June 18, 2025 • 45 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss the impact of the stablecoin legislation that passed the Senate with White House AI and Crypto Czar David Sacks. Plus, Klarna CEO Sebastian Siemiatkowski talks about the startup's super-app ambitions; Zoox CEO Aicha Evans joins from the company’s new facility to mass-produce robotaxis; and OpenAI CEO Sam Altman claims Meta is offering bonuses as high as $100 million to OpenAI staffers to jump ships.
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Speaker 1 (00:04):
Bloomberg Tech is alive from coast to coast, with Caroline
Hide in New York and Eva low into En frances Go.
Speaker 2 (00:14):
This is Bloomberg Tech coming up. Open Ai CEO Sam
Altman says Meta offered his employees signing bonuses as high
as one hundred million dollars.
Speaker 1 (00:23):
Plus it's a win for the crypto industry. After a
stable coin bill passes the Senate, we discussed with the
White House cryptos are David.
Speaker 2 (00:31):
Sachs and another extension for the sale of TikTok. We
have Frank McCourt Jr. To talk through where his bid stands.
Speaker 1 (00:39):
Meanwhile, we talk about his market. The macro perspective, ED,
is one of a FED decision in but a few hours,
the fact that the Middle East tensions will we see
outreach between the US in Iran. At the moment, we
seeing a buying signal. We're up six percent on the NASAC.
Most of those magnificent seven names training higher. But ED,
you're focusing in on one particular name.
Speaker 2 (01:00):
Yeah, I'm looking at Meta shares a kind of like
modestly higher up half a percentage point. Meta, open Ai,
Scale i AI have all been in the news a
lot recently. The headlight right now is because of this.
Speaker 3 (01:12):
They started making these like giant offers to you know
a lot of people on our team, you know, like
hund't mind our signing bonuses more than that comper years.
Speaker 4 (01:22):
And I'm actually it is crazy.
Speaker 3 (01:24):
I'm really happy that, at least so far, none of
our best people have decided to take them up on that.
Speaker 1 (01:30):
Bloomberg has reached out to Meta, but we've not heard
back on a request for comment. For more on Meta
and the competition for AI talent, Bloomberg's Jackie Duellis joins us. Now, Jackie,
what we didn't hear in the rest of that conversation
with his brother in Uncapped He went on to really
say some damning things, perhaps about Meta and the fact
that they lack innovation and ultimately is not losing talent
(01:51):
because they want to stay for the mission of Open AI.
How fierce is it out there right now?
Speaker 5 (01:57):
Well, there's a few things that we can draw from
his comments on the podcast. One, it confirms that there's
this new chapter in the AI talent wars. It's always
been fears, but it's reaching a new level now.
Speaker 6 (02:08):
One hundred million.
Speaker 7 (02:09):
Dollar bonuses is something we've never heard of before, and
it's really telling of how much Meta is willing to
pay to regain its edge in this AI race.
Speaker 8 (02:20):
Altman's comments also highlight, like you said, there is confidence
that it's going to take more than just money to
bring the best and brightest to your team. If you
look at open AI's mission statement, they say that they
think about their work for the benefit of humanity. That's
really bold and large and purposeful. Whereas Meta I looked
(02:40):
up their mission statement earlier and it says we're advancing
AI for a more connected world to accelerate the potential
future META products for the benefit of people. It's not
as deep if you really dig into it, Jackie.
Speaker 2 (02:52):
A big part of the conversation that Sam Altman was
having with the reasons why one hundred million dollars isn't
enough to get open A employees to go to Meta.
What was his argument.
Speaker 1 (03:03):
Part of the.
Speaker 8 (03:04):
Argument is this larger purpose and also that they're not
as innovative that you know, people want to go to
a place where they feel like they're going to be
able to do their best work and some of that
culture problem that we've seen with Meta, and you know
they've also admitted in the past that they kind of
have trouble with middle management and just kind of the
(03:26):
almost internal bureaucracy of how you get things out there
that doesn't exist to the same degree according to all
men at Open AI. And so when you think about
the people that are going to go over, they won't
want to be able to have that assurance that their
ideas are actually going to make it into reality.
Speaker 1 (03:44):
And Jackie, they want to be on the winning team.
They want to get to AGI first, and that seems
to be the point of this. There's no point coming second.
You need to be at the business that leaves the charge.
And interestingly, those pay packages have led on some significant
talent to the superintelligence team from DeepMind, from sesame AI.
Speaker 8 (04:03):
That's right, it's but you know, we have to remember
that they are working in a new kind of organization.
Speaker 2 (04:11):
Meta at the end of the day needs.
Speaker 8 (04:13):
To incorporate this technology into its products, which is, you know,
the money maker they have shareholders they need to appease
on a quarterly basis, and that kind of pressure could
also affect the way the speed at which they work,
how quickly they roll out these these tools. But AGI
super Intelligence, this is new ground for Meta. They they
(04:37):
haven't really shredded this sort of landscape before in the
same way that open ai was really founded on these
principles to to create a gi and so you know,
you have the best and brightest, going, really intelligent people,
but we've seen some uh friction, some tension and.
Speaker 1 (04:56):
You know going on in.
Speaker 8 (04:57):
Its own in its fair team, the the research team
inside Mata, So they're not exactly going into a place
that has this all figure it out.
Speaker 2 (05:06):
Bloomberg, Jackie de Ballas, thank you very much. Let's get
to a story that broke in the last hour. Open
ai is phasing out the work it does with scale Ai,
cutting ties with that company just days after Meta's fourteen
billion dollar investment. Bloomboath Rachel Metz joins us with more So,
I think there's a very important distinction of what's happening here.
Open i has existing contracts with scale Ai, but what
(05:28):
we've learned is that that relationship is going to change
in the future.
Speaker 9 (05:33):
Yes, open ai is phasing out the remaining work that
is doing with scale Ai.
Speaker 1 (05:38):
The company has.
Speaker 9 (05:39):
Branched out a lot over the past few years as
its data needs have expanded vastly, and also changed based
on the kinds of models that it's building. So at
this point Scale represents the companies puts as a very
small fraction of its business, but over time it's going
to now be totally phasing that out.
Speaker 4 (06:00):
Chill.
Speaker 1 (06:00):
These two stories, yours and Jackie's, are linked the narratives
because of course Alexander Wang goes to the superintelligence team
over at Meta and indeed takes a lot of the
talent from SCALEAI. There other companies, perhaps not just open Ai,
start to move away from SCALEAI. Are you hearing it
elsewhere that maybe these contracts get undone in the future.
Speaker 9 (06:20):
We are definitely hearing that companies that provide data and
data services. It's a very fractured, fragmented space.
Speaker 1 (06:29):
And there are a lot of companies.
Speaker 9 (06:31):
That are much less known than Scale but that are
also worked with by these companies like open Ai Andthropic,
Google and many others. And I know they're seeing a
surge of inbound interest and they also are hearing from
some nervousness from some of their customers. Companies tend to
work with a bunch of players, and it is possible
that this tie up, even the Scale has said it
(06:53):
will remain as an independent business.
Speaker 1 (06:56):
It will make people nervous.
Speaker 2 (06:59):
We should say that Scale ai did decline to comment
on the story, just as Meta declined to comment on
the Sam Outman claims on comp The history of Scale
is interesting because there's an element of manual work that
they're doing and they relied on this kind of army
of contractors. Just explain that the basics of that, because
my reading of your story is the open AI was
(07:19):
thinking about the relationship over the past year before a
lot of this happened.
Speaker 9 (07:23):
Anyway, Yes, so Scale ai at You're absolutely correct. It
started out as a business that had a large number
of contractors that were paid to label data for AI models.
Over time, though, the AI market has shifted and shifted
quite rapidly, so at this point, while it still has
(07:45):
that legacy human data labeling business, it's also expanded into
a few other areas, and one of them is increasingly
hiring experts, experts that might work a few hours on
the nights or weekend, someone with a PhD or a
law degree, and instead of labeling data directly, what they're.
Speaker 2 (08:01):
Doing is coming up with difficult tasks for EI models
to solve.
Speaker 9 (08:04):
And that's also something that's become increasingly important to open AI,
but it seems like skill is opening. I felt that
skill was not quite up to the level that it
needed to support its products with this kind of work.
Speaker 1 (08:17):
Remokes Rachel Mets. We appreciate it, thank you. Let's just
talk about Emil Musk's AI startup now xai. It is
burning through one billion dollars a month, with expected losses
of thirteen billion in twenty twenty five due to the
high costs of building advanced AI models.
Speaker 3 (08:34):
Now.
Speaker 1 (08:34):
This is all according to sources, who say that to
cover the gap, musk start up is currently trying to
raise nine point three billion dollars in debt in equity.
But even before the money is in the bank, the
company has plans to spend more than half of it
is the next three months alone it Amazon CEO Andy
(08:56):
Jesse says he expects his workforce to shrink as a
handles more tasks. In an email to employees yesterday, Jasi
wrote that over the next few years, Amazon expects to
quote reduce our total corporate workforce. Is the later CEO
to warn of AI's impact on headcount. Now Amazon had
over one and a half million employees at the end
of March, mostly though in warehouse jobs ed.
Speaker 2 (09:18):
Another company that's warned about the impact of AI on
the workforce is Klana, embracing generatorve AI tools, though with
some change of heart on hiring for customer services. Today,
the startup, known for its buy and now pay Lada service,
is entering the mobile market with plans to launch a
thirty dollars per month service in the US, with plans
to expand into the UK and Germany later this year.
(09:40):
Klana's CEO Sebastian Schmierkowski joins us now welcome to the
world of Mvno. It was a headline I didn't expect
to see, Sebastian. I mean, the simple question for claner
is why why do this?
Speaker 10 (09:54):
It comes back actually to the fact that we do
believe the future is a digital financial assistant that helps
you save time, save money. And in this case, if
we not only identify that one of our customers can
save money using this, but we can actually put it,
bundle it together and offer it by this seamless experience
of just a button say yes, I would like to
(10:14):
get a better price or a better offer, and here
it is and it's live on my phone with virtual
SIM cards. Now you can get it live very very quickly.
That makes a lot of sense. So it's just a
way for us to kind of bundle more services and
value to our existing customer base.
Speaker 2 (10:28):
The mechanism, right is that this is on the AT
and T network forty dollars a month. Does Klana make
any money on that arrangement?
Speaker 10 (10:36):
We do, But most importantly this adds value to our
customer base.
