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Speaker 1: From Mahart where Innovation of Money and Power Collie in

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Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde

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Speaker 1: and Ed Ludlove.

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Speaker 2: I'm Caroline Heinde of Bloomberg's World headquarters in New York.

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Speaker 3: I'm Ed Ludlow in San Francisco. This is Bloomberg Technology.

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Speaker 3: Coming up.

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Speaker 2: We take a deep dive into the shock olster of

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Speaker 2: Sam Altman from Open Ai. What happened, what lies ahead

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Speaker 2: for the AI startup as most of the company's staff

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Speaker 2: threatened to depart and.

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Speaker 3: A clear win for Microsoft shares of the tech giant rises.

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Speaker 3: Analysts see risks contained for the company's AI ambitions as

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Speaker 3: Altman joins Microsoft to lead a new advanced AI research team.

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Speaker 2: Plus, we'll speak to developers in the field of AI

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Speaker 2: and the venture capitalists backing them this hour to discuss

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Speaker 2: what the ecosystem looks like for these startups and in

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Speaker 2: the upheaval and Open Ai.

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Speaker 3: This we speak, there are hundreds of Open Ai staff

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Speaker 3: that are taking action. Let's break down the news with

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Speaker 3: Bloomberg's Rachel Metz, who is joining me on set in

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Speaker 3: San Francisco, having stayed up with me all weekend to

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Speaker 3: break this story. What do we know about what's happening

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Speaker 3: inside Open AIHQ right now?

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Speaker 4: It sounds like the majority of the company's employees have

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Speaker 4: said that they will leave if their demands are not there.

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Speaker 4: They are really upset about this ousting of Sam Altman

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Speaker 4: and then the subsequent resignation of Greg Brockman.

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Speaker 3: So the numbers, I think are that five hundred and

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Speaker 3: ninety nine out of seven hundred and seventy staff. In

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Speaker 3: other words, the vast majority of staff have signed this letter.

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Speaker 3: Who side did this staff on here? I mean, this

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Speaker 3: is hard to understand that we're talking about everyone other

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Speaker 3: than those that have departed already.

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Speaker 4: Yeah, pretty much. I mean this What I thought was

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Speaker 4: really interesting when I saw this letter early this morning

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Speaker 4: is that it makes it very very clear whose side

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Speaker 4: most of the employees are on. Like I think before

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Speaker 4: there was a sense that a lot of people were

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Speaker 4: on Sam Aultman's side, but it wasn't crystal clear. This

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Speaker 4: is saying, hey, we almost all of us are very angry,

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Speaker 4: so angry we're willing to leave our jobs at what

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Speaker 4: has been the world's leading independent AI company.

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Speaker 2: Rachel number twelve took my eye on the list of

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Speaker 2: those who have signed this letter. It's Ilia Ilia Siskeva,

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Speaker 2: who is on the board, who.

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Speaker 3: Made the cools.

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Speaker 2: We understand through all of your guys reporting made the

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Speaker 2: calls to Sam Auntlan and Gregg himself to basically let

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Speaker 2: them know that they're no longer going to be at

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Speaker 2: the company.

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Speaker 3: Yeah.

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Speaker 4: That's really a bit confusing, right, I mean at first

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Speaker 4: I was like, hmm, but you know, it's been a

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Speaker 4: really long day that's lasted three days, So yeah, I

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Speaker 4: mean I think there he we did. I think it

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Speaker 4: was this morning that he made a mistake, right and

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Speaker 4: he I mean it sounds I don't think he wants

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Speaker 4: the company to explode. Perhaps he didn't anticipate what the

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Speaker 4: consequences would be of the actions he was taking.

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Speaker 2: And no wonder we are getting so much views and

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Speaker 2: theories being shared ultimately about corporate governance. Will go into

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Speaker 2: that much more later in the show, Rachel, But I'm

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Speaker 2: interested in also ultimately who's being drafted in to replace it.

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Speaker 2: How on earth does the new CEO of open AI

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Speaker 2: try to ensure that we don't have this mass departure.

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Speaker 4: That is an excellent question. So the person who was

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Speaker 4: named very late yesterday as the new CEO by the board,

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Speaker 4: Emmett's sheer. He was a co founder of the video

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Speaker 4: game streaming service Twitch, which has also of course been

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Speaker 4: used to for all kinds of streaming at this point,

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Speaker 4: em it is a little bit is more on the

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Speaker 4: conservative side of tech chnology development in the sense that

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Speaker 4: he is in favor of slowing things down somewhat, which

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Speaker 4: is what Ilia had been also pushing. So sort of,

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Speaker 4: you know, aligned with the board members and with Ilia,

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Speaker 4: He's gonna probably have to do a lot of convincing

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Speaker 4: to the staff if he wants to get them to

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Speaker 4: stay with him in charge. It's going to be very

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Speaker 4: interesting to see what happens over the next I was

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Speaker 4: about to say days, but let's say hours.

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Speaker 3: Well, let's recap. It's only been forty eight hours essentially,

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Speaker 3: maybe more since news broke that Sam Outman have been fired.

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Speaker 3: This is the timeline of what happened. You and I

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Speaker 3: and all of our colleagues spent most of the weekend

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Speaker 3: with everyone else thinking Sam's coming back. This is happening

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Speaker 3: based on the reporting since explained to us what actually

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Speaker 3: happened and the chronology of events.

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Speaker 4: So it how far back do you want me to go?

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Speaker 5: Here.

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Speaker 3: Gosh, let's say we start with Sam being fired on Friday.

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Speaker 4: Okay, on Friday, we were told that Sam had been

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Speaker 4: fired by the board, which I think came as a

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Speaker 4: shock to probably pretty much anybody except for the board.

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Speaker 4: Once that happened, it was a scramble to figure out, well,

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Speaker 4: you know, what happened here was did something really bad happen?

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Speaker 4: It sounded very mysterious, and information started coming from Open

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Speaker 4: Ai executives themselves in the form of memos they were

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Speaker 4: sending internally that the board has not told us of

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Speaker 4: any malfeasance, for instance, which I think was the word

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Speaker 4: used in a memo that bred Lightcap sent out to Yes, yeah,

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Speaker 4: thank you. So then it started to sound like Mira Marati,

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Speaker 4: who was named interim CEO. She had been the chief

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Speaker 4: technology officer and increasingly a prominent figure at the company

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Speaker 4: alongside Sam. It sounded like perhaps she was going to

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Speaker 4: rehire Sam Altman and Greg Brockman, who had been also

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Speaker 4: at the company and quit after Sam was ousted. Then,

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Speaker 4: in a last minute twist, it sounded like Emmett Sheer

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Speaker 4: was hired, and now everybody assigned this letter, or not everybody,

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Speaker 4: but most people assigned this letter saying, oh, we're going

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Speaker 4: to join this company that Microsoft is now creating, that

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Speaker 4: Sam and Gregor are going to run. So if you

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Speaker 4: you know, if you don't bring them back essentially So,

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Speaker 4: I don't know about you, guys, but I keep just

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Speaker 4: kind of turning left and right. I'm not really sure

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Speaker 4: what's going to happen next year.

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Speaker 2: Whiplash and a whole lot of discussion on what is

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Speaker 2: meant to be holiday week. Rachel Mets, We thank you

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Speaker 2: so much making time for us when I know you've

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Speaker 2: just been at the grindstone with your reporting. We thank

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Speaker 2: you so much. And look we just finished where well,

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Speaker 2: Rachel was discussing where next for Microsoft as it sets

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Speaker 2: up this new AI focus point, what is the impact

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Speaker 2: on the publicly traded company, what of Satyr and Nadella

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Speaker 2: and really his ability to turn this story around in

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Speaker 2: the final few hours joining us as Jeffrey's senior Internet analyst,

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Speaker 2: brend Phil Brent, You've got a rating on Microsoft four

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Speaker 2: hundred dollars price target? Is this a positive as it stands.

