April 25, 2025 • 45 mins
Bloomberg’s Caroline Hyde and Ed Ludlow speak with Greylock partner and LinkedIn co-founder Reid Hoffman about AI policy and investing amid global trade tensions. Plus, Kamyl Bazbaz from the privacy-focused search company DuckDuckGo discusses what changes to Google could create a more even playing field in search. And BNP Paribas’s David O'Connor joins to talk about Intel's disappointing first-quarter results.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde.
Speaker 2 (00:20):
And Ed Ludlow live from New York and San Francisco.
Speaker 3 (00:35):
This is Bloomberg Technology coming up. Alphabet earnings impress Wall
Street as Google's ad business stays resilient.
Speaker 4 (00:43):
It's a different story at Intel, with investors preparing for
short term pain from layoffs and a company culture reset.
Speaker 3 (00:49):
And as Trump targets EUAI regulation. We discussed with billionaire
founder and investor Read Hoffman. But first, let's just check
in on these markets. And we are significantly higher on
the week, Then that's that one hundred pushing up five
and a quarter percent. We've added one on a quarter
trillion dollars in terms of market cap over the last.
Speaker 2 (01:07):
Five training days.
Speaker 3 (01:09):
But it's only the biggest move on a weekly basis,
says two weeks ago. We are used to this sort
of volatility. Today, the consumer sentiment looking ugly. We just
pair some of those increases that we've been seeing over
the last three days. Let's move on and have a
little look at what's happening on other risk assets a choice.
Look Crepto having an absolute stellar run. If you're looking
at bitcoin, old coins to the side, but Bitcoin up
(01:29):
twelve percent of those five days, so clearly outperforming ed.
Speaker 4 (01:32):
What are you looking at on the micro Well, let's
start with T Mobile dan more than ten percent, on
track for its biggest drop since March of twenty twenty,
basically missed on paid wireless subscribers. Really interesting week in
that space. We don't have a lot of time today
to go over it, but the size of the move
I wanted to bring it to the audience and maybe
we'll find a.
Speaker 5 (01:49):
Moment to chat about.
Speaker 4 (01:50):
There are bigger names that we're focused on throughout the hour.
Speaker 5 (01:53):
One of those is Apple.
Speaker 4 (01:54):
A lot of Bloomberg reporting about what Apple was going
to do in supply chain in response to potential tariffs,
and also what they're going to do with talent at
the top of that company.
Speaker 5 (02:04):
We'll get to it later. Alphabet you just.
Speaker 4 (02:06):
Pointed out right up two percent core search business, good
revenue in cloud. Interesting, We're going to cover that in detail.
And then there's Intel still under pressure, still working out
what to do, cutting middle management, signs that they had
a good one queue because people were anticipating tariffs.
Speaker 5 (02:23):
We'll get to it, we.
Speaker 3 (02:24):
Will get to it, ed and more broadly, I know
that you spoke with a CFO of Intel and how
much that we're still seeing a seismic shift of that business,
how much you're still seeing an overall concern about where
Intel goes in terms of just trying to delayer, trying
to get rid of some of that middle management. The
fat that in Video is managing to bring in almost
well more than three times the revenue of Intel on
(02:46):
about a third less of the overall employee basis significant.
Speaker 2 (02:51):
But we returned to Alphabet.
Speaker 3 (02:52):
Which is actually coming off of those pre market highs.
We're up more than two percent, but we had seen
a move of more than six percent, and after hours
after the numbers stick in Davy albums with us, you
cover this company, and actually it just seemed to be relief.
Speaker 6 (03:05):
Yeah. I think that a lot of people were sort
of bracing themselves for the at least initial impact of
Trump tariffs which are looming over these companies. But Alphabet's
earnings were actually quite impressive, especially on advertising, YouTube and searched.
We up ten percent year over year, and it really
(03:26):
is a resilient and diverse business portfolio that they have,
and the earnings reflected that.
Speaker 5 (03:33):
Blue Most Daily Alba and all things alphabet. Thank you
very much. Let's turn to the other big mover. Intel.
Speaker 4 (03:38):
The company posted a week second quarter forecast with plans
to slash jobs, sending shares sliding. I spoke with Intel
CFO David Sinsna, and he told me they'll reduce the
layers and cut the bureaucracy out. It's an effort to
scale back on op X and Capex for more. Let's
bring in bloombos Ian King, who is also on that
call with David'sinsna. There are many stories with Intel, most
(04:02):
of them still negative.
Speaker 5 (04:03):
What's the need to know about this chip? Name?
Speaker 6 (04:05):
Yeah?
Speaker 7 (04:05):
I mean short term, they confirmed everybody's fears, which is
a nice first quarter. Things were better than we had feared, perhaps,
but that's really a false dawn for the industry. That
a lot of this is what's called pull in, but
basically people trying to get as much as they can
ahead of any tariff impact so that won't continue. And
guess what, there might be a recession on the way
you use the R word.
Speaker 8 (04:27):
Longer term.
Speaker 7 (04:27):
People wanted a more than just a diagnosis. They wanted
an answer, this is what we are going to fix,
this is how we're going to fix it. Didn't really
get that apart from as you just indicated, this is
what's wrong with Intel's culture and internally, this is what
we need.
Speaker 3 (04:41):
To fix what on earth happens with the fabrication side
of it. In King, it was a great interview that
you did with Ed. Thanks so much. More on Google
and Intel and broader tech sector Now, Ioko Yoshioka's with
US Wealth Enhancement Group porfolio consulting director. Ioko, I start
with Intel because it was the fabrication future that many
are still left quandering, and much of that is because
(05:01):
we don't really know what US policy is in terms
of money going to Intel. Just how difficult is it
to invest in hardware in the US right now?
Speaker 9 (05:12):
Sure, just given the overall uncertainty that you know is
in the market and as well as just with policy,
it's very difficult to make long term business decisions in general,
whether it's Intel or anybody else. And so I think
that's what's being reflected in the markets.
Speaker 2 (05:30):
And then for Intel.
Speaker 9 (05:31):
Specifically, you know, they really do need to make a
lot of changes, and they are going to be longer
term in nature, really in order to re establish themselves.
That it's table stakes at this point for Intel.
Speaker 4 (05:46):
Okay, can we just talk about the pull forward that
Ian mentioned. One Q is better than the street thought,
the two Q outlook worse. The logic customers bought chips
in the first three months of the year because they
knew tariffs were coming.
Speaker 8 (06:01):
Do you think.
Speaker 4 (06:01):
About that as a sort of solely Intel problem or
do you give them a pass in that this is
an everyone problem at the moment in this chip space.
Speaker 9 (06:11):
Now, I do think it is an everyone problem, and
it's not just for chips, right. I think a lot
of you know, business executives made the decision to pull
forward some of the needs, anticipating that there might be
some turmoil, you know, going forward related to trade policy.
We did start to see a lot of the sort
(06:33):
of news come through, whether it was with Canada and
Mexico in February, and so I think there was a
little bit of angst and there was likely a lot
of pull forward across not just the chip sector, but
across a lot of different goods.
Speaker 4 (06:50):
Google's core search related ad business is doing well. What
does that tell you about the world we live in
right now.
Speaker 8 (06:59):
Sure, so, I think.