Speaker 4 (10:42):
I think also, like one of my beliefs is that
if you have if.
Speaker 10 (10:46):
We're going to have truly digital financial assistance that can
recognize can come to you and wake you up in
the morning and say I can save you on the
carrier bill, I can save you on electricity bill. The
only thing you need to do is say yes, and
I'll take care of all the switching. I'll do everything,
you all the paperwork. So you're just going to save
ten dollars a month or whatever it is.
Speaker 4 (11:04):
The point is.
Speaker 10 (11:05):
What that means is the excess profits that have existed
in utilities, in banking and all these things will have
to come down because we are predominantly stuck with our
existing providers, not because we love them, not because they're awesome,
but because we hate switching and we hate leading reading
boring legal terms.
Speaker 4 (11:25):
To realize is this offer really better or not? Right?
Speaker 10 (11:28):
So the point is that, like we believe that their
marginsy in these services will be significantly lower going forward.
Speaker 4 (11:36):
And that's why. Also it's smarter of us to who are.
Speaker 10 (11:39):
A new entrance into this industry, to come in with
a very attractive offer from day one, rather than believe
that we can lure people into some long, lengthy contracts
and make too much money on them over time.
Speaker 1 (11:50):
New entrants that already serve twenty five million active users
here in the United States, many users who associate you
really would buy now, pay later. How is that narrative shifting?
How were starting to see you as everything happ instead?
Speaker 4 (12:02):
Well, definitely a neo bank at least.
Speaker 10 (12:03):
I think that the neo banking concept again comes back
to that digital financial assistant, that we want to help
people save time, save money, and have them not worry
about their finances. We want to help them with all
of that, and that is kind of what banking was
supposed to do. But at some point in time that
banker got a little bit too smart realized you didn't
really have that good understanding of your own stuff and
(12:25):
put you in some pension funds where they were charging
you to I fees on it.
Speaker 4 (12:29):
Like that has to change.
Speaker 10 (12:30):
We have to come back and be in customer obsessed
and offer it the greatest value at the lowest you know,
in the highest quality, at the most affordable price.
Speaker 4 (12:39):
So that is what we're doing.
Speaker 10 (12:40):
And to us, it's everything related to you know, your
every day spending, and phone is part of your everyday spending, right,
It's a every day.
Speaker 4 (12:48):
Cost for you. So this this falls very naturally into that.
Speaker 1 (12:52):
You the Trump organization, everyone is getting into the phone companies.
But I'm interested, Sebastian, and you say your customer obsessed.
To be customer obsessed, you have to be employee obsessed.
I'm interested on the shift you've made when it comes
to customer services. You've come on the show before and
said we're all in on general to AI, I could place,
I could replace myself as CEO. I'm replacing customer services.
(13:13):
I don't need to add in terms of people and headcount.
But you've changed your mind on that.
Speaker 10 (13:18):
Well, Partially what we've said is that, like, look, I
think in many countries you'll see that in the last
ten to twenty years, our doctors and nurses have spent
less and less time with patients and more and more
times on administrative tasks. In addition to that, the cost
of administration in healthcare has risen much faster than the
amount of money spent on actual doctors, nurses and being
available to patients. So what this AI technology can enable
(13:41):
us to do is to again take all the administrative
burdens out, make those be processed by AI and allow
doctors and nurses to be available and actually spend time
on patients. And this is the same for us as
a company. We can use ais AT technology so that
when people want to speak to us and if they
want to speak to a human, which we want to
(14:02):
make sure that everyone who wants to speak to human
should always be able to do so, we also want
to make sure that those humans have less administrative task
and can actually spend more time. So to me, the
value of human connection rises in the world of AI.
Speaker 4 (14:15):
It becomes more valuable.
Speaker 10 (14:16):
It becomes more expected that you have people that have
time to talk to you properly, not rushed in the
customer service center, that can actually sit down with you
and resolve your errands and so to us two things
can be so true. At the same point of time,
we can use AI to take and automate the boring
and mundane task away, and we at the same point
of I must recognize that people will expect a human
(14:37):
connection Sebastian.
Speaker 2 (14:39):
Being an everything app or everything platform is a goal
and vision you share with others. X has similar ambitions,
particularly in finance, right, But Uber would also say there
are elements of its platform that in the future it
can move into the areas you're talking about. Where do
you see yourself sitting and who are your rivals in
(14:59):
that domain?
Speaker 10 (15:02):
It's the billion dollar question, my friend, in the silicon
value right now, will there be one assistant to serve all,
one ring to forge them all or will there be
multiple assistants?
Speaker 11 (15:14):
Right?
Speaker 4 (15:15):
And the answer is nobody knows.
Speaker 10 (15:17):
I at least for one, need to know that our
assistant digital financial system needs to be the best in
the world at what it does for our customers, and
hopefully people want to use it for that now. On
the other hand, as much as some people are yeah,
of course, it's just going to be one. I've been
around twenty years long enough to remember in two thousand
and seven, when Facebook was supposed to be where all
(15:38):
of Internet happened, and all of Internet was going to
happen inside Facebook, that didn't.
Speaker 4 (15:42):
Actually materialize that way.
Speaker 10 (15:44):
So I'm still probably in the camp that there will
be a few really smart assistants that help you on
different topics and that you trust more on specific topics
than others.
Speaker 4 (15:54):
But this is the billion dollar question.
Speaker 1 (15:56):
And we're old enough to remember that Klan is older
than Facebook Meta. So the IPO not happening this year,
mind it next year.
Speaker 10 (16:05):
Well, I would say market conditions look brighter than they
did back in April, but now, as you know, I
can't comment on.
Speaker 4 (16:15):
That, so I'm sorry.
Speaker 10 (16:17):
I would love to say something more than that, but
I think at least it's great to see that markets
look better.
Speaker 1 (16:22):
Sebastian is always great talking to you. Thank you, Knnescio.
Sebastian instrum Kowski.
Speaker 2 (16:27):
Robotaxi firm Zekes has opened a production facility in the
Bay Area that says has the capacity to turn out
ten thousand robotaxes a year. The Amazon unit's been testing
its purpose built robotaxis that have no steering wheel wall
pedals in locations across San Francisco and Las Vegas.
Speaker 4 (16:43):
Zooks.
Speaker 2 (16:43):
CEO I S. Evans joins us from the new facility,
and the obvious question is, like ten thousand robotaxes a
year at full scale, it's a lot of potential, But
what's the reality. I've always known you to be very pragmatic.
Give me the sort of target for this year and
next year for what we'll roll off the line.
Speaker 11 (17:02):
Yeah, the reality is really, first of all, thanks for
having me ed.
Speaker 2 (17:04):
Good to see you.
Speaker 11 (17:05):
The reality is that we're just ready. We are, as
you know, we're very excited. We're finally headed to our
commercial lounge in starting in Las Vegas. Ladis is here
and from there you have more and more robot taxis
coming in than we have San Francisco. Right after that
Austin and Miami coming up, and so we're gearing up
to basically be ready because as you know, with our
(17:26):
robot taxi it's purpose built serial production in the United States,
So putting the capacity in place and then turning it
on little by little as we go city by city.
Speaker 2 (17:36):
The ten thousand numbers important in the context of federal rules.
Right right now, there's a limit on the number of
vehicles that can be on public roads that have no
driver controls, just like your vehicle. But Nitza's looking at it.
How are those talks going with nitzer And do you
think you'll get that exemption to really scale up in
the coming year or two.
Speaker 11 (17:57):
So, as you know, we want the self certification route,
that's all that was available at the time. I have
to say we're very grateful to the administration for the
progress in this innovation is happening worldwide and so making
sure the US is prepared is really key. And the
talks aren't going really well. I've always said that this
is a huge transformation in transportation and working hand in
(18:21):
hand with the regulatory authorities is key. And really really
impressed with the speed so far.
Speaker 1 (18:28):
How about Amazon support as well? How much are they
loosening the purse strings? How much budget have you got Asia.
Speaker 11 (18:36):
So I don't know about loosening the first string. We
want to be every day. Were still a startup. We
have a lot of work to do. This is very
expensive and so what I can say is that Amazon
has been very supportive. They ask us good questions, they
support us, and you know, of course we come in
with a budget.
Speaker 2 (18:53):
We discuss it.
Speaker 11 (18:54):
We come in with what we have to what we
say we commit to doing, we have to do it.
And if we don't do with their questions as there
should be. But frankly, super super happy. It's been five years,
so way past the dating period and a greatful to Amazon.
Speaker 1 (19:09):
Full of relationship. What's interesting is they're also eyeing others
on the block. I'm sure the competitors just tell us
about the robo taxi competition weaimo and particularly from Tesla.
Is this narrative good for you? How much has that
impacted the government?
Speaker 11 (19:24):
Look, we've always said this is a huge market right
at scale after a sort of shelter meaning homes, apartments
and dwellings. Transportation is one of the most important and
also costly things. We know that it could be a
lot safer than it is right now on the road,
and so it's a big market, it's a big industry.
(19:46):
It's good to have multiple players. I've been a public
that we're super proud of way Moore, especially if you
live in the areas they serve. I live in the
San Francisco Bay area and I call them the cute
Casper ghosts. They are roaming around and as far as Sessler,
I've also said the more the merrier, I know they
have their own path. I don't like to comment or
(20:07):
criticize others. I'm sure they have their path laid out,
and we all have to be on the same roads,
and we're all subject to the same regulatory authorities.
Speaker 2 (20:16):
I'm sure I've taken the Zoo's vehicle on the strip
in Las Vegas, right, and you're inching towards commercial service,
But I think people would really appreciate the literal understanding
of what you'll do. Number of zoos vehicles on that strip,
the pricing in charging fares for all of those tourists.
Speaker 11 (20:34):
All right, So in terms of numbers right now, we
have over a dozen or so roaming around the strip.
I mean, you know, people could count them, so there's
no point in not telling you the number. And they
write every day because we have to learn it's not
just self driving is the underlying technology. But at the
end of the day, what the customer cares about is
(20:54):
a wonderful experience that makes them feel special, that they
are picked up where they want it to be picked up,
dropped off where they wanted to be dropped off, and
that it took a reasonable amount of time and they
have a great experience while doing it, and then you
also have operations behind that.
Speaker 4 (21:10):
So you can expect us to be just.
Speaker 11 (21:12):
You know, adding tens and tens and tens and serving
the market and then controlling that relative to the demand.