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Speaker 6: As a standard, It's a win win for Microsoft. I

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Speaker 6: mean they get the number one up, up and coming

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Speaker 6: individual and tech leading AI journey. And then secondarily, they've

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Speaker 6: been talking about this for a long time. How do

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Speaker 6: they reduce their independence on one vendor like open ai

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Speaker 6: and spread their AI bats across open source, across their

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Speaker 6: own languages, across other languages. And we think that Altman

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Speaker 6: can probably steer that chip in a really good way.

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Speaker 6: From internally at Microsoft, obviously, from a hiring perspective, if

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Speaker 6: you've got over five hundred people signing a petition that

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Speaker 6: feel this strong, I've never seen this in my coverage

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Speaker 6: at Tech in twenty years, or literally five hundred people

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Speaker 6: sign a letter.

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Speaker 7: Internally, you've never seen this at Tech ever.

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Speaker 6: So if they feel that strongly about him, and he says, hey,

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Speaker 6: would you like to come over here to Microsoft? Like,

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Speaker 6: what's the tailent pool? Microsoft can to look like? You

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Speaker 6: know two months from now, it's going to be insane.

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Speaker 3: Well, friend. The question that I hear out in the

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Speaker 3: market is will Microsoft buy out the rest of open Ai?

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Speaker 3: Can Microsoft buy out the rest of open Ai?

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Speaker 7: I don't know if they can.

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Speaker 6: They obviously have an eleven billion dollar plus stake, so

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Speaker 6: they care for the future.

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Speaker 7: They want to ensure this happens.

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Speaker 6: My view is actually open Ai will get eventively.

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Speaker 7: That board settled down.

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Speaker 6: We'll get the employee settled down and hopefully keep everyone

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Speaker 6: in place. And I don't know their incentive structure, but

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Speaker 6: I'm not sure that I'd want to lose all my

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Speaker 6: incentive comp and stock options in open Ai just because

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Speaker 6: I'm upset the CEO left.

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Speaker 7: I don't think that makes a lot of sense.

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Speaker 6: So my sense is this ship will be calmed at

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Speaker 6: open Ai Microsoft with Via Nadella.

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Speaker 7: He's the best negotiator intact.

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Speaker 6: He'll figure out a way to ensure that they keep

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Speaker 6: this intact, keep their investment preserved, but also have the

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Speaker 6: best of having you know, Sam and team there. So

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Speaker 6: I look at I think there's going to be a

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Speaker 6: better outcome, hopefully for open Ai and their employees, where

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Speaker 6: they can get SOMEDISI board members in and get them

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Speaker 6: calmed down. I understand why they're is upset, but again,

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Speaker 6: I can't recall a story in twenty years where that

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Speaker 6: many people signed a petition would walk out. I think

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Speaker 6: that you're going to end up seeing a situation where

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Speaker 6: there's a middle ground that's met and that hopefully both

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Speaker 6: camps survive peacefully and we move on and we can

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Speaker 6: of enjoy our Thanksgiving weak.

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Speaker 2: Do you think Microsoft remains the key player in AI? Therefore,

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Speaker 2: can they remain basically still having the distance between themselves

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Speaker 2: and ultimately the viewpoint that alphabet's behind.

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Speaker 7: For example, Microsoft's crushing it.

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Speaker 6: I was up at the Microsoft Developer Conference Seattle last

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Speaker 6: week and you could barely get in to see some

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Speaker 6: of these demos. The pace of innovation is like nothing

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Speaker 6: I've seen covering tech for twenty years. You talk to

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Speaker 6: product managers that are not spokespeople for Microsoft and talk

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Speaker 6: about the pace of the innovation. And we were talking

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Speaker 6: about months when they said it was go time to

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Speaker 6: launch in a product. Now the product isn't perfect, it's

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Speaker 6: not gonna it's not going to be the smoothest ride

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Speaker 6: out of the gate. But the level of innovation is

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Speaker 6: beyond anything we have seen at any any time I've

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Speaker 6: spent covering Microsoft, even as a developer of Microsoft in

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Speaker 6: the nineties. This pace of innovation is off the charts.

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Speaker 6: They are so far ahead of everyone else. And we

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Speaker 6: do believe that, you know, Amazon is gonna also be

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Speaker 6: in the mix. So our thesis is Amazon and Microsoft.

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Speaker 6: When the enterprise Google wins the consumer market, they're very

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Speaker 6: different markets, but all three will have a seat at

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Speaker 6: the table.

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Speaker 3: All right, Jeffrey, Senior Internet analyst Brent Hill on the

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Speaker 3: Microsoft side of this story. Coming up on the program,

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Speaker 3: we will continue the conversation on Sam Mountain and on

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Speaker 3: open ais one. Hundreds of employees threaten to leave the

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Speaker 3: company if the board doesn't reside the VC The AI

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Speaker 3: reaction is next. This is Bloomberg Technology to recap our

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Speaker 3: top story. In a letter to the open ai board

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Speaker 3: from hundreds of employees, the vast majority of those left

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Speaker 3: that open ai is saying they will resign from the

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Speaker 3: company and join the newly announced Microsoft subsidiary led by

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Speaker 3: Sam Outman and Greg Brockman. If the board of open

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Speaker 3: ai does not resign, lots of implications joining us now,

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Speaker 3: as someone that knows open Ai very well worked with

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Speaker 3: that company now leads his own startup, Octane. Let's bring

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Speaker 3: a match licked Octane AI CEO. First off, what have

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Speaker 3: you heard from open ai? You are essentially a developer

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Speaker 3: that relies on the underlying technology. You're trying to build

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Speaker 3: using underlying technology. Have you had any update from open Ai?

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Speaker 8: Yeah, so, Octer the I We've been around since twenty sixteen,

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Speaker 8: we now are built on top of open EI's GPT four.

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Speaker 9: We help entrepreneurs run AI automations.

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Speaker 8: We've helped them generate over half a billion dollars and

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Speaker 8: a lot of that is because of what OPENINGI has

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Speaker 8: provided us. So this weekend has been really tumultuous. I'm

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Speaker 8: a big believer in Sam. The community is a big

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Speaker 8: believer in Sam. I know him from back when I

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Speaker 8: was my combinator in twenty twelve.

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Speaker 9: But open aie we just had dev day.

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Speaker 8: I was there. It was the peak of their technology.

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Speaker 8: Excitement was off the church. It went really really well.

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Speaker 8: Now there's a little bit of a lot of mistrust

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Speaker 8: on what's going to happen.

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Speaker 9: I am hearing from open.

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Speaker 8: Ai that they are expressing support for developers. They're going

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Speaker 8: to make sure the API stay up, the technology is

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Speaker 8: not going to go down. But this weekend has been

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Speaker 8: a lot for anyone in the AI ecosystem.

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Speaker 3: Now, let's stay with your relationship with Sam and the

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Speaker 3: company from minute. You know lots of people that work there,

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Speaker 3: You're friends with people who rely on the ecosystem as well.

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Speaker 3: In your minds, is there a path forward where Sam

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Speaker 3: comes back to open ai or were looking at a

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Speaker 3: new look open ai and trying to understand how you

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Speaker 3: work with them and how others work with this new

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Speaker 3: look open Ai.

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Speaker 8: It's it's really unclear. I think over the weekend we

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Speaker 8: thought Sam was going to come back. Now that Satya has,

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Speaker 8: you know, announced that he's over at Microsoft, Soya also,

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Speaker 8: you know, obviously has to make sure that the Microsoft

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Speaker 8: stock is performing well. I don't know if he can

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Speaker 8: flip back on that. So it's a really sticky situation.

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Speaker 8: It's it's unclear. I have no idea what's going on.

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Speaker 8: I don't think that open i employees know what's going.

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Speaker 2: On, Matt. Much of this is about a concern of

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Speaker 2: the pace of innovation. How you ever had any concern

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Speaker 2: are indeed the ability for open ai to live up

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Speaker 2: to the amount of demand that we were seeing as well?

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Speaker 8: Open ai has treated something that literally is magic. They're

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Speaker 8: on the forefront of AI. They're the soul of no

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Speaker 8: matter what.

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Speaker 9: Anybody wants to say, They're the soul of the AI

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Speaker 9: community or the movement. Right now in terms of you know,

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Speaker 9: have I thought about is ai going to go too

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Speaker 9: fast or is it going to go too slow?

