Speaker 1: From Mahart where innovation, money and power. Collie in Silicon
Speaker 1: Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
Speaker 3: I med Lolo in San Francisco. Caroline hides off today
Speaker 3: this is Bloomberg Technology in my water show we have
Speaker 3: for you coming up. Sam Outman returns to open Ai.
Speaker 3: Will break down the changes at the artificial intelligence company.
Speaker 3: As Outman takes the helm after a shock Ouster, we
Speaker 3: speak to Vino Kosler, the first venture investor into open Ai.
Speaker 3: Past the world's most valuable chipmaker and Nvidia tops earnings
Speaker 3: estimates that fails to meet loftier expectations from investors. We
Speaker 3: break down the results and will take a deep dive
Speaker 3: into the world of crypto as cz pleads Gill to
Speaker 3: criminal charges for anti money laundering and US sanctions violations.
Speaker 3: All that and so much more ahead a very quick
Speaker 3: check on the kind of public market perspective of what
Speaker 3: is going on in the world. Nvidia smashes it in
Speaker 3: the fiscal third quarter, gives a very strong outlook in
Speaker 3: the fiscal fourth quarter ahead of the street consensus. The
Speaker 3: story the impact of US technology curbs taking hold. It
Speaker 3: will impact them in the fiscal fourth quarter. We will
Speaker 3: go deep and bring you the analysis on that stock
Speaker 3: and what the world of AI accelerators looks like going
Speaker 3: into next year. The other publicly traded proxy for the
Speaker 3: big story is Microsoft. Sam Altman is back at open Ai.
Speaker 3: This is largely being seen as a big cluss for
Speaker 3: Microsoft to stock up one point five percent. It's the
Speaker 3: third time this week that Microsoft has hit a fresh
Speaker 3: record high. There is some element that Microsoft gets what
Speaker 3: it wants. We will discuss that throughout the program. We
Speaker 3: have an excellent external voice coming right up. But first
Speaker 3: our top story, Sam Outman's return to open Ai as CEO.
Speaker 3: I want to bring in Sharen Gafari. Okay, let's start
Speaker 3: with the basics. Sam Ountman is back as CEO, and
Speaker 3: there are some temporary board changes. We don't know, let's
Speaker 3: be honest, but what are those changes?
Speaker 2: Right?
Speaker 4: So, there are some new board members and you know,
Speaker 4: it's unclear exactly the details, but it seems like there
Speaker 4: may they may be appointing a new board long term.
Speaker 4: For now, it is going to be Larry Summers. Adam
Speaker 4: Dangelo is still on the board, who.
Speaker 3: Was already a board member, who was already.
Speaker 5: A board member.
Speaker 3: And then we have Brett Taylor.
Speaker 4: Brett Taylor, that's right, who was also a remember on
Speaker 4: the board of Twitter, right.
Speaker 3: He was chairman when Twitter now known as X was
Speaker 3: sold to Elon Musk.
Speaker 4: Correct, So he has experience with companies and crises, right
Speaker 4: and during leadership changes. So that's a new board we're
Speaker 4: seeing reported, right. But Tasha and Helen are out.
Speaker 3: Yeah, I'm hearing that from sources as well. Yep, Tusha
Speaker 3: and Helen, who were on the board that that fired
Speaker 3: Sam Outman, excuse me, Friday are not as it stands
Speaker 3: my understanding, and I think other outlets are reported they're
Speaker 3: not on the board, correct.
Speaker 4: And remember Tasha and Helen were both keyboard members who
Speaker 4: ousted Sam Altman, right, And we're behind essentially this coup.
Speaker 4: So it makes sense that with Sam returning, part of
Speaker 4: that negotiation would involve having people who turned on him out.
Speaker 3: For our audience worldwide disclosure, Larry Summers is a paid
Speaker 3: contributor on Bloomberg Television, So that's that a lot of
Speaker 3: people around the world ask why the drama? Why do
Speaker 3: any of us around the world care about open AI
Speaker 3: who leads it? The answer to me seems well, open
Speaker 3: Ai is the face of AI, absolutely.
Speaker 4: I mean, this is an industry leader. Remember that AI
Speaker 4: has been something that Silicon Valley talked about for decades,
Speaker 4: but it didn't really explode onto the market until Opening
Speaker 4: Eye came out with Chatchipt just about a year ago. Right,
Speaker 4: that was a breakthrough moment. So they are the ones
Speaker 4: setting the tone for this industry. They are the ones
Speaker 4: making AI relevant on a consumer level. They're the ones
Speaker 4: who came out with products at one hundred you know,
Speaker 4: one hundred million people are actually using So how AI go,
Speaker 4: how open Ai go, as the rest of the industry
Speaker 4: will go. And that's why I think people should care.
Speaker 5: About this story.
Speaker 3: I think it's important to recap that this will started
Speaker 3: Friday lunchtime and we are now Wednesday, the day before Thanksgiving,
Speaker 3: and we actually don't have a definitive end to this story.
Speaker 3: There's a part of the resolution where there will be
Speaker 3: an independent investigation into Sam Outman why he was fired.
Speaker 3: Just explain the rest of what was announced late last
Speaker 3: night by open Ai.
Speaker 4: Correct, So we're going to see you know, and again,
Speaker 4: remember this is a negotiation between two sides.
Speaker 3: You have the old board who.
Speaker 4: Was very skeptical of Sam Altman and pushed him out,
Speaker 4: and then you have Sam having this prodigal return. So
Speaker 4: on the other side, we sort of see this concession
Speaker 4: and that there will be an investigation into Sam's.