As far as pricing, obviously, I'm not going to get
into the details of pricing, but customers are already used
to a certain pricing, and we intend to be competitive,
and we also intend to be ready for what happens
at scale.
Speaker 4 (21:30):
Ay.
Speaker 1 (21:30):
Sure, Evans, it's great to talk to you. The CEO
of Zoos or a backdrop, Welcome back to Blomberg Tech.
Speaker 2 (21:41):
I'm Caroline hid in New York and I met Love
Love in San Francisco. I wan look at the chip
sector real quick, because there's bits and pieces of news
driving markets. Two names I'm looking at are Marvel and Intel.
Marvel best performer and then that's that one hundred and
the socks. The news well, it's just been talking up
its competence in AI at a conference. Frankly, Marvel does
ace right custom silicon, but that's a significant gain and
(22:02):
a lot of sales siders coming out and saying we
like what we're hearing about Marvell and where it's going
to fit in in that custom silicon landscape. Then you
have Intel up two percent or so, a restructuring, new
engineering leadership, new chief revenue officer, and the market's cheering it,
although in a more muted way, probably carried than Marvell's getting.
But always keeping an eye on the semiconductor space.
Speaker 1 (22:23):
Now you are. We're also always keeping an eye on
TikTok because the US deadline to divest or be banned,
it's got a third count them, third extension from President Trump,
the administration delaying the ban by another ninety days, allowing
the social media app just keep on operating in the
United States as it proceeds with negotiations. For more on
the future of TikTok, Project Liberty founder long time bidder
(22:44):
for TikTok, Frank mccott, JO Junior joins US. Now, Frank,
this is a never ending story, is it not?
Speaker 12 (22:52):
Well, it just yeah, it does seem that it's it's
taking a long time to get a deal made here.
You know, you had the two hundred and seventy days
and then the two seventy five day extensions, and now
another ninety days. So yeah, it's been a while, but
you know, I've learned to be very patient, hang around
the hoop.
Speaker 6 (23:09):
A lot of good things get done when that happens.
Speaker 12 (23:11):
And you know, my sense is and this is not
a you know, this is pure, purely my opinion, but
I think this is the last extension. I think ninety days,
not seventy five days, is significant, and I think something
gets done within the next ninety days or not.
Speaker 1 (23:23):
But does it involve you. Have you been on the
phone with the Vice president? Have you been involved in
the negotiations.
Speaker 12 (23:30):
You know, we were very much involved during the first
extension and less so during the second.
Speaker 6 (23:37):
Things have been relatively quiet as a.
Speaker 2 (23:39):
Matter of fact.
Speaker 12 (23:40):
So I don't know if I should, you know, draw
any inferences there, but it's been fairly quiet overall. Look,
I still love our chances, Caroline, because look, the legislation
is very very clear on what is mandated. Our bid,
as far as I know, is the only bid that
(24:03):
actually qualifies, that actually meets the criteria in that legislation
where we completely disentangle from.
Speaker 6 (24:09):
The Chinese technology.
Speaker 2 (24:11):
So, Frank, I want to get really detailed on this
because on the other side of the table in this
bidding process, there is a coalition of different individuals and
technology companies whose proposals I understand it is outside what's
legislated for, in other words, some element of collocation of
data and licensing the algorithm. Would you just explain how
(24:34):
your bid is distinct from that. Yeah, well, and I
think you've hit the nail on the head. And what
we are we're.
Speaker 6 (24:41):
Not looking to co host the data or to use
the Chinese algorithm.
Speaker 12 (24:50):
Project Liberty is about empowering individuals, not exploiting them. So
we're not interested in scraping people's down to surveilling them, right,
spying on them, scraping their data, aggregating it, and then
micro profiling people and then using a black box algorithm
(25:11):
to manipulate them.
Speaker 6 (25:13):
That's not what we're interested in.
Speaker 12 (25:15):
And that's why TikTok is so attractive to us, because
we can not only solve the national security issue, but
we can move the user base in the data onto
this new, clean, made in America stack, which doesn't rely
on Chinese technology, doesn't surveil on people, and as a
matter of fact, empowers people to permission the use of
(25:36):
their data and get paid for it.
Speaker 6 (25:39):
This is going to be the new Internet. It's going
to happen sooner or later.
Speaker 12 (25:43):
How many more days can go by where we're going
to read about another horror story that is occurring with
the current Internet technology, which is highly exploitive and highly predatory.
The current model is not sustainable. In my opinion, it's
going you change, we bring the sooner it change is
(26:03):
the better, Frank.
Speaker 2 (26:05):
As the extensions keep coming and the process continues, does
the price for TikTok go up or down or stay
the same?
Speaker 12 (26:15):
Well, from our perspective, it stays the same because what
we were buying, assuming the user base stays the same
and there's no change in the numbers. As far as
the value to others, I can't, I really can't comment
on that, and I'd only be speculating. But you know,
our view is we can put a really clear value
(26:36):
on TikTok, the US TikTok, with the current user base,
with the data, with the brand, without the algorithm.
Speaker 1 (26:44):
Frank, we asked you, and we thank you for being
so transparent about your conversations with the administration. What about
with China? What about with byte dance, Because we understand
much of the elongation of the process is they don't
want to let go of the algorithm and they want
to keep it INtime.
Speaker 12 (27:01):
Caroline, I think that's a really important question you're asking.
I don't think any of us know what China is
ultimately going to do here, and I think it's a
big if in this whole transaction. If I think, one
thing we do know is they're not going to let.
Speaker 6 (27:18):
Us TikTok go with the algorithm or with the IP.
Speaker 12 (27:22):
So any chance of a deal, in my opinion, would
be a deal that disentangles from their technology. And the
deal that disentangles from their technology, I mean, why not
make the deal then? Because if there's not going to
be a deal and the only option to shut down,
why not sell.
Speaker 6 (27:40):
The pieces and parts for.
Speaker 12 (27:42):
A lot of money and achieve their objective, which is
no sharing of their technology.
Speaker 6 (27:49):
So I think that we just don't.
Speaker 12 (27:52):
Know if they're even going to let us TikTok go
without the algorithm.
Speaker 6 (27:57):
We're betting they will, and that's been our bet from
day one, But we'll see.
Speaker 1 (28:02):
And what about the moon music of the user base.
When this all first came to light under the Biden administration,
there was fierce opposition from many of those users, but
actually the US public at large actually wanted to get
rid of TikTok. But now it feels as though we've
moved the other way. Where is general public consensus on
whether we want to kick out TikTok or not?
Speaker 6 (28:25):
You know, I think it shifts and moves. I think
right now what's happened is that because you know that.
Speaker 12 (28:30):
This is the third extension, people are a bit anesthetized,
and you know, you're not sure what's going to happen,
and so are kind of not as it's it's not
as front and center on the minds of the user
base as it was when it was.
Speaker 6 (28:44):
Threatened to be shut down with the legislation.
Speaker 12 (28:47):
By the way, I believe us TikTok is going to
be sold a shut down. The legislation is very clear,
and something's going to give here. And I you know
again I said earlier, and I have no I please,
I have no proof of this, but I just have
a gut feel this is the last extension.
Speaker 6 (29:04):
Something's going to happen during this ninety days.
Speaker 2 (29:07):
So Frank, sorry to interrupt you. So you've also you
basically opened the door to a third path, which we
discussed less, which is that the President could indeed decide,
you know what, I don't want to go with. I've
a bidder, and I will shut down US TikTok or
TikTok in the US just explain, you know how you've
(29:28):
You've been transparent. Contact with the administration has been limited
in this period. But that seems a possibility.
Speaker 6 (29:37):
Yeah, I think it is a third possibility.
Speaker 12 (29:39):
And this is again I've said from the beginning, I
think when push comes to shove, or when this process
has come to a conclusion, TikTok will be sold without
the algorithm.
Speaker 6 (29:54):
But you're quite right, it may be shut down on
the US.
Speaker 12 (29:58):
Side and and or China may just not allow it
to be sold. These are all distinct possibilities. So there
is uncertainty here. But look, Project Liberty is continuing to
build the technology onboard users and create this alternative Internet,
which we think is we need now that the bottom
(30:21):
line is we have an Internet that's that's broken, but
nobody's not going to use.
Speaker 6 (30:25):
It until there's an alternative.
Speaker 12 (30:27):
So our goal is to build that alternative and then
and then actually migrate users and build and by the way,
build new apps in this new world, and to create
user base there. So who would not be given the
choice of an Internet that surveils you, scrapes your data,
and it basically exploits you, versus an Internet where you're
(30:48):
permissioning the use of your data. You get paid for
your data if it's a commercial use case that it's
used for, and you're in charge of you Again, you're
at the center right now. We have an Internet, We
have the platform at the center. Were are all just commandities?
We need an Internet? Well, we're at the center.
Speaker 6 (31:04):
We have agency. Again, we're in charge and we're respected
quite frankly.
Speaker 2 (31:09):
Frank McCourt, junior Project Liberty, one of the bidders as
well of course for us TikTok. Thank you very much.
Speaker 1 (31:16):
This is Bloomberg Tech and you are looking at a
live shot for the principal room. Check out the premiere
of Bloomberg Tech Europe this Friday, where we'll dive into
all the key tech stories from across the pond. This
is the bloemerg.
Speaker 2 (31:38):
The US Senate voted to pass the Genius Act late yesterday,
moving the country's first crypto legislation forward. A rare moment
of bipartisanship in the Senate However, Republicans did block Democratic
efforts to bar the president from profiting from crypto efforts
he's affiliated to while he's in office. White House, AI
and Cryptos are David Sachs joins us now in an
(32:00):
exclusive conversation. David, good morning, Thank you for being back
here on Bloomberg Tech. I think that the immediate question
is the immediacy of how quickly the bill passes to
the President's desk and how you see that happening.
Speaker 13 (32:15):
Well, thanks ed, glad to be here. So the next
step year is for the House to take it up,
and I think the House is considering its options, but
I think we're basically at the finish line here. The
House already passed a similar version of the bill called
the Stables Act, and I think that we're very close
(32:35):
here to having a bill that can go to the
President's desk.
Speaker 2 (32:38):
There is also a lot of parallel interest from our audience,
in particularly in the market structure efforts that are underway.
Do you believe or see that the President considering packaging
them together the Stable Coain legislation with market Structure.
