1 00:00:00,200 --> 00:00:01,040 Speaker 1: From Mahart. 2 00:00:01,040 --> 00:00:05,440 Speaker 2: We're Innovation, Money and Power Collie in Silicon Valley, NBN. 3 00:00:05,800 --> 00:00:09,840 Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 4 00:00:23,440 --> 00:00:26,440 Speaker 4: I'm Caroline Heiner Bloomberg's World headquarters in New York, and 5 00:00:26,440 --> 00:00:28,120 Speaker 4: I'm Ed Ludlow in San Francisco. 6 00:00:28,200 --> 00:00:30,240 Speaker 5: This is Bloomberg Technology coming up. 7 00:00:30,320 --> 00:00:33,320 Speaker 4: Of course, full coverage of Open Ai ahead, as investors 8 00:00:33,360 --> 00:00:37,040 Speaker 4: seek to reinstate Oltman as CEO while the company tries 9 00:00:37,040 --> 00:00:38,680 Speaker 4: to prevent an employee exodus. 10 00:00:38,680 --> 00:00:42,240 Speaker 5: More ahead, and we'll preview what to expect from chip 11 00:00:42,320 --> 00:00:46,040 Speaker 5: giant Nvidia, with AI accelerators expected to drive a sales 12 00:00:46,080 --> 00:00:48,360 Speaker 5: surge for the company. We have all the details. 13 00:00:48,440 --> 00:00:51,680 Speaker 4: Plus Elomsqu's x IT sues Media Matters in a lawsuit 14 00:00:51,680 --> 00:00:55,080 Speaker 4: of maliciously trying to drive away advertisers from the social 15 00:00:55,120 --> 00:00:58,160 Speaker 4: media platform. I want to discuss that and so much 16 00:00:58,200 --> 00:01:01,080 Speaker 4: more throughout this hour. Let's get right to it. The situation. 17 00:01:01,240 --> 00:01:04,200 Speaker 4: It just continues to unfold, and it's chaotic, certainly has 18 00:01:04,240 --> 00:01:06,399 Speaker 4: been for the last few days of boardroom coup investors 19 00:01:06,480 --> 00:01:10,240 Speaker 4: pushing for Altman's return, Microsoft hiring Alman and to lead 20 00:01:10,280 --> 00:01:12,800 Speaker 4: a new AI research team, and in a show supporting 21 00:01:12,800 --> 00:01:15,839 Speaker 4: nearly all of open AI's employees, threatening to quit enjoying 22 00:01:15,880 --> 00:01:19,800 Speaker 4: Microsoft unless Altman is reinstated and the board resigns look. 23 00:01:19,800 --> 00:01:22,560 Speaker 4: An open Ai memo viewed by Bloomberg says that the 24 00:01:22,560 --> 00:01:26,720 Speaker 4: company is in quote intense discussions to unify once again. 25 00:01:27,160 --> 00:01:30,199 Speaker 4: Look whatever the outcome ends up being, Microsoft CEO Saturn 26 00:01:30,240 --> 00:01:33,959 Speaker 4: Nadella emphasized the company fully backs Sam Alman and former 27 00:01:34,000 --> 00:01:36,759 Speaker 4: open ai chair Greg Bockman. Just take a listen. 28 00:01:37,600 --> 00:01:40,280 Speaker 3: We are leading in this next generation of AI technology. 29 00:01:40,959 --> 00:01:43,200 Speaker 6: We continue to be committed to open ai, and we 30 00:01:43,240 --> 00:01:46,000 Speaker 6: continue to be committed to Sam and Greg and the 31 00:01:46,080 --> 00:01:48,160 Speaker 6: team irrespect your where they. 32 00:01:48,000 --> 00:01:50,920 Speaker 4: Are joining us now to break it all down, Bloomberg's 33 00:01:50,960 --> 00:01:54,680 Speaker 4: Sharon Gafari and Sharon, you had up to the moment 34 00:01:54,720 --> 00:01:57,880 Speaker 4: reporting on what's happening internally at those left at open ai, 35 00:01:58,000 --> 00:02:00,560 Speaker 4: and really it feels as though we could even see 36 00:02:00,560 --> 00:02:02,760 Speaker 4: a reinstatement or reunification. 37 00:02:05,320 --> 00:02:05,840 Speaker 3: That's right. 38 00:02:05,960 --> 00:02:07,520 Speaker 7: So there is still hope. 39 00:02:08,800 --> 00:02:11,480 Speaker 8: With buyo employees and management at the company that they 40 00:02:11,520 --> 00:02:14,560 Speaker 8: will be able to reach some kind of agreement with management. 41 00:02:14,840 --> 00:02:18,480 Speaker 8: But at around eight thirty last night, management sense a 42 00:02:18,680 --> 00:02:22,000 Speaker 8: memo to staff saying that you know they're going to 43 00:02:22,040 --> 00:02:25,520 Speaker 8: call it a night and in the morning, you today Tuesday, 44 00:02:25,880 --> 00:02:28,040 Speaker 8: when people have a little more sleep, they'll pick back 45 00:02:28,120 --> 00:02:29,120 Speaker 8: up for sure and. 46 00:02:29,120 --> 00:02:30,840 Speaker 5: Grab aable supper water, because I know it was a 47 00:02:30,919 --> 00:02:33,200 Speaker 5: late night for you just as much as it was 48 00:02:33,240 --> 00:02:37,799 Speaker 5: for me. This memos come from Anna MacAndrew, who's basically 49 00:02:37,880 --> 00:02:41,000 Speaker 5: this was, as I understood it, the global affairs chief. 50 00:02:41,400 --> 00:02:43,480 Speaker 5: I think what the audience doesn't have a sense of 51 00:02:43,960 --> 00:02:46,440 Speaker 5: is who is inside open AI actually doing any of 52 00:02:46,440 --> 00:02:49,600 Speaker 5: this negotiating, at least on the open AI side. 53 00:02:50,320 --> 00:02:52,160 Speaker 8: Yeah, so there's kind of a you know, a core 54 00:02:52,320 --> 00:02:56,040 Speaker 8: management team. It's it's kind of like almost you know, 55 00:02:56,160 --> 00:02:59,520 Speaker 8: government in exile, you could call it, right, It's sort 56 00:02:59,520 --> 00:03:02,760 Speaker 8: of a group of people who are trying to act 57 00:03:02,760 --> 00:03:05,640 Speaker 8: as a bridge right between this new board and the 58 00:03:05,720 --> 00:03:08,600 Speaker 8: old guard, and of course their goal is to try 59 00:03:08,639 --> 00:03:11,600 Speaker 8: to get Sam Altman, Greg Brockman, the old leaders of 60 00:03:11,600 --> 00:03:12,880 Speaker 8: open AI back in place. 61 00:03:13,600 --> 00:03:16,399 Speaker 5: There's a difference between the reporting that we've done, which 62 00:03:16,440 --> 00:03:19,080 Speaker 5: is basically Satya Nadela is behind the scenes being the 63 00:03:19,120 --> 00:03:22,760 Speaker 5: peace broker bringing the investors to the table. The board 64 00:03:22,840 --> 00:03:25,120 Speaker 5: wasn't talking for a while, are they now talking? And 65 00:03:25,120 --> 00:03:27,080 Speaker 5: then there's what he said on camera, which is we 66 00:03:27,200 --> 00:03:30,400 Speaker 5: back Sam either way. Do we have a real sense 67 00:03:30,440 --> 00:03:32,680 Speaker 5: of what Sam's position is in all of this. 68 00:03:34,680 --> 00:03:38,040 Speaker 8: I mean, look, we know that Sam has said he's 69 00:03:38,120 --> 00:03:41,440 Speaker 8: going to go to Microsoft right with his old colleague 70 00:03:41,440 --> 00:03:46,600 Speaker 8: Greg Brockman and start an AI leader AI department there. However, 71 00:03:47,280 --> 00:03:48,840 Speaker 8: at the end of the day, we also know that 72 00:03:48,880 --> 00:03:52,520 Speaker 8: Sam's goal is ultimately you know, Opening is a company 73 00:03:52,520 --> 00:03:55,200 Speaker 8: that he built, right, So if he's being offered an 74 00:03:55,240 --> 00:03:57,680 Speaker 8: executive position to go lead again back there, it's hard 75 00:03:57,680 --> 00:03:59,720 Speaker 8: to imagine him not taking that. And that's definitely what 76 00:03:59,840 --> 00:04:02,360 Speaker 8: inmployees rallying for him right now. 77 00:04:02,360 --> 00:04:03,520 Speaker 9: We're pushing for all. 78 00:04:03,480 --> 00:04:06,320 Speaker 5: Right, bloom Mosteringforry, late night for you, late night for 79 00:04:06,360 --> 00:04:08,480 Speaker 5: the team. Once again, Let's keep a conversation going on 80 00:04:08,560 --> 00:04:11,360 Speaker 5: the story though, and we're excited to say. Josh Wolfe, 81 00:04:11,400 --> 00:04:15,040 Speaker 5: co founder and managing partner of Lux Capital, joins us 82 00:04:15,080 --> 00:04:18,240 Speaker 5: on the program. Josh, just as a scene setter, you 83 00:04:18,279 --> 00:04:21,880 Speaker 5: are not an investor in open Ai, as I understand it, 84 00:04:22,120 --> 00:04:25,160 Speaker 5: there's this tender that was due to happen in the background. 85 00:04:25,520 --> 00:04:28,680 Speaker 5: Start by asking you would you invest in open ai 86 00:04:28,880 --> 00:04:31,960 Speaker 5: right now if you could through a tender mechanism or otherwise. 87 00:04:33,320 --> 00:04:36,040 Speaker 10: Right now, I would not just because of the instability. 88 00:04:36,360 --> 00:04:38,360 Speaker 10: You could see that as an opportunity. I will say, 89 00:04:38,360 --> 00:04:40,440 Speaker 10: I actually think that they should, once they get this 90 00:04:40,520 --> 00:04:43,360 Speaker 10: as sorted out, immediately file to go public. I think 91 00:04:43,400 --> 00:04:46,360 Speaker 10: that the demand and the outpouring and interest that you've 92 00:04:46,360 --> 00:04:49,960 Speaker 10: seen and the support for SAM is just absolutely unprecedent 93 00:04:50,000 --> 00:04:52,040 Speaker 10: in the tech company. It's almost like an unintended pre 94 00:04:52,200 --> 00:04:56,120 Speaker 10: IPO roadshow to shill the overwhelming demand. So while we're 95 00:04:56,160 --> 00:04:59,479 Speaker 10: not an investor in Opening Eye, I do think that 96 00:04:59,760 --> 00:05:01,960 Speaker 10: if them and I was the ultimate board, which I 97 00:05:02,000 --> 00:05:04,440 Speaker 10: think has to be a restructured, real governance board, I 98 00:05:04,440 --> 00:05:05,360 Speaker 10: would file for IPO. 99 00:05:05,920 --> 00:05:09,640 Speaker 4: I'm digging in there, Josh, because that is a contrarian view. 100 00:05:09,960 --> 00:05:14,560 Speaker 4: When ultimately it looks like the entire company is destroying itself. 101 00:05:15,200 --> 00:05:18,320 Speaker 4: What would the governance have to look like if a 102 00:05:18,360 --> 00:05:19,919 Speaker 4: company was to go public. 