Speaker 1: Conduct.
Speaker 4: So far, the only allegations we've seen raised against him
Speaker 4: by the board or people close to the board are
Speaker 4: pretty vague, right, just statements around that he essentially was
Speaker 4: not candid with the board, but we don't know about
Speaker 4: exactly what was he not candid allegedly.
Speaker 3: Now you're maybe maybe a philosophical point of difference on
Speaker 3: the existential threat of AI and I reported and you
Speaker 3: reported that one reason Emmitt Sheer has added as the
Speaker 3: CEO and interim basis is that he was an EA.
Speaker 3: He shared that stential threat.
Speaker 4: Yes, and that gets to a key detail that we
Speaker 4: should mention, which is that you know, the interim CEO,
Speaker 4: em Shear is stepping down right right, and so he's
Speaker 4: being seen in the industry now and seeing a lot
Speaker 4: of people react in texting that he he sort of
Speaker 4: is actually not as maybe bad as people thought who
Speaker 4: were pro Sam, because he's sort of giving up now
Speaker 4: and letting Sam Altman come back.
Speaker 3: All right, Bloomberg's sharing Gafara, You've been just an incredible
Speaker 3: reporting over the last five days or so. Let's continue
Speaker 3: the conversation. There is another party to this drama, Microsoft,
Speaker 3: and we need to understand what this means for them.
Speaker 3: Michael Pacter of Webbush joins us. Now someone this covied
Speaker 3: Microsoft Clay State for a long time. Simple question, what
Speaker 3: does this mean for Microsoft?
Speaker 1: It's pretty huge, you know.
Speaker 2: I think that if you think about why we haven't
Speaker 2: had deep AI solutions for the last twenty years, it's
Speaker 2: that computing power hadn't caught up. And open Ai is
Speaker 2: integrated into Microsoft Cloud. Microsoft made a huge investment in
Speaker 2: them to make sure that happens. And Microsoft Cloud is
Speaker 2: building its scale. It's scaling all of its products, all
Speaker 2: of its user interface, all of its developer and product
Speaker 2: interfaces to make sure they work with open Ai. So
Speaker 2: you need massive computing power. You know, if you were
Speaker 2: to decide to write Charles Dickens novel and The Voice
Speaker 2: of Stephen King, you need a product that's going to
Speaker 2: read every tools Dickens ever and that requires massive cloud capabilities.
Speaker 2: So Microsoft is leveraging something it's already built and integrating
Speaker 2: it into what they consider it to be the up
Speaker 2: and coming application and developers are going to be forced
Speaker 2: to use Microsoft Cloud if they want to use up
Speaker 2: in AI.
Speaker 3: But Michael Pactor, this is not a Charles Dickens novel.
Speaker 3: This is real life. For what it's worth, I've lived
Speaker 3: it for the last five days. I want to go
Speaker 3: to the point of what Satya Nadella told our Emily Chang,
Speaker 3: which is, surprises are bad. And clearly, as we've reported
Speaker 3: at Bloomberg, a priority for Microsoft was to address governance changes,
Speaker 3: governance structure. Can Microsoft say with any certainty and you
Speaker 3: know you're analyzing the stock right and it's in Microsoft's leadership,
Speaker 3: but can they say with any certainty that this is
Speaker 3: the end of the story, this is the outcome that
Speaker 3: they wanted.
Speaker 5: They meet a.
Speaker 2: Lot of friends, I think by hiring Sam Mortman. And
Speaker 2: you know, you saw that the letter, you know, demanding
Speaker 2: the board resign was signed by seven hundred and fifteen
Speaker 2: of the seven hundred and fifty employees they then offered
Speaker 2: apparently offered all of those employees of job of Microsoft.
Speaker 2: So you know, would they rather have rebuilt everything starting
Speaker 2: from scratch with all the same employees or would they
Speaker 2: rather just leverage what those employees have already built. And ultimately,
Speaker 2: I think it's easier to just continue the partnership than
Speaker 2: to try to rebuild. So I think that they won
Speaker 2: either way, they win more. I think keeping things as
Speaker 2: is it will require less of an investment. Nadella managed
Speaker 2: this masterfully. I mean, he honestly was an honest broker
Speaker 2: in the whole process, and he reaffirmed his commitment to
Speaker 2: Altman and to the product and to the product team.
Speaker 2: So I think everything that they did was just flawlessly executed.
Speaker 3: Michael, how closely is Microsoft's valuation tied to the investment
Speaker 3: it made in Microsoft a thesis outline on the show
Speaker 3: yesterday that the ten billion investment they put into open
Speaker 3: Ai at the beginning of the year has translated to
Speaker 3: the one trillion valuation. It's direct. Do you agree with that?
Speaker 2: I look, it's really it's hard to value Microsoft based
Speaker 2: solely on a single investment. The company is worth the
Speaker 2: sum of its future cash flows, and so if the
Speaker 2: market is making a bet that Microsoft can leverage ten
Speaker 2: or thirteen billion into a trillion of ultimate profit, then
Speaker 2: the market's right. I mean, that's really what this comes
Speaker 2: down to that the market thinks that this is going
Speaker 2: to turn into let's say, one hundred billion to free
Speaker 2: cash flow a year in perpetuity. You know, at some
Speaker 2: point twenty thirty years from now. I'm not smart enough
Speaker 2: to tell you what the market is thinking. I can
Speaker 2: tell you that this is worth a lot to them.