Speaker 13 (32:53):
Well, like I said, I think the House is still
considering its options. The issue with packaging them together. Is
that is that the Market Structure Bill has never been
taken up by the Senate. It did pass the House
and the last Congress, but it never passed the Senator
or was even taken up by the Senate. And so
you could say that the market structure bills on the
(33:14):
ten yard line, whereas the whereas the Market Structure Bill
is really just a few yards away from becoming laws.
So I think there are different stages of the process,
and if they were packaged together, it would slow down
the stable Coin Bill, But those decisions still have to
be made.
Speaker 1 (33:31):
Let's just talk about what this could unleash. If it
does go forward. Stable coins could swell to its high
as three point seven trillion dollars by twenty thirty, that's
according to City. But are we seeing perhaps a delay
in regulation elsewhere that could stymy that sort of growth,
Zizy saying, Look, if we don't see others getting on
the bandwagon here, it could be limited to just five
(33:52):
hundred billion dollars.
Speaker 13 (33:55):
No, I mean, I think that the stable Coin Bill
is very helpful, provides regulatory clarity and stability for the
stable coin industry. Like you were saying, there's already something
like two hundred and fifty billion dollars in float of
stable coins, and that's out without there being a true
regulatory framework in the United States. Right now, the number
one issuer stable coins is offshore. And what this bill
(34:19):
would do is provide like I said, the regulatory clarity
and safety would bring the whole stable coin industry on shore.
It would enhance consumer protection. The issuers of stable coins
would have to get audited on a quarterly basis. Consumers
could be confident that their dollar based stable coins were
reserved on a one to one basis with actual dollars
(34:41):
in US bank accounts, and I think this would increase
confidence in the industry. And I think that you would
also see banks getting into the act. I think you'd
see traditional financial players getting involved in it, and that's
why the float is expected to grow from call it
roughly two hundred and fifty billion to trillions of dollars,
(35:01):
and that would create more demand for the US dollar Internationally,
I think you could see other economies start to dollarize
the bottom up, as their citizens would prefer to use
US digital dollars as opposed to whatever fiat currency they're using,
and that would create potentially trillions of dollars of new
demand for US Treasury. So I think this bill is
(35:23):
a is a major piece of legislation. I think it is.
It's a fantastic bill just on its own. I think
that the House would go ahead and take it up,
and I think they will take it up and lots
that they're going to put it on the President's desk
very soon.
Speaker 1 (35:34):
What about businesses taking it up? As you say, people
waiting in the wings reports Amazon, Walmart wanting to have
their own stable coin issuance? What is the regulatory oversight
kind of be like you say, of course it's put
in stone in terms of the law, What about the
resources for their regulation, because there's going to be a
lot to analyze.
Speaker 13 (35:50):
It feels like, yeah, so it's going to stable coins
will be under the purview of the banking system, and
banking regulators will look at that, and stable cooin insurers
will have to go through a regulatory process and they'll
get approved and like I said, they'll be quarterly audits.
And I think that the bill will provide the framework
that will give confidence to a lot of traditional financial
(36:12):
players to enter the space. And so I think you're
going to see new stable coin products, and I think
you'll also see stable coins.
Speaker 4 (36:18):
Being used as payments.
Speaker 13 (36:19):
I think this is one of the really exciting things
about the bill is that blockchain infrastructure will be used
as a new kind of dollar based payment system. Yes,
that's faster, it's more efficient, smoother, It's a payment system
of the future. It's kind of ironic that when the
crypto industry really started with bitcoin about fifteen years ago,
what was anticipated is that you would get a new
(36:40):
kind of currency, you get a non fiat currency. But
as it turns out, a really important use case of
blockchains has been to support digital dollars, to support tokenized dollars.
And I think you'll see the extension of that payment
system online with that legislation, and that's a really exciting thing.
We don't want this being driven offshore right now. Like
(37:01):
I said, the leading staple coin issure is offshore. I
think that you will see this be a new US
based payment system that emerges online.
Speaker 2 (37:10):
David, I'm looking at it, for example, shares of coinbase
and Circle and basically the market hearing the passage of
the bill, you're basically talking about dollarization, and I wondered
if you'd just reflect for a minute of how you
feel that the final sort of composition of this legislation
(37:33):
supports the goals, the bigger picture goals that you and
the President had hoped for when you set out to
do it.
Speaker 13 (37:41):
Sure so, when the President first took office, and even
before he took office, when he was on the campaign trail,
he promised to make the United States the crypto capital
of the planet and to replace the approach of the
Biden administration, which was essentially regulation through prosecution. I mean,
the Biden administration was doing everything it could to driveto
companies offshore, and he promised to change that approach and
(38:03):
make and provide regulatory clarity so that the innovation could
happen in the United States. And I think that you know,
the Trump administration has done that. Even before this bill,
the President had signed in an executive order to make
bitcoin a strategic reserve asset, providing I think a kind
of legitimacy for the industry that it had been seeking.
(38:24):
We also have formed a President's Working Group on Digital
Assets that's been systematically hunting down and eliminating some of
these war on crypto regulations that have been impeding in
the industry. The bottom line here is that we just
want a fair approach. What founders and entrepreneurs been asking
for is just tell us what the rules are and
will abide by those rules. So we've been trying to
(38:44):
provide that regulatory clarity. But at the end of the day,
if you want to make sure that the rules stay
stable for founders, you need to enshrine them in law.
And it's great when you can get the various agencies
and departments the government to change their rules to take
up better rulemaking, and we've done that. But again, the
(39:06):
way that you provide long term protection against certain of
you know, a new Garriginsler or something like that, just
do you enshrining them into law. And that's what this bill,
the Genius Act, would do, and it's also what the
Market Structure legislation would do, and we want to keep
that up.
Speaker 2 (39:21):
Next to be sure, sorry to interrupt you, what is
missing from the bill and what Democrats push for, What
specific controls on the president and president's family in their
ability to move within the corners of the crypto market
with which they're affiliated. There's a lot of concern that
that wasn't done. Is the concern justified.
Speaker 13 (39:45):
I don't think so. I mean, so, first of all,
you should ask them what they're doing, because I'm not
involved in any particular company's products. I'm just an innovation advisor.
But my understanding is that what they've said is the
president's assets are in a blind trust. His sons are
not in the government. They're adults, and they're allowed to
engage in business, and they have a company. And I
think that these are unrelated things.
Speaker 1 (40:06):
You're an innovation expert, not just in crypto but in
AI too. We shift there a little bit because you've
hunted down rules that perhaps weren't serving some in the
business entrepreneurship in a US, for example, the diffusion rule.
But what follows it?
Speaker 13 (40:18):
David Well, I think it's a good question about what
comes next. I think the problem with the diffusion rule,
this was the Biden difusion rule that was dropped at
the eleventh hour by the Biden administration something like five
days before the end of their term. I don't think
it was really thought through. It was overly burdensome, and
what it did is it required every sale of a
(40:38):
GPU worldwide, it required a license from the Commerce Department
or one of several narrow exemptions that also had to
be lawyered, and so this was just incredibly burdensome. I
think it impeded the global the US semiconduct business and
(41:01):
the US data center business. I think it hampered its
a market share worldwide, which should be an important objective
of US policy is for the US to win the
AI race by becoming the dominant tech stack internationally. So
the diffusion rule I think would have shot our technology
industry in the foot out of a concern to prevent
(41:21):
chips from going to China. To be sure, I think
that the leading American semiconductors should not go to China,
but we have export controls on that, and I don't
think we need a new global licensing regime on every
single GPU transaction to achieve that objective.
Speaker 2 (41:37):
David Jensen Wong was on the show very recently and
he expressed his concern that Huawei has technology that is
as performances in Vidia's H two hundred. There had been
a lot of focus on AG twenty. I know that
the Commerce Department has issued some assessment of how much
Huawei can produce. I think they said two hundred thousand
(42:00):
GPU capacity, but there are concerns, and actually that their
ability to export to markets outside of America is much
greater than that. What is your assessment of how China
can compete with its own GPUs in markets outside of America.
Speaker 13 (42:16):
Well, it is true that today China is supply constrained
on how many GPUs they can produce, but I would
expect that to change pretty rapidly because China has proven
adept at working around our restrictions, and you saw that
back in January. We had this Deep Seek moment where
before Deep Seek people thought that Chinese AI models were
(42:39):
years behind, and then Deepseak launch, we realized that maybe
they're more like three to six months behind. I think
today China is maybe one and a half to two
years behind US in chip design, but Huawei is moving
fast to catch up, and even before they fully caught up,
I think you will see them exporting their chips for
the global market. For example, there was a story out
(43:02):
of Malaysia that they were creating a sovereign data center
with Wawei send chips, and that story got walked back
because because I think the government was afraid of the
US reaction. But it was a minister of the government
who did announce that they were creating a sovereign data
center using Huawei chips, So I think that we do
have to be concerned about Huawei competing on the global market.
(43:24):
They may not fully be there yet, but I would
expect that to change in the future. And I think
that if we're overly restrictive in terms of US sales
to the world, I think there'll be a time where
we're kind of kicking ourselves saying, you know, when we're
in all of a sudden, Huawei is everywhere, We'll be saying, well, wait,
when we had this whole market to ourselves, why didn't
we take advantage of that opportunity and lock in the
(43:44):
American tech stack. I think it's very important that when
we think about our goals here with respect to AI,
we want the American tech stack to win. We wanted
to become the global standard. We want to have the
largest market share we can. We want all to be
the partner of choice for the world. And I think
it's a valid policy objective to prevent our leading edge
seming conductors from going to China, but at the same time,
(44:07):
we don't want to restrict them from going to our
friends and allies. To be sure, we should name our
security requirements, but our friends and allies are eager to
comply with those security requirements.
Speaker 4 (44:16):
So I think we can.
Speaker 13 (44:17):
Achieve our objective here, our dual objective of preventing leading
chips from going to China while also making the United
States the global standard.
Speaker 1 (44:27):
David Sachs, it's great to have you back on the show.
Me thank you. Of course, the White House, AI and
cryptos are meanwhile. That does it for this edition at
Bloomberg Tech. What a wide ranging conversation with David Sacks.
Have plenty of others. We've talked to autonomous vehicles, We've
talked AI within super apps as well.
Speaker 2 (44:44):
Yeah, and there's an intense focus on that bill, right,
so I think go back and recap what David said
about what happens next? That is the question. Recap it
on the podcast. You can find the Bloomberg Tech Pod
on the terminal all the Bloomberg platforms, as well as
online on Apple, Spotify, I and on iHeart. From San Francisco,
New York City, this is Bloomberg Tech.