103 00:05:21,000 --> 00:05:22,720 Speaker 10: I think it's the kind of traditional governance that you 104 00:05:22,760 --> 00:05:24,479 Speaker 10: want to see. You want to have checks and balances. 105 00:05:24,760 --> 00:05:27,680 Speaker 10: There's a big difference between giving founders control, which has 106 00:05:27,880 --> 00:05:30,159 Speaker 10: actually worked we know in tech from Google and Meta 107 00:05:30,160 --> 00:05:32,920 Speaker 10: and many others, and then just having basic governance checks 108 00:05:32,920 --> 00:05:35,600 Speaker 10: and balances that you can avoid these sort of capricious 109 00:05:35,640 --> 00:05:38,120 Speaker 10: whims of just a handful of individuals around a table. 110 00:05:38,839 --> 00:05:41,200 Speaker 10: You want the judgment to avoid, As you said, this 111 00:05:41,560 --> 00:05:44,840 Speaker 10: sort of making devastating mistakes that can be very hard 112 00:05:44,880 --> 00:05:47,200 Speaker 10: to recover from. And the really important thing here we're 113 00:05:47,240 --> 00:05:50,159 Speaker 10: seeing is this wasn't because of absence of GPUs, This 114 00:05:50,240 --> 00:05:53,280 Speaker 10: wasn't because of absence of compute, This wasn't because of algorithms. 115 00:05:53,600 --> 00:05:55,240 Speaker 10: You know, the great irony is people are so worried 116 00:05:55,240 --> 00:05:57,680 Speaker 10: about AI destroying all this stuff. It was human nature. 117 00:05:58,040 --> 00:06:00,400 Speaker 10: It was a bunch of people in a room and 118 00:06:00,440 --> 00:06:03,880 Speaker 10: the emotions that drove the sort of whimsical and capricious 119 00:06:03,880 --> 00:06:07,240 Speaker 10: decision to say we're going to oust this beloved leader 120 00:06:07,279 --> 00:06:07,640 Speaker 10: in tech. 121 00:06:09,279 --> 00:06:12,760 Speaker 5: We just showed a graphic with some of your portfolio companies. 122 00:06:12,839 --> 00:06:17,640 Speaker 5: You guys are investing in AI, either AI native IAI 123 00:06:17,680 --> 00:06:21,600 Speaker 5: adjacent companies. What does this do for the competitive landscape? 124 00:06:21,680 --> 00:06:25,160 Speaker 5: Right there are dozens of companies building large language models. 125 00:06:25,160 --> 00:06:28,640 Speaker 5: We all recognize that open AI was the sort of 126 00:06:28,640 --> 00:06:33,400 Speaker 5: technological leader and in some sense the commercial leader. What 127 00:06:33,440 --> 00:06:36,160 Speaker 5: opportunity does this present to those you're backing. 128 00:06:36,920 --> 00:06:38,920 Speaker 10: Well, start generally and just remember that the one thing 129 00:06:38,920 --> 00:06:41,200 Speaker 10: that open ai had was this pole position, and I 130 00:06:41,279 --> 00:06:43,720 Speaker 10: believe that they can recover it. But they had predictability, 131 00:06:43,720 --> 00:06:45,760 Speaker 10: they had stability, they had reliability, and all of that 132 00:06:45,760 --> 00:06:48,760 Speaker 10: gives confidence, and confidence gives trust, and trust is the 133 00:06:48,839 --> 00:06:50,880 Speaker 10: ultimate currency. The reason that I watch Bloomberg, the reason 134 00:06:50,880 --> 00:06:53,080 Speaker 10: that people watch you every day is because they trust you. 135 00:06:53,279 --> 00:06:55,640 Speaker 10: People partner with a company because they trusted and this 136 00:06:55,680 --> 00:06:58,880 Speaker 10: weekend trust blew up. So it could take ten years 137 00:06:58,880 --> 00:07:01,599 Speaker 10: to build a reputation, ten to build trust, and ten 138 00:07:01,680 --> 00:07:03,840 Speaker 10: seconds to lose it. So a week prior, you had 139 00:07:03,880 --> 00:07:06,000 Speaker 10: all of these startups that basically with the open Aide 140 00:07:06,400 --> 00:07:09,000 Speaker 10: demo day thought all right, they just killed our latest 141 00:07:09,000 --> 00:07:11,440 Speaker 10: product or our latest feature. Now they have a second chance. 142 00:07:11,480 --> 00:07:14,480 Speaker 10: Because any company that's working with a hospital system, or 143 00:07:14,520 --> 00:07:17,920 Speaker 10: a government group or a major corporation, all those entities, 144 00:07:17,920 --> 00:07:19,720 Speaker 10: all those customers want to know that they're working with 145 00:07:19,760 --> 00:07:22,840 Speaker 10: someone who is reliable and predictable and stable. Now you 146 00:07:22,840 --> 00:07:24,640 Speaker 10: look at some of our companies hugging face on the 147 00:07:24,680 --> 00:07:27,080 Speaker 10: open source. We are huge believers in open source. We 148 00:07:27,120 --> 00:07:30,480 Speaker 10: think that this is probably like exhibit A of why 149 00:07:30,520 --> 00:07:33,920 Speaker 10: you want open source systems as opposed to closed siloed 150 00:07:33,920 --> 00:07:36,640 Speaker 10: concentrated systems. If you care truly about humanity, if you 151 00:07:36,680 --> 00:07:41,920 Speaker 10: care about AI really getting out into the far reaches 152 00:07:41,960 --> 00:07:44,560 Speaker 10: of the industry, you want open systems. So, whether it's 153 00:07:44,640 --> 00:07:48,560 Speaker 10: hugging face together, doing distributed compute Mosaic mL, which we 154 00:07:48,600 --> 00:07:52,520 Speaker 10: sold to Data Bricks, Runway mL, they're all the fastest 155 00:07:52,560 --> 00:07:55,720 Speaker 10: growing and well positioned companies in these spaces because they 156 00:07:55,760 --> 00:07:58,760 Speaker 10: are very heavily geared towards open. 157 00:07:58,520 --> 00:08:04,640 Speaker 4: Source, marked to being safe, and to ultimately ensuring that 158 00:08:04,720 --> 00:08:07,960 Speaker 4: in some way that aligns if not. In open AI's case, 159 00:08:08,320 --> 00:08:11,840 Speaker 4: came first above profitability, and I'm interested in that tension 160 00:08:11,880 --> 00:08:14,680 Speaker 4: that we continue to see around artificial intelligence and ultimately 161 00:08:14,920 --> 00:08:18,880 Speaker 4: whether or not we can see absolutely monumental valuations and 162 00:08:18,920 --> 00:08:23,040 Speaker 4: profitability at the same time as well ethical use and deployment. 163 00:08:24,680 --> 00:08:25,200 Speaker 3: I do think so. 164 00:08:25,240 --> 00:08:27,720 Speaker 10: I think that the ethics and the safety are just 165 00:08:27,800 --> 00:08:29,680 Speaker 10: basic good judgment. You know what we saw here in 166 00:08:29,680 --> 00:08:32,240 Speaker 10: this board coup and all this craziness was just bad judgment. 167 00:08:32,520 --> 00:08:35,640 Speaker 10: Now you just want good people making good decisions. And 168 00:08:35,720 --> 00:08:37,400 Speaker 10: whenever I hear anybody say, oh, I'm just trying to 169 00:08:37,400 --> 00:08:39,320 Speaker 10: do this to save the world, that actually really gets 170 00:08:39,320 --> 00:08:41,480 Speaker 10: my spidey sense going I actually find it quite cynical. 171 00:08:41,520 --> 00:08:42,680 Speaker 2: I don't trust that. 172 00:08:42,920 --> 00:08:44,160 Speaker 3: But when you have somebody that's. 173 00:08:43,960 --> 00:08:45,400 Speaker 10: Just like I want to build this thing. I want 174 00:08:45,400 --> 00:08:47,320 Speaker 10: to solve problems. I want to get every student a 175 00:08:47,360 --> 00:08:50,080 Speaker 10: teacher in a tutor. I want to help reduce hospital 176 00:08:50,120 --> 00:08:52,920 Speaker 10: bills and get people better differential diagnoses. I want to 177 00:08:52,960 --> 00:08:55,320 Speaker 10: help discover new drugs. Those are the things that you 178 00:08:55,360 --> 00:08:57,000 Speaker 10: really want to be backing. Most of those people are 179 00:08:57,000 --> 00:08:59,800 Speaker 10: thinking what could go wrong. I always say that failure 180 00:09:00,200 --> 00:09:02,720 Speaker 10: from a failure to imagine failure, and if you are 181 00:09:02,760 --> 00:09:05,720 Speaker 10: adequately thinking about the downsides, what can go wrong? 182 00:09:05,960 --> 00:09:07,199 Speaker 3: Without just a pure. 183 00:09:07,160 --> 00:09:09,800 Speaker 10: Techno optimist view, we're going full speed of had without 184 00:09:09,800 --> 00:09:11,880 Speaker 10: looking to the sides and looking through this year rear 185 00:09:11,960 --> 00:09:14,360 Speaker 10: view mirrors. You don't have to have regulation, you don't 186 00:09:14,400 --> 00:09:17,120 Speaker 10: have to have intense scrutiny. It should just be self 187 00:09:17,120 --> 00:09:20,720 Speaker 10: reflection and good leadership to anticipate the failure points so 188 00:09:20,840 --> 00:09:23,600 Speaker 10: as to avoid them. What happened this weekend with open 189 00:09:23,640 --> 00:09:27,080 Speaker 10: AI and what's still happening was a failure of imagination. 190 00:09:27,200 --> 00:09:29,400 Speaker 10: People did not imagine that this was possible, that so 191 00:09:29,480 --> 00:09:32,000 Speaker 10: much risk could be concentrated in just a handful of 192 00:09:32,600 --> 00:09:35,000 Speaker 10: people's hands. To make a decision on what the future 193 00:09:35,040 --> 00:09:38,600 Speaker 10: would be. There's one big winter here. There's one big 194 00:09:38,600 --> 00:09:41,080 Speaker 10: winter gear, which, as you noted just in the prior comms, 195 00:09:41,559 --> 00:09:43,400 Speaker 10: is Microsoft. Microsoft. 