tv Best of Bloomberg Technology Bloomberg December 4, 2016 9:00am-10:01am EST
first, to our lead. this week, we heard from billionaire carlos slim, mexico's richest person, for an exclusive interview from mexico city. the america mobil chairman emeritus says at&t's aggressive pricing strategy is causing the company to "lose a lot of money." he also chimes in on the u.s. president-elect, saying mexico needs to return its focus inward after his presidential win. bloomberg's erik schatzker caught up with him from the mexico year ahead 2017 summit. take a listen. mr. slim: mainly in latin america, and we have a big operation in the u.s. and something in europe. we always take care of our investments because we cannot get behind in technology, capacity, and we cannot stop
this for any reason. it gets cheaper because now we pay less for what we are going to do in dollar terms. in dollar terms it will be lower. local currencies will be -- >> cheaper. erik: the concerns that you have about the effect of trump policies on the domestic economy and america's standing in the world -- does that change the calculus that you may have for some of your assets in the united states? you own a very large wireless -- prepaid wireless company, tracfone. mr. slim: no. i don't think there is any change about that. he's talking about climate change, let's look at what he's going to do, because he is not saying he will get out of climate change, that's very important. about the leadership of the u.s., once he said he will get out of and everywhere, and he
wants to make a stronger army, a stronger military. and maybe he is looking to negotiate the reissuance of that -- the resources that will pay it --at but i think is in it is an issue of negotiations. he is talking about corruption in washington. . >> rooting out corruption. i'd like to think that's good for everybody. mr. slim: i know. if you take a look, that is the officials of government and congress. erik: i mentioned this business you have, tracfone. what is the long-term strategy for the business? is it to continue as it is now, to maybe merge it with a wireless carrier or perhaps sell it at some point?
mr. slim: in the short-term, like we are doing, we need to follow what is happening in the industry, and the industry is moving very fast. then we are alert of what is coming, and depending on all these things, we'll make a decision at the right moment. erik: so what is more likely to happen the longer-term? mr. slim: the longer-term, it's difficult to define at this moment. but we're working in the short-term to what we have done to make it profitable, to have a good operation, a good market share. erik: here in mexico, your former partner, at&t, is now the greatest threat to your wireless business. is at&t playing fair? mr. slim: we know that they were going to come to compete, because we opened the door. we opened the door -- they have had a big piece for many years of american mobile.
erik: yes. >> in 1991, they had 10%. in 1981, they had 10%. we opened the door to them buying it. if we did not buy it, they would not be here. and they're getting very aggressive, a little more -- they are losing a lot of money. i don't know how much, but they are losing a lot of money. you can see that in the balance sheets. we need markets, and that is the strategy, that is the take. -- the strategy that they take. what is very surprising is that they are selling at a very low price here, less than 50% of the price. that means it is a surprise not that they are selling at the
u.s. price but less than 50% of the price in the u.s. erik: is that anticompetitive behavior? mr. slim: i don't know. you make your judgment. erik: i think you know more about those regulators and i do. but what can you do, what can american mobil do to stop at&t from taking your market share? if it continues to price of that level? mr. slim: they are taking too much market. they are subsidizing too much. they are taking some market from competitors, but it's not just good for the consumers, we are happy. emily: coming up, we will hear from the ceo of fox, aaron levie, the company's latest results topping estimates. plus, what he thinks the trump administration will mean for the tech industry. and payment provider strike gets $150 million fund and creates ireland's youngest billionaire.
