 100 years ago. 20 years ago a lot of ago a lot of movement was formed because we have new technologies emerging that could automate the making of clothing. in fact now the common man, woman could have a whole wardrobe rather than just one shared. but this revolutionized manufacturing you will have open source versions of products and proprietary versions testing. let's take several other industries that have already then transform to information products. if i wanted to send you a book by music album a few years ago i was send your fedex package. now i send you an e-mail. there's millions of high-quality free documents and books and movies and songs and will have a very good time that free media products. people still see the latest blockbuster with the coexistence of the open source markets. what happens to the revenues of those industries? they've gone up, not down field by the distributed and marketed and we can tell you you're going to like this movie or this song based on what we've noticed your preferences are. the same thing will happen with the fashion industry. they will still be designed with the latest designers that people spend money for. manufacturing is going to be transformed. impacts unemployment, the the perception is entirely opposite the reality. i would say 38% of the work on farms and i predicted 100 years they'll be 2%. 25% in factories of the 8.7%. they'll get jobs to the design on the web and created the websites and applications for devices and chip designs we will create new jobs to create the ones. what new jobs? my answer would be we haven't invented them that yet. that is a bad political answer but it's reality. this really has changed and this is different this time. this didn't just five years ago. people creating mobile devices and websites and new applications. >> most of them, is to grab the and a great example sold for a billion dollars a minute digital world that is different than tangible goods. >> we've gone from 24 million jobs to 142 million jobs today. what about percentage of the population? 31% to 44% having jobs. what about the wages of those jobs? they've gone up for our 11 fold over the last 100 years. has that really happened over the last five years? the answer is yes, all these economic dvds exist now that did before. >> you don't include those living in some kind of luxury or the shared. we will become part of the leisure class. >> i think 100 years ago you were happy to have it back breaking job to put food on your family's table. today not everyone, but an increasing percentage could definition an identity and gratification and self-actualization from their careers. the idea that you are going to study for a trade and have one type of job that you keep 40 years, 30 years and retire, that model has already gone away. the perception is quite different. there was a poll of 24,000 people in 26 countries that will let gone up or down or how much? 87% thought and correctly that poverty had gotten worse. over 1% identified that it had been done by 50% or more. this is similar in every other economic area. part of the reason is people cannot see the writing on the wall. you hear about these autonomous vehicles and that makes you nervous. people didn't have that level of information. part of the reason people think is the information about getting exponentially better. i would like to point out the better angels is the most peaceful time. what are you kidding? didn't you hear about the incident yesterday and last week? something happens halfway around the world in falluja and we experience it. that could be a big battle that wiped out the next village. 100 years ago you would hear about it. in every area, democratization you can count the number on one hand a century ago. become the number of democracies on one finger two centuries ago. not every country is the perfect democracy, but in all these areas, democratization, human freedom, peace, economic activity, this is the most beneficial time in human history. we didn't have any safety net. >> you don't think in 20 or 30 years we will have a universal income be so many people will be out of work? >> i'll give you an example. >> we had 52,000 college students in 1970. we have 20 million today and another five to 10 million. 30 million, 10% of the population of the united states. 20% of the workforce. they are studying poetry and history and appomattox and music and that is considered a useful thing to do. so we are going to redefine the nature of work. you greeted mobile devices and that could give you 100 activities that didn't exist five, 10 years ago. >> does this ultimately create far less customers which to say what happened as a function of all the things. >> we are becoming wealthier and a lot of our activities and gratification in terms of beauty and creativity. if you look at the statistics of the fashion, it has gone up. it used to be a very small percentage of the population. we are going to be very wealthy. people say when i point out this exponential growth of the value of information products, people say as i said before, you can't eat information products. so i mention 3-d printing of clothing that were also going to be producing food, very inexpensively using agriculture, basically artificial intelligence, controlled food production at low cost. ard is a demonstration put together three story put together three story office buildings snapping together modules printed on the 3-d printer like lego bricks. very low cost them three days will be the nature of creating structures from the houses and buildings in the 2020s. the physical things we need ultimately will be provided to a.icontrolled 3-d printing at very low cost. we will have the physical resources to provide the highest levels and are delivering for everyone in the world and we are already well underway towards that. poverty and a shot over the last 25 years has been cut by 90% according to the world bank and south america and africa are not told they moving in the right direction so we are wealthier, but our perception of what is wrong with the world is increasing. they will have more information about the threats to their economic security and data sent in a security and understand and apply to focus on any election is people are better off but perception of their economic security is infused with more knowledge of the change in the world. we adapt very quickly. we think it's always been not play. >> to other smart fellows who have a less rosy for shand relating to add. elon musk and bill gates say that a.i., artificial intelligence represents our greatest existential threat. >> i started writing abo

a.i. are very intriguing. we'll see what happens into next year. >> isn't the bull thesis here, matthew, that it's about the forward looking sort of businesses of a.iand machine learning and the data processors that has this rally going here? and the question, i guess going forward there is, how much competition is there going to be in some of those opportunity spaces? >> i think those are great questions. i would make two points. first, as i said, i think the gaming platform nvidia has tons of growth over the next five years from some of the metrics i've pointed out. but second, certainly you're right, artificial intelligence phenomenon that gpus are very well suited for in medical, automotive, data center, big data analytics and other markets, nvidia has growth legs well into the future. so i think there's plenty investors can go after with this company on a go forward basis. if you look at the stock's up 35% for the year and relatively low semiconductor growth for a macro, i think investors continue to seek out themes like nvidia that can check three or four of the boxes over the next three to five years and i think that holds valuation. and we'