Speaker 3: And I as to say current market cap two point
Speaker 3: eight trillion. Michael Packtive web Bits. Great to have you
Speaker 3: on this program, Thank you so much. This is an
Speaker 3: individual H one hundred GPU, or graphics processing unit in
Speaker 3: videos AI accelerator, But in reality, it's not just a
Speaker 3: chip that comes out of a plant. When we talk
Speaker 3: about the h one hundred GPUs training AI models, we're
Speaker 3: likely talking about DGXH one hundred in videos AI supercomputer.
Speaker 3: That's eight h one hundred GPUs combined, capable of thirty
Speaker 3: two quadrillion floating point operations per second, crazy computer performance.
Speaker 3: It's a server design, and this is what it looks
Speaker 3: like under the lid. It starts with an H one
Speaker 3: hundred GPU seen here in the form of an SXM module.
Speaker 3: Eight individual sxms are topped with heat six, designed to
Speaker 3: dissipate heat generated from running big AI workloads. Those are
Speaker 3: connected on a single baseboard by interconnectors, and that assembly
Speaker 3: alone weighs sixty pounds. Add CPUs and other components, and
Speaker 3: a finished DGX system weighs almost three hundred pounds. But
Speaker 3: the scale in the real world is bigger still. Some
Speaker 3: of the most power of four large language models are
Speaker 3: trained on the Nvidia DGX super Pod. That is thirty
Speaker 3: two DGX eight one hundred systems combined into what's called
Speaker 3: a scalable unit. At its absolute most mind modeling scale,
Speaker 3: DGX Superpod can be up to sixty four scalable units.
Speaker 3: That's more than sixteen thousand individual h one hundred GPUs.
Speaker 3: An AI company may use several superpods to train their LLLM.
Speaker 3: In the end, the DGX infrastructure sent out to the
Speaker 3: hyperscale cloud providers to put in their massive data centers.
Speaker 3: We bring you that video something we put out before
Speaker 3: because it was a point of discussion on the call
Speaker 3: and video reporting third quarter results beating expectations in the
Speaker 3: fiscal third quarter yesterday, giving an outlook for the fiscal
Speaker 3: fourth which was strong on any account. The Chick Company
Speaker 3: been a major beneficiary of the AI trade up more
Speaker 3: than two hundred and forty percent this year on the stock,
Speaker 3: prompting Wolf Research is Chris Casso to remain very bullish
Speaker 3: and outperformed rating and a six hundred and thirty dollars
Speaker 3: price target on that stock, and Chris Casso joins us
Speaker 3: now welcome to the program, Wolf Research, Managing Director for Semiconductors.
Speaker 3: So the stocks down, we go into this saying really
Speaker 3: high hurdle. They didn't pass the really high herd or
Speaker 3: based on the stock reaction. But what was the big
Speaker 3: takeaway for you? What did you learn about in Video's
Speaker 3: data center business.
Speaker 6: Well, certainly the numbers were very strong and as you said,
Speaker 6: expectations re elevated coming into the print. But the concern
Speaker 6: that we heard from investors coming into this event was
Speaker 6: not about how strong the numbers are right now. It's
Speaker 6: really about where do we go from here? And I
Speaker 6: think there's some concerns over just kind of peak revenue
Speaker 6: here in calendar twenty four, precisely because in Vidia has
Speaker 6: become such a large part of overall cloud capex, and
Speaker 6: what we think they need to do next is give
Speaker 6: people comfortable comfort that you know there's just going to
Speaker 6: be enough dollars to be able to generate in video growth. Right,
Speaker 6: what we think is of the next year, there's enough
Speaker 6: product cycle catalyst, there's new products coming out, and most importantly,
Speaker 6: the pricing of those products are substantially higher, which is
Speaker 6: driving growth.
Speaker 1: But the longer.
Speaker 6: Term that I think kind of really moves to the
Speaker 6: stock well over five hundred dollars is convincing people that
Speaker 6: you know, there's enough dollars flowing into the data center
Speaker 6: to be able to commodate this growth.
Speaker 3: Okay, so let's go there. This is what Jensen Huang,
Speaker 3: the CEO of the Video said on the call. Absolutely
Speaker 3: he sees data center can grow through twenty twenty five.
Speaker 3: Several factors or reasons. They're expanding their supply quite significantly.
Speaker 3: Do you buy that and that's calendar year twenty five,
Speaker 3: by the way, not fiscal twenty five.
Speaker 6: Well, certainly that's the case, and you know we've seen
Speaker 6: we speak to the suppliers and that, and certainly they're
Speaker 6: Any capacity is a particular type of assembly back end
Speaker 6: capacity that's very unique to Innvidia that nobody expected it
Speaker 6: to be this large at this point. It takes some
Speaker 6: time to add that capacity. That happens again. The other factor,
Speaker 6: which I think is somewhat misunderstood with regard to the
Speaker 6: stock is a large part of the growth is coming
Speaker 6: from pricing, and that's a function of more's loss slowing down.
Speaker 6: The chips themselves are more expensive. The H one hundred
Speaker 6: of the current version is almost three times as expensive
Speaker 6: as the prior version, but the benefit the Nvidia gives
Speaker 6: you is that it's more than ten times the performance,
Speaker 6: so you're.
Speaker 1: Basically more of this.
Speaker 6: This pricing is coming to in Nvidia because they're giving
Speaker 6: you so much more performance for the same dollar.
Speaker 3: So the big unknown is the long term ability to
Speaker 3: sell chips into China. This is what collect Cres the
Speaker 3: CFO said in the letter to shareholders that basically there
Speaker 3: will be an impact in the fiscal for from US
Speaker 3: technology curves right, and they will ship bless the China
Speaker 3: in that quarter, but they will more than make up
Speaker 3: for it in growth or offset by strong growth in
Speaker 3: other regions. How do you price in the China risk
Speaker 3: on this stock?