Speaker 9 (07:00):
You know, with Google, it's been a little tough, right.
Google is inexpensive. It trades at sixteen and a half
seventeen times, and Search has been strong. Search and YouTube,
you know, up ten percent a year over year and
so strong numbers there. And Google Cloud was up over
twenty eight percent and they showed great profitability in that
(07:24):
segment as well. So things are moving along really well
for Google. It's just that the narrative and those existential
issues aren't going away. You have those regulatory issues and
you also have you also have the AI issues still.
Speaker 3 (07:45):
Get to that, dig into that iocode because we all
know about the ab trust issues and we're going to
talk about that at.
Speaker 2 (07:51):
Length with Doug dot Go in a moment. But I'm
interested in the.
Speaker 3 (07:54):
AI issues because people are using aioverviews, people are seeing
a capex spend of seventy five billion dollars being committed
to and sort of are okay with that infrastructure rollout.
Speaker 2 (08:04):
What more do they need to do to prove that
they're the winning one here?
Speaker 9 (08:09):
Sure so, I think because so many you know, there's
so many competitors in the AI space that you know,
we don't. We just don't know, and we still don't
know how it's going to monetize properly for.
Speaker 2 (08:23):
Google, right.
Speaker 9 (08:24):
We know that even and when they do monetize some
of it, they're still cannibalizing some of their own search revenue.
And so I think that's the part that's still just
not going away, and until that mix sort of levels off,
we won't have a true answer there. And I think
that's what's keeping a lid on the overall multiple for Google,
at least in the near.
Speaker 4 (08:44):
Term when the numbers hit other megacaps Rose, Meta and
VideA for example. But when I bring back that chart,
we had a moment ago twenty eight per cent growth
is great, but it's a deceleration year on year quarter
on Quarder, there's micro focus on the ad business, But
how did this set us up for the rest of
earning season, in particular our sort of commitment to living
(09:09):
or dying by capital expenditures numbers?
Speaker 5 (09:11):
Please ioco, Yeah.
Speaker 9 (09:14):
You know, I think it's more of an overall industry
capex spend that we're looking at, right, So it's not
just alphabets spend on capex, but it's also Amazon and
Meta and Microsoft's overall spend because a lot of that
is then going to go to in video with the
chips and the overall AI build out, all the data
(09:35):
center providers as well will be beneficiaries. And so I
think that's where you know, we're all focused on. It's
still relatively early, and despite the fact that it was
a deceleration from a Google Google Cloud perspective, you know,
I think that you know, you're still seeing cloud growth,
cloud computing grow in this fifteen to twenty percent range,
(09:58):
you know, for the next five plus years, and so
I think you want to lean into that for the
long term and not just look at the overall you know,
one quarter deceleration, you know, relatives to last quarter.
Speaker 4 (10:11):
A Yoko Yoshoka Wealth Enhartcement Group. Great to see, thank
you very much.
Speaker 3 (10:23):
The Trump administration, well, it's pressuring Europe to ditch an
AI rulebook that would play stricter standards on transparency, on
mis mitigation, on copyright rules for advanced artificial intelligence. Let's
get more on this of Bluebergs Mike Shephard, this is
basically a voluntary AI Code of Practice to accompany the
AI Act.
Speaker 2 (10:40):
What is the US dislike here.
Speaker 10 (10:43):
Well, the US dislikes the idea that it could be
compelling companies to have to comport.
Speaker 8 (10:50):
With rules that they see as.
Speaker 10 (10:52):
Restrictive and potentially restricting innovation and stifling innovation. And this
is a refrain that we've been hearing from the Trump
administer really since they took office, and they're targeting this
even though it's a voluntary code of conduct, it's designed
to serve as a set of guidelines for obeying the
Block's AI Act, and under that law, companies that violate
(11:15):
it run the risk of some pretty hefty fines, and
that would be up to seven percent of a company's
annual sales, and if you look at Google's results from yesterday,
that could be upwards of five billion dollars. But there's
more at stake here than just the money here, Caro,
it's also just this idea of regulation, and it's a
question that we've heard the administration articulate time and again,
(11:36):
especially with relation to the EU.
Speaker 4 (11:39):
Here, Caro, I think a lot like about the administration's
approach to the Block. This is just one example, right
of this administration's attitude towards the European Union, particularly in
the context of tech.
Speaker 10 (11:54):
Absolutely, and they are taking aim at a series of measures.
Speaker 8 (11:58):
One on the whole question.
Speaker 10 (12:00):
They have questioned the Digital Markets Act, seeing it as
a restriction on free trade. They are also complaining about
content moderation, that the block is much more in favor
of than here in the United States, and they see
that as a restriction on free speech. And then when
it comes to artificial intelligence. Back in February, you'll recall
that during the Big art AI summit the French President
(12:23):
Emanuel Macrone hosted in Paris, jd Vance made an address
there where he drew a line in the sand and
he cautioned the entire block in other countries as well
against overregulating AI and targeting American companies in the process.
Speaker 3 (12:39):
Google has spoken out about it, so too has Matta
bloombergs Mike Shephard.
Speaker 2 (12:42):
We thank you.
Speaker 3 (12:43):
Look turning back to Washington now, where a court continues
to hear arguments on remedies for Google's search monopoly. One
beneficiary of a breakup, well potentially, it's such rivals such
as dot dot Go. We're joined now by Camail Buzbas,
Doc dot Go is senior vice president of.
Speaker 2 (12:59):
Public Affairs, how has this remedial discussion been going from
your perspective? Have you been heard?
Speaker 8 (13:06):
Yeah?
Speaker 11 (13:06):
So, our CEO just wrapped up almost six hours of
testimony yesterday in the trial.
Speaker 8 (13:13):
And it's our.
Speaker 11 (13:13):
Belief that over the last fifteen years since both the
case was filed and the time that the case addresses,
Google's illegally monopolize the search market, and so throughout that time,
we've never had a fair playing field to compete, and
the remedies in this case can change that.
Speaker 3 (13:35):
Well, the remedies, alphabet would argue, go too far spinning
off chrome, for example, We'll get to a price point
for chrome in a moment.
Speaker 2 (13:42):
I know EDS need to talk about that.
Speaker 3 (13:44):
But there's other ones in terms of whether it's selling
off chrome, whether it's sharing data realistically, what would you
like to be done that makes it more of a
leven a level playing field.
Speaker 5 (13:55):
Yeah, Well, here's the thing.
Speaker 11 (13:56):
Each of the remedies that have been proposed by the
government are necessary but not sufficient on their own. We're
talking about undoing more than fifteen years of illegal monopoly
monit of so you think it doesn't go far enough.
I think that everything in there deserves to be there
and has a very targeted purpose and specifically addresses what
the judge put in his ruling. There's both a distribution
(14:18):
advantage and a scale advantage. So you need access to
users right right now, most users don't actually pick Google.
That decision is made for them by the fact that
they're the near default, the near exclusive default everywhere people
access search engines. When you have that advantage, it means
you have a scale advantage. And you heard multiple CEOs
(14:40):
from different companies over this week talk about that scale
advantage and how that makes getting quality search results difficult.
Even open ai was saying that it's an eighty twenty thing.