emily: enterprise cloud company box rose the most in a month. the company showed strong sales growth and third quarter. i caught up with box ceo, aaron levie. take a listen. aaron: two things that we have been benefiting from. we have been building a platform for 11 years now which is differentiated from the rest of the competitive landscape. as more and more enterprises need to move their data to the cloud and manage it securely, we have the most competitive product on the market for helping large companies, companies of all sizes, storing, share, collaborate on information in a very secure
way. that's what has been going well, and we are benefiting from the fact that most enterprises all around the world need to modernize their infrastructure, modernize the way they work. we happen to be in the right place and the right time. emily: you see growth from expanding sales to existing customers, or adding new customers? aaron: a mix of both. our product makes see for any business in any industry, anywhere around the world. we see a dramatic expansion because of new customers. were now at 69,000 businesses that use the product. at the same time we are seeing continued expansion with an existing accounts. -- within existing accounts. some of our new products will be launched through the year and a half, add-on products in terms of revenue model, that have been performing well. we think we will both expand in terms of new product sales to existing customers, as well as being able to reach on the markets and segments of the customer landscape. emily: you guys already have
partnerships with big tech companies -- ibm, microsoft. now you have a partnership with google and facebook. do you have any concerns that these bigger companies will add box-type functionality to their own platform? aaron: part of the reason of the partnership is the power that type of functionality for those companies. what's really unique about the cloud is as enterprises move to the cloud, they will be using more applications than ever before. some companies have 30, 50, 100 different providers that power different parts of their enterprise. so you might be using salesforce, workday, workplace, office 365, but you will want your content and data to store securely in one place, back next -- connect to those applications. our fund mental strategy is to be the agnostic, horizontal platform that connects all those different services. emily: you, like many in silicon valley, were vocal about the presidential election. you had a conference where you had a tagline -- make software
great again. aaron: that was when it was a joke. emily: [laughter] now that we know the results, you recently tweeted "can trump keep america great, can he recognize the pain he has created?" what are your biggest concerns? aaron: there are probably two big components of trump specifically moving into office. the first is i think the campaign that we saw over the past year, the rhetoric from the campaign created a lot of divisiveness in the country, and we have seen that play out over the past couple weeks. the first thing is he needs a strong message that is one of the social issues of inclusion that we need as a country, to build great organizations and to innovate. that would be the first and most important thing i'd want to see from the new administration. the second part is, we have a bunch of issues in the tech industry that relate to policy and government regulation, but these are increasingly not becoming tech issues only.
they are becoming issues for the rest of the country. emily: immigration, trade? >> even things that are going to .mpact how every company as we imagine car companies moving to anonymous vehicles, manufacturing companies moving to automated manufacturing, we have seen encryption and privacy and how we have to drive it, it is going to be applicable to every company on the planet. while we think about these issues as silicon valley issues, there will be issues for every large enterprise, every type of company that exists. emily: that was box ceo aaron levie. turning to samsung, south korea's most valuable company climbed to a record this week after announcing a series of moves, including pending shareholders a 36% increase in per-share dividends. the company also announced it may split as soon as next year, responding to pressure from activist hedge funds.
paul singer's elliott management. we caught up with the managing editor for asia tech, peter hellstrom, from tokyo, just as the news broke, along with tech economy ceo david kirkpatrick in new york. peter: the big news out of this is that samsung has decided it's going to return more cash to shareholders, specifically through dividends and share buybacks. it set in the past that it wants to return about 30%-50% of free cash flow to shareholders. as it has done that, the amount of cash and has on hand increases. it will go to the top end of that range, 50% going back to shareholders either through dividends or share buybacks. it's going to begin by increasing the dividend for 2017, by 36%. it will also move from twice a year dividend to a four-time a year dividend. in addition to that, they say that by next year they will nominate an independent director with global experience to their board, and they are also going
to look at the structural changes, including the split into a whole big company and an -- into a holding company and an operating company. emily: david, you believe samsung's current corporate governance structure is archaic and just can't survive in this day and age. david: thank you for characterizing my view. emily: [laughter] david: i am absolutely amazed that samsung has done as well as it has, as the secretive, family-controlled company that is caught up in all of the relatively questionable governance issues that korean business in general suffers from. now they are hit by the double whammy of having a disastrous product development that is going to lose them at least $6 billion this year, plus being an environment in korea where the relationship between government and business is highly suspect, because of this extreme corruption scandal happening with the president, involving samsung, among other companies. i think they have to go a lot