Speaker 9 (45:06):
Mm hmmmmmmmm mmmm
Bloomberg Tech is alive from coast to coast, with Caroline
Hide in New York and Eva low into En frances Go.
Speaker 2 (00:14):
This is Bloomberg Tech coming up. Open Ai CEO Sam
Altman says Meta offered his employees signing bonuses as high
as one hundred million dollars.
Speaker 1 (00:23):
Plus it's a win for the crypto industry. After a
stable coin bill passes the Senate, we discussed with the
White House cryptos are David.
Speaker 2 (00:31):
Sachs and another extension for the sale of TikTok. We
have Frank McCourt Jr. To talk through where his bid stands.
Speaker 1 (00:39):
Meanwhile, we talk about his market. The macro perspective, ED,
is one of a FED decision in but a few hours,
the fact that the Middle East tensions will we see
outreach between the US in Iran. At the moment, we
seeing a buying signal. We're up six percent on the NASAC.
Most of those magnificent seven names training higher. But ED,
you're focusing in on one particular name.
Speaker 2 (01:00):
Yeah, I'm looking at Meta shares a kind of like
modestly higher up half a percentage point. Meta, open Ai,
Scale i AI have all been in the news a
lot recently. The headlight right now is because of this.
Speaker 3 (01:12):
They started making these like giant offers to you know
a lot of people on our team, you know, like
hund't mind our signing bonuses more than that comper years.
Speaker 4 (01:22):
And I'm actually it is crazy.
Speaker 3 (01:24):
I'm really happy that, at least so far, none of
our best people have decided to take them up on that.
Speaker 1 (01:30):
Bloomberg has reached out to Meta, but we've not heard
back on a request for comment. For more on Meta
and the competition for AI talent, Bloomberg's Jackie Duellis joins us. Now, Jackie,
what we didn't hear in the rest of that conversation
with his brother in Uncapped He went on to really
say some damning things, perhaps about Meta and the fact
that they lack innovation and ultimately is not losing talent
(01:51):
because they want to stay for the mission of Open AI.
How fierce is it out there right now?
Speaker 5 (01:57):
Well, there's a few things that we can draw from
his comments on the podcast. One, it confirms that there's
this new chapter in the AI talent wars. It's always
been fears, but it's reaching a new level now.
Speaker 6 (02:08):
One hundred million.
Speaker 7 (02:09):
Dollar bonuses is something we've never heard of before, and
it's really telling of how much Meta is willing to
pay to regain its edge in this AI race.
Speaker 8 (02:20):
Altman's comments also highlight, like you said, there is confidence
that it's going to take more than just money to
bring the best and brightest to your team. If you
look at open AI's mission statement, they say that they
think about their work for the benefit of humanity. That's
really bold and large and purposeful. Whereas Meta I looked
(02:40):
up their mission statement earlier and it says we're advancing
AI for a more connected world to accelerate the potential
future META products for the benefit of people. It's not
as deep if you really dig into it, Jackie.
Speaker 2 (02:52):
A big part of the conversation that Sam Altman was
having with the reasons why one hundred million dollars isn't
enough to get open A employees to go to Meta.
What was his argument.
Speaker 1 (03:03):
Part of the.
Speaker 8 (03:04):
Argument is this larger purpose and also that they're not
as innovative that you know, people want to go to
a place where they feel like they're going to be
able to do their best work and some of that
culture problem that we've seen with Meta, and you know
they've also admitted in the past that they kind of
have trouble with middle management and just kind of the
(03:26):
almost internal bureaucracy of how you get things out there
that doesn't exist to the same degree according to all
men at Open AI. And so when you think about
the people that are going to go over, they won't
want to be able to have that assurance that their
ideas are actually going to make it into reality.
Speaker 1 (03:44):
And Jackie, they want to be on the winning team.
They want to get to AGI first, and that seems
to be the point of this. There's no point coming second.
You need to be at the business that leaves the charge.
And interestingly, those pay packages have led on some significant
talent to the superintelligence team from DeepMind, from sesame AI.
Speaker 8 (04:03):
That's right, it's but you know, we have to remember
that they are working in a new kind of organization.
Speaker 2 (04:11):
Meta at the end of the day needs.
Speaker 8 (04:13):
To incorporate this technology into its products, which is, you know,
the money maker they have shareholders they need to appease
on a quarterly basis, and that kind of pressure could
also affect the way the speed at which they work,
how quickly they roll out these these tools. But AGI
super Intelligence, this is new ground for Meta. They they
(04:37):
haven't really shredded this sort of landscape before in the
same way that open ai was really founded on these
principles to to create a gi and so you know,
you have the best and brightest, going, really intelligent people,
but we've seen some uh friction, some tension and.
Speaker 1 (04:56):
You know going on in.
Speaker 8 (04:57):
Its own in its fair team, the the research team
inside Mata, So they're not exactly going into a place
that has this all figure it out.
Speaker 2 (05:06):
Bloomberg, Jackie de Ballas, thank you very much. Let's get
to a story that broke in the last hour. Open
ai is phasing out the work it does with scale Ai,
cutting ties with that company just days after Meta's fourteen
billion dollar investment. Bloomboath Rachel Metz joins us with more So,
I think there's a very important distinction of what's happening here.
Open i has existing contracts with scale Ai, but what
(05:28):
we've learned is that that relationship is going to change
in the future.
Speaker 9 (05:33):
Yes, open ai is phasing out the remaining work that
is doing with scale Ai.
Speaker 1 (05:38):
The company has.
Speaker 9 (05:39):
Branched out a lot over the past few years as
its data needs have expanded vastly, and also changed based
on the kinds of models that it's building. So at
this point Scale represents the companies puts as a very
small fraction of its business, but over time it's going
to now be totally phasing that out.
Speaker 4 (06:00):
Chill.
Speaker 1 (06:00):
These two stories, yours and Jackie's, are linked the narratives
because of course Alexander Wang goes to the superintelligence team
over at Meta and indeed takes a lot of the
talent from SCALEAI. There other companies, perhaps not just open Ai,
start to move away from SCALEAI. Are you hearing it
elsewhere that maybe these contracts get undone in the future.
Speaker 9 (06:20):
We are definitely hearing that companies that provide data and
data services. It's a very fractured, fragmented space.
Speaker 1 (06:29):
And there are a lot of companies.
Speaker 9 (06:31):
That are much less known than Scale but that are
also worked with by these companies like open Ai Andthropic,
Google and many others. And I know they're seeing a
surge of inbound interest and they also are hearing from
some nervousness from some of their customers. Companies tend to
work with a bunch of players, and it is possible
that this tie up, even the Scale has said it
(06:53):
will remain as an independent business.
Speaker 1 (06:56):
It will make people nervous.
Speaker 2 (06:59):
We should say that Scale ai did decline to comment
on the story, just as Meta declined to comment on
the Sam Outman claims on comp The history of Scale
is interesting because there's an element of manual work that
they're doing and they relied on this kind of army
of contractors. Just explain that the basics of that, because
my reading of your story is the open AI was
(07:19):
thinking about the relationship over the past year before a
lot of this happened.
Speaker 9 (07:23):
Anyway, Yes, so Scale ai at You're absolutely correct. It
started out as a business that had a large number
of contractors that were paid to label data for AI models.
Over time, though, the AI market has shifted and shifted
quite rapidly, so at this point, while it still has
(07:45):
that legacy human data labeling business, it's also expanded into
a few other areas, and one of them is increasingly
hiring experts, experts that might work a few hours on
the nights or weekend, someone with a PhD or a
law degree, and instead of labeling data directly, what they're.
Speaker 2 (08:01):
Doing is coming up with difficult tasks for EI models
to solve.
Speaker 9 (08:04):
And that's also something that's become increasingly important to open AI,
but it seems like skill is opening. I felt that
skill was not quite up to the level that it
needed to support its products with this kind of work.
Speaker 1 (08:17):
Remokes Rachel Mets. We appreciate it, thank you. Let's just
talk about Emil Musk's AI startup now xai. It is
burning through one billion dollars a month, with expected losses
of thirteen billion in twenty twenty five due to the
high costs of building advanced AI models.
Speaker 3 (08:34):
Now.
Speaker 1 (08:34):
This is all according to sources, who say that to
cover the gap, musk start up is currently trying to
raise nine point three billion dollars in debt in equity.
But even before the money is in the bank, the
company has plans to spend more than half of it
is the next three months alone it Amazon CEO Andy
(08:56):
Jesse says he expects his workforce to shrink as a
handles more tasks. In an email to employees yesterday, Jasi
wrote that over the next few years, Amazon expects to
quote reduce our total corporate workforce. Is the later CEO
to warn of AI's impact on headcount. Now Amazon had
over one and a half million employees at the end
of March, mostly though in warehouse jobs ed.
Speaker 2 (09:18):
Another company that's warned about the impact of AI on
the workforce is Klana, embracing generatorve AI tools, though with
some change of heart on hiring for customer services. Today,
the startup, known for its buy and now pay Lada service,
is entering the mobile market with plans to launch a
thirty dollars per month service in the US, with plans
to expand into the UK and Germany later this year.
(09:40):
Klana's CEO Sebastian Schmierkowski joins us now welcome to the
world of Mvno. It was a headline I didn't expect
to see, Sebastian. I mean, the simple question for claner
is why why do this?
Speaker 10 (09:54):
It comes back actually to the fact that we do
believe the future is a digital financial assistant that helps
you save time, save money. And in this case, if
we not only identify that one of our customers can
save money using this, but we can actually put it,
bundle it together and offer it by this seamless experience
of just a button say yes, I would like to
(10:14):
get a better price or a better offer, and here
it is and it's live on my phone with virtual
SIM cards. Now you can get it live very very quickly.
That makes a lot of sense. So it's just a
way for us to kind of bundle more services and
value to our existing customer base.
Speaker 2 (10:28):
The mechanism, right is that this is on the AT
and T network forty dollars a month. Does Klana make
any money on that arrangement?
Speaker 10 (10:36):
We do, But most importantly this adds value to our
customer base.
Speaker 4 (10:42):
I think also, like one of my beliefs is that
if you have if.