They can do eighty percent, but then when it comes
to the twenty percent of what's called long tail queries,
these are specific queries that aren't done a lot. Even
they're struggling with it. And this is and Google still
(15:00):
has the best index.
Speaker 5 (15:02):
Cameo, I do want to talk to you about queries.
Speaker 4 (15:05):
I think we've talked about this in the past, But
what came out of the process is that Chrome is
a hot commodity. Right your boss assigned a fifty billion
dollar value, but we hear from Yahoo and open ai
that they're interested in it. What I'd appreciate you spelling
out for the audience is what would your business actually
(15:25):
get in purchasing or there being a change in the
ownership of Chrome, particularly in light of that Chromium the
underlying source base or source code is open source anyway.
Speaker 11 (15:39):
So if you are a big tech company and you
are trying to make money, which is of course the goal,
and you have advertising, the fact that the most popular
browser in the entire world would be up for sale
is in enormous value.
Speaker 5 (15:56):
I mean, if you think about the kids that's going.
Speaker 11 (15:58):
On just downstairs from the a search case, the metacase
meant about WhatsApp for nineteen million dollars, sorry, at nineteen
billion dollars, the worth of Chrome is at least double that.
You can imagine any big tech company that has an
ad service would put ads on a Chrome that they own,
(16:19):
and that could create endless monetization opportunities for them.
Speaker 4 (16:25):
I believe that you would like to have access to
Google's click and query data.
Speaker 5 (16:30):
What is the benefit of that to you? Please?
Speaker 11 (16:33):
Yeah, So the benefit there is, you know, Google has
a massive scale advantage now when compared to other search engines,
and that scale advantage means they see much more clicks
and queries than other search engines, which means that they
can improve the quality of their search engines faster and
(16:53):
just overall have a better quality than others. Can you
know our CEO talked about yesterday, right, Let's say you
look something up on duck duto. You're trying to go
to a pharmacy or a restaurant, and you might see
that the hours aren't correct, but they are on Google.
And oftentimes that's because of that kind of clicking query data.
(17:16):
More people are clicking on the correct hours and thus
giving Google the information that this is what you should
be displaying to users. And you know, you don't want
someone switching to duc dout go and having them try
a few things out and end up rage quitting at
the end of it. And so by sharing this data,
(17:38):
you can level the quality playing field while also making
improvements to it. Because as I think people have seen,
you know, Google has said, you know, whether it's I
overviews or telling people to eat rocks and put glue
on pizza, you know, there's a lot of opportunity for
better integrations and better services. And so this is not
at all a copy and paste. This is asking for
(18:01):
a level of playing field on which to compete.
Speaker 3 (18:04):
You feel that Google should be forced to give you
that data.
Speaker 11 (18:10):
I think that is how you can level the playing
field for other search engines.
Speaker 2 (18:15):
And it's more just about leveling the playing field.
Speaker 3 (18:17):
Remind us of the benefit to the consumer here, because
I mean, it's all very well that your business wants
to do better, but me as a consumer, is really
rather happy with my experience thus far.
Speaker 11 (18:26):
You know, I think that there's a little bit of
a Stockholm syndrome happening with Google and that everyone's like, well,
this is great, I'm enjoying this, but you're also somewhat
captive to this because you've never been exposed to alternatives.
I mean, you know, anyone watching here, try and switch
your search engine right now and see if you can
finish it. By the time we're done. It is too
(18:47):
difficult to do it. And that's not an accident, right.
Google is extremely good at designing products to get users
or do exactly what they want to do, and in
this case, what they don't want to do right as well.
Speaker 4 (19:00):
In Google's counter would of course be that Chromium's open
source and the four penalties or targeted remedies of the
Dog combined Go Way Beyond and are Way Too Punitive.
Kamil Barzbars, SVP of Public Affairs with GO, thank you
for joining us on the story. Now coming up, Apple
looks to accelerate a manufacturing shift from China to India.
Speaker 5 (19:20):
Will have more. This has been bo technology.
Speaker 3 (19:31):
It is time now for talking tech and first up,
Meta Well. It's laying off over one hundred people in
its reality Labs division.
Speaker 2 (19:37):
It's acording to a person familiar with the matter now.
Speaker 3 (19:39):
The cuts will impact staff focused on creating the r
experiences for Metaquest headsets, along with operations focused employees, as
as the company looks to streamline work being done across
two different teams. Plus Apple Well, it's stripping its secret
robotics unit from the AI organization under John Gianandrea.
Speaker 2 (19:58):
Now it's moving to AG division.
Speaker 3 (20:00):
According to sources, the move is part of a broader
Apple effort to catch up rivals in the AI space
and its second major project to be removed from aichief
in the past month. And Sticking with Apple, the company
says it plans to build more iPhones to the United States.
Speaker 2 (20:14):
In India, Apple aims.
Speaker 3 (20:16):
To roughly double its annual iPhone output in India to
all than eighty million units, moving production away from China.
Mid of course, the US trade war ed coming up.
Speaker 4 (20:26):
Divergences in tech, Intel issues and outlook warning as Google
posts strong ad sales results, yet both companies face headwinds
from renewed tariffs and global uncertainty. That's going to be
our topic of conversation next. Let's get back to a
recap of where the markets stand. It's been a decent
five days at the index level, and as that one
hundred looking strong but kind of losing a bit of
(20:48):
momentum on the Friday. Now Bitcoin caro ninety five, six
hundred US dollars per token. If I say this is
behaving like gold and a haven asset, someone will clip
it and put it on social media. So I better
not say that. But that's what the writing on the
Bloomberg terminal states. And as you just covered, I think
Apple is really interesting. Google is out the way, and
(21:08):
when we think about next week, it is Apple that
I think we really really focus on. It answers or
hopes we will answer many of the questions around trade
uncertainty in tariffs. It is down half a percentage point,
but You've just outlined some of the Bloomberg reporting on
why that's the case. Stick with us. Much more to
come than this is Bloomberg Technology.
Speaker 3 (21:38):
Welcome back to Bloomberg Technology. I'm Caroline hid in New.
Speaker 4 (21:40):
York and I met Ludlow in San Francisco. Let's get
a check again on what the markets look like. Look
and now's that one hundred. I always go to it
very tech heavy index. On the basis of five days,
we're up almost five and a half percent, rebounding from
the drop of two and a half percent we had
last week. But Friday we've kind of lost some momentum.
There is some economic angs about all the headlines from
President Trump and trade, which we'll get to shortly on
(22:02):
the show, but also the mixed bag of corporate earning,
speaking of which, shall we take a look at a
couple of them. The story I think with Intel is
pretty clear. On the product side, they still haven't worked
it out. On the scale side, they haven't worked it
out cutting OPX, cutting CAPEX, and they will do significant layoffs.
But we don't have a full sense of the strategy
(22:22):
from the new CEO. Alphabet up two percent core search business,
but the eagle. Iide of you, Caro, the eager eide
well has spotted that profit got a boost from somewhere,
maybe surprise.
Speaker 3 (22:33):
An unrealized gain for an investment in a private company
ed to the tune eight billion dollars.
Speaker 2 (22:41):
And you know what that private company is.
Speaker 4 (22:43):
Right, Yeah, it's SpaceX. So Google has been an investor
in SpaceX Elon Musk's Space company since twenty fifteen. And
it's an unrealized gain, but sort of eight billion on
paper boost. That's pretty good going, isn't it. The question is, like,
you know what happens long term in the few future.