further than what this suggests they might do. one outside director is not enough. they probably need to go public in the united states, to really have the transparency that comes with the kind of company they are competing with, which is google and apple and companies like that. i really think that is one of the main reasons why they had this big problem with the note 7, which was an inexcusable corporate problem. emily: that was peter ahlstrom from tokyo and david kirkpatrick in new york. coming up, this week was energy him and week here at bloomberg. we ask the ceo of sunrun if trump's administration puts the clean energy industry in danger. next. and china is looking to compete with the u.s. and russia in the race to space. we will dive into the private space ambitions, next. this is bloomberg. ♪
emily: this week on bloomberg, we focused in on energy. first up, solar. in the weeks following donald trump's election, there has been endless speculation on it. trump campaigned on promises to bring back mining jobs and scrap the clean energy initiative. some of those initiatives helped scale of the use of solar, which -- a scale up the use of solar which increased 30 fold under obama. with solar jobs growing 12 times faster than the rest of the economy. we caught up with sunrise ceo lynn jurich and cory johnson on the road ahead for the industry. lynn: you know, i'm not concerned at all. renewables are here to stay. the cost performance is just there and the people want it. just to highlight what voters wanted, if we look at the federal election, where the energy policy gets set is more at the state level. there were two places where there was voting based on solar,
in florida and arizona -- nevada, excuse me. in florida, the same voters that elected trump and rubio also voted to keep solar in the state. this is very of the moment. it creates the jobs people want, it brings affordable solar energy to people, and it brings competition, and that is a very bipartisan set of characteristics. emily: ok, but there is still some question about how donald trump feels about it. he hasn't said very much since being elected, but let's take a listen to one thing he did say. mr. trump: on energy, i will cancel job-killing restrictions on the production of american energy, including shale energy and clean coal, creating many millions of high-paying jobs. that's what we want. that's what we have been waiting for. emily: when you hear him say that, when you hear concern about tax credits getting rolled back, what is the response?
lynn: i think first what he is saying is that we are investing in infrastructure and jobs. we are investing in domestic jobs. that is precisely what we are doing. as you were saying in the opening comment, the jobs and solar are going 12 times that of the rest of the economy. i see a very consistent with his message. the other benefit about the rooftop solar is that what we are really competing with is we are really competing with the price of retail power, and that is why it is so efficient and while we will win long-term. it makes sense to use the existing rooftop infrastructure and to produce the power where it is delivered. we aren't really competing with a centralized power source, we are competing with the whole cost to transmit them to the home. onto the tax credits -- i will say that the tax credit was a policy that was extended under republican-led congress, that was a george bush era policy. it sunsets after four to five years, and that is what's so
great about this industry, that the cost reductions we are realizing make it so that to subsidize this industry makes a ton of sense. it is working. it is creating the jobs, and it is bringing the savings to people. cory: i wonder if we -- i buy your argument that this is intended to drive solar more than federal, but when i look at what's happening to your company, you are succeeding were company, you are succeeding were others aren't -- solar city, point of fact, has massively cut their guidance toward how many megawatts they will install. they operate in many of the same markets where sunrun is, and you have not cut. i wonder how you are seeing the world differently than they are. lynn: well, the benefit of our industry is that we have available market size that is vastly beyond where we are today. if you look at u.s. households, we have penetrated 2% or 3%. but when you look over 10 years with the cost reductions we are expecting, that could be 20%, which means that we would
deliver a 20% annual growth rate over 10 years. i have been very consistent to say that this industry can sustain that. during that time period, there could be companies that get over levered, companies that get in trouble. but one of the things i am most proud of, it is our sixth quarter of being public, and we have delivered nice, strong, consistent growth. if you look at performance year to date, we are 50% year-over-year in terms of the number of megawatts. emily: the tesla merger has been approved. how does this impact you? a bigger, more diverse, and to end tesla give them more power? lynn: i applaud the merger. i think it's very good for the industry. we are operating in a $400 billion annual industry. we welcome innovation. we welcome strong companies. we welcome strong brands to educate consumers that we are here, it's inevitable. it's a good choice for the home. i think it will lift and we will
welcome the industry. cory: to that point, i don't know how well you guys are doing . on my bloomberg terminal, i have the sunrun stock chart. if we go into the terminal, just by typing it, we look at your cash flow statement, we get to a beautiful, beautiful free cash flow chart, or maybe not so much. you are going through a lot of free cash flow. big losses, a little bit better than it has been, but how do you intended to reduce the free cash flow burn that you guys have been in for such a long time? lynn: it's interesting -- we have held cash balance flat at $200 million for over four quarters. if you look at that cash balance, not only have we held flat, but we have delivered it while we have grown the business. last year we grew it 80%, this year 50%. we are investing in that growth. we are investing in policy. we are investing in r&d. we have a lot of exciting things happening in terms of incorporating storage into the panels, and we are holding our cash balance study.
