Speaker 1: Bloomberg Audio Studios, podcasts, radio news, The.
Speaker 2: Stock Movers podcast, your roundup of companies making moves in
Speaker 2: the stock market harnessing the power of Bloomberg Data.
Speaker 3: I'm Tim Stenebeck along with Carol Master. Let's take a
Speaker 3: look at some stocks. Meta Platforms taking a forty nine
Speaker 3: percent steak in scale AI with Alexander Wang, who's twenty
Speaker 3: eight years old, joining Meta as a top executive to
Speaker 3: build AI super intelligent.
Speaker 2: Mistake, Right, it's a steak's g ak.
Speaker 3: It's not an acquisition.
Speaker 1: Yet, Okay, If it walks like an acquisition.
Speaker 3: Dave Lie says, do not call it an acquisition for
Speaker 3: a host of reasons. Okay, yeah. Davely is US technology
Speaker 3: columnists for Bloomberg Opinion. He spent about fifteen years reporting
Speaker 3: on tech at the FT and BBC before joining Bloomberg.
Speaker 3: He joins us, here, do we just not call this
Speaker 3: an acquisition? Like? Why why are we not acquired? Why
Speaker 3: aren't companies not acquiring things right now?
Speaker 4: Because they're afraid. They're afraid that the courts are going
Speaker 4: to undo their acquisition. So at this time they're thinking
Speaker 4: probably too risky to complicated. If the stake was fifty
Speaker 4: percent as opposed the forty nine percent. That would of
Speaker 4: course be a takeover rather than an investment, and immediately
Speaker 4: that would trigger all kinds of reviews. They'd have to wait,
Speaker 4: they'd have to get clearances, not only in the US
Speaker 4: but also around the world different regulators.
Speaker 5: There's no time for that in the AI era.
Speaker 4: They've got they've got to get to work straight away.
Speaker 4: And so we're seeing this sort of new approach which
Speaker 4: I sort of likened in a column I wrote to
Speaker 4: sort sort of when a football team buys a great
Speaker 4: young prospect, you know, they pay a transfer fee to
Speaker 4: compensate wherever he's leaving. In this case, for Wang, it's about,
Speaker 4: you know, making investors whole at the scale AI the
Speaker 4: company he founded, and they bring on this young talent
Speaker 4: with the view that he's going to be, you know,
Speaker 4: the what.
Speaker 5: He's going to run a super.
Speaker 4: Intelligence team at Meta and this is obviously what Mark
Speaker 4: Zuckerbo thinks. He's needed to bring his team up to
Speaker 4: up to speed to compete against the other big teams.
Speaker 3: He's going to be sitting by. Mark Zuckerberg reportedly what
Speaker 3: is superintelligence?
Speaker 2: What is?
Speaker 3: And also scally Eyes not building its own superintelligence either of.
Speaker 5: That's what's danger. That's what's confusing to me. So Scale
Speaker 5: Eye is an interesting company.
Speaker 4: It's kind of right at the very early stages of
Speaker 4: AI development. It's about hiring humans to do data labeling
Speaker 4: and say that's a tree, that's a bus, and so forth.
Speaker 3: It doesn't sound like super intelligence to me.
Speaker 4: The crucial thing and a colleague, one of my colleagues,
Speaker 4: Ellen who Hewitt, wrote this fantastic piece about Alexander Wang
Speaker 4: today sort of talking about how this guy knows everybody
Speaker 4: in AI and he knows everything that's going on. And
Speaker 4: one of the things about SCALEI that makes it particularly
Speaker 4: useful for Meta is that it's a company that other
Speaker 4: companies would go to when they needed data. So they
Speaker 4: were working with open Ai, they were working with Google,
Speaker 4: They're working with several other companies, and so they have
Speaker 4: a bit of an insight into what those companies are
Speaker 4: working on and what sort of data they were needing
Speaker 4: to have. So now Mark Zuckerberg gets a bit of
Speaker 4: that intelligence as we want what you.
Speaker 1: Have, We want to we want what you know about
Speaker 1: what kind of the whole landscape is doing when it
Speaker 1: comes to AI.
Speaker 5: What have these companies come to you for yeah, exactly.
Speaker 4: And also Alexander Wung is just known as a great networker, right,
Speaker 4: and so when so much of this AI race is
Speaker 4: about talent and bringing people on, we're hearing Zuckerberg is
Speaker 4: emailing people personally and saying, come and join us. I'll
Speaker 4: give you ten million bucks if you do it. This
Speaker 4: is this is just a signal of how fierce the
Speaker 4: AI rate.
Speaker 1: Different type of signing bonus.
Speaker 4: Right, like a smart star, but considerably bigger in terms
Speaker 4: of the numbers.
Speaker 3: What's the promise, though, I mean, what is this super
Speaker 3: intelligence that they're working toward. What is the world Dave
Speaker 3: that Meta Platforms wants to build and be ready for.
Speaker 5: I'm not sure I want to imagine it, frankly, but.
Speaker 3: It's you and me both.
Speaker 5: I mean, there's various names for it.
Speaker 2: Now.
Speaker 5: Superintelligence or artificial general intelligence is.
Speaker 3: Very a g I and super intelligence are the same thing.