But I would also note that one of Google's executives
(23:03):
has a board seat at SpaceX, which is important to note.
Speaker 3 (23:05):
Well, when you taken a billion dollar chunk years ago
alongside Fidelity, I can imagine you kind of want to
board seat at the same time.
Speaker 4 (23:12):
Men, Yeah, exactly. And also the thing is that satellite communication.
It's slightly analogous, although I think we should track that
story over time.
Speaker 5 (23:20):
Yeah, right, let's stick with Google.
Speaker 4 (23:22):
Parent company Alphabet did post a first quarter sales beat
as its search ad business sees strength despite tariff uncertainty.
Morning Star Tech analysts amed Cahn, writing, while we believe
investor concerns around a tariff induced digital ad spending slow
down and antitrust related impact to Alphabet's business are valid,
we think the sell off in the firm shares has
(23:42):
been overly punitive, creating an attractive buying opportunity. Armed joins
us now, and I think the selling you refer to
is kind of a year to date selling, right as
opposed to to what we're seeing happen in the session.
Your main point from the print we got last night
about the search business.
Speaker 12 (24:00):
First of all, thank you so much for having me ed.
We really like to report. I mean, you know, the
search business clearly is showing resilience. There's been a lot
of you know, sort of investor concerns about search disruption
happening at the hands of like, you know, these generative
AI chatbots such as CHATGPT your perplexity, but if you
actually look at the number of queries and the number
of monetizable or commercial queries that actually increased, So that
(24:24):
kind of stands in contradiction to this overall narrative that
that investors have kind of like jumped on about the
death of Google Search, which we do not agree with one.
Speaker 3 (24:34):
And a half billion monthly users I think is what
we heard from the CEO coming for search and actually
like a billion podcast listeners on YouTube. Just this strength
and the bases of this business is significant, But that
is why it's trying to be broken up. Just are
you factoring in, in any near term sense an impact
on a sale of Chrome or an ability to have
(24:56):
to share the data?
Speaker 12 (24:57):
Well, first of all, when we're thinking about anti trust,
it's important to separate the near term and the sort
of medium to long term. In the near term, you
have some headline risks, but there's actually like very little
actual business risks because Google is going to appeal where
Alphabet is going to appeal the decision that Justice Metha
sort of puts out in the summer of this year,
and that appeals process may take some time.
Speaker 8 (25:19):
Now.
Speaker 12 (25:19):
As long term investors, though, that still is a valid concern.
Speaker 5 (25:23):
The way we think.
Speaker 12 (25:24):
About it is that there's a sort of range of
antitrust outcomes, and we think some of the more uh uh,
you know, value destructive remedies, such as the divester of
Chrome or potential divester of Android, we do not think
is likely. We think more sort of behavioral remedies such
as like the the end of exclusive revenue sharing agreements
(25:45):
or even certain certain other sort of like you know,
uh changes that that that alphabet would have to make
with their deals with these OEMs end browsers would probably
you know, be the forefront of the eventual remedy.
Speaker 5 (26:01):
Then that's where we're marbling in.
Speaker 3 (26:03):
I'm i con it's great to have your analysis, morning star.
We thank you. Now, look if there's another name we're
watching today, and it's Intel. Shares down significantly after the
company issued a pretty bleak second quarter forecasts.
Speaker 2 (26:13):
In an interview with you Ed. In fact, the Intel.
Speaker 3 (26:16):
CFO said the first quarter saw upside from tariff, saying
it probably pulled some demand and softened up the second
quarter for more. We welcome David O'Connor, a BMP parabat
Exan joining us. Now you've got around to perform and
a nineteen dollar price target, and there we are, nineteen
dollars ninety. We've erased all of this year's games on
the stock and rightly so from your perspective, you just
(26:38):
didn't get enough from the new CEO of how they're
going to rectify the business.
Speaker 8 (26:42):
Yeah.
Speaker 13 (26:43):
Thanks, for having me Karlyne.
Speaker 8 (26:45):
Yeah.
Speaker 13 (26:45):
Absolutely, you know we're underperform the stock. The stock today
the moves reflecting the tariff concerned. Also, investors didn't like
the message on their is structuring. I think the well,
we thought it was a kind of a positive message
from Lipoo and what needs to be done to restructure business.
The overall the overriding takeaway I think from investors it's
(27:05):
going to.
Speaker 5 (27:06):
Take a long time. David.
Speaker 4 (27:08):
On the one hand, people will say, Okay, we give
Lipboo the benefit of the doubt, he's only been in
post a few weeks. On the other hand, some say
cutting is not a strategy for growth or to fix
the product's issue. How much time are you willing to
give lipbou Tan and David's intner the benefit of the
doubt on both those things?
Speaker 13 (27:27):
Yeah, good question ed. I think there's a lot of
goodwill in the industry for Lipoo, and you know, he
keeps reiterating this will take time. The issues that they're
facing are not a quick fix. They're not really on
the kind of strategy side of things. It's more about
execution and that is where kind of they've fallen down
in the past. Intel and you know, Lipoo has acknowledged that,
(27:49):
and he's taking quite decisive action now. You know, he's
talked about changing the culture at Intel, which we haven't
heard before, stripping back all that added layers of bureaucracy,
going back to a focus on products and engineering driven.
Now all this needs to be done, but again it's
to take multiple years in our view to get there.
(28:11):
In the short term, ed I would say, the first
thing they really need to do is to stabilize the
market share. Stabilize the mark share and PCs servers. This
has been the core problem for Intel where they've lost
share to AMD and to ARM as well.
Speaker 4 (28:26):
David O'Connor, p and p Powi bag Zan, thank you
very much. Now coming up, Reed Hoffman from Graylock Partners
joins us to talk about his latest AI startup aiming
to cure cancer. The broader AI and political landscape much
to discuss that is next. This is Bloomberg Technology, a
(28:53):
top technology story today. The Trump Administration's putting pressure on
Europe to ditch stretcher standards AI developers. The EU says
this voluntary framework is intended to help tech companies comply
with the blocks New AI Act. The US says it's
another example of overreach that unfairly targets American companies. Joining
us to discuss that story his own work in the
(29:15):
field of AI investing and global trade wars.
Speaker 5 (29:18):
Read Hoffman.
Speaker 4 (29:19):
Read is a partner of bench firm Greylock, co founder
of LinkedIn, Inflection AI and now Mannus AI, and joins
us here in San Francisco. Welcome to the program, Read,
and thank you for coming back. You know you have
experience of working across jurisdictions. This administration's approach to Europe's
AI industry and that specific piece of news on the
(29:40):
AI Act, how do you interpret it?
Speaker 14 (29:43):
Well, broadly, I do think the European Union tries to
need to regulatory against future development of technology versus asting
to actual things.
Speaker 5 (29:52):
You agree on the overreaching, I agree on the.
Speaker 14 (29:54):
General overreach part, and I think that the it's actually
bad for Europe.
Speaker 8 (30:00):
It's not just a question of like different philosophies.
Speaker 14 (30:02):
I think I already know of US tech companies that
are deploying outdated or older models because you go through
the certification process and they go, fine, we'll just leave
that and as we do the next year at development,
you get development.