-- cash balance steady. what you're seeing is a very strong contribution margin for everyone in the solar company. emily: china is spending billions of dollars on its space program, building a rival to the u.s. and russia. it's not simply a state-led effort. entrepreneurs are also investing in the spacers. our china correspondent tom mackenzie has more on the story. tom: here in the desert closer to couple then beijing, china's kabulser to couple -- then beijing, private space ambitions are taking flight. it is designed to climbed to near space, 20 kilometers above sea level. the company behind the project has lofty ambitions. it wants to commercialize manned near-space travel by 2020. in near-space travel by 2020. first, though, they have to testify controls, catch up to andest of flight controls
support system. you have probably heard about the monkeys and dogs we sent into space. the traveler ii will be transporting this little guy, a two-inch terrapin. chairman liu ruopeng is hailed by some as china's elon musk. he wants to make near space travel accessible to as many people as possible, and by designing a craft with the reusable parts she loves to get tickets as low as $100,000 per person. dr. ruopeng: our goal is to make normal people go to near space. whether by rockets or some other technology, we can either give you a crazy leading up or crazy dropping process, which is very difficult for normal people. what we want to develop is that it goes smoothly, just like taking a space elevator.
tom: the ambition dovetails with china's bid to continue the space rates with u.s., russia, and asian neighbors. the country aims to build and operate its first space station by 2020, and land an unmanned vehicle on mars. in october, china sent two astronauts into orbit for its longest mission yet. and the private company is backed by state money. the final frontier is still dangerous, though, and a long way off. half an hour after lunch and at just 12 kilometers above the earth, their systems failed. the mission was aborted, and the fate of its turtle crew is sadly unknown. tom mackenzie, bloomberg. emily: coming up, facebook remains in the spotlight over fake news. should the social network be
>> welcome back. i'm emily chang. investors are rushing to snap up shares of snapchat's parent company ahead of next year's i.p.o. but they are having little luck as they search the typical sources of private stock by employees and investors. consumers are facing the same challenges as they scout out the company's first hardware product, spectacles. we were able to get our hands on the elusive
specs. snap's first investor, jeremy liew, brought the gadget over for a test run.
how did you get your spectacles? i have a feeling you did not wait in line for six hours. jeremy: i have some friends at snapchat. i called in a favor. emily: if you don't have friends at snapchat, the only way to get your hands on snap's new camera-clad spectacles is to stand in line for hours at pop-up vending machines across the country. $130 a pair or up to thousands on ebay. jeremy was a lucky one. he is one of snap's first investors, so he didn't have to wait. how does it work? jeremy: there is a little button on the top. when i press it, it starts recording video. you can see the light is on. you know you're being recorded right now.