196 00:09:43,440 --> 00:09:45,440 Speaker 3: I mean people are forgetting this ten. 197 00:09:45,520 --> 00:09:49,640 Speaker 4: Really, Josh really, because ultimately they now have regulatory exposure, 198 00:09:49,679 --> 00:09:52,280 Speaker 4: they now have a cost exposure. They also don't have 199 00:09:52,360 --> 00:09:55,280 Speaker 4: that arm's length protection of seeing hallucination built on their 200 00:09:55,320 --> 00:09:56,840 Speaker 4: own brand type. 201 00:09:57,640 --> 00:10:00,000 Speaker 10: I will trade that if I was a Microsoft shareholder 202 00:10:00,080 --> 00:10:01,800 Speaker 10: or a board member or employee there, I would trade 203 00:10:01,840 --> 00:10:04,640 Speaker 10: that every time they put ten billion dollars of committed capital, 204 00:10:04,640 --> 00:10:06,760 Speaker 10: how much actually has gone in whatnot? And what did 205 00:10:06,760 --> 00:10:10,440 Speaker 10: they get in marketcap value? A trillion dollars. That is 206 00:10:10,520 --> 00:10:14,160 Speaker 10: one of the best trades in technology history. Ten billion 207 00:10:14,200 --> 00:10:18,040 Speaker 10: dollars to create a trillion dollars of market value. So 208 00:10:18,080 --> 00:10:19,640 Speaker 10: I think that they can afford, whether it's one hundred 209 00:10:19,640 --> 00:10:22,200 Speaker 10: million dollars of regulatory costs, whether it's Bradsmith going and 210 00:10:22,200 --> 00:10:24,480 Speaker 10: trying to get regulatory capture, which I don't approve of. 211 00:10:24,520 --> 00:10:26,560 Speaker 10: I think it's wrong for this industry. I think that 212 00:10:26,640 --> 00:10:31,160 Speaker 10: it's really disingenuous in its attempt. But Microsoft has won 213 00:10:31,320 --> 00:10:33,840 Speaker 10: ten billion dollars to yield. The trillion dollars of market 214 00:10:33,960 --> 00:10:35,920 Speaker 10: value is a coup of epic proportions. 215 00:10:36,320 --> 00:10:37,920 Speaker 4: Boy, are we going to talk about that a little 216 00:10:37,960 --> 00:10:40,520 Speaker 4: bit more perfect? Start to the show, Josh Warfe, We 217 00:10:40,559 --> 00:10:42,400 Speaker 4: thank you so much, co found a managing partner of 218 00:10:42,440 --> 00:10:44,920 Speaker 4: Lux Capital, and of course an investor in hugging face. 219 00:10:45,000 --> 00:10:46,360 Speaker 4: Just to warn you a little bit later, of course, 220 00:10:46,520 --> 00:10:48,439 Speaker 4: you have Margaret Mitchell joining us on the show. She's 221 00:10:48,480 --> 00:10:50,880 Speaker 4: hugging face, chief ethics scientist, so a little bit more 222 00:10:50,920 --> 00:10:53,120 Speaker 4: there on the ethics side of the equation. Meanwhile, they're 223 00:10:53,120 --> 00:10:55,400 Speaker 4: coming up. We push ahead to the big earnings after 224 00:10:55,440 --> 00:10:57,840 Speaker 4: the bell calls. We're talking AI. Of course, we're talking 225 00:10:57,880 --> 00:11:00,359 Speaker 4: in videos results as a bloom make technology. 226 00:11:14,960 --> 00:11:17,600 Speaker 5: In Video's earnings are the big one coming after the bell. 227 00:11:17,640 --> 00:11:20,280 Speaker 5: Here's what to watch for. Analyst expects sales to jump 228 00:11:20,440 --> 00:11:23,240 Speaker 5: one and seventy one percent from a year ago, driven 229 00:11:23,320 --> 00:11:27,760 Speaker 5: by demand for its AI accelerators. Profit also expected to jump. 230 00:11:27,920 --> 00:11:30,760 Speaker 5: Wall Street also sees a leap in profit three dollars 231 00:11:30,760 --> 00:11:33,800 Speaker 5: thirty six cents of earnings per share, and Video already 232 00:11:33,880 --> 00:11:36,440 Speaker 5: leads the market with its h one hundred GPU used 233 00:11:36,440 --> 00:11:40,720 Speaker 5: to train artificial intelligence models. Investors will want an update 234 00:11:40,840 --> 00:11:43,520 Speaker 5: on the GH two hundred or Great Shopper super chip, 235 00:11:43,640 --> 00:11:46,840 Speaker 5: the next gen accelerator that started shipping last quarter. An 236 00:11:46,880 --> 00:11:50,480 Speaker 5: improved version with HMB three E memory supposed to go 237 00:11:50,960 --> 00:11:53,640 Speaker 5: out in the second quarter of next year. Those are 238 00:11:53,640 --> 00:11:56,200 Speaker 5: the numbers. Let's get the analysis with Bloomberg Intelligence and 239 00:11:56,240 --> 00:11:59,680 Speaker 5: this Kunjan Sabani high bar going into earnings, what do 240 00:11:59,720 --> 00:12:00,200 Speaker 5: you look for. 241 00:12:01,200 --> 00:12:04,080 Speaker 11: A significantly higher beaten Race. I mean, look, the expectations 242 00:12:04,120 --> 00:12:06,520 Speaker 11: have been climbing up and up. Everyone expect them to 243 00:12:06,559 --> 00:12:09,000 Speaker 11: beaten race. But it's going to come down to how 244 00:12:09,120 --> 00:12:11,599 Speaker 11: much more can they keep repeating the performance that is 245 00:12:11,720 --> 00:12:12,720 Speaker 11: in the last two quarters. 246 00:12:13,360 --> 00:12:16,679 Speaker 5: A part of the repeat performance is that their supply constraint, right, 247 00:12:16,800 --> 00:12:19,760 Speaker 5: So wherever you look those demand for AI accelerators, how 248 00:12:19,800 --> 00:12:21,000 Speaker 5: does that factor into your model. 249 00:12:21,559 --> 00:12:23,760 Speaker 11: I think they're going to definitely ship a lot more 250 00:12:23,960 --> 00:12:27,520 Speaker 11: H one hundreds. Based on our estimates, the first half 251 00:12:27,679 --> 00:12:30,520 Speaker 11: H one hundred contribution would be thirty to forty percent 252 00:12:30,559 --> 00:12:34,079 Speaker 11: of the total GPU volumes server GPU volumes. We expect 253 00:12:34,120 --> 00:12:36,600 Speaker 11: that to significantly increase in the second half because with 254 00:12:36,720 --> 00:12:38,640 Speaker 11: each H one hundred they get a lot more ASP 255 00:12:39,840 --> 00:12:40,640 Speaker 11: fascinating Counji. 256 00:12:40,760 --> 00:12:42,120 Speaker 4: We thank you so much you'll be glued to the 257 00:12:42,160 --> 00:12:46,680 Speaker 4: screens after the bell Conjensibani bluemeg Intelligence. We appreciate it 258 00:12:46,760 --> 00:12:49,000 Speaker 4: joining us now to think more broadly about AI and 259 00:12:49,040 --> 00:12:51,480 Speaker 4: indeed where we're currently trading across the board for the 260 00:12:51,559 --> 00:12:54,280 Speaker 4: nasdac Heni fishes with us senior research analyst of Technology 261 00:12:54,320 --> 00:12:57,760 Speaker 4: software at Clearbridge and really do deep dive insights into 262 00:12:57,800 --> 00:13:00,239 Speaker 4: certain names out there that have been powered and benefiting 263 00:13:00,240 --> 00:13:06,160 Speaker 4: from artificial intelligence. Have we seen valuations exceed ultimately the 264 00:13:06,200 --> 00:13:08,760 Speaker 4: growth trajectory the monetization options here? 265 00:13:10,000 --> 00:13:11,800 Speaker 9: It's good to be here. Thank you care lyon think 266 00:13:11,800 --> 00:13:16,600 Speaker 9: you had no, I don't think so. I think we've 267 00:13:16,600 --> 00:13:19,160 Speaker 9: been playing a little bit of push and pull between 268 00:13:19,240 --> 00:13:23,200 Speaker 9: valuations and fundamentals coming through. But fundamentals are only just 269 00:13:23,240 --> 00:13:26,920 Speaker 9: starting to come through. AI monetization is just in the 270 00:13:27,040 --> 00:13:29,760 Speaker 9: earliest stages. We're just on the cusp of seeing what 271 00:13:29,880 --> 00:13:32,840 Speaker 9: these companies will garner from their GENAI offerings. 272 00:13:33,240 --> 00:13:37,800 Speaker 4: What has been so disruptive, largely to sleep of journalists 273 00:13:37,840 --> 00:13:40,040 Speaker 4: and those working in open AI, but also just the 274 00:13:40,080 --> 00:13:43,160 Speaker 4: ecosystem more broadly, has been this sort of self destruction 275 00:13:43,240 --> 00:13:45,160 Speaker 4: path that open air has been on. More generally now 276 00:13:45,160 --> 00:13:46,760 Speaker 4: this is a private company, not one that you'll be 277 00:13:46,800 --> 00:13:49,319 Speaker 4: doing deep dive research on too much. But what they 278 00:13:49,360 --> 00:13:53,480 Speaker 4: have done has created fierce competition and exuberance ever since 279 00:13:53,640 --> 00:13:57,320 Speaker 4: the launch of originally CHATCHYPT back in November of last year. 280 00:13:58,200 --> 00:14:01,559 Speaker 4: Is it more competitive now the space? Do you think the. 281 00:14:01,520 --> 00:14:04,920 Speaker 9: Space is more competitive? And it will become increasingly competitive. 282 00:14:05,240 --> 00:14:08,680 Speaker 9: But the opportunity set continues to rise with each week, 283 00:14:08,840 --> 00:14:12,640 Speaker 9: each month, meaning companies are figuring out more and more 284 00:14:12,679 --> 00:14:16,040 Speaker 9: ways to utilize AI. Vendors are figuring out more and 285 00:14:16,120 --> 00:14:19,160 Speaker 9: more applications to which to apply it. And I think 286 00:14:19,920 --> 00:14:23,520 Speaker 9: we're we're just in the infancy of all that. So yes, 287 00:14:23,560 --> 00:14:24,800 Speaker 9: it will become more competitive. 288 00:14:24,840 --> 00:14:25,360 Speaker 3: Absolutely. 289 00:14:25,680 --> 00:14:27,280 Speaker 4: Has it been a worry for you for the companies 290 00:14:27,280 --> 00:14:29,720 Speaker 4: that you do monitor or those that more broadly that 291 00:14:29,920 --> 00:14:33,720 Speaker 4: your company holds, that are based upon the large language 292 00:14:33,760 --> 00:14:34,720 Speaker 4: models of open ai? 293 00:14:34,880 --> 00:14:37,000 Speaker 9: Do you think I'm sorry with your painting? 294 00:14:37,040 --> 00:14:40,880 Speaker 4: Well, ultimately, many companies have been building around the architecture 295 00:14:40,880 --> 00:14:42,800 Speaker 4: that open ai has built. Oh yeah, and now everyone 296 00:14:42,840 --> 00:14:45,520 Speaker 4: suddenly is worrying about that architecture, about its resiliency. 