Speaker 8 (30:15):
So fast that like much less good for consumers, much
less good for industry.
Speaker 14 (30:20):
There Now this specific one is it's actually more the
questions about the regulations in the Act, the actual playbook,
as I understand it, is to say, here's yourself safe
harbor boundaries, which is actually in fact a good thing
to do generally in regulation, which you're like, if you
drive within these lines, there's not unspecified liabilities and stability
is actually in fact a.
Speaker 8 (30:41):
Good thing for the development of business.
Speaker 14 (30:43):
I mean, that's part of the problem with all the
craziness around the tariffs.
Speaker 8 (30:47):
Stability is important.
Speaker 4 (30:48):
Well, you make the point that the European Union moved
to codify what they wanted the rules to be. You know,
I think about the first four months of the administration,
we've had David sex on the program as the AIS are,
but they haven't really codified what they believe the rules
for AI should be in the same way that they
did with crypto.
Speaker 5 (31:08):
Which would you agree with that?
Speaker 14 (31:09):
Yes, because look, part of what business needs is stability
to invest in developing it. Even if you disagree with
the particular regulation, you at least know how to navigate it.
If you say it's unspecified, it's going to change, it's
gonna come, it's going to go. That just makes everything retrench.
So it's good to have that kind of thing. Now
that being said, you know, with Superagency, and you know
(31:29):
the book I just published recently on all it's actually,
in fact, we're going to have so many better features
for both great things like medical assistance but also safety
features in the future that we shouldn't be trying to
impede that through regulatory slowness.
Speaker 8 (31:42):
So that part of it I agree with.
Speaker 14 (31:44):
But you also want the stability and clarity and the
rule book, as I understand it is an effort in
that direction.
Speaker 3 (31:50):
Without that stability here in the US, you're investing. Nonetheless,
you're creating mannus Ai, which is about really important work
discovering drug discovery, particularly against aggressive cancer.
Speaker 2 (32:02):
Why do you have that commitment to do this in
this environment?
Speaker 14 (32:04):
Read Well, generally speaking, I'm always an optimist, and so
I'm always building the future, you know, kind of no
matter what, because that's how we create good futures is
by saying this could be great. Now with manis trying
to cure cancer. This is a multi year effort, like
most of my investments are like ten year efforts.
Speaker 8 (32:22):
Or you obviously hope.
Speaker 14 (32:23):
To get you know, kind of return like kind of results,
you know, one year, two years, three years, but you're
you're you're.
Speaker 8 (32:31):
Playing it out in the future.
Speaker 14 (32:32):
So the fact that there is kind of regulatory uncertainty
around AI in the US right now, doesn't you know
kind of you know, doesn't slow down my startup efforts.
Speaker 4 (32:41):
Can I just jump in and counter with something manus
AI long term ten year project with Inflection AI? And
I note your position on Microsoft's board that you turned
that around quite quickly, and then you know that we
call it an acqua higher in that context, is there
opportunity for you to do that with MANSAI with a
(33:02):
Biggert B stool?
Speaker 5 (33:03):
Is that an unfair question?
Speaker 8 (33:05):
Well, it's not.
Speaker 14 (33:06):
Look part of when you're a smart entrepreneur and you're
a smart investor, you're always thinking how do I transform
an industry? But also what are pivots or changes you
might make along the way as kind of plans B
And the decision with Inflection, which I think was a
solid decision, is the consumer agent where you have to
spend billions of dollars building a model before you actually
(33:26):
understand the revenue model. Actually in fact is harder for
startups to do yes if you're doing it. So it's like, okay,
let's change to a B to B model. It's still
going They got a whole bunch of different B to
B clients and let's do that. But the consumer thing
will actually have to be done by other players. And
so obviously if we made a similar decision with Manus,
which we're nowhere close to, then of course we have
(33:49):
various plans B in terms of how we operate, but
the goal is always to change in industry.
Speaker 3 (33:53):
Thank you and prosper and prosper with AI. And that's
where your book Superagency really comes in and you talk
about this cognitive industrial revolution that we're going through that
is going to have short term pain. I go brought
a picture here and just think about the short term
trade anxiety. How much is that playing into the fact
that the bogeyman we like to make of China in
the US, well, it's China getting ahead in terms of
(34:16):
it's cognitive industrial revolution because of the instability we're creating
here in the US.
Speaker 14 (34:21):
I do think that one of the things that the
that the tariff, you know, kind of Chernobyl kind of
catastrophe is actually in fact aiding China across its entire industry.
Like for example, you know, Europe says, well, if China
is a more stable trading partner, you know, for not
just manufacturing, but technology and all the rest, and we
(34:43):
can rely upon them better, that creates better global markets
for China and worse for the US. And so I
think that part of being smart about you know, kind
of what we're trying to do is we want trading
partners and trading allies for our own you know, kind
of industries and our own prosperity and jobs for American citizens.
And so I think that is creating It's very funny
(35:05):
because the rhetoric, of course is very competition with China, but.
Speaker 8 (35:08):
The actions in terms of.
Speaker 14 (35:10):
You know, kind of attacking our allies and friends and
partners is anti our efforts.
Speaker 3 (35:18):
What's interesting as well is whether some of the real
winners that come out of China come over here to
the US. Now, the latest news is actually an American investor,
Benchmark Capital, are putting money into not related to yours,
man us Ai, which is owned by another company which
is an actually consumer agent. They're just putting in money
(35:39):
because they want to expand that Chinese offering here in
the US and abroad.
Speaker 2 (35:43):
How do you feel about.
Speaker 3 (35:44):
Some of the wins that China is getting on the
consumer agent side and whether US should be investing in it.
Speaker 14 (35:51):
Well, I'm actually I actually think coopetition is the right
way to approach things like China. As you say, co authoathetition. Yes,
so you're both competing, but you're also cooperating. I think
that creates better prosperity and better kind of peace and
all the rest through the world. And so I'm actually
positive on kind of US investors investing in in kind
(36:11):
of general markets and all the rest. But obviously part
of what we want is we want like level playing fields.
We want you know, kind of equal access. Like I
actually think that the general discourse with China to say,
look at you, you restrict all of our technology industry
from playing in your field. So we're going to put
restrictions on you here. But I think the investment and
the ties are actually still good. Now that being said,
(36:34):
I think man use is actually not per se.
Speaker 8 (36:37):
Leading in the agent space. I actually see.
Speaker 14 (36:41):
A bunch of other you know, players, not just open
aianthropic Microsoft, Google. But I think there's a bunch of
folks who are doing very strong things, and there's nothing
that we've seen from them yet that suggests that they
are as yet, you know, caught up to some of
the things that are being built within American companies.
Speaker 4 (36:59):
You left open AI as a director in twenty twenty three.
I think I'm right in saying, but we've had you
on the program before to talk about it. It is
the leader in the field, shall we say, of frontier
models and now business and consumer facing applications of that model.
I have to ask you what you think the future
(37:19):
of open ai is in terms of instructure.
Speaker 5 (37:22):
You're close with Sam.
Speaker 4 (37:23):
And you speak with Sam, and you must keep a
very firm eye on that company.
Speaker 14 (37:28):
Well, yes, but in part because they're still doing their mission,
which is how do we make AI for the benefit
of humanity.