after it stops, it syncs through bluetooth to my phone. when i open my snapchat up, it will sync through. emily: the specs come in edgy
colors, teal, coral and a muted black. they charge when connected to the battery. they have a cool factor. but you have to wonder if spectacles will make a cool dent in snap's business. when you heard snapchat was going to make something like this, was going to get into hardware, what did you think? jeremy: i found that evan and the team know better than anyone else what their users will want. emily: my turn. jeremy: let me know what you think. emily: i'll give it a try. jeremy: you're recording. emily: oh, i'm recording. jeremy: can you see? emily: yeah. hey! the camera records circular video, allowing you to hold your phone virtically or horizontally. jeremy: i went ziplining with my
daughter, and not having to worry about dropping a camera or a phone and being able to record that experience, it was really pretty fantastic. emily: why do you think spectacles will do any better than these? google glass? jeremy: i think it is kind of obvious just looking at them, don't you? emily: obvi, right? remember google glass retails at $1,500. more than 11 times more than spectacles. it can do a lot more things, though. jeremy liew believes that snap's price point will help get the product into the hands of the product into the hands of the masses, but will it have long-term staying power? i want to bring in ryan hoover.
you haven't tried it, but you just saw our little experience there. i'm sure you have heard a lot about it. what do you think? ryan: i think it is a brilant move. snapchat is doing so well on so many different levels. it is very difficult for, especially a software company, to execute in hardware. they are doing it in a very snap kind of way. they are making it a toy and making it fun. introducing price point making it accessible for a lot of people. emily: brilliant is a strong word. really, brilliant? ryan: they are creating vending machines. vending machines, since when were vending machines cool? they have made them kind of cool and also marketing campaigns, dropping them in different cities. emily: they are making it feel very exclusive, that is for sure. i will say i walked into it feeling skeptical but i can certainly see a, you would love these if you were a huge snapchat user. it is so easy to get the video to your phone and to your app, and b, if you have kids, it takes away that awkward moment when you pull out your phone and
your kid automatically stops doing that cute thing that they were doing that you wanted to get a picture of. do you think this is something actually that will add revenue to the bottom line or drive usage? in a big way? ryan: yeah, long-term, i believe this movement. it is not the first version that necessarily will. but it is the first step towards a hardware snap company. emily: now to a story we are watching. german prosecutors are investing facebook ceo mark zuckerberg and a number of other facebook executives after complaints of hate speech. they claim the social network accident unlawfully by failing to remove posts that incite hatred or violence. they provide examples of hundreds of posts denying the holocaust, calling for violence, and expressing support for terror groups. facebook said, "the allegations lack merit." meantime, the ceo of axel springer, one of the biggest companies in europe, says that politicians should resist calls to regulate facebook as a media company. this despite concerns on fake news on the social network during the u.s. election. the ceo made the comments in an
exclusive interview with bloomberg. take a listen. mathias: i think it is a tremendous distribution platform. i stick to mark zuckerberg's philosophy that it is about connecting people. it is a platform a bit like a telco in the old days. it brings people together. it facilitates communication. perhaps in a couple of years, it will be virtual reality conversations that we have on facebook. facebook is a technology company and a platform. it is a not publisher. it is not a content producer. it takes no responsibility for content and should not. i think it is a totally misleading debate. you cannot blame people what they have shared during a telephone conversation. the only restriction for facebook i think should be the rule of law. what is against the constitution, what brings people into jail, that cannot be published on facebook, but i think the whole idea that they should have a super editor, that would transform facebook into a global media monopoly, and that's really going in the wrong direction from various points of view. emily: coming up, we will be talking to the c.f.o. of stripe, william gaybrick. the company just raised $150
emily: microsoft held its annual meeting on wednesday. one of the biggest topics covered was the cloud. the company is on course to pull in $20 billion in annual sales from its corporate cloud business by 2018. speaking at the meeting, ceo satya nadella described the massive scope of the plans. satya: by 2025, our society will produce 180 zetabytes of data. in fact, we are running out of words to describe the number of bytes we're gathering. our role is to ensure that the data is not just an exhaust but is converted into actionable, helpful insights and intelligence. emily: this year, cybermonday set a new record, according to adobe digital insights.