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Speaker 8: I think that this disruption is definitely causing it to

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Speaker 8: go slower, and I would like it to go faster

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Speaker 8: as well as a lot of people in the AI community.

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Speaker 8: We rely on this technology. It's allowing you to put

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Speaker 8: human like intelligence inside of your code, which means that

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Speaker 8: the program can write content, it can talk like a human,

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Speaker 8: and it can make reasoning decisions like a human. It

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Speaker 8: can be autonomous, and it's just getting better at a

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Speaker 8: breakneck speed. So this disruption with Opening Eye, for myself

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Speaker 8: and for anyone building on top of this technology, means

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Speaker 8: that it isn't going to go slower. Is it going

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Speaker 8: to be pulled back? What's going to happen next? It's

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Speaker 8: this is not an ideal situation by any means.

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Speaker 2: What do you think it means in terms of your

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Speaker 2: desire to work with a newly formed unit with a

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Speaker 2: Microsoft or indeed without the competitors MAP.

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Speaker 8: I think the Opening Eye was seen as someone that

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Speaker 8: you could beats.

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Speaker 9: It was too big to beats.

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Speaker 8: And one of the interesting things that is happening because

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Speaker 8: of this weekend, because of all of this chaos, is

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Speaker 8: now no matter what happens, let's say they bring back SAM,

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Speaker 8: everyone everybody stays open. AI is not infallible. They are

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Speaker 8: someone you can beat now, and that actually opens up

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Speaker 8: a tremendous amount of opportunities for new people, whether they're

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Speaker 8: ex employees of open ai or other entrepreneurs, to go

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Speaker 8: start companies that compete with open ai. And I think

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Speaker 8: that that's going to happen. This leaves a huge open

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Speaker 8: for that. Any event that a lot of people leave

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Speaker 8: open Ai, maybe a bunch joined Microsoft and go join

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Speaker 8: Sam and Greg, a lot of the other ones are

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Speaker 8: going to start companies, and I think more capital than

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Speaker 8: ever is going to flow into AI.

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Speaker 9: You know, just this year, I.

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Speaker 8: Started a venture capital firm called Theory Forge Ventures with

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Speaker 8: Ben Park to do just that.

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Speaker 9: And this is a sad situation with open ai.

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Speaker 8: It makes me sad, but at the same time investors

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Speaker 8: are going to be clamoring in.

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Speaker 2: Mat Schicked obtain Ai CEO and indeed avention Capitalist. We

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Speaker 2: thank you so much. Turning back to where we left

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Speaker 2: off with our open Ai conversation, the drama, the impact

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Speaker 2: on the AI landscape more broadly, Sarahgayo, founder of Conviction.

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Speaker 2: It's a venture firm purpose built to serve AI native

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Speaker 2: companies and what we were just talking to Matchlick who

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Speaker 2: thinks that more innovation will start ups are going to

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Speaker 2: come of this, Sarah, do you abide by that silver

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Speaker 2: lining to what feels like a cloud right now?

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Speaker 5: I mean I would start by saying I have such

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Speaker 5: enormous respect for the work Sam and Greg and Illi

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Speaker 5: and the entire openI team have done over the years.

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Speaker 5: Right So before we talk about silver aligning, I think

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Speaker 5: we should talk about the contribution they've had in terms

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Speaker 5: of igniting a technology revolution. It's just very sad to

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Speaker 5: see it happen. And since your respect to Ilia for

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Speaker 5: you know, a public apology for something he regrets, whatever

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Speaker 5: the outcome, this is his life's for work and he

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Speaker 5: has made a tremendous contribution to the enhancement of AI

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Speaker 5: and many of the startups that we back and partner

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Speaker 5: with open ai in like Harvey, which is legal AI

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Speaker 5: and a portfolio company for open Ai. We benefit from

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Speaker 5: all of that innovation. I think that being said, the ecosystem,

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Speaker 5: the landscape is much more open than it was a

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Speaker 5: week ago, which is wild to say. Opening is both

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Speaker 5: revered and feared. In its current state, it is much diminished.

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Speaker 3: Sarah, delight to have you on the show. You know

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Speaker 3: everyone you know the players. You yourself and not invested

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Speaker 3: in open ai, but the ecosystem you are so closely

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Speaker 3: connected to. Just tell me your reaction, frankly, your how

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Speaker 3: you felt this weekend watching that unfold.

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Speaker 5: Yeah, I mean I started with sort of respect and

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Speaker 5: sadness for friends who work at open AI. I think

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Speaker 5: my secondary action is really just as champion level business people,

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Speaker 5: you have to hand it to Saya and Kevin and

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Speaker 5: managing all of this. The multiple on Microsoft stocks and

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Speaker 5: Saya took it over in twenty fourteen is up ten

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Speaker 5: x from what was already one of the largest five.

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Speaker 7: Companies in the world.

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Speaker 5: So I am and I'm just floored by their ability

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Speaker 5: to navigate the situation. It's incredibly hard to be this

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Speaker 5: aggressive and strategic and steering so large a ship and

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Speaker 5: anticipating the title wave and coming out so far ahead.

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Speaker 5: So all roads from here are paved the gold for Microsoft.

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Speaker 5: I think, going back to the first question, we are

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Speaker 5: an AI focused early stage investing firm, right and so

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Speaker 5: a part of it is a recognition that there are

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Speaker 5: opportunities at every layer, which we continue to believe, but

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Speaker 5: now even more so for the independent foundation model labs

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Speaker 5: such as mistral and inflection and anthropic, and I think

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Speaker 5: there I think there's increasing interest in open source from yes,

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Speaker 5: corporations and developers just in having more control over their

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Speaker 5: own models and running them monitor on their own infrastructure,

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Speaker 5: and infrint platforms like Base ten, and so there will

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Speaker 5: be continued capital for startups making these bets from investors

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Speaker 5: like in Conviction, and of course we're full stack and

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Speaker 5: application level companies as well.

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Speaker 3: You've invested in startups building your own large language models.

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Speaker 3: You've interviewed on your podcast leaders some of the firms

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Speaker 3: with making bigger models with much many more billions of parameters.

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Speaker 3: Does this weekend make it a more competitive marketplace for

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Speaker 3: building generative AI technology?

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Speaker 5: I think companies are. So there's sort of two dimensions, right,

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Speaker 5: There's like what it takes to compete, and of course

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Speaker 5: like the reaction from the ecosystem of customers and developers.

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Speaker 5: This set of events, of course gives all of open

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Speaker 5: AI's customers and developers pause. They're making long term bets

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Speaker 5: and they want to understand the incentives and staying power

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Speaker 5: of their partners. My experienced startup founders are sometimes reluctant

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Speaker 5: to ask for the early check or seem too profit

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Speaker 5: seeking or capitalists to their customers. But I think transparency

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Speaker 5: is key. That's a lesson from this weekend. I've heard

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Speaker 5: so many customers ask startups, how are you planning to

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Speaker 5: make money? Or even ask me as an investor in

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Speaker 5: these starts, is the business viable? I am willing to pay,

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Speaker 5: but I don't want to make the wrong bet. Well,

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Speaker 5: they make it, and the nonprofit board here is explicitly

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Speaker 5: prioritizing other goals they have above customers and developers, and

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Speaker 5: so I think that I think that does change the

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Speaker 5: ecosystem in terms of other opportunities, like we should not

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Speaker 5: trivialize the work that open Ai had done has done

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Speaker 5: over the years. Right, creating foundation models is a huge effort,

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Speaker 5: and so from an infrastructure, data, partnerships, pooling and talent perspective,

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Speaker 5: I think you know the ship of theseus. It's a

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Speaker 5: thought experiment, like if you rebuild a ship entirely with

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Speaker 5: new parts, is it the same ship. It's a question

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Speaker 5: of identity, and it's often applied to human consciousness and

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Speaker 5: sci fi, but it applies to organizations too.

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Speaker 3: Right, if okai has the.