Speaker 6: Well, for right now, for the January quarter guidance, there's
Speaker 6: very little China in there right now, so you know,
Speaker 6: to some extent that's been de risked already. We also
Speaker 6: when a company talked on the call, and our own
Speaker 6: checks have been indicating that there is a new chip
Speaker 6: that will be compliant with China that will come out
Speaker 6: in the first half of next year. You would imagine
Speaker 6: that there's some pent up demand for that chip since
Speaker 6: that you know, they can't ship it in the January quarter.
Speaker 6: The question that management doesn't know is what's going to
Speaker 6: be the reception of this chip in China. And it's
Speaker 6: going to have less performance because that's what's required to
Speaker 6: meet the new regulations, but you know, what are the
Speaker 6: Chinese going to do with it? Our view is that
Speaker 6: we think there's the Chinese customers are still going to
Speaker 6: buy it because there's really no alternative in the marketplace
Speaker 6: right now. And the problem is that there are local
Speaker 6: Chinese alternatives from from folks like Huaweih for example, but
Speaker 6: that's also a company with manufacturing restrictions on China. So
Speaker 6: they can build an ANI chap, they can design an
Speaker 6: AI chip, but they can't build it with leading edge
Speaker 6: technology because Chinese manufacturing facilities don't have access to that. So,
Speaker 6: you know, none of it is we think the Chinese
Speaker 6: are going to have to buy in video product, even
Speaker 6: if it's less performance, because that's all what's going to be.
Speaker 3: A beltwright Chris Chris Casso, Wolf Research Managing director covering
Speaker 3: Semis with tie on time. But we're grateful to have
Speaker 3: you on the show. Thank you know. Coming up here
Speaker 3: on b tech Binance, ceocz pleads guilty to anti money
Speaker 3: laundering and US sanctions violations of Jilak. Joe Bamputra, founder
Speaker 3: and managing partner of Future Perfect Ventures, is our guest
Speaker 3: with the take. Next. This has been bog Technology. Another
Speaker 3: story we're watching finance after its CEO, Cheng Peng Chao
Speaker 3: pleaded guilty to anti monitoring money laundering in US sanctions
Speaker 3: violations under a sweeping settlement with the US that allows
Speaker 3: the crypto exchange to continue operating. Coinbased CEO Brian Armstrong,
Speaker 3: a competitor, joined Bloomberg Tuesday to discuss.
Speaker 7: Well, I think this is really a vindication of the
Speaker 7: long term strategy that coinbase has taken to build a
Speaker 7: trusted and regulated company, going back to twenty twelve. We
Speaker 7: really decided to do that and got the licenses and
Speaker 7: got the teams in place that were necessary to run
Speaker 7: that type of company, and then every few years we
Speaker 7: did see a new company come on the scenes that
Speaker 7: didn't take that approach. Sometimes they would grow very quickly
Speaker 7: because they were able to offer products that we didn't
Speaker 7: think were legal. But inevitably they do come rashing down.
Speaker 7: You know, regulators do eventually act even if they don't
Speaker 7: act quickly, and that's what we saw here in this
Speaker 7: case today. So it's not only been I think, an
Speaker 7: opportunity for coinbase to step in, but it's also an
Speaker 7: opportunity for the industry I think to turn the page
Speaker 7: here and say that, yeah, some of the rules are
Speaker 7: clear around AMLKYIC oh fact that the issues that Finance
Speaker 7: really had you know, stepped over line on, but some
Speaker 7: areas of the law are not yet clear. We need
Speaker 7: to go get that regulatory clarity to make sure that
Speaker 7: the future of this industry is built here in America,
Speaker 7: not on offshore underregulated exchanges. And so that's what we
Speaker 7: need to go do next, and I think it'll prevent
Speaker 7: this kind of activity in the future.
Speaker 8: Well, listen, even with this crackdown that you're seeing, there
Speaker 8: were some really scathing allegations in the DJ's crackdown sanctions violations,
Speaker 8: illegal trafficking of drugs.
Speaker 3: You know, how do you know that this is it?
Speaker 8: How do you know that there are not more bad
Speaker 8: actors out there that would continue to stay in crypto?
Speaker 7: Well, I can tell you the companies that I really
Speaker 7: engage with, at least especially the ones here built in
Speaker 7: the United States, they don't get to big headlines because
Speaker 7: it's not salacious. They haven't you know, rocketed up because
Speaker 7: you know they're not following the rules. But there are
Speaker 7: dozens of really well intentioned and well funded and compliant
Speaker 7: US based crypto companies that are building this industry. I mean,
Speaker 7: you have to remember that fifty two million Americans have
Speaker 7: used crypto now about four hundred million people globally. And
Speaker 7: so while there is there are bad actors who try
Speaker 7: to use crypto, the best data we have is that
Speaker 7: that's less than one percent of the activity is for
Speaker 7: illicit purposes. By the way, the US dollar cash is
Speaker 7: about four percent illicted activity. So crypto is really not
Speaker 7: uniquely crime ridden. And the centralized actors in crypto, they
Speaker 7: need to follow these rules around transaction monitoring and kyc AML,
Speaker 7: just that like coinbase has been doing for over a
Speaker 7: decade now to make sure bad actors don't take advantage
Speaker 7: of these systems.
Speaker 3: That was Coinbase CEO Brian Armstrong along with Bloomberg Shnale Bassett.