Speaker 8 (37:34):
The reason why they're shifting the structure is to realize
that mission.
Speaker 14 (37:38):
It's going from to a public benefit corp, which allows
the board of directors to make decisions for its missions
separate from the profit line, and that's actually, in fact
the way it gets the capital. Continue to do that now,
I think open AI continues to If people haven't played
with their recent kind of chain of thought models with
deep research. I mean, I try to do a deep
(37:59):
research every day because I think that that gives you
the lens to the amplification we're going to get with
these products as workers in the future.
Speaker 4 (38:08):
I've been using for every day. I also communicate more
with voice mode. It's a psychological thing that is a consumer.
You kind of have to get over this environment. More broadly,
a lot of capital is being deployed. Again, I note
that you're a board member of Microsoft, but the infrastructure
question is still very big. How far ahead do you
(38:30):
see the commitment to capital expenditures on the infrastructure side,
And is there anything about the willingness to deploy capital
that worries you?
Speaker 14 (38:38):
Read fundamentally, No, it doesn't mean that we might go, well, look,
the most optimum use of capital might have been a
slower ramp. But when you do the kind of the
two by two matrix and you say we don't do
the investment and then we fall really behind and building
the new franchises, or we do do the investment and
it's a little early and aggressive. The two by two
matrix is by far goes out to strategically to go
(39:01):
aggressive on it. Because the fact that AI is going
to redefine industries, that's not in doubt.
Speaker 8 (39:07):
The only real question is what year is it?
Speaker 14 (39:10):
This year, next year, the year after, and so going
aggressive is the right strategic model for both startup companies
but also of course are large tech giants.
Speaker 3 (39:19):
Can you remain bold in this environment? Read when, as
you say, the land is changing. We're trying to get
any sort of guidance from companies in this earning season.
How disruptive is this moment? How much you seeing a
freezing of business as we know it?
Speaker 14 (39:35):
So so far, what I've seen in every major AI
company has been a commitment to go as bold as
they possibly can. And I think that's actually a good
thing because it's partially again what I was saying is
like if you go well, it's going to work in
the next three years, it's not going to work in
the next three years for generating business returns, et cetera.
Speaker 8 (39:54):
And going heavy in investment.
Speaker 14 (39:57):
The chance of getting caught like basically well behind off
sides is much worse outcome than Hey, if I made
a mistake and I invested a little bit too much
in infrastructure in Capex. You know, twenty twenty five, twenty
twenty six. We know that adding intelligence to everything, like,
for example, one of the interesting questions for a program
(40:17):
like this will be when is it and this is
a small in number of years that we will have
an AI agent along with us in doing this program
saying hey, let's ask this question, or here's a fact
that's really relevant or so, and the answer to that
is small and years two four.
Speaker 2 (40:35):
I'm using one now read don't you worry, I'm using
one now exactly exactly well read boldness.
Speaker 3 (40:42):
You've been bold in continuing your political giving this year
as well, I think in the Wisconsin race, which was
more about judges. But I'm interested as to what you're
still feeling in terms of your political agenda here and
how much you have felt any impact of the money
you've given to ultimately the losing side of what kinrent
of administration is.
Speaker 14 (41:01):
Look, I'm still most fundamentally a kind of an American,
a kind of how we build prosperity here, and everything
I do is in that is in that vector. And
that's part of the reason why. Like, for example, when
you know President Trump was inaugurated, I was not saying
very many things because I wanted to be as many
(41:23):
good things to.
Speaker 8 (41:24):
Come out of that as possible. I think that's what
we all want.
Speaker 14 (41:28):
And and look, I'm still hopeful for kind of changing
you know, kind of energy regulation and getting advantages from that.
I'm still hopeful for, you know, can we apply you know,
kind of software to make government much more effective in services.
I'd rather see that than illegal degportations. I'd rather see
(41:49):
that than trade wars that are damaging to you know,
like everyday American citizens.
Speaker 8 (41:54):
That That's what I'm still hopeful for.
Speaker 14 (41:56):
And so I'm still investing in that in that arena,
And that's.
Speaker 5 (41:59):
Very much nine.
Speaker 4 (42:00):
We've what DOGE purports to want to achieve. Right, could
you just give your views on DOGE and the work
of efficiency but also deploying technology to modernized government.
Speaker 14 (42:10):
Well, so if what you did is said, hey, well,
we're first going to do is build data analytics and
understand everything and do things where we then we refactoring
that in, that might have led to a very good
process at the beginning. But kind of going in and
saying hey, we're first going to just shut off all
payments and break everything like that's like a disastrous.
Speaker 8 (42:32):
Way to do these kinds of things.
Speaker 14 (42:34):
So I think there are doing a bunch of less
reported good work on like you know, trying to make
HR records you know, kind of more you know, digitalized
and a process all that in a much more time
and economically efficient way.
Speaker 8 (42:45):
I think that's great. But on the other.
Speaker 14 (42:47):
Hand, I think that they you know, like all the
cases that are reported, like you know, everything from like
a catastrophic mis handling of the university system, like not
understandingly when you shift the overhead costs, you're basically saying
we're not funding any of the science labs anymore. Science labs,
like like science is one of the ways that we've
gotten our American technology advantage. It's like literally like say, hey,
(43:10):
let's let's put you know, concrete overshoes on both legs
and run a marathon.
Speaker 8 (43:15):
It's like, no, no, don't do that.
Speaker 14 (43:16):
And so being smarter about like I don't mean gradual,
but iterative like understand first, then act as opposed to
just like you know, like like blow it up and
then figure out like, oh is there anything good here?
Speaker 3 (43:32):
Talking of HR and changes, I mean the tool that
you built within human resources LinkedIn is changing at such
a rapid pace right now read and I feel social
media is more broadly, just briefly, how do you like
the look of LinkedIn right now as we all swarm
it with our videos and our narratives and our high fives?
Speaker 14 (43:52):
Well, thank you for swarming it with videos and sor
I mean, I obviously you know, have a have a
sense of pride and happiness with LinkedIn or time, and
we've stayed, I think, very true to our focus, which
is how do we help people with.
Speaker 8 (44:05):
Their economic lives? How do we help people's jobs?
Speaker 14 (44:07):
How do we help people, you know, make deals, understand
the business world, all the rest of that stuff. And
so I think like that mission has stayed true. There's
always more work. Like when you ask a product tech
founder and you say, what do you think, it's.
Speaker 8 (44:19):
Like, oh, there's a lot more to do. I still
want to see a lot more.
Speaker 14 (44:22):
And I think, you know, the LinkedIn team is doing
a great job, especially.
Speaker 5 (44:25):
The first time.
Speaker 4 (44:26):
I think over the years we've got to ask you
about LinkedIn, And the point Carrie's point is we recognize
growth there. Gray Lock partner LinkedIn founder Reid Hoffman, thank
you for the extended conversation here on Bloomberg Technology.
Speaker 3 (44:37):
Carroc What a conversation, What a way to wrap an
extraordinary week. That does it from this edition of BlueBag Technology,
so much to check in on their end.