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Speaker 5: Weights and then all of the advantages that we were

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Speaker 5: just talking about. They're huge, but an organization is also

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Speaker 5: a sera culture.

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Speaker 3: Yeah, yeah, conviction fanta serago. It's just great to have

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Speaker 3: you on the show and get that perspective. Thank you.

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Speaker 2: Some breaking news for you right now the United States,

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Speaker 2: the Justice Department, being exact, is seeking more than four

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Speaker 2: billion dollars from Finance, that of course being the cryptocurrency

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Speaker 2: exchange to end a criminal case. It's years long investigation

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Speaker 2: negotiations between the DJ and Finance, including in fact of

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Speaker 2: the plussibit that its founder cz would face criminal charges

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Speaker 2: in the United States under an agreement to resolve the

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Speaker 2: probe into alleged money laundering, bank forward and sanctions violations.

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Speaker 2: That's some update on cryptobeded back to our key number

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Speaker 2: one story.

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Speaker 3: Okay, all change at open ai and my goodness, how

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Speaker 3: quickly things do change. Earlier this year, Bloomberg's Emily Chang

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Speaker 3: caught up with now former open Ai CEO Sam Outman's

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Speaker 3: talk about his relationship with Microsoft.

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Speaker 4: Listen to this, how would you describe your relationship with

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Speaker 4: Sacha Inadella?

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Speaker 7: How much control they have?

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Speaker 2: You know, I've heard people say, you know.

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Speaker 10: Microsoft is just going to buy open Ai you're just

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Speaker 10: making big tech bigger.

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Speaker 7: Companies not for sale. Thank you. I don't know how

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Speaker 7: to be more clearer than that, we have a great

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Speaker 7: relationship with them.

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Speaker 11: I think it's a these like big major partnerships between

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Speaker 11: tech companies usually don't work.

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Speaker 7: This is an example that are working really well.

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Speaker 3: Okay, fast forward present day. This is the latest. After

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Speaker 3: a game of musical chairs, Microsoft announces that Altman and

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Speaker 3: his co founder Greg Brockman will join the company. Will

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Speaker 3: join Microsoft. This announcement on literally on the heels of

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Speaker 3: a frenetic weekend in Silicon Valley following the aftermath of

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Speaker 3: Altman's firing on Friday, Microsoft shares continuing to push higher

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Speaker 3: in the session at one point nine percent. Bloomberg's Dina

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Speaker 3: bass is our Microsoft correspondent and alongside the rest of us,

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Speaker 3: has been all over this story all weekend. Let's first

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Speaker 3: talk about this new unit within Microsoft. Setia announces it

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Speaker 3: late late late last night. What do we know?

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Speaker 9: Musical chairs and or a game of growth?

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Speaker 10: So what we what we know is you know, Microsoft

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Speaker 10: at Satiez spent the weekend trying to figure out a

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Speaker 10: way with other investors to get Sam and Gregory and

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Speaker 10: stated to the company. As of late Sunday night, there

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Speaker 10: were conversations with Mira Maratti, the interim CEO, trying to

440
00:24:03,880 --> 00:24:07,320
Speaker 10: do exactly that those with board members are conversations. Those

441
00:24:07,320 --> 00:24:12,000
Speaker 10: conversations failed, and so Nadela had to go to plan being,

442
00:24:12,119 --> 00:24:15,920
Speaker 10: which was, Okay, we'll just hire Sam and brag ourselves,

443
00:24:15,960 --> 00:24:19,680
Speaker 10: because the concern that Microsoft had was, you know, when

444
00:24:19,720 --> 00:24:23,480
Speaker 10: there's all this people in open ai start seeing everybody

445
00:24:23,640 --> 00:24:25,879
Speaker 10: threatening to jump ship, and you saw that mass about

446
00:24:25,880 --> 00:24:30,000
Speaker 10: pouring support Saturday night for Sam that it very much

447
00:24:30,000 --> 00:24:33,080
Speaker 10: referrels not just microsoft thirteen billion dollar investment in open

448
00:24:33,080 --> 00:24:37,200
Speaker 10: add but Microsoft's entire shredding SATA has revamped the entire

449
00:24:37,280 --> 00:24:42,040
Speaker 10: company's product line around artificial intelligence, and that artificial intelligence

450
00:24:42,080 --> 00:24:45,440
Speaker 10: depends on open Ai. If open Ai ceases to exist

451
00:24:45,560 --> 00:24:48,640
Speaker 10: in the way that Microsoft had expected, that is an

452
00:24:48,800 --> 00:24:50,480
Speaker 10: enormous problem for Microsoft.

453
00:24:51,480 --> 00:24:55,000
Speaker 2: But for now the deal brokering seems to be in

454
00:24:55,080 --> 00:24:58,639
Speaker 2: its advantage and have Acreisi saying that the hiring is

455
00:24:58,640 --> 00:25:02,119
Speaker 2: a clear win for Microsoft. It's basically an AQUAHAI. What

456
00:25:02,320 --> 00:25:05,639
Speaker 2: are some of the difficulties around doing this culturally and

457
00:25:05,680 --> 00:25:09,360
Speaker 2: indeed potentially even regulatory in the long term.

458
00:25:09,880 --> 00:25:12,720
Speaker 10: Sure, we don't know whether regulators will look at this

459
00:25:12,840 --> 00:25:14,000
Speaker 10: that there.

460
00:25:14,440 --> 00:25:15,560
Speaker 9: I heard the discussion and.

461
00:25:15,560 --> 00:25:18,360
Speaker 10: Emily's question, and well, why not just have Microsoft buy them?

462
00:25:18,840 --> 00:25:20,160
Speaker 9: Microsoft both because of.

463
00:25:20,119 --> 00:25:23,600
Speaker 10: The complicated and nonprofit for profits structure of open ai

464
00:25:24,040 --> 00:25:25,560
Speaker 10: and for regulatory reasons.

465
00:25:25,560 --> 00:25:29,040
Speaker 9: I really could not have just outright thought open ai A.

466
00:25:29,200 --> 00:25:32,720
Speaker 9: Most experts think, what are the problems?

467
00:25:32,720 --> 00:25:35,680
Speaker 10: Well, Microsoft has its own artificial intelligence effort. It's been

468
00:25:35,720 --> 00:25:38,560
Speaker 10: working on in that area for more than two decades,

469
00:25:38,720 --> 00:25:41,560
Speaker 10: and there has been some tension over the last.

470
00:25:41,280 --> 00:25:43,639
Speaker 9: Couple of years around the way in which.

471
00:25:43,800 --> 00:25:48,280
Speaker 10: Microsoft and Adula chose to really prioritize, both in terms

472
00:25:48,280 --> 00:25:51,400
Speaker 10: of resources and focus the work of open AI over

473
00:25:51,440 --> 00:25:55,600
Speaker 10: some of Microsoft's internal projects. Some people most concerned about

474
00:25:55,600 --> 00:25:59,720
Speaker 10: that perhaps of lust Microsoft, but there's still AI researchers there,

475
00:26:00,080 --> 00:26:02,639
Speaker 10: or some question of how you integrate those things without

476
00:26:03,520 --> 00:26:06,760
Speaker 10: making you know, a real sort of you know issue

477
00:26:06,800 --> 00:26:07,400
Speaker 10: with people that.

478
00:26:07,359 --> 00:26:09,800
Speaker 9: Are already there. Then there's just you know, there are

479
00:26:09,840 --> 00:26:10,840
Speaker 9: more mounding details.