Speaker 3: Let's keep the conversation going. So much has happened in
Speaker 3: the last twenty four ho job Bampuutra founder, a managing
Speaker 3: partner of Future Perfect Ventures, early stage VC firm zeroed
Speaker 3: in on blockchain, blockchain tech, CRYPTOAI, human computer interaction. Oppose
Speaker 3: the question that Shanali put to Brian Armstrong, when you're
Speaker 3: in this market and investing in this sector, how do
Speaker 3: you know that that's it? That's all there is left
Speaker 3: to come out?
Speaker 9: Well, it's good to talk to you again. At We
Speaker 9: spoke after the FTX ruling, and the way I look
Speaker 9: at this right now is the other shoe has dropped.
Speaker 5: Now.
Speaker 9: We can't guarantee that there's nothing else out there, but
Speaker 9: those of us in the industry have been waiting for
Speaker 9: a while to see what happened with Finance. We know
Speaker 9: that they've been under investigation for several years now. There
Speaker 9: have been a number of allegations against them. CZ has
Speaker 9: been notorious for moving the company to different jurisdictions, first
Speaker 9: China and then Japan and then Malta and so we
Speaker 9: knew something was coming, and the fact that this finally happened,
Speaker 9: these allegations were proven, they've been find cz is out,
Speaker 9: but the exchange is still running, and so I think
Speaker 9: that is an indication that regulators also understand that crypto
Speaker 9: is not going away, but they want to encourage the
Speaker 9: good actors, the.
Speaker 5: Ones that want to be compliant.
Speaker 9: And our portfolio is full of those entrepreneurs and those
Speaker 9: companies and we welcome this and we really want to
Speaker 9: move forward.
Speaker 3: So Jack, we have fifteen seconds. This impact your ability
Speaker 3: to invest, yes or.
Speaker 9: No, It makes it even more of an opportunity. We're
Speaker 9: leveling the playing field for those that do want to
Speaker 9: be compliant, and then we're looking forward to what happens
Speaker 9: with the ETF and more adoption of cryptois. As Ryan
Speaker 9: alluded to in this interviewing.
Speaker 3: All right, jalak, Job and Boucher, we love having you
Speaker 3: on the show. Founder managing partner of Future Perfect Ventures.
Speaker 3: Another big news story is experimenting with AI. Last year,
Speaker 3: Walmart launched a text to shop feature, allowing people to
Speaker 3: pick what to buy, automatically, add it to their online card,
Speaker 3: and check out right from a text message Wallart wants
Speaker 3: to make its app and website just as conversational with AI.
Speaker 3: It's working on a generative AI powered search where you
Speaker 3: can ask a question similar to how you'd ask chat
Speaker 3: GPT on Walwot's app or website and bring up product suggestions,
Speaker 3: for example asking what daycore you need for a housewarming party.
Speaker 3: There's also an AI shopping Assistant in the works where
Speaker 3: customers can chat with a virtual assistant when deciding what
Speaker 3: to buy, like getting a recommendation for what kind of
Speaker 3: cell phone to buy for a ten year old. The
Speaker 3: retailer also introduced augmented reality tools last year to try
Speaker 3: on clothing virtually or see how furniture will look in
Speaker 3: their home. Right now, you can test out how a
Speaker 3: TV will look in your space. For example, you can
Speaker 3: compare different sizes or product suggestions.
Speaker 1: So soon Walmart will.
Speaker 3: Add generative AI into the met You'll be able to
Speaker 3: ask the AI assistant how to decorate a space and
Speaker 3: get suggestions and frighting, as well as see the items
Speaker 3: in the space using the AR technology. Walmar says it's
Speaker 3: training these tools on a variety of AI models that
Speaker 3: are currently available, not one specific large language model. The
Speaker 3: generative AI tools are still in test phase, Walmart says,
Speaker 3: but will be available to customers very soon. Okay, Walmart
Speaker 3: is in the AI games. Let's get into it with
Speaker 3: Walmart US Omni Platforms and Tech Executive Vice president Triny.
Speaker 3: Then contestant Triny, welcome to the program. We outlined some
Speaker 3: of the tools that you guys have been working on
Speaker 3: over at Walmart. Of those that we outlined, what is
Speaker 3: gaining most traction? Right this is about consumer behaviors and
Speaker 3: how we shop. And I guess I'm just curious to
Speaker 3: know which tool you think is going to change the
Speaker 3: game in that respect, Dan.
Speaker 5: Said, foving me on the show at one night.
Speaker 10: We are at the custom dramatic changes that the customers
Speaker 10: are main ways to discover, buy and shop goods right,
Speaker 10: be the speed up delivery, beate the way that they
Speaker 10: want to shop it in an online experience, which is
Speaker 10: very simple for them.
Speaker 5: It has been what we have been trying to do
Speaker 5: is to make it very easy for them to do
Speaker 5: that shopping.
Speaker 10: To your question on what is really getting traction is
Speaker 10: as we think about the GENAI decision assistant and search
Speaker 10: our queries, those are things that the customers are really
Speaker 10: starting to use more and we are seeing positive engagement
Speaker 10: so far.
Speaker 3: Really, given the events in the last five days, I
Speaker 3: have to ask, where does your technology come from the
Speaker 3: underlying large language model? The power is the tool.
Speaker 10: So at Walmart we're always invested in actual intelligence, right,
Speaker 10: or we have invested it in for transportation and other
Speaker 10: our podcasting and other optimizations that has made us what
Speaker 10: we are in our supply chain.
Speaker 5: And in our transportation sector.