Speaker 10 (10:46):
We're going to have truly digital financial assistance that can
recognize can come to you and wake you up in
the morning and say I can save you on the
carrier bill, I can save you on electricity bill. The
only thing you need to do is say yes, and
I'll take care of all the switching. I'll do everything,
you all the paperwork. So you're just going to save
ten dollars a month or whatever it is.
Speaker 4 (11:04):
The point is.
Speaker 10 (11:05):
What that means is the excess profits that have existed
in utilities, in banking and all these things will have
to come down because we are predominantly stuck with our
existing providers, not because we love them, not because they're awesome,
but because we hate switching and we hate leading reading
boring legal terms.
Speaker 4 (11:25):
To realize is this offer really better or not? Right?
Speaker 10 (11:28):
So the point is that, like we believe that their
marginsy in these services will be significantly lower going forward.
Speaker 4 (11:36):
And that's why. Also it's smarter of us to who are.
Speaker 10 (11:39):
A new entrance into this industry, to come in with
a very attractive offer from day one, rather than believe
that we can lure people into some long, lengthy contracts
and make too much money on them over time.
Speaker 1 (11:50):
New entrants that already serve twenty five million active users
here in the United States, many users who associate you
really would buy now, pay later. How is that narrative shifting?
How were starting to see you as everything happ instead?
Speaker 4 (12:02):
Well, definitely a neo bank at least.
Speaker 10 (12:03):
I think that the neo banking concept again comes back
to that digital financial assistant, that we want to help
people save time, save money, and have them not worry
about their finances. We want to help them with all
of that, and that is kind of what banking was
supposed to do. But at some point in time that
banker got a little bit too smart realized you didn't
really have that good understanding of your own stuff and
(12:25):
put you in some pension funds where they were charging
you to I fees on it.
Speaker 4 (12:29):
Like that has to change.
Speaker 10 (12:30):
We have to come back and be in customer obsessed
and offer it the greatest value at the lowest you know,
in the highest quality, at the most affordable price.
Speaker 4 (12:39):
So that is what we're doing.
Speaker 10 (12:40):
And to us, it's everything related to you know, your
every day spending, and phone is part of your everyday spending, right,
It's a every day.
Speaker 4 (12:48):
Cost for you. So this this falls very naturally into that.
Speaker 1 (12:52):
You the Trump organization, everyone is getting into the phone companies.
But I'm interested, Sebastian, and you say your customer obsessed.
To be customer obsessed, you have to be employee obsessed.
I'm interested on the shift you've made when it comes
to customer services. You've come on the show before and
said we're all in on general to AI, I could place,
I could replace myself as CEO. I'm replacing customer services.
(13:13):
I don't need to add in terms of people and headcount.
But you've changed your mind on that.
Speaker 10 (13:18):
Well, Partially what we've said is that, like, look, I
think in many countries you'll see that in the last
ten to twenty years, our doctors and nurses have spent
less and less time with patients and more and more
times on administrative tasks. In addition to that, the cost
of administration in healthcare has risen much faster than the
amount of money spent on actual doctors, nurses and being
available to patients. So what this AI technology can enable
(13:41):
us to do is to again take all the administrative
burdens out, make those be processed by AI and allow
doctors and nurses to be available and actually spend time
on patients. And this is the same for us as
a company. We can use ais AT technology so that
when people want to speak to us and if they
want to speak to a human, which we want to
(14:02):
make sure that everyone who wants to speak to human
should always be able to do so, we also want
to make sure that those humans have less administrative task
and can actually spend more time. So to me, the
value of human connection rises in the world of AI.
Speaker 4 (14:15):
It becomes more valuable.
Speaker 10 (14:16):
It becomes more expected that you have people that have
time to talk to you properly, not rushed in the
customer service center, that can actually sit down with you
and resolve your errands and so to us two things
can be so true. At the same point of time,
we can use AI to take and automate the boring
and mundane task away, and we at the same point
of I must recognize that people will expect a human
(14:37):
connection Sebastian.
Speaker 2 (14:39):
Being an everything app or everything platform is a goal
and vision you share with others. X has similar ambitions,
particularly in finance, right, But Uber would also say there
are elements of its platform that in the future it
can move into the areas you're talking about. Where do
you see yourself sitting and who are your rivals in
(14:59):
that domain?
Speaker 10 (15:02):
It's the billion dollar question, my friend, in the silicon
value right now, will there be one assistant to serve all,
one ring to forge them all or will there be
multiple assistants?
Speaker 11 (15:14):
Right?
Speaker 4 (15:15):
And the answer is nobody knows.
Speaker 10 (15:17):
I at least for one, need to know that our
assistant digital financial system needs to be the best in
the world at what it does for our customers, and
hopefully people want to use it for that now. On
the other hand, as much as some people are yeah,
of course, it's just going to be one. I've been
around twenty years long enough to remember in two thousand
and seven, when Facebook was supposed to be where all
(15:38):
of Internet happened, and all of Internet was going to
happen inside Facebook, that didn't.
Speaker 4 (15:42):
Actually materialize that way.
Speaker 10 (15:44):
So I'm still probably in the camp that there will
be a few really smart assistants that help you on
different topics and that you trust more on specific topics
than others.
Speaker 4 (15:54):
But this is the billion dollar question.
Speaker 1 (15:56):
And we're old enough to remember that Klan is older
than Facebook Meta. So the IPO not happening this year,
mind it next year.
Speaker 10 (16:05):
Well, I would say market conditions look brighter than they
did back in April, but now, as you know, I
can't comment on.
Speaker 4 (16:15):
That, so I'm sorry.
Speaker 10 (16:17):
I would love to say something more than that, but
I think at least it's great to see that markets
look better.
Speaker 1 (16:22):
Sebastian is always great talking to you. Thank you, Knnescio.
Sebastian instrum Kowski.
Speaker 2 (16:27):
Robotaxi firm Zekes has opened a production facility in the
Bay Area that says has the capacity to turn out
ten thousand robotaxes a year. The Amazon unit's been testing
its purpose built robotaxis that have no steering wheel wall
pedals in locations across San Francisco and Las Vegas.
Speaker 4 (16:43):
Zooks.
Speaker 2 (16:43):
CEO I S. Evans joins us from the new facility,
and the obvious question is, like ten thousand robotaxes a
year at full scale, it's a lot of potential, But
what's the reality. I've always known you to be very pragmatic.
Give me the sort of target for this year and
next year for what we'll roll off the line.
Speaker 11 (17:02):
Yeah, the reality is really, first of all, thanks for
having me ed.
Speaker 2 (17:04):
Good to see you.
Speaker 11 (17:05):
The reality is that we're just ready. We are, as
you know, we're very excited. We're finally headed to our
commercial lounge in starting in Las Vegas. Ladis is here
and from there you have more and more robot taxis
coming in than we have San Francisco. Right after that
Austin and Miami coming up, and so we're gearing up
to basically be ready because as you know, with our
(17:26):
robot taxi it's purpose built serial production in the United States,
So putting the capacity in place and then turning it
on little by little as we go city by city.
Speaker 2 (17:36):
The ten thousand numbers important in the context of federal rules.
Right right now, there's a limit on the number of
vehicles that can be on public roads that have no
driver controls, just like your vehicle. But Nitza's looking at it.
How are those talks going with nitzer And do you
think you'll get that exemption to really scale up in
the coming year or two.
Speaker 11 (17:57):
So, as you know, we want the self certification route,
that's all that was available at the time. I have
to say we're very grateful to the administration for the
progress in this innovation is happening worldwide and so making
sure the US is prepared is really key. And the
talks aren't going really well. I've always said that this
is a huge transformation in transportation and working hand in
(18:21):
hand with the regulatory authorities is key. And really really
impressed with the speed so far.
Speaker 1 (18:28):
How about Amazon support as well? How much are they
loosening the purse strings? How much budget have you got Asia.
Speaker 11 (18:36):
So I don't know about loosening the first string. We
want to be every day. Were still a startup. We
have a lot of work to do. This is very
expensive and so what I can say is that Amazon
has been very supportive. They ask us good questions, they
support us, and you know, of course we come in
with a budget.
Speaker 2 (18:53):
We discuss it.
Speaker 11 (18:54):
We come in with what we have to what we
say we commit to doing, we have to do it.
And if we don't do with their questions as there
should be. But frankly, super super happy. It's been five years,
so way past the dating period and a greatful to Amazon.
Speaker 1 (19:09):
Full of relationship. What's interesting is they're also eyeing others
on the block. I'm sure the competitors just tell us
about the robo taxi competition weaimo and particularly from Tesla.
Is this narrative good for you? How much has that
impacted the government?
Speaker 11 (19:24):
Look, we've always said this is a huge market right
at scale after a sort of shelter meaning homes, apartments
and dwellings. Transportation is one of the most important and
also costly things. We know that it could be a
lot safer than it is right now on the road,
and so it's a big market, it's a big industry.
(19:46):
It's good to have multiple players. I've been a public
that we're super proud of way Moore, especially if you
live in the areas they serve. I live in the
San Francisco Bay area and I call them the cute
Casper ghosts. They are roaming around and as far as Sessler,
I've also said the more the merrier, I know they
have their own path. I don't like to comment or
(20:07):
criticize others. I'm sure they have their path laid out,
and we all have to be on the same roads,
and we're all subject to the same regulatory authorities.
Speaker 2 (20:16):
I'm sure I've taken the Zoo's vehicle on the strip
in Las Vegas, right, and you're inching towards commercial service,
But I think people would really appreciate the literal understanding
of what you'll do. Number of zoos vehicles on that strip,
the pricing in charging fares for all of those tourists.
Speaker 11 (20:34):
All right, So in terms of numbers right now, we
have over a dozen or so roaming around the strip.
I mean, you know, people could count them, so there's
no point in not telling you the number. And they
write every day because we have to learn it's not
just self driving is the underlying technology. But at the
end of the day, what the customer cares about is
(20:54):
a wonderful experience that makes them feel special, that they
are picked up where they want it to be picked up,
dropped off where they wanted to be dropped off, and
that it took a reasonable amount of time and they
have a great experience while doing it, and then you
also have operations behind that.
Speaker 4 (21:10):
So you can expect us to be just.
Speaker 11 (21:12):
You know, adding tens and tens and tens and serving
the market and then controlling that relative to the demand.
As far as pricing, obviously, I'm not going to get
into the details of pricing, but customers are already used
to a certain pricing, and we intend to be competitive,
and we also intend to be ready for what happens
at scale.
Speaker 4 (21:30):
Ay.