297 00:14:45,800 --> 00:14:50,880 Speaker 9: Sure, is that a concern? Well, none of the situation 298 00:14:51,000 --> 00:14:54,320 Speaker 9: at open ai has introduced some level of near trum uncertainty. 299 00:14:54,320 --> 00:14:58,080 Speaker 9: But Microsoft just gave every open Ai employee big bear hug. 300 00:14:58,320 --> 00:15:02,000 Speaker 9: Sam Altman has apparently joined Microsoft in a research fashion. 301 00:15:02,360 --> 00:15:07,080 Speaker 9: I think it's too soon to call this a major issue. 302 00:15:07,160 --> 00:15:10,160 Speaker 9: I think Microsoft has had exclusive access to the technology, 303 00:15:10,440 --> 00:15:12,840 Speaker 9: So I think what Microsoft needs to do is actually 304 00:15:12,960 --> 00:15:16,840 Speaker 9: just to draw this situation to some form of conclusion. 305 00:15:17,000 --> 00:15:20,920 Speaker 9: Either they can help stabilize open Ai. They could encourage 306 00:15:20,960 --> 00:15:23,520 Speaker 9: sam Altman to go back to a I to open AI, 307 00:15:23,720 --> 00:15:27,120 Speaker 9: or they could actually take on the majority of the 308 00:15:27,160 --> 00:15:29,840 Speaker 9: employee base of open Ai or the employees which they like, 309 00:15:30,160 --> 00:15:33,400 Speaker 9: which they certainly can do. So I think I think 310 00:15:33,400 --> 00:15:36,840 Speaker 9: we're going to see conclusion before not too long, and 311 00:15:37,320 --> 00:15:41,520 Speaker 9: then we can look forward. Other companies are certainly competing. 312 00:15:42,000 --> 00:15:45,120 Speaker 9: I'm not sure that this gives them a major leg up, 313 00:15:45,400 --> 00:15:47,320 Speaker 9: yet there seems to be some loyalty on the part 314 00:15:47,360 --> 00:15:49,800 Speaker 9: of that team. They would like to stay together if 315 00:15:49,840 --> 00:15:53,120 Speaker 9: they can. Microsoft just clearly gave signals that they're making 316 00:15:53,120 --> 00:15:53,760 Speaker 9: that possible. 317 00:15:54,360 --> 00:15:56,720 Speaker 4: We always have having you on because you like stocks 318 00:15:56,800 --> 00:15:59,960 Speaker 4: like Microsoft, Hype Scalers, CRM, Snow, and Oracle, to name, 319 00:16:00,000 --> 00:16:02,360 Speaker 4: but a few really appreciate you coming on this holiday 320 00:16:02,400 --> 00:16:13,080 Speaker 4: shorten week, It's called Hillary Fish of Clearbridge time now 321 00:16:13,120 --> 00:16:16,480 Speaker 4: for talking tech. First up crypto exchange platform Craken is 322 00:16:16,520 --> 00:16:18,960 Speaker 4: in some hot water with the USSCC, the Securities in 323 00:16:19,000 --> 00:16:22,280 Speaker 4: Exchange Commission. Now, the SEC is saying Cracken com mingled 324 00:16:22,320 --> 00:16:25,200 Speaker 4: client assets with its own, even going as far as 325 00:16:25,280 --> 00:16:27,760 Speaker 4: to pay expenses from bank accounts that held customer cat. 326 00:16:28,000 --> 00:16:30,960 Speaker 4: Craghan said it disagreed with the SEC cleans and planned 327 00:16:30,960 --> 00:16:35,120 Speaker 4: to vigorously defend its position. Meanwhile, President Biden and Vice 328 00:16:35,160 --> 00:16:38,680 Speaker 4: President Kamala Harris are officially on threads. White House officials 329 00:16:38,720 --> 00:16:41,080 Speaker 4: also open accounts for the First Lady and second and Gentlemen, 330 00:16:41,320 --> 00:16:43,160 Speaker 4: and the move, of course, comes just days after the 331 00:16:43,160 --> 00:16:46,680 Speaker 4: White House condemned enol Musk's endorsement of anti Semitic posts 332 00:16:46,720 --> 00:16:49,840 Speaker 4: on x Fulling known as Twitter plus. The US Senate 333 00:16:49,880 --> 00:16:52,800 Speaker 4: Judiciary Committee is calling a number of social media executors 334 00:16:52,880 --> 00:16:56,120 Speaker 4: to testify at a Decembiner sixth hearing regarding online child 335 00:16:56,200 --> 00:17:00,480 Speaker 4: sexual exploitation. Those subpoenad include Jason Citron of Discord Snaps, 336 00:17:00,480 --> 00:17:04,600 Speaker 4: Evan Spiegel, an X CEO, Ninda Yakarina at more on X. 337 00:17:05,160 --> 00:17:07,960 Speaker 5: Yeah More on X, the platform formerly known as Twitter 338 00:17:08,160 --> 00:17:12,560 Speaker 5: is suing watchdog group Media Matters, claiming it quote maliciously 339 00:17:12,640 --> 00:17:16,040 Speaker 5: drove advertisers away from the social media platform. Let's bring 340 00:17:16,080 --> 00:17:19,520 Speaker 5: in Bloomberg's ashaccounts. Who's been all across this. Musk has 341 00:17:19,560 --> 00:17:22,440 Speaker 5: been very vocal on X. Yakarino has been quite vocal 342 00:17:22,480 --> 00:17:25,600 Speaker 5: on X. What is it that they're accusing Media Matters of. 343 00:17:26,240 --> 00:17:30,080 Speaker 7: Well, they're essentially saying that Media Matters mischaracterize some of 344 00:17:29,920 --> 00:17:31,240 Speaker 7: the content on the platform. 345 00:17:31,320 --> 00:17:33,600 Speaker 5: Right, This is in a report a week ago exactly, 346 00:17:33,680 --> 00:17:34,359 Speaker 5: a Matters report. 347 00:17:34,440 --> 00:17:36,760 Speaker 7: Yes, the Media Matters report came out and basically said 348 00:17:36,800 --> 00:17:40,560 Speaker 7: they found ads from huge advertisers like IBM and Apple 349 00:17:40,640 --> 00:17:43,720 Speaker 7: next to pro nazi content. And so what Yakarino and 350 00:17:43,800 --> 00:17:46,520 Speaker 7: Musk and the Right Association X are arguing is that 351 00:17:46,520 --> 00:17:48,280 Speaker 7: that's not the case. It was only a small number 352 00:17:48,280 --> 00:17:50,879 Speaker 7: of people that saw it that Media Matters sort of 353 00:17:50,920 --> 00:17:53,200 Speaker 7: manipulated their feed to do that. So they have all 354 00:17:53,200 --> 00:17:56,720 Speaker 7: these sorts of arguments against why they don't think that's 355 00:17:56,760 --> 00:17:57,680 Speaker 7: exactly accurate. 356 00:17:58,160 --> 00:18:02,399 Speaker 4: Meanwhile, Media Matters says they stand by their reporting and 357 00:18:02,920 --> 00:18:07,600 Speaker 4: ultimately think that this is well a mistrodden path for 358 00:18:07,640 --> 00:18:09,280 Speaker 4: them to be being sued right now. 359 00:18:10,560 --> 00:18:13,840 Speaker 7: Yeah, Medium Matters is saying that, look, we see the ads. 360 00:18:13,840 --> 00:18:15,879 Speaker 7: We looked at them, we saw the ads next to 361 00:18:15,920 --> 00:18:19,520 Speaker 7: pronati content. And unfortunately this is not something that is new, right. 362 00:18:19,600 --> 00:18:21,760 Speaker 7: Advertisers have seen this over the past year. This has 363 00:18:21,800 --> 00:18:24,680 Speaker 7: been an ongoing saga of advertisers finding their ads next 364 00:18:24,680 --> 00:18:27,199 Speaker 7: to content that they don't like, and so media managers saying, look, 365 00:18:27,240 --> 00:18:29,680 Speaker 7: we've done the research, we saw the ads, here's examples 366 00:18:29,760 --> 00:18:32,080 Speaker 7: of it, and so they stand by what they put. 367 00:18:33,640 --> 00:18:38,960 Speaker 5: At the heart of this is the pervasiveness of fake 368 00:18:39,040 --> 00:18:42,960 Speaker 5: content on the platform and the exposure of the advertisers. 369 00:18:43,840 --> 00:18:50,480 Speaker 5: You and I reported that Yakarino has acknowledged broadly advertiser flight. 370 00:18:51,480 --> 00:18:54,040 Speaker 5: What has she said about addressing the issue at heart, 371 00:18:54,080 --> 00:18:57,160 Speaker 5: which is the pervasiveness of content on that platform. 372 00:18:57,280 --> 00:18:59,320 Speaker 7: I mean, again, they sort of continue to go back 373 00:18:59,320 --> 00:19:01,480 Speaker 7: to their part. They said they've taken a number of 374 00:19:01,520 --> 00:19:05,080 Speaker 7: steps to combat anti submitic content on the platform. They 375 00:19:05,119 --> 00:19:07,439 Speaker 7: stand by some of the policies that they have, but 376 00:19:07,520 --> 00:19:09,840 Speaker 7: it's just hard because they continue to say that, but 377 00:19:09,880 --> 00:19:12,240 Speaker 7: then advertisers are continuing to see their ads next to 378 00:19:12,280 --> 00:19:15,960 Speaker 7: this content, and agency executives at this point are pretty 379 00:19:15,960 --> 00:19:17,520 Speaker 7: fed up with a lot of the stuff that they're seeing, 380 00:19:17,560 --> 00:19:20,119 Speaker 7: and so they've consistently pointed to their policies into the 381 00:19:20,160 --> 00:19:22,919 Speaker 7: actions that they're taking. But from the advertiser perspective, it 382 00:19:22,920 --> 00:19:24,720 Speaker 7: doesn't seem to be making a difference, which is why 383 00:19:24,760 --> 00:19:27,440 Speaker 7: we're seeing Apple and IBM and Comcast and all these 384 00:19:27,440 --> 00:19:29,560 Speaker 7: companies pull their ads off the platform or at least 385 00:19:29,560 --> 00:19:30,600 Speaker 7: suspend temporarily. 386 00:19:31,119 --> 00:19:33,679 Speaker 4: And she counts busier is always We thank you so 387 00:19:33,800 --> 00:19:34,919 Speaker 4: much for the date dive, the. 388 00:19:42,880 --> 00:19:45,919 Speaker 5: Welcome back to Bloomberg Technology. I'm Ed Loveler in San Francisco. 389 00:19:46,040 --> 00:19:48,119 Speaker 4: I'm Caroline Heid in New York. We had some breaking 390 00:19:48,160 --> 00:19:50,600 Speaker 4: news earlier this hour, the Wall Street Journal reporting that 391 00:19:50,640 --> 00:19:53,440 Speaker 4: the CEO of Binance and it is founder Ceazy, has 392 00:19:53,440 --> 00:19:56,040 Speaker 4: a step down and plead guilty to violating US anti 393 00:19:56,040 --> 00:19:59,560 Speaker 4: money laundering requirements. Now, the cryptocurrency exchange will also pay 394 00:19:59,760 --> 00:20:02,080 Speaker 4: some four point three billion dollars in fines, but no 395 00:20:02,119 --> 00:20:04,000 Speaker 4: mention Oni bus I is here with the breakdown. This 396 00:20:04,080 --> 00:20:07,159 Speaker 4: is in of course, the DOJ's investigation, not the SEC. 397 00:20:07,359 --> 00:20:10,359 Speaker 4: But what caught your attention from this line from the 398 00:20:10,400 --> 00:20:11,119 Speaker 4: Wall Street Channel. 