Speaker 5: It's all basically the same goal.
Speaker 4: This idea that you can create this essentially one machine
Speaker 4: or you know, one technology that people can use for
Speaker 4: whatever sort of varied us as they want an AI
Speaker 4: to do.
Speaker 5: And there is this feeling that somebody will get there first.
Speaker 4: Right now, I'm of the view personally that there'll be
Speaker 4: several players doing this and that's how it's going to
Speaker 4: the land's going to turn out. However, I think there
Speaker 4: is a sort of panic to make sure that we've
Speaker 4: got to be you know, first, or very very close.
Speaker 5: Behind, to be fair.
Speaker 1: I mean Microsoft has done some similar moves right to
Speaker 1: try and position themselves by acquiring you know, either different
Speaker 1: people that seem to have certainly some AI insight or
Speaker 1: know how. I think Alphabet has done the same thing right,
Speaker 1: So they're all kind of jocking for position.
Speaker 4: They're all truking a position, and they're also taking the
Speaker 4: same approach of we can't be seen to be acquiring
Speaker 4: companies so we can try and acquire people.
Speaker 1: Now.
Speaker 4: I think they're not as clever as they think in
Speaker 4: this regard. I think the Federal Trade Commission, the Department
Speaker 4: of Justice, they know what's happening here. This is competition,
Speaker 4: just in a different form. Because if you've got companies
Speaker 4: that are spending crazy money on wages, does that mean
Speaker 4: a smaller company just can't compete for talent? I guess not, right,
Speaker 4: So there's going to be and we already know the
Speaker 4: FEC is looking into some of these deals.
Speaker 5: I'm looking at what they're going to do.
Speaker 3: Yeah, what's going on when it comes to innovation at
Speaker 3: these huge companies. I mean, I read your calm and
Speaker 3: I think to myself, this is turning into like a
Speaker 3: PEPSI buys Poppy for two billion dollars type of thing,
Speaker 3: because we want to let the startups duke it out
Speaker 3: for shelf space. When it comes to probiotic soda, we're
Speaker 3: not going to develop it ourselves. Is that happening? A
Speaker 3: decade ago, I thought Facebook killed the startup ecosystem.
Speaker 4: Well, I mean, look, I guess it's a question of
Speaker 4: the shifting purpose of the ecosystem to those big companies, right.
Speaker 4: I mean it used to be if you started a startup,
Speaker 4: you had several exit opportunities U IPO, you get acquired.
Speaker 4: You know, both of those channels have almost been closed off.
Speaker 4: We're not seeing so many tech companies IPO anymore. That's
Speaker 4: really dried up, and it's becoming much harder for tech
Speaker 4: companies to acquire companies at all. But at the same time,
Speaker 4: the startup ecosystem still has this fantastic ability to work
Speaker 4: quickly and bring out new ideas. And I wrote in
Speaker 4: that Columny reference that, you know, I'm not sure if
Speaker 4: Alexander Wang joins Meta as like a junior engineer, I'm
Speaker 4: not sure he writeses through the ranks.
Speaker 5: That becomes this guy.
Speaker 4: I think that's only something you could do outside of
Speaker 4: the company, and that's just the nature of startups. And
Speaker 4: one of the sort of moments of real reflection in
Speaker 4: Silica Value was when open ai came along and launched
Speaker 4: chat GBT and everyone's going, well, hold on a second,
Speaker 4: why Google's been working on this for years? You know,
Speaker 4: Microsoft's been doing it. Apple, you know, you'd think would
Speaker 4: have been doing it, and it just wasn't at all really,
Speaker 4: So there is this sort of understanding that the way
Speaker 4: to incubate a lot of this talent, particularly of AI,
Speaker 4: which is so talent and engineering driven, it's easier to
Speaker 4: find that in the ecosystem rather than spend all your
Speaker 4: own R and D for you know, ideas that might
Speaker 4: come toughing.
Speaker 1: It's funny, I was thinking about Amazon when they used
Speaker 1: to just buy all these companies. I feel like kind
Speaker 1: of almost a catch and kill kind of thing, right
Speaker 1: to make sure that they didn't kind of lose out
Speaker 1: on a marketplace. This sounds like it's kind of catch
Speaker 1: and not miss out as well when it comes to
Speaker 1: AI a little bit right, they want to make sure
Speaker 1: that rather, you know, rather than take something out so
Speaker 1: that it's not competitive. It's to like, wait, what am
Speaker 1: I missing with people who really might have some insight
Speaker 1: into this?
Speaker 4: Just quickly, Yeah, I think it's it's they're not worried
Speaker 4: that these smaller companies are going to steal their lunch,
Speaker 4: worried that these smaller companies might go and help.
Speaker 5: Somebody else they steal that lunch.
Speaker 2: Check the Stock Movers podcast from Bloomberg Radio. Check back
Speaker 2: with us throughout the day for the latest roundup of
Speaker 2: companies making news on Wall Street and for the latest
Speaker 2: market moving headlines. Listen to Bloomberg Radio Live. Catch us
Speaker 2: on YouTube, Bloomberg dot com, and on Applecarplay and Android
Speaker 2: Auto with the Bloomberg Business app.