480
00:26:10,840 --> 00:26:13,600
Speaker 10: How many overayed people as Microsoft really going to hire,

481
00:26:13,960 --> 00:26:16,280
Speaker 10: how do they decide to you know, how do they

482
00:26:16,320 --> 00:26:20,040
Speaker 10: compensate that people already at Microsoft who had a salary

483
00:26:20,080 --> 00:26:23,280
Speaker 10: free this year feel about that compensation, all sorts of

484
00:26:23,280 --> 00:26:27,080
Speaker 10: cultural issues. That said, people who say people from outside

485
00:26:27,080 --> 00:26:30,600
Speaker 10: Microsoft cannot do well at Microsoft, I think are potentially

486
00:26:30,680 --> 00:26:33,600
Speaker 10: thinking about a Microsoft off. Ten years ago. Satya has

487
00:26:34,040 --> 00:26:37,080
Speaker 10: acquired companies like LinkedIn, liked to get up, let them

488
00:26:37,160 --> 00:26:40,119
Speaker 10: run on their own, and had them function quite effectively

489
00:26:40,160 --> 00:26:43,359
Speaker 10: within Microsoft. He's also hired executives here. I think of

490
00:26:43,520 --> 00:26:46,480
Speaker 10: CTO Kevin Scott, who leads the AI for you know,

491
00:26:46,560 --> 00:26:50,040
Speaker 10: executives from outside who have become very senior and very

492
00:26:50,040 --> 00:26:52,960
Speaker 10: important to Microsoft in a way that perhaps was not

493
00:26:53,119 --> 00:26:55,160
Speaker 10: easy for outsiders to do in the office.

494
00:26:55,280 --> 00:26:58,000
Speaker 2: Many noting the title of sam Alman being that of

495
00:26:58,040 --> 00:27:00,720
Speaker 2: a CEO internally. DNA Basqueta, thank you so much for

496
00:27:00,800 --> 00:27:03,480
Speaker 2: all the iterations for that publicly sarded of the company.

497
00:27:03,520 --> 00:27:05,520
Speaker 2: And let's just talk about what's left at open AI

498
00:27:05,560 --> 00:27:08,320
Speaker 2: for a moment, because late Sunday, Emmitt Shecher was appointed

499
00:27:08,400 --> 00:27:11,600
Speaker 2: interim CEO of open AI after the board quietly vetted

500
00:27:11,600 --> 00:27:14,240
Speaker 2: candidates starting on Saturday night. Now here's what we know

501
00:27:14,280 --> 00:27:17,160
Speaker 2: about the appointment. Sources tell Bloomberg that she was seen

502
00:27:17,200 --> 00:27:19,520
Speaker 2: as someone that can lead a large engineering group, but

503
00:27:19,560 --> 00:27:23,920
Speaker 2: also as someone who recognizes an insistential threat from AI,

504
00:27:23,520 --> 00:27:26,080
Speaker 2: and like some members of open AI's board, she has

505
00:27:26,119 --> 00:27:28,800
Speaker 2: ties to the so called effective altruism movement. She has

506
00:27:28,880 --> 00:27:31,960
Speaker 2: stepped down as CEO of Amazon's game streaming site Twitch

507
00:27:32,000 --> 00:27:34,400
Speaker 2: earlier in the year, and in May he actually joined

508
00:27:34,480 --> 00:27:38,200
Speaker 2: y Combinator as a visiting partner. Let's get a conversation

509
00:27:38,240 --> 00:27:40,920
Speaker 2: going with Zachary Lipton. Here's the chief technologist and scientific

510
00:27:40,960 --> 00:27:43,119
Speaker 2: officer over at a Bridge. It's a company using Generator

511
00:27:43,200 --> 00:27:46,440
Speaker 2: AI for automatic drafting of after visit clinical notes. You're

512
00:27:46,440 --> 00:27:50,640
Speaker 2: also an assistant professor of machine learning at Cannie Mellon University. Zachary,

513
00:27:51,040 --> 00:27:54,600
Speaker 2: the fact that you really focus on understanding the social

514
00:27:54,720 --> 00:27:58,679
Speaker 2: impacts of machine learning in a philosophically coherent way is

515
00:27:58,720 --> 00:28:01,320
Speaker 2: the way it says on your website. Is that kind

516
00:28:01,359 --> 00:28:03,720
Speaker 2: of what the tension was here ultimately own open ai

517
00:28:04,040 --> 00:28:05,000
Speaker 2: philosophical at.

518
00:28:04,880 --> 00:28:09,440
Speaker 12: That I think it's important to draw a big distinction.

519
00:28:10,040 --> 00:28:13,440
Speaker 12: There's a contingent of this community that is more focused

520
00:28:13,480 --> 00:28:16,800
Speaker 12: on the idea of AI as a potential existential risk

521
00:28:16,840 --> 00:28:19,800
Speaker 12: to humanity, and there's a bunch of us who are

522
00:28:19,920 --> 00:28:27,280
Speaker 12: more a group of social scientists, ethhysists, some maybe socially

523
00:28:27,320 --> 00:28:30,320
Speaker 12: inclined computer scientists who've looked at these problems from different angles,

524
00:28:30,440 --> 00:28:35,399
Speaker 12: more focused on near term terrestrial actual harms of AI

525
00:28:35,520 --> 00:28:38,000
Speaker 12: systems is operationalized in businesses today.

526
00:28:38,360 --> 00:28:39,080
Speaker 7: So there's.

527
00:28:41,320 --> 00:28:43,480
Speaker 12: A lot of work that I think very few people

528
00:28:43,560 --> 00:28:47,080
Speaker 12: disagree is like serious or real problems and important today

529
00:28:47,120 --> 00:28:53,080
Speaker 12: about understanding how we think about privacy, accountability, transparency, where

530
00:28:53,120 --> 00:28:56,800
Speaker 12: liability goes once you have a greater degree of automation

531
00:28:56,960 --> 00:28:59,600
Speaker 12: in our decision making systems. But on the other side,

532
00:28:59,600 --> 00:29:02,040
Speaker 12: there's a but people who are more focused on something

533
00:29:02,440 --> 00:29:04,880
Speaker 12: but they call it X risk or this idea that

534
00:29:04,920 --> 00:29:08,840
Speaker 12: AI is careening towards, you know, by mechanisms known or unknown,

535
00:29:09,120 --> 00:29:12,120
Speaker 12: that there's this marching progress towards towards something that is

536
00:29:12,200 --> 00:29:14,280
Speaker 12: a different kind of threat that needs to be regarded

537
00:29:14,720 --> 00:29:19,360
Speaker 12: as more of like an epoch changing event, something more

538
00:29:19,400 --> 00:29:23,040
Speaker 12: analogous to nuclear weapons. And I'd say that, like my work,

539
00:29:23,080 --> 00:29:25,040
Speaker 12: sits a little bit more in what they might call

540
00:29:25,120 --> 00:29:30,160
Speaker 12: near termism and this group of affective altruisms. Their philosophical

541
00:29:30,200 --> 00:29:33,520
Speaker 12: position is that they are they think that however small

542
00:29:33,560 --> 00:29:37,840
Speaker 12: a threat, if the risk, if they're wrong, is a

543
00:29:38,040 --> 00:29:40,600
Speaker 12: wiping out of humanity, that this is the most important

544
00:29:40,600 --> 00:29:43,080
Speaker 12: priority in the world, and I'd say it's a relatively

545
00:29:43,080 --> 00:29:47,600
Speaker 12: fringe belief among technologists, among business people, but it does

546
00:29:47,680 --> 00:29:50,000
Speaker 12: have some very well heeled backers, and it does have

547
00:29:50,200 --> 00:29:55,240
Speaker 12: quite a bit of a foothold in San Francisco and

548
00:29:55,280 --> 00:29:58,400
Speaker 12: in particular in particular research labs and open AI does

549
00:29:58,480 --> 00:30:02,960
Speaker 12: have some amount of influence this existentialist thinking.

550
00:30:03,160 --> 00:30:09,320
Speaker 3: Right, Zachary, Whether the existential threat is a fringe idea

551
00:30:09,440 --> 00:30:11,720
Speaker 3: or not, what is? I think we can agree on

552
00:30:12,000 --> 00:30:16,880
Speaker 3: the events of the last weekend being monumental. I guess

553
00:30:16,880 --> 00:30:20,760
Speaker 3: within your career, both in academia and building generative AI tools,

554
00:30:21,040 --> 00:30:24,200
Speaker 3: just reflect quickly on what you made of the last

555
00:30:24,240 --> 00:30:26,360
Speaker 3: forty eight to seventy two hours.