399 00:20:11,200 --> 00:20:13,440 Speaker 1: Well, we've already reported that the fines could be more 400 00:20:13,480 --> 00:20:15,440 Speaker 1: than four billion dollars. We now know that it will 401 00:20:15,480 --> 00:20:18,560 Speaker 1: be four point three billion dollars, and it does close 402 00:20:18,560 --> 00:20:21,320 Speaker 1: a matter that has been going on for many, many years. 403 00:20:21,359 --> 00:20:24,520 Speaker 1: This investigation from the Justice Department, with involvement also from 404 00:20:24,560 --> 00:20:27,800 Speaker 1: the Treasury Department and the Commodity's Futures Training Commission, the CFTC. 405 00:20:28,200 --> 00:20:32,080 Speaker 1: So this does close that page for Finance and Chong Panjao. 406 00:20:32,920 --> 00:20:35,199 Speaker 1: He's not only stepping down to CEO. You have to 407 00:20:35,200 --> 00:20:37,640 Speaker 1: remember also, according to the Wall Street Journal, he can 408 00:20:37,680 --> 00:20:41,480 Speaker 1: retain his majority ownership of Finance, and the settlement would 409 00:20:41,480 --> 00:20:44,760 Speaker 1: allow them to keep operating. Remember this is the world's 410 00:20:44,840 --> 00:20:47,320 Speaker 1: largest crypto exchange we're talking about, so to kind of 411 00:20:47,359 --> 00:20:49,760 Speaker 1: save the company is a big deal. In light of 412 00:20:49,960 --> 00:20:53,680 Speaker 1: this probe and settlement, he is expected, according to the Journal, 413 00:20:53,720 --> 00:20:56,439 Speaker 1: to appear in a federal court on Tuesday afternoon and 414 00:20:56,600 --> 00:20:59,440 Speaker 1: enter his guilty plead. I think what's interesting here too 415 00:20:59,560 --> 00:21:02,800 Speaker 1: is the Journal does draw parallel to a prior case 416 00:21:03,200 --> 00:21:06,960 Speaker 1: to bitmex and in that instance, Arthur Hayes had plied 417 00:21:07,000 --> 00:21:11,119 Speaker 1: guilty to violating anti money laundering laws and was sentenced 418 00:21:11,119 --> 00:21:14,280 Speaker 1: to two years of probation and avoided jail time. So 419 00:21:14,320 --> 00:21:16,879 Speaker 1: the sentencing of course will come later, but he is 420 00:21:16,960 --> 00:21:20,080 Speaker 1: expected to plead guilty today in court. 421 00:21:20,440 --> 00:21:25,000 Speaker 4: So notably, as you say, Hayes didn't have any jail time. 422 00:21:25,080 --> 00:21:27,440 Speaker 4: And we wonder what, indeed what would happen in terms 423 00:21:27,480 --> 00:21:30,280 Speaker 4: of the guilty plea coming from cz But is this 424 00:21:31,640 --> 00:21:34,240 Speaker 4: enough to then appease the SEC as well? What would 425 00:21:34,320 --> 00:21:37,480 Speaker 4: be the potential offering to them to be able to 426 00:21:37,520 --> 00:21:38,800 Speaker 4: settle the ongoing investigation. 427 00:21:39,000 --> 00:21:41,360 Speaker 1: These are interesting questions because we know that the SEC, 428 00:21:41,400 --> 00:21:44,280 Speaker 1: among all regulatory bodies, the DJ has come down quite 429 00:21:44,280 --> 00:21:47,200 Speaker 1: hard on the industry, but the SEC, the sheer scale 430 00:21:47,400 --> 00:21:49,720 Speaker 1: of how they've been approaching the industry has been massive, 431 00:21:49,800 --> 00:21:52,680 Speaker 1: and you just saw recently their approach to Kraken, for example, 432 00:21:53,040 --> 00:21:56,600 Speaker 1: And they're concerned with many crypto exchanges and their ability 433 00:21:56,640 --> 00:22:00,120 Speaker 1: to list tokens or what the SEC believes are secure. 434 00:22:00,680 --> 00:22:03,080 Speaker 1: And so for Binance to keep operating, it draws a 435 00:22:03,080 --> 00:22:05,600 Speaker 1: lot of questions not only just about the SEC's approach 436 00:22:05,680 --> 00:22:10,119 Speaker 1: to Binance itself, but also remember what is fixed here? 437 00:22:10,119 --> 00:22:11,280 Speaker 4: If he's pled guilty to. 438 00:22:11,280 --> 00:22:15,639 Speaker 1: Violating anti money laundering laws in the United States, what 439 00:22:15,840 --> 00:22:18,560 Speaker 1: is being fixed at a place like Binance to be 440 00:22:18,640 --> 00:22:21,119 Speaker 1: able to ensure that this doesn't happen in the future, 441 00:22:21,200 --> 00:22:23,600 Speaker 1: I think is another critical question as we think about 442 00:22:23,640 --> 00:22:25,719 Speaker 1: the future of these crypto exchanges. 443 00:22:25,200 --> 00:22:27,520 Speaker 4: And indeed the future of retaining talent at that company, 444 00:22:27,560 --> 00:22:29,600 Speaker 4: which quite a few executives have been departing of late 445 00:22:29,680 --> 00:22:32,879 Speaker 4: Chanali Bassec always all across these breaking news headlines. You 446 00:22:32,920 --> 00:22:34,680 Speaker 4: can catch Nali along with Calee lines coming up on 447 00:22:34,720 --> 00:22:37,639 Speaker 4: Bloomberg Crypto one pm New York time. They'll be speaking 448 00:22:37,640 --> 00:22:40,439 Speaker 4: with the SEC Commissioner has to piss. Perfect time for 449 00:22:40,440 --> 00:22:42,600 Speaker 4: that conversation ed right. 450 00:22:42,680 --> 00:22:44,639 Speaker 5: The other top story that we're trying to keep on 451 00:22:44,680 --> 00:22:48,280 Speaker 5: top of, open ai investors are still trying to return 452 00:22:48,680 --> 00:22:51,679 Speaker 5: co founder Sam Outman to a leadership role at the company. 453 00:22:51,680 --> 00:22:54,920 Speaker 5: At the same time, open ai staff are threatening mass mutiny, 454 00:22:55,000 --> 00:22:59,400 Speaker 5: saying they'll follow Outman to Microsoft unless the board resigns. 455 00:22:59,440 --> 00:23:02,680 Speaker 5: Microsoft c Satianadella spoke with bloombergs Emily Chang last night. 456 00:23:02,880 --> 00:23:06,040 Speaker 5: He says he would not suppose Altman's return to open Ai. 457 00:23:06,280 --> 00:23:06,919 Speaker 5: Take a listen. 458 00:23:08,119 --> 00:23:10,840 Speaker 3: We are leading in this next generation of AI technology. 459 00:23:11,520 --> 00:23:13,720 Speaker 6: We continue to be committed to open ai, and we 460 00:23:13,800 --> 00:23:16,560 Speaker 6: continue to be committed to Sam and Greg and the 461 00:23:16,600 --> 00:23:19,119 Speaker 6: team in respect to where they are and you know, 462 00:23:19,440 --> 00:23:22,760 Speaker 6: I think about Sam has chosen multiple times now to 463 00:23:22,880 --> 00:23:25,439 Speaker 6: work with us, and that's fantastic to see. And I 464 00:23:25,440 --> 00:23:28,919 Speaker 6: think the real thing is that the capability that Microsoft 465 00:23:29,000 --> 00:23:33,040 Speaker 6: has across the tech stack is what attracts great people 466 00:23:33,400 --> 00:23:35,800 Speaker 6: like Sam, you know, and people like Sam and you know, 467 00:23:35,840 --> 00:23:38,680 Speaker 6: innovators like Sam when it comes to ai to come 468 00:23:38,680 --> 00:23:39,959 Speaker 6: to us, and we are thrilled about it. 469 00:23:41,119 --> 00:23:47,040 Speaker 12: You incredibly quickly hired Sam as well as Greg. We 470 00:23:47,160 --> 00:23:51,359 Speaker 12: are hearing that Sam wants to return. Investors want him 471 00:23:51,400 --> 00:23:54,840 Speaker 12: to return to open ai. How would you feel about that? 472 00:23:56,080 --> 00:23:59,359 Speaker 6: Yeah, as I said, we really want to partner with 473 00:23:59,440 --> 00:24:01,480 Speaker 6: open ai, and we want to partner with Sam. And 474 00:24:01,520 --> 00:24:04,520 Speaker 6: so in respect to where Sam is, he's working with 475 00:24:04,600 --> 00:24:07,280 Speaker 6: Microsoft and that is the case on Friday, and that 476 00:24:07,320 --> 00:24:10,080 Speaker 6: will be. That's the case today and we will I 477 00:24:10,119 --> 00:24:12,160 Speaker 6: absolutely believe that will be the case tomorrow. 478 00:24:12,760 --> 00:24:16,200 Speaker 12: Now we understand that to support a return of Sam 479 00:24:16,240 --> 00:24:19,399 Speaker 12: mom and two open Ai, Microsoft wants some changes to 480 00:24:19,440 --> 00:24:23,120 Speaker 12: the board to governance to its overall contract with open Ai, 481 00:24:23,359 --> 00:24:27,320 Speaker 12: so something like this never happens again. What specifically are 482 00:24:27,320 --> 00:24:30,200 Speaker 12: you looking for, for example, would you want to board 483 00:24:30,240 --> 00:24:31,760 Speaker 12: see and if not, what else? 484 00:24:32,880 --> 00:24:33,080 Speaker 3: Yeah? 485 00:24:33,119 --> 00:24:35,479 Speaker 6: I mean I think we definitely will want some governance changes, 486 00:24:35,520 --> 00:24:39,520 Speaker 6: so you know, you know, surprises are bad and we 487 00:24:39,600 --> 00:24:41,720 Speaker 6: just want to make sure that things are. 488 00:24:41,560 --> 00:24:44,520 Speaker 3: Done in a way that will allow us to continue 489 00:24:44,520 --> 00:24:46,080 Speaker 3: to partner. Well, that's about it, right. 