Speaker 1 (21:30):
Sure, Evans, it's great to talk to you. The CEO
of Zoos or a backdrop, Welcome back to Blomberg Tech.
Speaker 2 (21:41):
I'm Caroline hid in New York and I met Love
Love in San Francisco. I wan look at the chip
sector real quick, because there's bits and pieces of news
driving markets. Two names I'm looking at are Marvel and Intel.
Marvel best performer and then that's that one hundred and
the socks. The news well, it's just been talking up
its competence in AI at a conference. Frankly, Marvel does
ace right custom silicon, but that's a significant gain and
(22:02):
a lot of sales siders coming out and saying we
like what we're hearing about Marvell and where it's going
to fit in in that custom silicon landscape. Then you
have Intel up two percent or so, a restructuring, new
engineering leadership, new chief revenue officer, and the market's cheering it,
although in a more muted way, probably carried than Marvell's getting.
But always keeping an eye on the semiconductor space.
Speaker 1 (22:23):
Now you are. We're also always keeping an eye on
TikTok because the US deadline to divest or be banned,
it's got a third count them, third extension from President Trump,
the administration delaying the ban by another ninety days, allowing
the social media app just keep on operating in the
United States as it proceeds with negotiations. For more on
the future of TikTok, Project Liberty founder long time bidder
(22:44):
for TikTok, Frank mccott, JO Junior joins US. Now, Frank,
this is a never ending story, is it not?
Speaker 12 (22:52):
Well, it just yeah, it does seem that it's it's
taking a long time to get a deal made here.
You know, you had the two hundred and seventy days
and then the two seventy five day extensions, and now
another ninety days. So yeah, it's been a while, but
you know, I've learned to be very patient, hang around
the hoop.
Speaker 6 (23:09):
A lot of good things get done when that happens.
Speaker 12 (23:11):
And you know, my sense is and this is not
a you know, this is pure, purely my opinion, but
I think this is the last extension. I think ninety days,
not seventy five days, is significant, and I think something
gets done within the next ninety days or not.
Speaker 1 (23:23):
But does it involve you. Have you been on the
phone with the Vice president? Have you been involved in
the negotiations.
Speaker 12 (23:30):
You know, we were very much involved during the first
extension and less so during the second.
Speaker 6 (23:37):
Things have been relatively quiet as a.
Speaker 2 (23:39):
Matter of fact.
Speaker 12 (23:40):
So I don't know if I should, you know, draw
any inferences there, but it's been fairly quiet overall. Look,
I still love our chances, Caroline, because look, the legislation
is very very clear on what is mandated. Our bid,
as far as I know, is the only bid that
(24:03):
actually qualifies, that actually meets the criteria in that legislation
where we completely disentangle from.
Speaker 6 (24:09):
The Chinese technology.
Speaker 2 (24:11):
So, Frank, I want to get really detailed on this
because on the other side of the table in this
bidding process, there is a coalition of different individuals and
technology companies whose proposals I understand it is outside what's
legislated for, in other words, some element of collocation of
data and licensing the algorithm. Would you just explain how
(24:34):
your bid is distinct from that. Yeah, well, and I
think you've hit the nail on the head. And what
we are we're.
Speaker 6 (24:41):
Not looking to co host the data or to use
the Chinese algorithm.
Speaker 12 (24:50):
Project Liberty is about empowering individuals, not exploiting them. So
we're not interested in scraping people's down to surveilling them, right,
spying on them, scraping their data, aggregating it, and then
micro profiling people and then using a black box algorithm
(25:11):
to manipulate them.
Speaker 6 (25:13):
That's not what we're interested in.
Speaker 12 (25:15):
And that's why TikTok is so attractive to us, because
we can not only solve the national security issue, but
we can move the user base in the data onto
this new, clean, made in America stack, which doesn't rely
on Chinese technology, doesn't surveil on people, and as a
matter of fact, empowers people to permission the use of
(25:36):
their data and get paid for it.
Speaker 6 (25:39):
This is going to be the new Internet. It's going
to happen sooner or later.
Speaker 12 (25:43):
How many more days can go by where we're going
to read about another horror story that is occurring with
the current Internet technology, which is highly exploitive and highly predatory.
The current model is not sustainable. In my opinion, it's
going you change, we bring the sooner it change is
(26:03):
the better, Frank.
Speaker 2 (26:05):
As the extensions keep coming and the process continues, does
the price for TikTok go up or down or stay
the same?
Speaker 12 (26:15):
Well, from our perspective, it stays the same because what
we were buying, assuming the user base stays the same
and there's no change in the numbers. As far as
the value to others, I can't, I really can't comment
on that, and I'd only be speculating. But you know,
our view is we can put a really clear value
(26:36):
on TikTok, the US TikTok, with the current user base,
with the data, with the brand, without the algorithm.
Speaker 1 (26:44):
Frank, we asked you, and we thank you for being
so transparent about your conversations with the administration. What about
with China? What about with byte dance, Because we understand
much of the elongation of the process is they don't
want to let go of the algorithm and they want
to keep it INtime.
Speaker 12 (27:01):
Caroline, I think that's a really important question you're asking.
I don't think any of us know what China is
ultimately going to do here, and I think it's a
big if in this whole transaction. If I think, one
thing we do know is they're not going to let.
Speaker 6 (27:18):
Us TikTok go with the algorithm or with the IP.
Speaker 12 (27:22):
So any chance of a deal, in my opinion, would
be a deal that disentangles from their technology. And the
deal that disentangles from their technology, I mean, why not
make the deal then? Because if there's not going to
be a deal and the only option to shut down,
why not sell.
Speaker 6 (27:40):
The pieces and parts for.
Speaker 12 (27:42):
A lot of money and achieve their objective, which is
no sharing of their technology.
Speaker 6 (27:49):
So I think that we just don't.
Speaker 12 (27:52):
Know if they're even going to let us TikTok go
without the algorithm.
Speaker 6 (27:57):
We're betting they will, and that's been our bet from
day one, But we'll see.
Speaker 1 (28:02):
And what about the moon music of the user base.
When this all first came to light under the Biden administration,
there was fierce opposition from many of those users, but
actually the US public at large actually wanted to get
rid of TikTok. But now it feels as though we've
moved the other way. Where is general public consensus on
whether we want to kick out TikTok or not?
Speaker 6 (28:25):
You know, I think it shifts and moves. I think
right now what's happened is that because you know that.
Speaker 12 (28:30):
This is the third extension, people are a bit anesthetized,
and you know, you're not sure what's going to happen,
and so are kind of not as it's it's not
as front and center on the minds of the user
base as it was when it was.
Speaker 6 (28:44):
Threatened to be shut down with the legislation.
Speaker 12 (28:47):
By the way, I believe us TikTok is going to
be sold a shut down. The legislation is very clear,
and something's going to give here. And I you know
again I said earlier, and I have no I please,
I have no proof of this, but I just have
a gut feel this is the last extension.
Speaker 6 (29:04):
Something's going to happen during this ninety days.
Speaker 2 (29:07):
So Frank, sorry to interrupt you. So you've also you
basically opened the door to a third path, which we
discussed less, which is that the President could indeed decide,
you know what, I don't want to go with. I've
a bidder, and I will shut down US TikTok or
TikTok in the US just explain, you know how you've
(29:28):
You've been transparent. Contact with the administration has been limited
in this period. But that seems a possibility.
Speaker 6 (29:37):
Yeah, I think it is a third possibility.
Speaker 12 (29:39):
And this is again I've said from the beginning, I
think when push comes to shove, or when this process
has come to a conclusion, TikTok will be sold without
the algorithm.
Speaker 6 (29:54):
But you're quite right, it may be shut down on
the US.
Speaker 12 (29:58):
Side and and or China may just not allow it
to be sold. These are all distinct possibilities. So there
is uncertainty here. But look, Project Liberty is continuing to
build the technology onboard users and create this alternative Internet,
which we think is we need now that the bottom
(30:21):
line is we have an Internet that's that's broken, but
nobody's not going to use.
Speaker 6 (30:25):
It until there's an alternative.
Speaker 12 (30:27):
So our goal is to build that alternative and then
and then actually migrate users and build and by the way,
build new apps in this new world, and to create
user base there. So who would not be given the
choice of an Internet that surveils you, scrapes your data,
and it basically exploits you, versus an Internet where you're
(30:48):
permissioning the use of your data. You get paid for
your data if it's a commercial use case that it's
used for, and you're in charge of you Again, you're
at the center right now. We have an Internet, We
have the platform at the center. Were are all just commandities?
We need an Internet? Well, we're at the center.
Speaker 6 (31:04):
We have agency. Again, we're in charge and we're respected
quite frankly.
Speaker 2 (31:09):
Frank McCourt, junior Project Liberty, one of the bidders as
well of course for us TikTok. Thank you very much.
Speaker 1 (31:16):
This is Bloomberg Tech and you are looking at a
live shot for the principal room. Check out the premiere
of Bloomberg Tech Europe this Friday, where we'll dive into
all the key tech stories from across the pond. This
is the bloemerg.
Speaker 2 (31:38):
The US Senate voted to pass the Genius Act late yesterday,
moving the country's first crypto legislation forward. A rare moment
of bipartisanship in the Senate However, Republicans did block Democratic
efforts to bar the president from profiting from crypto efforts
he's affiliated to while he's in office. White House, AI
and Cryptos are David Sachs joins us now in an
(32:00):
exclusive conversation. David, good morning, Thank you for being back
here on Bloomberg Tech. I think that the immediate question
is the immediacy of how quickly the bill passes to
the President's desk and how you see that happening.
Speaker 13 (32:15):
Well, thanks ed, glad to be here. So the next
step year is for the House to take it up,
and I think the House is considering its options, but
I think we're basically at the finish line here. The
House already passed a similar version of the bill called
the Stables Act, and I think that we're very close
(32:35):
here to having a bill that can go to the
President's desk.
Speaker 2 (32:38):
There is also a lot of parallel interest from our audience,
in particularly in the market structure efforts that are underway.
Do you believe or see that the President considering packaging
them together the Stable Coain legislation with market Structure.
Speaker 13 (32:53):
Well, like I said, I think the House is still
considering its options. The issue with packaging them together. Is
that is that the Market Structure Bill has never been
taken up by the Senate. It did pass the House
and the last Congress, but it never passed the Senator
or was even taken up by the Senate. And so
you could say that the market structure bills on the
(33:14):
ten yard line, whereas the whereas the Market Structure Bill
is really just a few yards away from becoming laws.