Speaker 4 (44:44):
Yeah, this is what markets look like at the end
of the week. It is again on the week then
as that one hundred a bit more muted by the way,
Tesla pushing higher. They were hearing a lot more from
the federal government on regulation and going back to Intel,
you know the conversation we have with the CFO. It's
very much a streamlining of this company for now. The
tech and product refocus. I think that's going to come
later from New York City and San Francisco. This is
(45:07):
Bloombo Technology.
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde.
Speaker 2 (00:20):
And Ed Ludlow live from New York and San Francisco.
Speaker 3 (00:35):
This is Bloomberg Technology coming up. Alphabet earnings impress Wall
Street as Google's ad business stays resilient.
Speaker 4 (00:43):
It's a different story at Intel, with investors preparing for
short term pain from layoffs and a company culture reset.
Speaker 3 (00:49):
And as Trump targets EUAI regulation. We discussed with billionaire
founder and investor Read Hoffman. But first, let's just check
in on these markets. And we are significantly higher on
the week, Then that's that one hundred pushing up five
and a quarter percent. We've added one on a quarter
trillion dollars in terms of market cap over the last.
Speaker 2 (01:07):
Five training days.
Speaker 3 (01:09):
But it's only the biggest move on a weekly basis,
says two weeks ago. We are used to this sort
of volatility. Today, the consumer sentiment looking ugly. We just
pair some of those increases that we've been seeing over
the last three days. Let's move on and have a
little look at what's happening on other risk assets a choice.
Look Crepto having an absolute stellar run. If you're looking
at bitcoin, old coins to the side, but Bitcoin up
(01:29):
twelve percent of those five days, so clearly outperforming ed.
Speaker 4 (01:32):
What are you looking at on the micro Well, let's
start with T Mobile dan more than ten percent, on
track for its biggest drop since March of twenty twenty,
basically missed on paid wireless subscribers. Really interesting week in
that space. We don't have a lot of time today
to go over it, but the size of the move
I wanted to bring it to the audience and maybe
we'll find a.
Speaker 5 (01:49):
Moment to chat about.
Speaker 4 (01:50):
There are bigger names that we're focused on throughout the hour.
Speaker 5 (01:53):
One of those is Apple.
Speaker 4 (01:54):
A lot of Bloomberg reporting about what Apple was going
to do in supply chain in response to potential tariffs,
and also what they're going to do with talent at
the top of that company.
Speaker 5 (02:04):
We'll get to it later. Alphabet you just.
Speaker 4 (02:06):
Pointed out right up two percent core search business, good
revenue in cloud. Interesting, We're going to cover that in detail.
And then there's Intel still under pressure, still working out
what to do, cutting middle management, signs that they had
a good one queue because people were anticipating tariffs.
Speaker 5 (02:23):
We'll get to it, we.
Speaker 3 (02:24):
Will get to it, ed and more broadly, I know
that you spoke with a CFO of Intel and how
much that we're still seeing a seismic shift of that business,
how much you're still seeing an overall concern about where
Intel goes in terms of just trying to delayer, trying
to get rid of some of that middle management. The
fat that in Video is managing to bring in almost
well more than three times the revenue of Intel on
(02:46):
about a third less of the overall employee basis significant.
Speaker 2 (02:51):
But we returned to Alphabet.
Speaker 3 (02:52):
Which is actually coming off of those pre market highs.
We're up more than two percent, but we had seen
a move of more than six percent, and after hours
after the numbers stick in Davy albums with us, you
cover this company, and actually it just seemed to be relief.
Speaker 6 (03:05):
Yeah. I think that a lot of people were sort
of bracing themselves for the at least initial impact of
Trump tariffs which are looming over these companies. But Alphabet's
earnings were actually quite impressive, especially on advertising, YouTube and searched.
We up ten percent year over year, and it really
(03:26):
is a resilient and diverse business portfolio that they have,
and the earnings reflected that.
Speaker 5 (03:33):
Blue Most Daily Alba and all things alphabet. Thank you
very much. Let's turn to the other big mover. Intel.
Speaker 4 (03:38):
The company posted a week second quarter forecast with plans
to slash jobs, sending shares sliding. I spoke with Intel
CFO David Sinsna, and he told me they'll reduce the
layers and cut the bureaucracy out. It's an effort to
scale back on op X and Capex for more. Let's
bring in bloombos Ian King, who is also on that
call with David'sinsna. There are many stories with Intel, most
(04:02):
of them still negative.
Speaker 5 (04:03):
What's the need to know about this chip? Name?
Speaker 6 (04:05):
Yeah?
Speaker 7 (04:05):
I mean short term, they confirmed everybody's fears, which is
a nice first quarter. Things were better than we had feared, perhaps,
but that's really a false dawn for the industry. That
a lot of this is what's called pull in, but
basically people trying to get as much as they can
ahead of any tariff impact so that won't continue. And
guess what, there might be a recession on the way
you use the R word.
Speaker 8 (04:27):
Longer term.
Speaker 7 (04:27):
People wanted a more than just a diagnosis. They wanted
an answer, this is what we are going to fix,
this is how we're going to fix it. Didn't really
get that apart from as you just indicated, this is
what's wrong with Intel's culture and internally, this is what
we need.
Speaker 3 (04:41):
To fix what on earth happens with the fabrication side
of it. In King, it was a great interview that
you did with Ed. Thanks so much. More on Google
and Intel and broader tech sector Now, Ioko Yoshioka's with
US Wealth Enhancement Group porfolio consulting director. Ioko, I start
with Intel because it was the fabrication future that many
are still left quandering, and much of that is because
(05:01):
we don't really know what US policy is in terms
of money going to Intel. Just how difficult is it
to invest in hardware in the US right now?
Speaker 9 (05:12):
Sure, just given the overall uncertainty that you know is
in the market and as well as just with policy,
it's very difficult to make long term business decisions in general,
whether it's Intel or anybody else. And so I think
that's what's being reflected in the markets.
Speaker 2 (05:30):
And then for Intel.
Speaker 9 (05:31):
Specifically, you know, they really do need to make a
lot of changes, and they are going to be longer
term in nature, really in order to re establish themselves.
That it's table stakes at this point for Intel.
Speaker 4 (05:46):
Okay, can we just talk about the pull forward that
Ian mentioned. One Q is better than the street thought,
the two Q outlook worse. The logic customers bought chips
in the first three months of the year because they
knew tariffs were coming.
Speaker 8 (06:01):
Do you think.
Speaker 4 (06:01):
About that as a sort of solely Intel problem or
do you give them a pass in that this is
an everyone problem at the moment in this chip space.
Speaker 9 (06:11):
Now, I do think it is an everyone problem, and
it's not just for chips, right. I think a lot
of you know, business executives made the decision to pull
forward some of the needs, anticipating that there might be
some turmoil, you know, going forward related to trade policy.
We did start to see a lot of the sort
(06:33):
of news come through, whether it was with Canada and
Mexico in February, and so I think there was a
little bit of angst and there was likely a lot
of pull forward across not just the chip sector, but
across a lot of different goods.
Speaker 4 (06:50):
Google's core search related ad business is doing well. What
does that tell you about the world we live in
right now.
Speaker 8 (06:59):
Sure, so, I think.
Speaker 9 (07:00):
You know, with Google, it's been a little tough, right.