this signals a huge shift in consumer habits. americans spent $3.45 billion monday, a 12% increase from last year. enter stripe, the payment service that just raised $150 million, doubling its valuation to $9.2 billion. its focus on online merchants gives it an edge over competitors as retail shifts away from traditional brick and mortar. i spoke with william gaybrick, the c.f.o. of stripe, for exclusive interview. william: stripe is a platform for building on business and in particular for accepting payments. with this round, i do not think there is anything that has reinforced the capital. in particular, it has gotten investors excited about stripe is momentum that we carried payments. through 2016, 2016 was the year of building for scale at stripe, and scale has come, in particular a lot of really big companies have been joining stripe. s.a.p., bloomingdales, target, macy's, unicef all have joined this platform. in addition, we have opened up
four new markets. france, spain, singapore, japan and launched a lot of great new products. that list, which is for incorporating a business. as we look into 2017, the capital is to double down on those efforts, open up a bunch of new markets, and be ready for the scale to come. emily: you mentioned bloomingdale's and macy's. cyber monday spending up now 12%. how do you continue to monetize and capitalize on this strength? william: as you mentioned a second ago, up 12% year over year. yesterday was a huge, huge day for stripe users. we see more and more commerce moving from offline to online. stripe is really about being an ally to startups and technology companies and giving them the tools to create their businesses and go global and build marketplaces and platforms and pioneer new business models. emily: $9 billion is double square's market cap. is the difference justified, and why? william: stripe and square are very different businesses. square is a business that i greatly admire. it is a great business, but it serves a very different user base and is solving a very different problem. for square, you're looking at the huge market of millions of small businesses across the country. largely offline. coffee shops, hair salons, things like that. stripe, in turn, is very focused on technology companies. it is often very high-growth
companies building businesses online and taking advantage of the new opportunities the internet creates. emily: on that note, you processed $20 billion last year. what is the estimate or the forecast for this year, and how fast do you expect that number to grow? william: well, as a private company, we don't report any financials right now. we haven't confirmed any numbers. as i mentioned a second ago, we are seeing a lot of great scale driven by a lot of really large users joining stripe. emily: we have been talking a lot about the political situation. you mentioned you guys have a lot of international efforts and international expansion happening. you have a partnership with alipay in china. i know you are now in cuba as a result of the white house opening relations with cuba. now we have a president who says -- president-elect -- who says
he wants to curb our trade relationship with china and potentially end the relationship with cuba. are you concerned at all about stripe's business? william: as you know, emily, earlier this year when the president was making his historic trip down to cuba, he reached out to stripe in particular to invite us down there. in fact, a lot of entrepreneurs on the ground in cuba were asking for stripe to be there because of our atlas product. stripe will always be about economic inclusion. we are really about building the technologies to create an interconnected world.
what it means with the new administration joining, i'm not the expert to talk about policy or macro conditions. what i can say is there are there is strong evidence that the new administration is quite pro business. job creation and stoking the economy in general is a priority. we're aligned, at least in that way. emily: coming up, he is known as the hacking boy genius who cracked the iphone and turned down a job from elon musk. george hotz gives us an update on his regulation-defying self-driving car technology. this is bloomberg. ♪
emily: noted investor whitney tilson spoke on bloomberg television about his outlook for the markets and his investments this week, including his position on tesla. the solar city deal took a big chunk out of the company's stock, he is taking a cautious approach. whitney: i am so tempted to short it. i got destroyed shorting it last
time on the big run-up from 30 to 200 or something. it has made me cautious of shorting it, partly because i got burned before and partly because you can construct the most perfect case on it about rising competition and the company is hemorrhaging money, and the solar city acquisition is going to add to their losses and it certainly has added to their debt load. emily: hacker george hotz shocked the auto industry last year when he showed up with a working autonomous car jerryrigged in his own garage. he would on reportedly turned down a job and elon musk, instead founding his own company to promise to sell self-driving software car kits for $999. it came to a halt last week when regulator says hotz a warning over safety concerns. he scrapped the plan and he tweeted, "would much rather spend my life building amazing tech than dealing with regulators and lawyers. it isn't worth it. comma.ai will be exploring other markets and products. hello from china." not so fast. hotz came back this week to announce a plan to give away his software for free. he joined us to explain why. george: it supports right now select hondas and acuras and self-driving cars. you still have to pay attention at all times but there are certain scenarios that you can
take your hands off the wheel and not touch either pedal and the car will drive by itself. emily: ok. so regulators were not so happy about your original plan. how do they feel about this one? george: i don't know. i have not heard from them. the regulator response i thought was very reasonable. the problem was when it came. we were not selling a product. we were not even taking preorders for a product, and they were already asking me for things like a user manual under oath. easier to just cancel and pivot. emily: haven't you really just upped the ante? do you expect to get r more than just a warning? george: no. we are not selling a product.