Speaker 10: We have taken those learnings and then we now commented
Speaker 10: that with the GENAI tools that are available out in
Speaker 10: the public, not anyone spressit tools. We have done it
Speaker 10: with all large language models, and we are combining that
Speaker 10: with the extensive data with BI which is our Walmart
Speaker 10: catalog and other data that we have seen changing behaviors
Speaker 10: that we have seen, and that's how we have trained
Speaker 10: our AI to make it really powerful.
Speaker 3: Is there a technology relationship with open ai and their
Speaker 3: GPT technology?
Speaker 5: Now?
Speaker 10: We try to be allla agnostic, right. What we're trying
Speaker 10: to basically get at is how do we get the
Speaker 10: language understanding correct? What pretty much every other provider we've
Speaker 10: tried it with open ai.
Speaker 5: We use Google tools and we also use other open
Speaker 5: open source tools like Lama. What your phocused on is.
Speaker 10: What we call walnot embeddings, which are our internal data
Speaker 10: that we really train the models on which stumbled with
Speaker 10: the query understanding.
Speaker 5: That's it very powerful Twinny.
Speaker 3: In the retail context, what are the biggest pitfalls and
Speaker 3: risks with bringing generator to ai technology into the kind
Speaker 3: of sales and transaction stage of your relationship with the customer.
Speaker 10: I think there are twos you can look at again,
Speaker 10: like the way that we have trying to frame it
Speaker 10: as like what is the customer really looking for? Like
Speaker 10: what are they really trying to do in a way
Speaker 10: that makes the shopping experience better? So what we've seen
Speaker 10: is the shoppers are doing multiple sessions and multiple things
Speaker 10: to really.
Speaker 5: Shop multiple products.
Speaker 10: What we are really trying to honest, a lot of
Speaker 10: genai is explaining my problem and I can get all
Speaker 10: the multi products search at the same time. So I
Speaker 10: think that is kind of people prow of genai. What
Speaker 10: it does is it basically understands that very very much
Speaker 10: more I easily, and it's actually able to make your
Speaker 10: shopping experience much more simpler. Again, there are going to
Speaker 10: be learning out of it as we discover our people
Speaker 10: actually interact with it in a conversational way, and that
Speaker 10: is where our model training and our improvements are going
Speaker 10: to make sure that we are leaning on the right
Speaker 10: side for the customer.
Speaker 3: Boma US Omniplatforms Tech Executive Vice President Shriney then can
Speaker 3: tassen thank you so much for your time here on
Speaker 3: bloom Bag Technology. We have so much more head and
Speaker 3: we get back. It's the big story of the week.
Speaker 3: This is Blion Big Technology.
Speaker 11: We continue to be committed to open ai, and we
Speaker 11: continue to be committed to Sam and Greg and the
Speaker 11: team in respect you where they are.
Speaker 3: I've never seen this in my coverage attack in twenty years.
Speaker 5: I think transparency is key. That's a lesson from this weekend.
Speaker 1: My number one day is none doesn't twar.
Speaker 4: The capped profit model that open ai was spearheading was
Speaker 4: more of an experiment.
Speaker 8: I haven't seen this specific structure anywhere else, and I
Speaker 8: can't imagine we ever will again.
Speaker 2: After the debacle that this all was.
Speaker 11: We definitely will want some governance changes so they you know,
Speaker 11: surprises are bad.
Speaker 3: Just some of the many voices we've had on Bloomberg
Speaker 3: this week reacting to the open Ai saga. For more,
Speaker 3: Let's bring in the founder of Coasta Ventures, Vino Kosla,
Speaker 3: the first venture check written to open AI. Mister Coasla,
Speaker 3: good morning to you. Thank you for your time on
Speaker 3: Bloomberg Technology.
Speaker 11: Great to be here on a hopefully good occasion.
Speaker 3: Well, I get the sense from your posts on X
Speaker 3: that for you this is a good occasion. But just
Speaker 3: start with your reaction to Sam Altman being reinstalled at
Speaker 3: open AI.
Speaker 11: I've stated this before and I'm con stated again. I'm
Speaker 11: very happy to see Sam Beck. He's uniquely positioned to
Speaker 11: for Stuard Chip after this very important company.
Speaker 1: It's much more than just a company.
Speaker 11: It is benefit b FAI to humanity you much larger
Speaker 11: way over the next few decades, and I think we
Speaker 11: restored the patch.
Speaker 3: Mister Kosler, you outlined a thesis that when the board
Speaker 3: on Friday, or the board as it was then on Friday,
Speaker 3: fired Sam Outman, they set back artificial intelligence. Why was
Speaker 3: that the conclusion that you reached?
Speaker 11: Mostly because Sam is uniquely qualified to shepherd this and
Speaker 11: he has a vision over the next decade or two
Speaker 11: of what AI can do. I can't imagine somebody else
Speaker 11: being able to step on those shoes easily and without
Speaker 11: a lot of risks to the mission of what Opening Eye.
Speaker 3: Was, Vinode. When I posted on x that you were
Speaker 3: coming on the show, there was a lot of interest.
Speaker 3: You were the first venture investor in open AI, and
Speaker 3: there was this very specific question posed for you, which is,
Speaker 3: and forgive the framing of the question, but this is
Speaker 3: what the audience asks. What happens if Sam Altman gets
Speaker 3: hit by a bus? What happens if Sam Altman is
Speaker 3: discovered to have had some wrongdoing. What happens to open
Speaker 3: AI in that scenario.
Speaker 11: Here are other people at OPENINGI who are very qualified
Speaker 11: to do that. Greg Brockman would be among my favorites
Speaker 11: in the current Opening I team, and I think they
Speaker 11: should de risk this by adding more people to the
Speaker 11: team who can step in. But if he does get
Speaker 11: hit by a bus, I think we would have to
Speaker 11: do with Greg Brockman, who is very much after the
Speaker 11: same vision and mission Vinode.