490 00:24:46,119 --> 00:24:49,159 Speaker 6: You know, this idea that somehow, you know, suddenly changes 491 00:24:49,240 --> 00:24:52,120 Speaker 6: happen without being you know, in the loop is not good, 492 00:24:52,800 --> 00:24:55,600 Speaker 6: and we will definitely ensure that some of the changes 493 00:24:55,600 --> 00:24:58,480 Speaker 6: that are needed to happen and we continue to be 494 00:24:58,600 --> 00:25:01,720 Speaker 6: able to go along the partnership with open Ai. 495 00:25:02,520 --> 00:25:05,600 Speaker 4: Microsoft CEO Sati under the Nadella there along with our 496 00:25:05,640 --> 00:25:08,439 Speaker 4: own Emily chang Us keep digging on how all of 497 00:25:08,440 --> 00:25:13,119 Speaker 4: this impacts Microsoft and indeed well broadly AI in general. 498 00:25:13,119 --> 00:25:15,320 Speaker 4: But Austin Carr has a really interesting take our own 499 00:25:15,400 --> 00:25:20,280 Speaker 4: Brimberg reporter. Austin the initial read was Satio wins lemonade 500 00:25:20,280 --> 00:25:22,400 Speaker 4: out of lemons. He manages to do this deal very 501 00:25:22,440 --> 00:25:26,359 Speaker 4: quickly and turn around the situation. But you're digging perhaps 502 00:25:26,359 --> 00:25:28,360 Speaker 4: shows that longer term, this is not the best case 503 00:25:28,400 --> 00:25:31,159 Speaker 4: scenario to have Microsoft bringing open Ai in house. 504 00:25:32,720 --> 00:25:33,000 Speaker 6: Yeah. 505 00:25:33,119 --> 00:25:36,440 Speaker 13: I think right at the beginning there was that sort 506 00:25:36,440 --> 00:25:39,520 Speaker 13: of the idea that Microsoft was the big winner and 507 00:25:39,560 --> 00:25:40,960 Speaker 13: all of that and I think the reality is a 508 00:25:40,960 --> 00:25:45,080 Speaker 13: bit more complicated. They've invested ten to thirteen billion dollars 509 00:25:45,119 --> 00:25:48,240 Speaker 13: in open Ai. If that suddenly falls apart, that doesn't 510 00:25:48,280 --> 00:25:50,199 Speaker 13: look good for Microsoft. It doesn't look good that they 511 00:25:50,240 --> 00:25:53,800 Speaker 13: invested so much money given so much governance hurdles that 512 00:25:53,840 --> 00:25:57,040 Speaker 13: the startup clearly had. The second thing is just hiring 513 00:25:57,080 --> 00:25:59,560 Speaker 13: Sam Oltman. You heard how many times Satya said Sam 514 00:25:59,600 --> 00:26:02,280 Speaker 13: and that inner you maybe about a dozen, if not more. 515 00:26:03,359 --> 00:26:05,280 Speaker 13: This was a lot about damage control. How can we 516 00:26:05,359 --> 00:26:08,919 Speaker 13: keep Sam Altman within the Microsoft family? And that was 517 00:26:08,960 --> 00:26:11,320 Speaker 13: the first thing that they did. Hire Sam to read 518 00:26:11,320 --> 00:26:15,160 Speaker 13: this new advanced research group. But that doesn't come without complications. 519 00:26:15,200 --> 00:26:18,560 Speaker 13: It's going to be tremendously expensive if you have these 520 00:26:18,640 --> 00:26:21,520 Speaker 13: one hundreds of employees exiting open Ai to try to 521 00:26:21,520 --> 00:26:26,600 Speaker 13: rebuild something similar from scratch. Inside Microsoft, you have IP issues, 522 00:26:27,080 --> 00:26:29,560 Speaker 13: and then you all have a lot of bureaucratic issues 523 00:26:29,600 --> 00:26:32,240 Speaker 13: within Microsoft, which has its own AI and research teams 524 00:26:32,240 --> 00:26:34,320 Speaker 13: that are working on other things. So I think it's 525 00:26:34,400 --> 00:26:37,000 Speaker 13: really too early to say that Microsoft is the clear 526 00:26:37,040 --> 00:26:39,600 Speaker 13: winner in all this. Sachi, I think doing a really 527 00:26:39,600 --> 00:26:42,440 Speaker 13: excellent job at damage control in these last seventy two hours, 528 00:26:43,840 --> 00:26:44,720 Speaker 13: all Right, bloom. 529 00:26:44,440 --> 00:26:46,600 Speaker 5: Bezos Sinkhar who's been writing in The Tech Daily. You 530 00:26:46,640 --> 00:26:49,400 Speaker 5: should subscribe to the Tech Daily. It's a fantastic summary 531 00:26:49,640 --> 00:26:51,760 Speaker 5: and smart take on the news of the day in 532 00:26:51,800 --> 00:26:54,360 Speaker 5: the news of the hour. Let's send to another actual 533 00:26:54,440 --> 00:26:57,480 Speaker 5: player in the field of artsficial intelligence. Hugging Face dive 534 00:26:57,560 --> 00:27:00,960 Speaker 5: more into the implications for the AI industry at large 535 00:27:01,000 --> 00:27:04,320 Speaker 5: with Delcense, to be joined by Hugging Faces chief ethics 536 00:27:04,359 --> 00:27:08,000 Speaker 5: scientists Margaret Mitchell and Margaret I know that you have 537 00:27:08,119 --> 00:27:11,320 Speaker 5: relationships with many that work at open AI. They are 538 00:27:11,320 --> 00:27:14,560 Speaker 5: your industry peers that you have direct relationships. I'd just 539 00:27:14,680 --> 00:27:17,159 Speaker 5: like to first invite you to give your overall thoughts 540 00:27:17,200 --> 00:27:21,040 Speaker 5: of what is happening at open ai HQ about three 541 00:27:21,040 --> 00:27:23,360 Speaker 5: miles from where I'm sitting right. 542 00:27:23,720 --> 00:27:25,639 Speaker 14: Yeah, So I think I have a sort of different 543 00:27:25,640 --> 00:27:29,600 Speaker 14: perspective than a lot of people, although your recent interviews 544 00:27:29,640 --> 00:27:31,800 Speaker 14: are sort of hitting on them where I don't know 545 00:27:31,880 --> 00:27:35,520 Speaker 14: that it's the case that the board has failed broadly. 546 00:27:35,680 --> 00:27:39,600 Speaker 14: I do think they've failed the employees because of this 547 00:27:39,680 --> 00:27:42,919 Speaker 14: creation of shock and trauma, and what we're seeing is 548 00:27:42,920 --> 00:27:46,320 Speaker 14: a response based on that. Right when you have the 549 00:27:46,440 --> 00:27:48,360 Speaker 14: rug pulled out from you, you just want to get 550 00:27:48,359 --> 00:27:51,880 Speaker 14: the rug back. So that is happening, and that can 551 00:27:52,600 --> 00:27:56,000 Speaker 14: be arguably be a failure of the board. But I 552 00:27:56,040 --> 00:27:58,880 Speaker 14: think broadly the board is sticking to some of its 553 00:27:59,400 --> 00:28:02,600 Speaker 14: original goals, which is to balance the profit and the 554 00:28:02,640 --> 00:28:08,200 Speaker 14: non profit, make sure that safety concerns are being taken seriously, 555 00:28:08,440 --> 00:28:12,240 Speaker 14: and even making the decision to lose profit in cases 556 00:28:12,280 --> 00:28:16,040 Speaker 14: where some of the safety concerns are starting to become overwhelming. 557 00:28:16,680 --> 00:28:21,119 Speaker 4: I think if one goes openly to open AI's website 558 00:28:21,200 --> 00:28:24,000 Speaker 4: and looks at its governance and the statements it makes, 559 00:28:24,119 --> 00:28:27,240 Speaker 4: it makes it abundantly clear that they put safety ahead 560 00:28:27,240 --> 00:28:31,000 Speaker 4: of profits and are not for profit governance board. In hindsight, 561 00:28:31,119 --> 00:28:37,399 Speaker 4: perhaps for vcs wasn't totally aligned. Has the discussion point 562 00:28:37,600 --> 00:28:40,960 Speaker 4: changed longer term here, Margaret, Do you think that people 563 00:28:41,040 --> 00:28:42,720 Speaker 4: start to say, Okay, well, we have to put the 564 00:28:42,720 --> 00:28:45,160 Speaker 4: safety to one side because we need to keep on 565 00:28:45,240 --> 00:28:48,080 Speaker 4: building and founders need to keep on doing deals and 566 00:28:48,680 --> 00:28:50,480 Speaker 4: the compute power is so expensive. 567 00:28:52,240 --> 00:28:55,760 Speaker 14: Yeah, I mean, I think that there will definitely be 568 00:28:55,840 --> 00:28:59,080 Speaker 14: some changes and updates to this kind of structure. The 569 00:29:00,200 --> 00:29:04,680 Speaker 14: profit model that OpenAI was spearheading was more of an experiment, 570 00:29:04,840 --> 00:29:08,880 Speaker 14: and with experiments, in general with AI and in science, 571 00:29:08,960 --> 00:29:12,120 Speaker 14: you just update based on the results you're getting, and 572 00:29:12,160 --> 00:29:14,520 Speaker 14: so I think we're seeing that here. We'll probably see 573 00:29:14,640 --> 00:29:18,080 Speaker 14: changes in light of the fact that there clearly is 574 00:29:18,240 --> 00:29:22,560 Speaker 14: a need to have a reliance on commercial interests companies 575 00:29:22,640 --> 00:29:25,600 Speaker 14: like Microsoft to provide compute and so you don't want 576 00:29:25,640 --> 00:29:28,760 Speaker 14: to surprise Satchya, right if you have this kind of dependency. 577 00:29:29,440 --> 00:29:33,240 Speaker 14: So there probably will be some updates here. But I 578 00:29:33,280 --> 00:29:38,000 Speaker 14: do think that the board as originally constructed is basically 579 00:29:38,040 --> 00:29:39,600 Speaker 14: doing what it's supposed to be doing. 580 00:29:41,160 --> 00:29:45,240 Speaker 5: Margaret, how do we find a middle ground? If this 581 00:29:45,480 --> 00:29:49,080 Speaker 5: existential threat issue is the issue, and frankly, we don't 582 00:29:49,080 --> 00:29:52,040 Speaker 5: know why the board fired, Sam Outman, how do you 583 00:29:52,080 --> 00:29:53,320 Speaker 5: appease both sides? 584 00:29:54,680 --> 00:29:58,280 Speaker 14: Actually, if you work towards the solutions, if you sort 585 00:29:58,280 --> 00:30:00,959 Speaker 14: of take what the issue is and then work backwards 586 00:30:01,000 --> 00:30:05,160 Speaker 14: towards the solutions, you'll find that the solutions for safety, 587 00:30:05,480 --> 00:30:09,960 Speaker 14: for existential risk, for bias issues, non discrimination, a lot 588 00:30:10,000 --> 00:30:12,240 Speaker 14: of these sort of ethical values that a lot of 589 00:30:12,280 --> 00:30:15,000 Speaker 14: tech companies are holding right now, the solutions end up 590 00:30:15,040 --> 00:30:17,680 Speaker 14: being roughly the same, as far as I can tell. 591 00:30:18,120 --> 00:30:22,640 Speaker 14: And so really the middle ground is, let's go back 592 00:30:22,640 --> 00:30:25,200 Speaker 14: to what the solutions are for all these issues that 593 00:30:25,240 --> 00:30:28,440 Speaker 14: we're thinking and seeing, and can we agree on these 594 00:30:28,480 --> 00:30:32,800 Speaker 14: solutions even if our goals are somewhat different, and I 595 00:30:32,840 --> 00:30:35,520 Speaker 14: think that will really be a place where across the 596 00:30:35,520 --> 00:30:36,760 Speaker 14: industry we'll see alignment. 