nhtsa regulates the sale of products using the interstate commerce clause. we are just making plans available for free on the internet. that's a lot more like free speech. emily: isn't it like opening pandora's box, telling everyone, "here is how you can make a self-driving car"? you're basically allowing them to do something that is illegal. george: first off, it is not illegal. you are responsible for complying with local laws and regulations. my understanding is if somebody in california went and built one of these, i am not a lawyer but i think that would be legal, because technically is only an adaptive cruise control and lane keep assist. which are exempt under california law from being an autonomous vehicle. california has the most restricted laws. somewhere like texas -- that is why google it were are testing
down there. emily: have you made any commitment not to test yourself? george: nhtsa does not regulate testing. the only thing i told nhtsa is that we would notify them before we are making a product available for sale. we're not doing that. emily: what kind of interest have you gotten? george: we just opened it this morning. emily: are people excited? what is the response? george: already, we have people talking about building them, porting them to the old tesla that did not have autopilot. that is the great thing about it being open. this other cars we do not support, people can download our code and add support for them. emily: when you said hello from shenzhen, china, what did you mean? what are you doing there? george: i was in shenzhen, china. were looking for manufacturing partners. i did meet with a few companies
there as well. i am not going to say who. you know, the other thing about open sourcing this, there are so many more jurisdictions than the u.s. the u.s. government may not like what i'm doing, but some other governments may and hey, we would love to work with you. emily: is china more open to i george: i don't know. to be honest, i do not believe that it would be easier to navigate the regulatory environment in china, where i do not speak chinese, versus the u.s., where i speak english. but i don't know. emily: so, you know, folks like you have been willing to challenge regulators, but more broadly, people to not want to take that kind of risk. i wonder, how do you think regulations are essentially holding back self-driving car technology? george: i mean, again, i can really only comment on my specific case. in my specific case, they tried to regulate a product that was not even available for sale. they actually gave me 10 days to under oath provide them the user manual for a product i'm not taking orders for.