Speaker 3: What we're talking about, I guess is key man risk
Speaker 3: and just as you have you know, I've been reporting
Speaker 3: on the story since Friday lunchtime, considering what's happening, But
Speaker 3: the takeaway has been that the value of open Ai
Speaker 3: appears to be the intellectual capital right of its people.
Speaker 3: And when Microsoft reacted to the news, the idea was
Speaker 3: in the kind of mutiny that was going on, that
Speaker 3: those people would simply go and join Microsoft, And I
Speaker 3: wondered what you thought about that eventuality, which to some
Speaker 3: extent now is academic, but there is still a close
Speaker 3: tie between the two.
Speaker 11: I think the close eye helps make this make progress
Speaker 11: in AI because it needs a lot of resources. And frankly,
Speaker 11: I'm very pleased that open ai is there. Google is there,
Speaker 11: and there's at least two major efforts a few other
Speaker 11: credible efforts in the AI industry, So I do think
Speaker 11: Microsoft's support. Microsoft supporting open Ai really helps it move
Speaker 11: it along, give it the resources Google has internally, and more.
Speaker 1: Competition is generally a good.
Speaker 11: Thing, and more ais will make progress move faster.
Speaker 1: So I'm very happy with that.
Speaker 11: I won't comment on open Ai team becoming a part
Speaker 11: of Microsoft Ai. I always believe we would find a resolution.
Speaker 11: It was only a matter of time, so I was
Speaker 11: I had complete faith in this solution. In fact, my
Speaker 11: conversation with Sam around noon on Friday, and the first
Speaker 11: one announced is that I don't think it's over. It
Speaker 11: was my first comment back to Sam.
Speaker 3: You didn't think it was over Friday lunchtime. It seems
Speaker 3: like an eternity ago that it was Friday lunchtime when
Speaker 3: the headlines broke. I mean it is an issue of
Speaker 3: the board in corporate governance, right, And what we know
Speaker 3: is that Brett Taylor, at least on an interim basis,
Speaker 3: joins the board along with Larry Summers. For our audience,
Speaker 3: Larry Summers is a paid contributor of Bloomberg Television. And
Speaker 3: then my understanding is Adam DeAngelo stays at the board.
Speaker 3: To your mind, as an investor in this company, you
Speaker 3: know those names in Silicon Valley? Is this addressing the
Speaker 3: corporate governance question enough?
Speaker 11: I've been on a board with Larry Summer at Square
Speaker 11: or now called Block, and I admired Larry. I think
Speaker 11: over time the board will build up to more governance.
Speaker 11: And I think three is a small board, but over
Speaker 11: time there'll be more governance and better process. I think
Speaker 11: we've learned an important lesson on governance here. And frankly,
Speaker 11: I didn't, in my remote imagination imagine that something like
Speaker 11: this could happen or the board would do this. There
Speaker 11: were some errant people on the board who misinterpreted their
Speaker 11: own religion around EA or effective altruism. I think this
Speaker 11: was really arran surprising, shocking in every way it was,
Speaker 11: but totally unexpected under almost any circumstance, and the employees
Speaker 11: of Opening Eye spoke it by offering to join Sam
Speaker 11: in whatever he did.
Speaker 3: Vinod, I would love to get into the EA an
Speaker 3: X threat debate. We will in just a moment. But
Speaker 3: just you just mentioned what you see as bad actors.
Speaker 3: Do you know definitively as an investor in this company,
Speaker 3: and you said that you'd spoken to Sam Friday at midday?
Speaker 3: Do you have a clear sense on why Sam was
Speaker 3: fired in the first place.
Speaker 11: I have not talked to the board members who participated
Speaker 11: in that discussion. In frankly, a very little interest in
Speaker 11: talking to the two members that left, but I think
Speaker 11: it's certain behavior on their part. It was, of course,
Speaker 11: as widely reported, triggered by Ilia or having some concerns.
Speaker 11: And Ilia has since changed his mind, and I'm very
Speaker 11: admire Ilia a lot for changing his mind publicly.
Speaker 1: I think he deserves real kudos for that.
Speaker 11: But no, I haven't talked to the board direct that
Speaker 11: made this decision without Sam without Greg, so I couldn't
Speaker 11: speak to it further.
Speaker 3: And to be clear, you were in the school of
Speaker 3: thought that Ilia deserves a second chance to carry on
Speaker 3: or continue with open AI. Absolutely, So let's get to
Speaker 3: the debate, the existential threat debate. You know, much of
Speaker 3: what's been discussed is a philosophical point of difference. Right,
Speaker 3: Sam as least, as I've reported, he's the products guy. Right,
Speaker 3: he leads the global negotiation with policymakers. He is the
Speaker 3: one that attracts the talent. And the board was as
Speaker 3: a Friday, largely made up of academics who seemed to
Speaker 3: have an emphasis on the existential threat that AI poses
Speaker 3: to humankind. Where do you stand on that debate of
Speaker 3: commercialization versus slowing down looking at what the risks are?
Speaker 11: I published penderpiece for the Information at the Information dot
Speaker 11: Com this week on this risk issue and what I
Speaker 11: feel happened. Humanity face is the basket of risk sentient AI.