556
00:30:27,280 --> 00:30:31,480
Speaker 12: Oh, it's quite wild, given that when I entered the

557
00:30:31,480 --> 00:30:33,640
Speaker 12: field ten years ago, I had to explain to my

558
00:30:33,680 --> 00:30:35,880
Speaker 12: parents what machine learning and AI were, and they were

559
00:30:35,920 --> 00:30:38,040
Speaker 12: just glad that I wasn't trying to make a living

560
00:30:38,040 --> 00:30:41,040
Speaker 12: plight in the sexophone anymore. So to go from there

561
00:30:41,080 --> 00:30:43,240
Speaker 12: through the front page of the New York Times that

562
00:30:43,840 --> 00:30:49,400
Speaker 12: there's a kervuffl in AI startup's pretty wild, you know.

563
00:30:50,160 --> 00:30:53,600
Speaker 12: I think in general, we're watching before our eyes the

564
00:30:53,920 --> 00:30:58,200
Speaker 12: maturation of an industry and a lot of how we

565
00:30:58,240 --> 00:31:00,280
Speaker 12: got here, and I think you see this all over

566
00:31:00,320 --> 00:31:02,200
Speaker 12: the economy. I think we saw this with the dot

567
00:31:02,240 --> 00:31:07,040
Speaker 12: com bubble and some amount of discord and some amount

568
00:31:07,080 --> 00:31:10,520
Speaker 12: of insanity as we went from a sort of first

569
00:31:10,560 --> 00:31:16,719
Speaker 12: generation set of companies with strange governance structures and you know,

570
00:31:16,760 --> 00:31:20,760
Speaker 12: a certain kind of velocity to a more mature environment

571
00:31:20,800 --> 00:31:22,400
Speaker 12: than followed. You know, it didn't spell the doom of

572
00:31:22,440 --> 00:31:24,640
Speaker 12: the Internet, but it certainly was a growing up period.

573
00:31:25,040 --> 00:31:28,280
Speaker 12: I think what we're watching before our eyes is us

574
00:31:28,320 --> 00:31:31,080
Speaker 12: moving from a period of this being brand new technology

575
00:31:31,320 --> 00:31:35,800
Speaker 12: and people behaving in strange ways that are sort of

576
00:31:35,840 --> 00:31:39,400
Speaker 12: exceptional by any normal standards, to a period that's going

577
00:31:39,480 --> 00:31:41,560
Speaker 12: to follow, which is going to be more robust. It's

578
00:31:41,560 --> 00:31:43,720
Speaker 12: going to involve people depending on a much wider and

579
00:31:43,800 --> 00:31:47,520
Speaker 12: more stable ecosystem of services provided by a larger set

580
00:31:47,560 --> 00:31:48,240
Speaker 12: of companies.

581
00:31:49,720 --> 00:31:52,720
Speaker 3: And remind our audience that almost six hundred people representing

582
00:31:52,720 --> 00:31:56,600
Speaker 3: the intellectual capital within open ai are currently threatening to

583
00:31:56,720 --> 00:31:59,320
Speaker 3: leave and go to Microsoft. So Zachary lipped in a

584
00:31:59,320 --> 00:32:03,200
Speaker 3: bridge Cdio Carnegie Mellon, assistant Professor of Machine Learning, breaking

585
00:32:03,200 --> 00:32:04,760
Speaker 3: it down what a weekend it has been.

586
00:32:04,880 --> 00:32:07,040
Speaker 2: Now, look some other news that we're following for you.

587
00:32:07,520 --> 00:32:10,880
Speaker 2: X CEO Linda Yakarino has acknowledged that some advertisers are

588
00:32:10,920 --> 00:32:13,960
Speaker 2: taking a break a pause from the platform.

589
00:32:14,080 --> 00:32:14,320
Speaker 4: Now.

590
00:32:14,480 --> 00:32:17,800
Speaker 2: This pause follows some outrage over anti Semitic content and

591
00:32:17,840 --> 00:32:21,120
Speaker 2: commentary on X, some of it in fact seemingly endorsed

592
00:32:21,120 --> 00:32:23,080
Speaker 2: by the site's owner. In a musk now in a

593
00:32:23,120 --> 00:32:26,040
Speaker 2: mement of staff on Sunday, Yacarino blamed quote a misleading

594
00:32:26,040 --> 00:32:29,160
Speaker 2: a manipulated article for this pause in spending, referencing in

595
00:32:29,160 --> 00:32:32,120
Speaker 2: fact a Media Matters piece that said ads from big

596
00:32:32,120 --> 00:32:34,680
Speaker 2: brands were being placed near offensive content.

597
00:32:35,320 --> 00:32:39,840
Speaker 3: Ed coming up on Bluebow Technology, Tusk Ventures CEO Bradley

598
00:32:39,880 --> 00:32:42,240
Speaker 3: Tusk joins us we go back to open AI, the

599
00:32:42,320 --> 00:32:44,760
Speaker 3: drama and his impact on the AI space. We have

600
00:32:44,840 --> 00:32:48,280
Speaker 3: to ask questions about corporate governance. That's coming up next.

601
00:32:48,360 --> 00:32:50,920
Speaker 3: Also looking at shares of General Motors pairing some of

602
00:32:50,960 --> 00:32:53,400
Speaker 3: their gain in the session up one point eight percent.

603
00:32:53,520 --> 00:32:58,600
Speaker 3: The news curiously timed late Sunday night, Kyle Vote resigned

604
00:32:58,880 --> 00:33:02,280
Speaker 3: as the CEO of Crew Use General Motors Autonomous Driving

605
00:33:02,400 --> 00:33:05,280
Speaker 3: Unit GM, shuffling the debt, putting a lot of long

606
00:33:05,280 --> 00:33:08,720
Speaker 3: standing GM execs to run that unit. But goodness knows

607
00:33:08,760 --> 00:33:11,240
Speaker 3: what happens next. This is Bloomberg Technology.

608
00:33:23,560 --> 00:33:24,000
Speaker 13: Of course, we.

609
00:33:24,080 --> 00:33:26,720
Speaker 2: Returned to the drama consuming open Ai and how it

610
00:33:26,760 --> 00:33:29,680
Speaker 2: could impact the startup space more broadly after open ai

611
00:33:29,800 --> 00:33:33,040
Speaker 2: CEO Simalmon was ousted by the company's board on Friday,

612
00:33:33,200 --> 00:33:36,240
Speaker 2: prompting a campaign from investors and staff to bring him back.

613
00:33:36,480 --> 00:33:40,640
Speaker 2: Well now, Microsoft has hired Samowan, while former Twitch leader

614
00:33:40,800 --> 00:33:44,680
Speaker 2: Emitt Scheer is taking over as open AI's interim chief executive.

615
00:33:45,120 --> 00:33:48,120
Speaker 2: For today's VC Spotlight, let's bring in Bradley Tusk for

616
00:33:48,240 --> 00:33:50,200
Speaker 2: his read on all of this. He is the CEO

617
00:33:50,200 --> 00:33:52,160
Speaker 2: of Tusk Ventures and also the author of the upcoming

618
00:33:52,160 --> 00:33:55,360
Speaker 2: book Obvious in Hindsight, satirical behind the scenes look at

619
00:33:55,360 --> 00:33:58,040
Speaker 2: how technology and politics sort of intertwine the ways in

620
00:33:58,080 --> 00:34:00,760
Speaker 2: which decisions are actually being made by those in power.

621
00:34:01,720 --> 00:34:04,640
Speaker 2: Is all of this obvious in hindsight when you look

622
00:34:04,680 --> 00:34:05,960
Speaker 2: at the corporate governance.

623
00:34:05,600 --> 00:34:08,200
Speaker 11: Structure, Yeah, it absolutely is. I mean, this was an

624
00:34:08,239 --> 00:34:12,879
Speaker 11: insane structure, and this one's kind of unique in that

625
00:34:12,960 --> 00:34:15,719
Speaker 11: it both you had such a big underlying company that

626
00:34:15,840 --> 00:34:18,560
Speaker 11: is for profit with this nonprofit board on top of it.