if i make a mistake in the user manual, they are going to martha stewart me. you know? [laughter] emily: so -- george: premature. i think that was the problem. emily: you said elon musk offered you a job to build self-driving car software for tesla with a multimillion dollar bonus. you turned it down. you also said your software is just as good as the latest tesla autopilot. george: i've not said the latest, i said the previous. emily: how does it compare to the latest? george: autopilot is a bit better. all of their autopilot cars are helping to train the other autopilot cars. once a bunch of people start building these, they communicate with our network, we train, we improve, we ship out. we will be able to beat autopilot. emily: what is your relationship with musk and tesla today? george: i don't know. i haven't heard from him. emily: no new offers? george: no. emily: interestingly, president-elect trump has nominated elaine chao to run the department of transportation. do you have any inkling of what she might mean for this industry? george: i looked into her policy
positions a little bit. i could not find that much. the woman who he chose to do, to the lead transition committee on transportation, she came from a libertarian think tank who criticized california's steering wheel and pedal policy. for being overly restrictive, which i agree with. there has not been a single death in autonomous vehicles to date. you can talk about the autopilot one, but that is a lot more of a cruise control system. to try to regulate something that has not only never caused a public safety problem but also could potentially solve a huge public safety problem, to me, seems premature. i think that is the key word. emily: let's talk about the tesla autopilot death you just referred to. there's a debate about semi-autonomous versus fully autonomous, what is safer? what do you think is safer? what do you think most cars of
the future will be -- fully or semi-autonomous? george: there is a long path to get to fully autonomous. i do not believe that there is a path to fully-autonomous cars without going through semi-autonomous. i think tesla's plan for attacking the problem is brilliant and going to succeed. if tesla is the ios, we want to be the android. we will be the ones getting the 80%. we'll be a little bit worse for a bit, but that is kind of the plan. emily: comma.ai founder george hotz there. drones are swiftly busting into new and unfamiliar territory from military operations to food delivery. but there is one commercial drone you may not have seen yet -- designed by massachusetts-based drone maker cyphy works, which already works with the air force and u.p.s. bloomberg's ann moss visited their f.a.a.-approved test facility for an exclusive look. ann: hovering above the trees at peak foliage in this massachusetts town is an unfamiliar object. a high-powered commercial drone. lance: what you're seeing here is our p.a.r.c. system. what the p.a.r.c. is is persistence aerial reconnaissance communication platform. ann: these drones are not moving much. in fact, if you look closely, you'll see that they are tethered to the ground. that's because they are designed for surveillance and communication. lance: they do a couple of
things. it allows us to keep it in the air indefinitely. it is powering the system. it is also allowing us to move up and down the tether. ann: lance vander brook is the c.e.o. of cyphy works, which makes these drones which can fly up to 400 feet for 220 hours. cyphy has partnered with state police, the u.s. army, and big events such as concerts and marathons. lance: actually coming off that camera. yeah, we can lock in on a car. this is our payload. this is a cm 100 camera. it gives you three times optical zoom. ann: it is latest start up by helen grainer. helen: from a technology point of view we're rolling right along or flying right along. ann: she is a co-founder of irobot, the company behind the roomba.
cyphy has raised $36 million to date from investors and strategic partners such as motorola and u.p.s. the drone maker successfully flew its first delivery with u.p.s. this year. medicine to a hard-to-reach island. helen: i think initially going to inaccessible areas, emergency relief rural areas is the right place to start. no, i do envision them being used bringing you your starbucks coffee in the morning or your pizza at night. maybe even bringing you milk that you forgot another the store. ann: the f.a.a. cleared small commercial drones last summer, buthe prome of delivery drones has been limited by short battery life. 45 minutes max.
tethered drones present a new set of challenges. but for cyphy, it is a bigger picture play. helen: the tethered drones are making our drones really much more reliable. we get much more testing in and that will lead to much better, safer, more reliable delivery drones. ann: big players like amazon, alibaba and others are competing in the global market for global valuation of drone technology that is valued at $127 billion by price waterhouse coopers. lance: we work with a number of government agencies. public safety. we're starting to move into the private sector and starting to see it work with customers in the oil and gas base. telecoms, utilities. ann: cyphy currently employees 50 people and plans to double the size of the company in 2017. lance: it is an exciting time for drones, and the sky is the limit. emily: that was bloomberg's ann moss at the cyphy drone test facility in massachusetts. that does it for this edition of "the best of bloomberg technology." we will bring you all the latest in tech throughout the week
during our new time slot beginning monday. tune in at 5:00 p.m. eastern, 2:00 p.m. pacific. monday catch our interview with russian billionaire yuri milner, founder of digital sky technologies. he is one of facebook and twitter's earliest investors. we will see you then in our new time slot. this is bloomberg. ♪
david: what did your family think? did they say, what is wrong with this man? david: as far as your relationship with steve jobs -- >> we were both there at the very beginning. david: is that more of a burden than a pleasure, to be the wealthiest man in the world? >> will you fix your time please? david: people would not recognize me. alright.