Speaker 11: Existential risk is no different than an asteroid hitting the
Speaker 11: planet either. There's risks that humanity faces. This basket of
Speaker 11: risk has to be balanced against the basket of opportunity
Speaker 11: to free humanity from the slavery of really bad hourly
Speaker 11: jobs where you do the same thing for eight hours
Speaker 11: a day reputatively for thirty years of your career, or
Speaker 11: where you can have free doctors available to everybody on
Speaker 11: the prompt planet, or near free doctors and near free tutors,
Speaker 11: and my wife's nonprofits se K twelve dot org is
Speaker 11: providing for free free tutors to everybody in conjunction with
Speaker 11: open AI on their website.
Speaker 1: And in the open app.
Speaker 11: But chat GPT stored those kinds of benefits and including
Speaker 11: half the people on the planet from the kind of
Speaker 11: slavery that hourly repetitive jobs afford them, and enough GDP
Speaker 11: growth to pay for that those people is what the
Speaker 11: opportunity is. So risks have to be balanced against opportunity,
Speaker 11: and that has been fundamentally missing. There's a very very
Speaker 11: high risk of China having superior AI and interfering starting
Speaker 11: next year in our twenty twenty four election with persuasive
Speaker 11: AI that convinces voters to persuay save arguments in personal lives.
Speaker 1: There are many many risks that have to be balanced.
Speaker 11: Not just one exist from a movie science sci fi
Speaker 11: movie Fantasy Gone Wild that says or robots takeover and
Speaker 11: destroyed the humans. That's pretty silly in the basket of
Speaker 11: risks we are actually dealing with, and there's serious risks
Speaker 11: we need to address, and in both this weekend's paper,
Speaker 11: in a blog I published on China as our principal
Speaker 11: risk in AI a few weeks ago in medium dot com.
Speaker 11: But what looking at and I think they need to
Speaker 11: be treated seriously, but not this way.
Speaker 3: Veno, thank you for outlining that thesis. I want to
Speaker 3: get back to the corporate governance, the not for profit
Speaker 3: versus the for profit. Yesterday we had Josh Wolf of
Speaker 3: Lux Capital on the show. I think that's something you
Speaker 3: probably know, and he said the first thing that Sam
Speaker 3: Altman should do when he returns to open AI is
Speaker 3: take open AI public. Do an IPO. Your response to that.
Speaker 11: You know, I'm not going to comment on what they
Speaker 11: should do. I think open Aie is in a good position.
Speaker 11: It's a good financial position.
Speaker 1: The only reason to go public would be.
Speaker 11: Would be because it needs more resources, and I don't
Speaker 11: think it needs more resources right now. What I would
Speaker 11: say the structure is not as unusual that people make
Speaker 11: it out to be. There's companies in Europe owned by nonprofits,
Speaker 11: so at least significantly owned and controlled by nonprofits, So
Speaker 11: that structure has existed in Europe before, and I think
Speaker 11: there's nothing wrong with the structure. There was something wrong
Speaker 11: with the government, and I hope or the next year
Speaker 11: we can fix that.
Speaker 3: Mister Coastler. Finally, a lot of people are thinking about
Speaker 3: the seven hundred and seventy open AI employees. One point
Speaker 3: was made to me by sources and the valley is
Speaker 3: this pending tender presented potentially life changing amounts of money
Speaker 3: for those people, and they were willing to put it
Speaker 3: on hold or jeopardize it. In sticking with Sam, do
Speaker 3: you know what the late on the tender is and
Speaker 3: your thoughts on the staff.
Speaker 11: I think it's too early to comment, Kanek, but I
Speaker 11: don't know any reason the world will be any different
Speaker 11: tomorrow than what it was on Thursday evening.
Speaker 3: Okay, Coastla Ventures founder Vino Costa, I'm incredibly grateful for
Speaker 3: your time. We asked all of your investor counterparts to
Speaker 3: join us in the show. You said yes, and we're
Speaker 3: grateful for it. Thank you for your time. This is
Speaker 3: Bloomberg Technology, Okay. Also in the news talking tech first Up,
Speaker 3: North Korea is claiming a victory that it successfully put
Speaker 3: a spy satellite into orbit, moving Kim Jongen closer to
Speaker 3: his pledge to keep an eye on the US forces
Speaker 3: that are operating in the region. Officials in South Korea
Speaker 3: say they've assessed the satellite launch, but added it was
Speaker 3: still unclear if the device was operational, and Jack mar
Speaker 3: is walking back plans to sell ten million shares. Ali
Speaker 3: Barber Mah, who founded the internet company, will continue to
Speaker 3: hold onto his stake, which is worth about eight hundred
Speaker 3: and seventy million US dollars. Ali Barber shares recently faced
Speaker 3: to sell off, resulting in a twenty two billion dollar
Speaker 3: drop in market value in a single day, plus slim
Speaker 3: pickings for the Thanksgiving box office weekend is working against
Speaker 3: Disney's latest animated film Wish. In the past, Thanksgiving US
Speaker 3: ranked among the most lucrative times for movie studios, but
Speaker 3: in recent years a number of factors have conspired against that,
Speaker 3: such as the rise of streaming services and scaled back
Speaker 3: marketing due to the Hollywood strikes. It has been an
Speaker 3: incredible week in Silicon Valley. That does it for this
Speaker 3: edition of Bloomberg Technology. To those in the US, Happy
Speaker 3: Thanksgiving around the world. Don't forget to recap on the podcast.
Speaker 3: Wherever you get your podcasts, so many of you are
Speaker 3: listening to it. Apple's Spotify, iHeart, and of course of
Speaker 3: all the Bloomberg platforms. Again, Happy thanks thanks Giving here
Speaker 3: to all Americans in the world. Stay tuned in. This
Speaker 3: is Bloomberg Technology.