627
00:34:18,719 --> 00:34:21,160
Speaker 11: But I think it really raises questions about b corpse,

628
00:34:21,200 --> 00:34:23,760
Speaker 11: and I think about ESG to a certain extent, and

629
00:34:24,200 --> 00:34:26,520
Speaker 11: you know, there are fiduciary duties and there are incentives

630
00:34:26,520 --> 00:34:29,400
Speaker 11: that need to be aligned. When you have boards that

631
00:34:29,920 --> 00:34:33,520
Speaker 11: clearly have sort of other incentives and other ideas and

632
00:34:33,560 --> 00:34:36,400
Speaker 11: that aren't about the shareholders now, aren't about the employees,

633
00:34:36,440 --> 00:34:39,279
Speaker 11: and aren't about the customers, you can create a lot

634
00:34:39,320 --> 00:34:40,680
Speaker 11: of problems, which is what just happened.

635
00:34:41,239 --> 00:34:44,560
Speaker 2: Let's just go through ultimately what this board, how it

636
00:34:44,600 --> 00:34:47,319
Speaker 2: differs from others. It's made up of thinking about four

637
00:34:47,360 --> 00:34:52,000
Speaker 2: people now because of been there exactly gregorbin Fad, some

638
00:34:52,040 --> 00:34:54,000
Speaker 2: helpment had been fired, but others like Reid Hoffmann had

639
00:34:54,040 --> 00:34:55,600
Speaker 2: left over the course of the last year or so.

640
00:34:55,960 --> 00:34:58,319
Speaker 2: And ultimately this is a not for profit board where

641
00:34:58,360 --> 00:35:02,000
Speaker 2: the whole thesis was that it was the mission over

642
00:35:02,120 --> 00:35:05,800
Speaker 2: profits right now, is that replicated anywhere else? And is

643
00:35:05,840 --> 00:35:08,040
Speaker 2: this something that ultimately venture should be learning from.

644
00:35:08,200 --> 00:35:11,480
Speaker 11: Yeah, so I haven't seen this specific structure anywhere else,

645
00:35:11,520 --> 00:35:13,920
Speaker 11: and I can't imagine we ever will again after the

646
00:35:13,920 --> 00:35:16,839
Speaker 11: debacle that this all was. But even when you get

647
00:35:16,840 --> 00:35:19,480
Speaker 11: past that, you know the corpse, which are kind of

648
00:35:19,560 --> 00:35:21,719
Speaker 11: hybrid versions of what we're talking about, where they are

649
00:35:21,760 --> 00:35:24,640
Speaker 11: public corporations and their for profit, but they're meant to

650
00:35:24,680 --> 00:35:28,040
Speaker 11: be doing social good at least. I think, you know,

651
00:35:28,160 --> 00:35:30,839
Speaker 11: vcs should be taking a hard look at the bylaws

652
00:35:31,520 --> 00:35:33,560
Speaker 11: of the boards of B corps because then, by the way,

653
00:35:33,800 --> 00:35:35,640
Speaker 11: I've got one or two of my portfolio, and I'm

654
00:35:35,760 --> 00:35:37,920
Speaker 11: we're taking a look at it right now, because I

655
00:35:37,920 --> 00:35:41,240
Speaker 11: don't want a situation where the board has a moral

656
00:35:41,360 --> 00:35:45,799
Speaker 11: stance or an ideological stance, and that really comes at

657
00:35:45,840 --> 00:35:48,959
Speaker 11: the best interest of the company itself. Of course, there's

658
00:35:49,000 --> 00:35:52,440
Speaker 11: always room on every board to talk about morality and

659
00:35:52,480 --> 00:35:54,560
Speaker 11: ideology and everything else, but the end of the day,

660
00:35:54,600 --> 00:35:57,960
Speaker 11: you have fiduciary duty to the shareholders or to the investors,

661
00:35:58,040 --> 00:36:00,600
Speaker 11: or whoever it is, and that's what's got to be met.

662
00:36:00,640 --> 00:36:04,160
Speaker 11: And so while I'm sure most B corpors are okay,

663
00:36:04,600 --> 00:36:06,560
Speaker 11: it seems to me that the potential for what we

664
00:36:06,640 --> 00:36:09,080
Speaker 11: saw does exist. And what we're talking about companies like

665
00:36:09,520 --> 00:36:13,359
Speaker 11: Auburns and Warby Parker and ben and Jerry's, and we're

666
00:36:13,400 --> 00:36:15,560
Speaker 11: not just talking about kind of no name companies here.

667
00:36:15,800 --> 00:36:17,880
Speaker 11: So I know that I'm concerned, and I think other

668
00:36:17,960 --> 00:36:19,120
Speaker 11: vc should be looking at it too.

669
00:36:20,560 --> 00:36:22,520
Speaker 3: Bradley, I want to bring an update to our audience

670
00:36:22,640 --> 00:36:25,640
Speaker 3: in the private markets. I think this is important. Joshua Kushner,

671
00:36:26,080 --> 00:36:28,880
Speaker 3: who's the founder of Frive Capital, has posted on x

672
00:36:29,400 --> 00:36:33,880
Speaker 3: every problem has a solution. In the background, there is

673
00:36:33,920 --> 00:36:36,640
Speaker 3: a tender offer worth hundreds of millions of dollars that

674
00:36:36,760 --> 00:36:40,920
Speaker 3: is in question here running this month, where open ai

675
00:36:40,960 --> 00:36:44,359
Speaker 3: employees were due to sell shares with Frive Capital leading

676
00:36:44,360 --> 00:36:47,240
Speaker 3: that round. I know you're not an investor in open ai,

677
00:36:47,680 --> 00:36:51,120
Speaker 3: but is there any world in which that tender goes ahead?

678
00:36:52,160 --> 00:36:52,359
Speaker 7: Yeah?

679
00:36:52,480 --> 00:36:54,120
Speaker 11: I mean I think to a certain extent it has to,

680
00:36:54,200 --> 00:36:57,720
Speaker 11: because you have all of these employees who are probably

681
00:36:57,760 --> 00:37:00,000
Speaker 11: not making that much money in terms of salary, because

682
00:37:00,040 --> 00:37:01,880
Speaker 11: that's what happens when you work with a tech startup,

683
00:37:02,200 --> 00:37:04,880
Speaker 11: and the promise is the pay you know, the rainbow,

684
00:37:04,920 --> 00:37:07,480
Speaker 11: the podical at the end of the rainbow, and a

685
00:37:07,560 --> 00:37:10,720
Speaker 11: tender offer offers liquidity for people who have been counting

686
00:37:10,719 --> 00:37:12,520
Speaker 11: on it and relying on it. And you have employees

687
00:37:12,520 --> 00:37:14,959
Speaker 11: who want to move homes or pay for their kids'

688
00:37:15,000 --> 00:37:17,440
Speaker 11: school or whatever it is. And so I think, you know,

689
00:37:17,600 --> 00:37:21,799
Speaker 11: whether it's amateure, whoever's running that company, you have a

690
00:37:21,840 --> 00:37:24,200
Speaker 11: responsibility because you're going to have a really unhappy workforce.

691
00:37:24,239 --> 00:37:26,919
Speaker 11: You already have a workforce where over one hundred people

692
00:37:26,960 --> 00:37:30,040
Speaker 11: signed a letter threatening to quit, and I think this

693
00:37:30,080 --> 00:37:33,719
Speaker 11: would just exacerbate the problems. The question is at what valuations?

694
00:37:33,760 --> 00:37:36,000
Speaker 11: They were talking about an eighty billion dollar valuation on

695
00:37:36,040 --> 00:37:39,319
Speaker 11: the secondary market for the tender offer. I think that

696
00:37:39,360 --> 00:37:41,000
Speaker 11: if they can kind of get the ship righted and

697
00:37:41,360 --> 00:37:44,000
Speaker 11: just wait a few weeks, it probably goes back to normal.

698
00:37:44,719 --> 00:37:47,360
Speaker 11: But if it continues to be chaos, then obviously investors

699
00:37:47,360 --> 00:37:49,680
Speaker 11: are not going to pay up at that amount, and

700
00:37:49,800 --> 00:37:51,839
Speaker 11: the shareholders, if the employees, are going to lose value.