597 00:30:38,280 --> 00:30:42,120 Speaker 5: Margaret Chief Ethic Scientists, Margaret Mitchell, thank you for being 598 00:30:42,120 --> 00:30:44,760 Speaker 5: with us. We have some breaking us just crossing the Bloomberg. 599 00:30:45,960 --> 00:30:49,200 Speaker 5: Open AI and its board are in open talks with 600 00:30:49,280 --> 00:30:53,320 Speaker 5: Sam Outman about a return for Sam Outman to Open AI. 601 00:30:53,440 --> 00:30:56,320 Speaker 5: I'm reporting this with actually Evans. What we're hearing the 602 00:30:56,400 --> 00:31:01,000 Speaker 5: latest is that Adam D'Angelo is talking with Sam Altman. 603 00:31:01,600 --> 00:31:05,040 Speaker 5: One source tells me that a possible scenario is that 604 00:31:05,120 --> 00:31:09,920 Speaker 5: a transition board comes into place and Sam Altman takes 605 00:31:09,960 --> 00:31:13,560 Speaker 5: a director role on that transition board. That is one 606 00:31:14,000 --> 00:31:20,120 Speaker 5: caroline possible way forward that we're hearing about. Investors are involved, 607 00:31:20,120 --> 00:31:23,360 Speaker 5: Investors are speaking with both the open AI side and 608 00:31:23,400 --> 00:31:27,240 Speaker 5: the open aiye board. And what we're hearing myself, Ashley 609 00:31:27,280 --> 00:31:30,080 Speaker 5: Emily Chang reporting this as well, is that EMMITTT. Sheer, 610 00:31:30,120 --> 00:31:34,240 Speaker 5: whose interim open AI CEO is having a pretty tough time, 611 00:31:34,360 --> 00:31:38,200 Speaker 5: is basically in the dark and at breaking point. At 612 00:31:38,200 --> 00:31:39,320 Speaker 5: this point, and. 613 00:31:39,280 --> 00:31:42,560 Speaker 4: It's notable, of course that Veno Kosler, for example, very 614 00:31:42,600 --> 00:31:46,520 Speaker 4: early investor in open Ai, had been saying how much 615 00:31:46,600 --> 00:31:51,040 Speaker 4: the Quora ceo had DeAngelo had been digging in and 616 00:31:51,120 --> 00:31:53,000 Speaker 4: ultimately whether or not that was going to be a 617 00:31:53,040 --> 00:31:56,880 Speaker 4: difficult scenario to be able to have a board change 618 00:31:56,960 --> 00:31:59,800 Speaker 4: of direction. Ultimately, though, what are you hearing in terms 619 00:31:59,800 --> 00:32:02,480 Speaker 4: of being pushed for of the makeup of that board, 620 00:32:02,640 --> 00:32:05,040 Speaker 4: because many would say it doesn't just need Sam Altman 621 00:32:05,120 --> 00:32:06,040 Speaker 4: to be reinstated. 622 00:32:06,840 --> 00:32:09,280 Speaker 5: Yes, I mean the name Brett Taylor, who is the 623 00:32:09,320 --> 00:32:12,160 Speaker 5: co CEO of Salesforce, keeps coming up time and time 624 00:32:12,200 --> 00:32:15,600 Speaker 5: again as someone that would be an appeasement to both 625 00:32:15,640 --> 00:32:18,920 Speaker 5: sides of the discussion that we make the point in 626 00:32:18,960 --> 00:32:22,240 Speaker 5: the story we've just reported, just as the sources make 627 00:32:22,280 --> 00:32:24,560 Speaker 5: the point to us that the fact that Sam is 628 00:32:24,640 --> 00:32:28,960 Speaker 5: even speaking to Adam Dangelo is news. It is complete 629 00:32:29,080 --> 00:32:32,200 Speaker 5: change from the weekend. We sat there all day Sunday saying, Okay, 630 00:32:32,200 --> 00:32:34,760 Speaker 5: well Sam's definitely coming back and the board's going to go. 631 00:32:34,840 --> 00:32:36,880 Speaker 5: That wasn't the case at all. The board was digging 632 00:32:36,920 --> 00:32:40,360 Speaker 5: in and there was very little communication at AOLS. So yeah, 633 00:32:40,760 --> 00:32:42,000 Speaker 5: we keep going, we do. 634 00:32:42,280 --> 00:32:45,320 Speaker 4: And as Emily chattered to Satya yesterday, he of course 635 00:32:45,360 --> 00:32:47,959 Speaker 4: supports no matter where Sam ends up being, whether at 636 00:32:48,000 --> 00:32:50,920 Speaker 4: OpenAI or in house with Microsoft. So much more to come, 637 00:32:50,960 --> 00:32:52,280 Speaker 4: and of course we're going to be talking a little 638 00:32:52,280 --> 00:32:55,520 Speaker 4: bit more about Ed's scoops one about a chip venture 639 00:32:55,680 --> 00:32:58,600 Speaker 4: that Sam Ammon was apparently trying to be bringing to 640 00:32:58,640 --> 00:33:02,120 Speaker 4: the world. Will have Cleo Capital Serracance joining us. Next, 641 00:33:02,240 --> 00:33:18,360 Speaker 4: this is blue Meg Technology. Now, of course we just 642 00:33:18,400 --> 00:33:20,560 Speaker 4: had that breaking news coming from our own Ed Ludlow 643 00:33:20,600 --> 00:33:23,120 Speaker 4: and team that Sam Alman and the Open Ai board 644 00:33:23,240 --> 00:33:26,280 Speaker 4: are open to talks for his possible return. And while 645 00:33:26,400 --> 00:33:28,360 Speaker 4: the saga continues, we want to go to our VC 646 00:33:28,400 --> 00:33:31,480 Speaker 4: spotlight now Cleo Capital founder and managing director Serracus, for 647 00:33:31,800 --> 00:33:34,600 Speaker 4: your own take on all of this, the repercussions for 648 00:33:34,760 --> 00:33:38,440 Speaker 4: AI startup ecosystem more broadly, Sarah, is it that it 649 00:33:38,480 --> 00:33:41,239 Speaker 4: becomes more competitive? Is it that becomes more concerning of 650 00:33:41,240 --> 00:33:42,480 Speaker 4: profits visa V safety? 651 00:33:43,640 --> 00:33:45,920 Speaker 15: You know, I honestly think the biggest takeaway about this 652 00:33:46,040 --> 00:33:47,240 Speaker 15: isn't going to be about AI. 653 00:33:47,400 --> 00:33:49,400 Speaker 2: I think it's going to be about corporate governance. 654 00:33:49,960 --> 00:33:52,520 Speaker 15: You know, this on the heels of everything that happened 655 00:33:52,560 --> 00:33:56,160 Speaker 15: with FTX, and obviously could not be more different situations. 656 00:33:56,200 --> 00:33:58,600 Speaker 15: But in both cases you have companies that have been 657 00:33:58,680 --> 00:34:01,840 Speaker 15: super super hot, you know, is billions of dollars, and 658 00:34:01,960 --> 00:34:05,520 Speaker 15: there's no board, there's no traditional corporate governance, and so 659 00:34:05,560 --> 00:34:07,960 Speaker 15: when things go sideways, they tend to go sideways in 660 00:34:08,000 --> 00:34:10,759 Speaker 15: a really big way and catch a lot of people unawares. 661 00:34:10,840 --> 00:34:13,160 Speaker 15: You know, ventures a business where we usually like to 662 00:34:13,680 --> 00:34:16,400 Speaker 15: sort of handle the messy stuff a little bit quietly, 663 00:34:16,520 --> 00:34:19,240 Speaker 15: and that's really impossible to do when there's no board, 664 00:34:19,600 --> 00:34:22,240 Speaker 15: you know, no traditional board just sort of say, let's sit. 665 00:34:22,080 --> 00:34:28,560 Speaker 5: Down and hash this out quietly. We're reporting that one 666 00:34:29,600 --> 00:34:33,480 Speaker 5: possible outcome is that there's a transitional board, right Sam 667 00:34:33,480 --> 00:34:38,920 Speaker 5: Outman joins this transitional board as a director, as a 668 00:34:39,000 --> 00:34:41,040 Speaker 5: bench capsus. If somebody put in front of you the 669 00:34:41,040 --> 00:34:44,640 Speaker 5: opportunity to participate in the tender, which we believe is 670 00:34:44,680 --> 00:34:47,560 Speaker 5: still pending based on that information I just gave you, 671 00:34:47,600 --> 00:34:48,759 Speaker 5: would you take an allocation? 672 00:34:50,320 --> 00:34:53,040 Speaker 15: I do early stage ventures, so they are out of range, 673 00:34:53,040 --> 00:34:54,080 Speaker 15: and that's all I'll say. 674 00:34:54,160 --> 00:34:56,680 Speaker 2: But you know the reality is that I. 675 00:34:56,560 --> 00:34:58,960 Speaker 15: Think that this is going to be a moment where 676 00:34:59,080 --> 00:35:01,759 Speaker 15: the investors around the table say, look, you know, we 677 00:35:01,840 --> 00:35:04,200 Speaker 15: played by your rules. You started as a nonprofit, you 678 00:35:04,280 --> 00:35:06,799 Speaker 15: had this capped profit model, you know, you had this 679 00:35:06,920 --> 00:35:10,799 Speaker 15: board that didn't directly oversee you know, and wasn't wasn't 680 00:35:10,800 --> 00:35:13,080 Speaker 15: necessarily a fiduciary to the for profit arm. 681 00:35:13,400 --> 00:35:14,840 Speaker 2: I have a feeling that if Sam. 682 00:35:14,640 --> 00:35:18,040 Speaker 15: Comes back, that is all going to change, possibly in 683 00:35:18,080 --> 00:35:20,160 Speaker 15: a good way for him, but I think probably in 684 00:35:20,200 --> 00:35:21,000 Speaker 15: a way that's a. 685 00:35:20,960 --> 00:35:23,480 Speaker 2: Bit more investor in for profit friendly as well. 686 00:35:24,280 --> 00:35:28,680 Speaker 4: A rule early stage investment outlook right now, there is 687 00:35:28,760 --> 00:35:31,759 Speaker 4: this thesis at one point when indeed we thought that 688 00:35:31,920 --> 00:35:33,759 Speaker 4: Sam was going to be sticking with Microsoft, is that 689 00:35:34,280 --> 00:35:36,640 Speaker 4: open AI talent might not just go there, and they 690 00:35:36,719 --> 00:35:39,040 Speaker 4: might go off and start creating their own businesses. One 691 00:35:39,040 --> 00:35:41,799 Speaker 4: found at telling us that yesterday, are you seeing as 692 00:35:41,880 --> 00:35:45,960 Speaker 4: much exuberant about building AI companies at the smaller check 693 00:35:46,080 --> 00:35:47,080 Speaker 4: range at the moment? 