So I think there are different stages of the process,
and if they were packaged together, it would slow down
the stable Coin Bill, But those decisions still have to
be made.
Speaker 1 (33:31):
Let's just talk about what this could unleash. If it
does go forward. Stable coins could swell to its high
as three point seven trillion dollars by twenty thirty, that's
according to City. But are we seeing perhaps a delay
in regulation elsewhere that could stymy that sort of growth,
Zizy saying, Look, if we don't see others getting on
the bandwagon here, it could be limited to just five
(33:52):
hundred billion dollars.
Speaker 13 (33:55):
No, I mean, I think that the stable Coin Bill
is very helpful, provides regulatory clarity and stability for the
stable coin industry. Like you were saying, there's already something
like two hundred and fifty billion dollars in float of
stable coins, and that's out without there being a true
regulatory framework in the United States. Right now, the number
one issuer stable coins is offshore. And what this bill
(34:19):
would do is provide like I said, the regulatory clarity
and safety would bring the whole stable coin industry on shore.
It would enhance consumer protection. The issuers of stable coins
would have to get audited on a quarterly basis. Consumers
could be confident that their dollar based stable coins were
reserved on a one to one basis with actual dollars
(34:41):
in US bank accounts, and I think this would increase
confidence in the industry. And I think that you would
also see banks getting into the act. I think you'd
see traditional financial players getting involved in it, and that's
why the float is expected to grow from call it
roughly two hundred and fifty billion to trillions of dollars,
(35:01):
and that would create more demand for the US dollar Internationally,
I think you could see other economies start to dollarize
the bottom up, as their citizens would prefer to use
US digital dollars as opposed to whatever fiat currency they're using,
and that would create potentially trillions of dollars of new
demand for US Treasury. So I think this bill is
(35:23):
a is a major piece of legislation. I think it is.
It's a fantastic bill just on its own. I think
that the House would go ahead and take it up,
and I think they will take it up and lots
that they're going to put it on the President's desk
very soon.
Speaker 1 (35:34):
What about businesses taking it up? As you say, people
waiting in the wings reports Amazon, Walmart wanting to have
their own stable coin issuance? What is the regulatory oversight
kind of be like you say, of course it's put
in stone in terms of the law, What about the
resources for their regulation, because there's going to be a
lot to analyze.
Speaker 13 (35:50):
It feels like, yeah, so it's going to stable coins
will be under the purview of the banking system, and
banking regulators will look at that, and stable cooin insurers
will have to go through a regulatory process and they'll
get approved and like I said, they'll be quarterly audits.
And I think that the bill will provide the framework
that will give confidence to a lot of traditional financial
(36:12):
players to enter the space. And so I think you're
going to see new stable coin products, and I think
you'll also see stable coins.
Speaker 4 (36:18):
Being used as payments.
Speaker 13 (36:19):
I think this is one of the really exciting things
about the bill is that blockchain infrastructure will be used
as a new kind of dollar based payment system. Yes,
that's faster, it's more efficient, smoother, It's a payment system
of the future. It's kind of ironic that when the
crypto industry really started with bitcoin about fifteen years ago,
what was anticipated is that you would get a new
(36:40):
kind of currency, you get a non fiat currency. But
as it turns out, a really important use case of
blockchains has been to support digital dollars, to support tokenized dollars.
And I think you'll see the extension of that payment
system online with that legislation, and that's a really exciting thing.
We don't want this being driven offshore right now. Like
(37:01):
I said, the leading staple coin issure is offshore. I
think that you will see this be a new US
based payment system that emerges online.
Speaker 2 (37:10):
David, I'm looking at it, for example, shares of coinbase
and Circle and basically the market hearing the passage of
the bill, you're basically talking about dollarization, and I wondered
if you'd just reflect for a minute of how you
feel that the final sort of composition of this legislation
(37:33):
supports the goals, the bigger picture goals that you and
the President had hoped for when you set out to
do it.
Speaker 13 (37:41):
Sure so, when the President first took office, and even
before he took office, when he was on the campaign trail,
he promised to make the United States the crypto capital
of the planet and to replace the approach of the
Biden administration, which was essentially regulation through prosecution. I mean,
the Biden administration was doing everything it could to driveto
companies offshore, and he promised to change that approach and
(38:03):
make and provide regulatory clarity so that the innovation could
happen in the United States. And I think that you know,
the Trump administration has done that. Even before this bill,
the President had signed in an executive order to make
bitcoin a strategic reserve asset, providing I think a kind
of legitimacy for the industry that it had been seeking.
(38:24):
We also have formed a President's Working Group on Digital
Assets that's been systematically hunting down and eliminating some of
these war on crypto regulations that have been impeding in
the industry. The bottom line here is that we just
want a fair approach. What founders and entrepreneurs been asking
for is just tell us what the rules are and
will abide by those rules. So we've been trying to
(38:44):
provide that regulatory clarity. But at the end of the day,
if you want to make sure that the rules stay
stable for founders, you need to enshrine them in law.
And it's great when you can get the various agencies
and departments the government to change their rules to take
up better rulemaking, and we've done that. But again, the
(39:06):
way that you provide long term protection against certain of
you know, a new Garriginsler or something like that, just
do you enshrining them into law. And that's what this bill,
the Genius Act, would do, and it's also what the
Market Structure legislation would do, and we want to keep
that up.
Speaker 2 (39:21):
Next to be sure, sorry to interrupt you, what is
missing from the bill and what Democrats push for, What
specific controls on the president and president's family in their
ability to move within the corners of the crypto market
with which they're affiliated. There's a lot of concern that
that wasn't done. Is the concern justified.
Speaker 13 (39:45):
I don't think so. I mean, so, first of all,
you should ask them what they're doing, because I'm not
involved in any particular company's products. I'm just an innovation advisor.
But my understanding is that what they've said is the
president's assets are in a blind trust. His sons are
not in the government. They're adults, and they're allowed to
engage in business, and they have a company. And I
think that these are unrelated things.
Speaker 1 (40:06):
You're an innovation expert, not just in crypto but in
AI too. We shift there a little bit because you've
hunted down rules that perhaps weren't serving some in the
business entrepreneurship in a US, for example, the diffusion rule.
But what follows it?
Speaker 13 (40:18):
David Well, I think it's a good question about what
comes next. I think the problem with the diffusion rule,
this was the Biden difusion rule that was dropped at
the eleventh hour by the Biden administration something like five
days before the end of their term. I don't think
it was really thought through. It was overly burdensome, and
what it did is it required every sale of a
(40:38):
GPU worldwide, it required a license from the Commerce Department
or one of several narrow exemptions that also had to
be lawyered, and so this was just incredibly burdensome. I
think it impeded the global the US semiconduct business and
(41:01):
the US data center business. I think it hampered its
a market share worldwide, which should be an important objective
of US policy is for the US to win the
AI race by becoming the dominant tech stack internationally. So
the diffusion rule I think would have shot our technology
industry in the foot out of a concern to prevent
(41:21):
chips from going to China. To be sure, I think
that the leading American semiconductors should not go to China,
but we have export controls on that, and I don't
think we need a new global licensing regime on every
single GPU transaction to achieve that objective.
Speaker 2 (41:37):
David Jensen Wong was on the show very recently and
he expressed his concern that Huawei has technology that is
as performances in Vidia's H two hundred. There had been
a lot of focus on AG twenty. I know that
the Commerce Department has issued some assessment of how much
Huawei can produce. I think they said two hundred thousand
(42:00):
GPU capacity, but there are concerns, and actually that their
ability to export to markets outside of America is much
greater than that. What is your assessment of how China
can compete with its own GPUs in markets outside of America.
Speaker 13 (42:16):
Well, it is true that today China is supply constrained
on how many GPUs they can produce, but I would
expect that to change pretty rapidly because China has proven
adept at working around our restrictions, and you saw that
back in January. We had this Deep Seek moment where
before Deep Seek people thought that Chinese AI models were
(42:39):
years behind, and then Deepseak launch, we realized that maybe
they're more like three to six months behind. I think
today China is maybe one and a half to two
years behind US in chip design, but Huawei is moving
fast to catch up, and even before they fully caught up,
I think you will see them exporting their chips for
the global market. For example, there was a story out
(43:02):
of Malaysia that they were creating a sovereign data center
with Wawei send chips, and that story got walked back
because because I think the government was afraid of the
US reaction. But it was a minister of the government
who did announce that they were creating a sovereign data
center using Huawei chips, So I think that we do
have to be concerned about Huawei competing on the global market.
(43:24):
They may not fully be there yet, but I would
expect that to change in the future. And I think
that if we're overly restrictive in terms of US sales
to the world, I think there'll be a time where
we're kind of kicking ourselves saying, you know, when we're
in all of a sudden, Huawei is everywhere, We'll be saying, well, wait,
when we had this whole market to ourselves, why didn't
we take advantage of that opportunity and lock in the
(43:44):
American tech stack. I think it's very important that when
we think about our goals here with respect to AI,
we want the American tech stack to win. We wanted
to become the global standard. We want to have the
largest market share we can. We want all to be
the partner of choice for the world. And I think
it's a valid policy objective to prevent our leading edge
seming conductors from going to China, but at the same time,
(44:07):
we don't want to restrict them from going to our
friends and allies. To be sure, we should name our
security requirements, but our friends and allies are eager to
comply with those security requirements.
Speaker 4 (44:16):
So I think we can.
Speaker 13 (44:17):
Achieve our objective here, our dual objective of preventing leading
chips from going to China while also making the United
States the global standard.
Speaker 1 (44:27):
David Sachs, it's great to have you back on the show.
Me thank you. Of course, the White House, AI and
cryptos are meanwhile. That does it for this edition at
Bloomberg Tech. What a wide ranging conversation with David Sacks.
Have plenty of others. We've talked to autonomous vehicles, We've
talked AI within super apps as well.
Speaker 2 (44:44):
Yeah, and there's an intense focus on that bill, right,
so I think go back and recap what David said
about what happens next? That is the question. Recap it
on the podcast. You can find the Bloomberg Tech Pod
on the terminal all the Bloomberg platforms, as well as
online on Apple, Spotify, I and on iHeart. From San Francisco,
New York City, this is Bloomberg Tech.
Speaker 9 (45:06):
Mm hmmmmmmmm mmmm
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