701
00:37:52,880 --> 00:37:55,360
Speaker 3: TuS Benches found an n see Brandy Tuss. Great to

702
00:37:55,400 --> 00:38:05,640
Speaker 3: have you here on Blion dye Technology. Okay, let's wrap

703
00:38:05,719 --> 00:38:08,319
Speaker 3: up our coverage of Sam Mountaman's exit from Open AI

704
00:38:08,520 --> 00:38:11,960
Speaker 3: with the Bloomberg Big Take. We're joined by Bloomberg's Max Chafkin,

705
00:38:12,360 --> 00:38:16,640
Speaker 3: who penned that monumental Business Week piece, but also Bloomberg's

706
00:38:16,640 --> 00:38:18,880
Speaker 3: Actually vance, we have been in the trenches together for

707
00:38:19,040 --> 00:38:24,640
Speaker 3: three days uncovering everything that happened from about lunchtime Friday onwards. Actually,

708
00:38:24,680 --> 00:38:27,880
Speaker 3: I'll start with you just reflect on everything that we've learned,

709
00:38:28,120 --> 00:38:30,959
Speaker 3: but also this kind of side scoop. We had that

710
00:38:31,200 --> 00:38:33,239
Speaker 3: Sam Outman was out there trying to raise tens of

711
00:38:33,239 --> 00:38:36,439
Speaker 3: billions of dollars for a completely different chip company. What's

712
00:38:36,480 --> 00:38:36,920
Speaker 3: that about.

713
00:38:38,040 --> 00:38:41,560
Speaker 1: Yeah, I mean, there's just so much going on here. Sam.

714
00:38:41,760 --> 00:38:44,399
Speaker 1: He is a very ambitious guy. So he's out trying

715
00:38:44,400 --> 00:38:47,560
Speaker 1: to make this new artificial intelligence chip that would compete

716
00:38:47,560 --> 00:38:50,399
Speaker 1: against Nvidia, which open a eye is buy a ton

717
00:38:50,920 --> 00:38:55,480
Speaker 1: of Nvidia chips, and you know, just another indication of

718
00:38:55,560 --> 00:38:58,959
Speaker 1: all these other things going on on top of open

719
00:38:59,000 --> 00:39:02,120
Speaker 1: AI that I think some of the board was concerned about.

720
00:39:02,719 --> 00:39:05,439
Speaker 2: And it sort of links towards the headline of your

721
00:39:05,560 --> 00:39:08,600
Speaker 2: big take, the doomed mission behind Sam Altman's shock auster

722
00:39:08,680 --> 00:39:12,680
Speaker 2: from open ai, doomed ouster, but also perhaps a doomed

723
00:39:12,880 --> 00:39:17,160
Speaker 2: set of aligned or misaligned focuses coming from people who

724
00:39:17,239 --> 00:39:17,919
Speaker 2: lead open AI.

725
00:39:18,160 --> 00:39:18,359
Speaker 7: Yeah.

726
00:39:18,360 --> 00:39:20,279
Speaker 13: I mean you had this nonprofit board where a lot

727
00:39:20,320 --> 00:39:24,319
Speaker 13: of people were really concerned about these apocalyptic AI scenarios,

728
00:39:24,440 --> 00:39:26,880
Speaker 13: and he had Sam Altman and kind of his allies

729
00:39:26,880 --> 00:39:29,759
Speaker 13: who were sort of using the promise of a or

730
00:39:29,800 --> 00:39:33,759
Speaker 13: the potential of apocalypse to sell this new technology, and

731
00:39:33,800 --> 00:39:37,040
Speaker 13: those two things collided, right. I think Sam Maltman saw

732
00:39:37,080 --> 00:39:39,479
Speaker 13: that as kind of a great way to market open AI.

733
00:39:39,880 --> 00:39:41,719
Speaker 3: But you had people who actually believed.

734
00:39:41,400 --> 00:39:44,040
Speaker 13: It and then who were getting increasingly worried over the

735
00:39:44,040 --> 00:39:44,800
Speaker 13: past few weeks.

736
00:39:45,040 --> 00:39:48,359
Speaker 3: Yeah, right, Ashlely, Let's be honest. You and I had

737
00:39:48,360 --> 00:39:51,320
Speaker 3: heard pretty early in the day Sunday that the board

738
00:39:51,400 --> 00:39:53,240
Speaker 3: was digging in that there would be a new CEO.

739
00:39:53,400 --> 00:39:56,200
Speaker 3: No one believed it, And now you have ilia out

740
00:39:56,200 --> 00:39:59,240
Speaker 3: with a tweet apologizing just your final thoughts.

741
00:40:00,160 --> 00:40:03,279
Speaker 1: Well, yeah, Eliot's doing you know, coup inception, a coup,

742
00:40:03,280 --> 00:40:05,000
Speaker 1: a pot of coup. I don't think this is over.

743
00:40:05,120 --> 00:40:07,799
Speaker 1: It sounds like all these camps are still fighting to

744
00:40:07,840 --> 00:40:10,960
Speaker 1: break open AI back. As of right now, seven hundred

745
00:40:11,280 --> 00:40:14,399
Speaker 1: of the seven hundred seventy employees have vowed to leave

746
00:40:14,440 --> 00:40:16,840
Speaker 1: the company of Sam and Greg are brought back. And

747
00:40:16,880 --> 00:40:18,440
Speaker 1: so I don't think this is done. We still got

748
00:40:18,440 --> 00:40:19,400
Speaker 1: another day or two of this.

749
00:40:19,880 --> 00:40:22,520
Speaker 2: Yeah, I just want to hear from Max the weirdest

750
00:40:22,719 --> 00:40:23,920
Speaker 2: line you heard this week.

751
00:40:25,040 --> 00:40:27,840
Speaker 13: I mean, the idea of a counter coup that is

752
00:40:27,880 --> 00:40:30,520
Speaker 13: taking place while the same coup is taking is going on.

753
00:40:30,840 --> 00:40:33,480
Speaker 13: It's just like Ashley says, it's it's too crazy and

754
00:40:33,719 --> 00:40:36,560
Speaker 13: we're talking about Remember this is like the most important

755
00:40:36,560 --> 00:40:38,560
Speaker 13: part of one of the world's largest companies. You know,

756
00:40:38,640 --> 00:40:42,080
Speaker 13: Microsoft is totally dependent on this relationship with open Ai.

757
00:40:42,239 --> 00:40:45,680
Speaker 13: So seeing all of this chaos unfold around something that's

758
00:40:45,719 --> 00:40:48,280
Speaker 13: so critical that so much money, many billions of dollars,

759
00:40:48,280 --> 00:40:51,200
Speaker 13: are baked into, is just something Max Chafkin.

760
00:40:51,400 --> 00:40:53,680
Speaker 2: It was something that you wrote, Ashley Vance, it was

761
00:40:53,719 --> 00:40:57,200
Speaker 2: something that you broke. It was an extraordinary herculean effort

762
00:40:57,200 --> 00:40:59,719
Speaker 2: from all three of you. And that does it for

763
00:40:59,760 --> 00:41:02,839
Speaker 2: this edition of Bloomberg Technology ED. I mean, we didn't

764
00:41:02,840 --> 00:41:04,440
Speaker 2: even get to talk about the door dashes being done.

765
00:41:04,480 --> 00:41:05,080
Speaker 2: Over the weekend.

766
00:41:05,600 --> 00:41:08,200
Speaker 3: They went for DoorDash, for food, to open AIHQ. There

767
00:41:08,239 --> 00:41:10,799
Speaker 3: is so much to recap from a crazy weekend on

768
00:41:10,880 --> 00:41:13,040
Speaker 3: open ai. So we have a podcast. Check it out

769
00:41:13,040 --> 00:41:16,440
Speaker 3: wherever you get your podcast, Apple, Spotify, iHeart and on

770
00:41:16,480 --> 00:41:18,759
Speaker 3: all the Bloomberg's from SF in New York. This is

771
00:41:18,800 --> 00:41:19,360
Speaker 3: Bloomberg