694 00:35:48,000 --> 00:35:51,120 Speaker 15: So, you know, there's it's structurally hard to build a 695 00:35:51,200 --> 00:35:54,280 Speaker 15: true AI company right foundational models. You know, it takes 696 00:35:54,400 --> 00:35:55,600 Speaker 15: billions and billions of. 697 00:35:55,560 --> 00:35:56,960 Speaker 2: Dollars worth of compute power. 698 00:35:57,239 --> 00:36:00,279 Speaker 15: You know, we've heard reports this year of VC who 699 00:36:00,280 --> 00:36:03,160 Speaker 15: are actually going out and you know, getting compute space, 700 00:36:03,239 --> 00:36:06,359 Speaker 15: getting cloud space, you know, buying chips AI chips so 701 00:36:06,400 --> 00:36:08,560 Speaker 15: that they can use that as sort of an enticement 702 00:36:08,640 --> 00:36:11,520 Speaker 15: to founders, And the other reality is it's not just 703 00:36:11,680 --> 00:36:13,920 Speaker 15: enough to be sort of smart and hungry when you're 704 00:36:13,960 --> 00:36:16,840 Speaker 15: talking about building in these kind of foundational AI spaces. 705 00:36:16,880 --> 00:36:20,160 Speaker 15: You really need serious engineering chops, and not a ton 706 00:36:20,160 --> 00:36:22,920 Speaker 15: of people have them. So, you know, certainly the bloom 707 00:36:22,960 --> 00:36:25,200 Speaker 15: is a bit off the rose right now at open AI. 708 00:36:25,360 --> 00:36:27,680 Speaker 15: And I think that, you know, when things change, they 709 00:36:27,680 --> 00:36:31,000 Speaker 15: tend to stay somewhat changed, and so we might see people, 710 00:36:31,239 --> 00:36:33,320 Speaker 15: you know, who are planning to stick around a couple 711 00:36:33,360 --> 00:36:33,960 Speaker 15: more years. 712 00:36:34,200 --> 00:36:36,360 Speaker 2: You know, the macro environment's not great. 713 00:36:36,480 --> 00:36:38,480 Speaker 15: They you know, liked what they were doing at open AI, 714 00:36:38,880 --> 00:36:41,440 Speaker 15: who are now you know, sitting there saying, you know, 715 00:36:41,520 --> 00:36:44,720 Speaker 15: have whiplash and feel like, wow, maybe I do want. 716 00:36:44,600 --> 00:36:47,480 Speaker 2: To go out on my own. And that's not necessarily 717 00:36:47,520 --> 00:36:48,040 Speaker 2: a bad thing. 718 00:36:49,239 --> 00:36:52,440 Speaker 5: Clear Capital Founder Managing Directors, Hurricanes Goods catch up here 719 00:36:52,520 --> 00:36:58,920 Speaker 5: on bloom By Technology. 720 00:37:01,120 --> 00:37:03,600 Speaker 4: Zoom was out with earnings, reporting better than expected revenue 721 00:37:03,600 --> 00:37:06,640 Speaker 4: on some strong enterprise sales and raising is fully of forecast. 722 00:37:06,680 --> 00:37:09,680 Speaker 4: In fact, Zoom CFO Kelly Stackowa joins us now and 723 00:37:09,800 --> 00:37:14,240 Speaker 4: Kelly there was some significant international slowdown and I'm interested 724 00:37:14,280 --> 00:37:16,919 Speaker 4: as to how resilient the sort of growthing you saw 725 00:37:17,000 --> 00:37:19,160 Speaker 4: in the prior quarter is for the next. 726 00:37:20,800 --> 00:37:23,720 Speaker 16: Yeah, So we were really pleased with our Q three results. 727 00:37:23,760 --> 00:37:24,720 Speaker 3: As you said, we. 728 00:37:24,640 --> 00:37:28,960 Speaker 16: Exceeded both our top line as well as our profitability expectations, 729 00:37:28,960 --> 00:37:30,160 Speaker 16: and we were able to raise for. 730 00:37:30,120 --> 00:37:30,719 Speaker 2: The full year. 731 00:37:31,320 --> 00:37:34,759 Speaker 16: We saw growth in the Americas. We did see some 732 00:37:34,840 --> 00:37:37,560 Speaker 16: headwinds both in AMYA and Asia Pac, some of that 733 00:37:37,719 --> 00:37:41,960 Speaker 16: due to FX and currency. Were an Asia Pac for example, 734 00:37:42,000 --> 00:37:44,879 Speaker 16: we would have been flat year every year, but we 735 00:37:45,200 --> 00:37:48,160 Speaker 16: are starting to see some momentum in both of those 736 00:37:48,200 --> 00:37:51,279 Speaker 16: regions and are looking forward to further progress as we 737 00:37:51,280 --> 00:37:52,759 Speaker 16: moved through the rest of this year and in the 738 00:37:52,840 --> 00:37:53,279 Speaker 16: next year. 739 00:37:54,480 --> 00:37:57,560 Speaker 5: Like Kelly, the sales side analysts are basically saying that 740 00:37:57,719 --> 00:38:00,840 Speaker 5: the raising guidance is just not bullish, and they're still 741 00:38:00,880 --> 00:38:04,440 Speaker 5: worried about the long term growth of Zoom based on 742 00:38:04,520 --> 00:38:08,479 Speaker 5: how society behaves today, how we communicate one another. How 743 00:38:08,520 --> 00:38:12,320 Speaker 5: do you tell them definitively I can grow this company forever. 744 00:38:13,640 --> 00:38:14,640 Speaker 3: You know, we. 745 00:38:14,640 --> 00:38:18,520 Speaker 16: Achieved some amazing milestones during Q three. For example, Zoom 746 00:38:18,560 --> 00:38:23,000 Speaker 16: Phone hit seven million seats, our Zoom contact center grew 747 00:38:23,120 --> 00:38:28,960 Speaker 16: to over seven hundred customers, and Zoom AI Companion It's 748 00:38:28,960 --> 00:38:31,160 Speaker 16: only been out for approximately two months and it's already 749 00:38:31,200 --> 00:38:33,680 Speaker 16: activated in over two hundred thousand accounts. 750 00:38:33,840 --> 00:38:35,279 Speaker 3: So that shows you that. 751 00:38:35,280 --> 00:38:39,680 Speaker 16: We are expanding to be a full collaboration and communication platform, 752 00:38:40,239 --> 00:38:43,040 Speaker 16: and that's really what's going to drive our growth in 753 00:38:43,120 --> 00:38:45,560 Speaker 16: the future. And that's exactly what investors are looking for. 754 00:38:45,600 --> 00:38:49,439 Speaker 16: They're looking for reacceleration in our direct segment and they're 755 00:38:49,440 --> 00:38:51,320 Speaker 16: looking for stabilization. 756 00:38:50,680 --> 00:38:51,800 Speaker 2: And our online segment. 757 00:38:52,360 --> 00:38:55,160 Speaker 16: And as I said, the expansion of the platform is 758 00:38:55,160 --> 00:38:57,000 Speaker 16: exactly what's going to drive that over time. 759 00:38:57,760 --> 00:39:00,760 Speaker 4: How then, have you been reacting to the going changes 760 00:39:00,800 --> 00:39:02,200 Speaker 4: within AI? 761 00:39:02,360 --> 00:39:02,719 Speaker 16: Right now? 762 00:39:02,760 --> 00:39:05,840 Speaker 4: You've got Companion AI, you incorporate, you have a federated approach, 763 00:39:05,880 --> 00:39:08,759 Speaker 4: you incorporate your own MLM, you have metas you have 764 00:39:08,840 --> 00:39:11,960 Speaker 4: open AIS Andthropic. Your key competitor really is Microsoft in 765 00:39:12,000 --> 00:39:13,480 Speaker 4: the space and they look to we ever closer to 766 00:39:13,480 --> 00:39:15,640 Speaker 4: open AI. How does this situation impact you. 767 00:39:16,719 --> 00:39:19,960 Speaker 16: Yeah, So in setting up this model, just like we 768 00:39:20,000 --> 00:39:22,280 Speaker 16: do everything, we think about it from a customer's perspective 769 00:39:22,280 --> 00:39:25,440 Speaker 16: and we want them to have the best possible performance 770 00:39:26,040 --> 00:39:29,440 Speaker 16: and we believe that a federated approach does that. As 771 00:39:29,440 --> 00:39:32,600 Speaker 16: you mentioned, we're working with many partners in this space. 772 00:39:32,680 --> 00:39:35,839 Speaker 16: That gives us the opportunity to really fine tune our 773 00:39:35,880 --> 00:39:38,759 Speaker 16: models and get the absolute best result for our customers. 774 00:39:39,080 --> 00:39:41,080 Speaker 16: And I also want to highlight that we're doing it 775 00:39:41,120 --> 00:39:44,480 Speaker 16: in a very cost effective way. Zoom ad compand is 776 00:39:44,520 --> 00:39:47,680 Speaker 16: included for free in all of our paying for all 777 00:39:47,719 --> 00:39:50,680 Speaker 16: of our paying customers. So that's a really key competitive 778 00:39:50,680 --> 00:39:54,160 Speaker 16: differentiator as it comes included where some of our competitors 779 00:39:54,160 --> 00:39:57,680 Speaker 16: are char charging up to thirty dollars per month per 780 00:39:57,800 --> 00:39:58,400 Speaker 16: user for that. 781 00:39:59,160 --> 00:40:01,319 Speaker 4: Certainly the focus on the competition there. We thank you 782 00:40:01,400 --> 00:40:05,400 Speaker 4: so much soom CFO k Steckelberg on the reporting of 783 00:40:05,480 --> 00:40:09,880 Speaker 4: earnings and future growth drivers. Meanwhile, another extraordinary show of 784 00:40:09,920 --> 00:40:12,479 Speaker 4: Bloomberg Technology. We're just breaking news after breaking news. 785 00:40:13,400 --> 00:40:15,600 Speaker 5: It reminds you that the world of technology happens in 786 00:40:15,640 --> 00:40:18,600 Speaker 5: re time. Recap everything we discuss on the podcast. We 787 00:40:18,680 --> 00:40:21,240 Speaker 5: are publishing to all the Bloomberg platforms, but also Apple, 788 00:40:21,440 --> 00:40:24,040 Speaker 5: Spotify and iHeart. Remember there's a lot in the world 789 00:40:24,080 --> 00:40:26,120 Speaker 5: of crypto going on to check out the Crypto Show 790 00:40:26,160 --> 00:40:28,880 Speaker 5: as well. Incredibly important from SF and New York. This 791 00:40:29,320 --> 00:40:32,240 Speaker 5: is Bloomberg Technology