Google is inexpensive. It trades at sixteen and a half
seventeen times, and Search has been strong. Search and YouTube,
you know, up ten percent a year over year and
so strong numbers there. And Google Cloud was up over
twenty eight percent and they showed great profitability in that
(07:24):
segment as well. So things are moving along really well
for Google. It's just that the narrative and those existential
issues aren't going away. You have those regulatory issues and
you also have you also have the AI issues still.
Speaker 3 (07:45):
Get to that, dig into that iocode because we all
know about the ab trust issues and we're going to
talk about that at.
Speaker 2 (07:51):
Length with Doug dot Go in a moment. But I'm
interested in the.
Speaker 3 (07:54):
AI issues because people are using aioverviews, people are seeing
a capex spend of seventy five billion dollars being committed
to and sort of are okay with that infrastructure rollout.
Speaker 2 (08:04):
What more do they need to do to prove that
they're the winning one here?
Speaker 9 (08:09):
Sure so, I think because so many you know, there's
so many competitors in the AI space that you know,
we don't. We just don't know, and we still don't
know how it's going to monetize properly for.
Speaker 2 (08:23):
Google, right.
Speaker 9 (08:24):
We know that even and when they do monetize some
of it, they're still cannibalizing some of their own search revenue.
And so I think that's the part that's still just
not going away, and until that mix sort of levels off,
we won't have a true answer there. And I think
that's what's keeping a lid on the overall multiple for Google,
at least in the near.
Speaker 4 (08:44):
Term when the numbers hit other megacaps Rose, Meta and
VideA for example. But when I bring back that chart,
we had a moment ago twenty eight per cent growth
is great, but it's a deceleration year on year quarter
on Quarder, there's micro focus on the ad business, But
how did this set us up for the rest of
earning season, in particular our sort of commitment to living
(09:09):
or dying by capital expenditures numbers?
Speaker 5 (09:11):
Please ioco, Yeah.
Speaker 9 (09:14):
You know, I think it's more of an overall industry
capex spend that we're looking at, right, So it's not
just alphabets spend on capex, but it's also Amazon and
Meta and Microsoft's overall spend because a lot of that
is then going to go to in video with the
chips and the overall AI build out, all the data
(09:35):
center providers as well will be beneficiaries. And so I
think that's where you know, we're all focused on. It's
still relatively early, and despite the fact that it was
a deceleration from a Google Google Cloud perspective, you know,
I think that you know, you're still seeing cloud growth,
cloud computing grow in this fifteen to twenty percent range,
(09:58):
you know, for the next five plus years, and so
I think you want to lean into that for the
long term and not just look at the overall you know,
one quarter deceleration, you know, relatives to last quarter.
Speaker 4 (10:11):
A Yoko Yoshoka Wealth Enhartcement Group. Great to see, thank
you very much.
Speaker 3 (10:23):
The Trump administration, well, it's pressuring Europe to ditch an
AI rulebook that would play stricter standards on transparency, on
mis mitigation, on copyright rules for advanced artificial intelligence. Let's
get more on this of Bluebergs Mike Shephard, this is
basically a voluntary AI Code of Practice to accompany the
AI Act.
Speaker 2 (10:40):
What is the US dislike here.
Speaker 10 (10:43):
Well, the US dislikes the idea that it could be
compelling companies to have to comport.
Speaker 8 (10:50):
With rules that they see as.
Speaker 10 (10:52):
Restrictive and potentially restricting innovation and stifling innovation. And this
is a refrain that we've been hearing from the Trump
administer really since they took office, and they're targeting this
even though it's a voluntary code of conduct, it's designed
to serve as a set of guidelines for obeying the
Block's AI Act, and under that law, companies that violate
(11:15):
it run the risk of some pretty hefty fines, and
that would be up to seven percent of a company's
annual sales, and if you look at Google's results from yesterday,
that could be upwards of five billion dollars. But there's
more at stake here than just the money here, Caro,
it's also just this idea of regulation, and it's a
question that we've heard the administration articulate time and again,
(11:36):
especially with relation to the EU.
Speaker 4 (11:39):
Here, Caro, I think a lot like about the administration's
approach to the Block. This is just one example, right
of this administration's attitude towards the European Union, particularly in
the context of tech.
Speaker 10 (11:54):
Absolutely, and they are taking aim at a series of measures.
Speaker 8 (11:58):
One on the whole question.
Speaker 10 (12:00):
They have questioned the Digital Markets Act, seeing it as
a restriction on free trade. They are also complaining about
content moderation, that the block is much more in favor
of than here in the United States, and they see
that as a restriction on free speech. And then when
it comes to artificial intelligence. Back in February, you'll recall
that during the Big art AI summit the French President
(12:23):
Emanuel Macrone hosted in Paris, jd Vance made an address
there where he drew a line in the sand and
he cautioned the entire block in other countries as well
against overregulating AI and targeting American companies in the process.
Speaker 3 (12:39):
Google has spoken out about it, so too has Matta
bloombergs Mike Shephard.
Speaker 2 (12:42):
We thank you.
Speaker 3 (12:43):
Look turning back to Washington now, where a court continues
to hear arguments on remedies for Google's search monopoly. One
beneficiary of a breakup, well potentially, it's such rivals such
as dot dot Go. We're joined now by Camail Buzbas,
Doc dot Go is senior vice president of.
Speaker 2 (12:59):
Public Affairs, how has this remedial discussion been going from
your perspective? Have you been heard?
Speaker 8 (13:06):
Yeah?
Speaker 11 (13:06):
So, our CEO just wrapped up almost six hours of
testimony yesterday in the trial.
Speaker 8 (13:13):
And it's our.
Speaker 11 (13:13):
Belief that over the last fifteen years since both the
case was filed and the time that the case addresses,
Google's illegally monopolize the search market, and so throughout that time,
we've never had a fair playing field to compete, and
the remedies in this case can change that.
Speaker 3 (13:35):
Well, the remedies, alphabet would argue, go too far spinning
off chrome, for example, We'll get to a price point
for chrome in a moment.
Speaker 2 (13:42):
I know EDS need to talk about that.
Speaker 3 (13:44):
But there's other ones in terms of whether it's selling
off chrome, whether it's sharing data realistically, what would you
like to be done that makes it more of a
leven a level playing field.
Speaker 5 (13:55):
Yeah, Well, here's the thing.
Speaker 11 (13:56):
Each of the remedies that have been proposed by the
government are necessary but not sufficient on their own. We're
talking about undoing more than fifteen years of illegal monopoly
monit of so you think it doesn't go far enough.
I think that everything in there deserves to be there
and has a very targeted purpose and specifically addresses what
the judge put in his ruling. There's both a distribution
(14:18):
advantage and a scale advantage. So you need access to
users right right now, most users don't actually pick Google.
That decision is made for them by the fact that
they're the near default, the near exclusive default everywhere people
access search engines. When you have that advantage, it means
you have a scale advantage. And you heard multiple CEOs
(14:40):
from different companies over this week talk about that scale
advantage and how that makes getting quality search results difficult.
Even open ai was saying that it's an eighty twenty thing.
They can do eighty percent, but then when it comes
to the twenty percent of what's called long tail queries,
these are specific queries that aren't done a lot. Even
they're struggling with it. And this is and Google still
(15:00):
has the best index.
Speaker 5 (15:02):
Cameo, I do want to talk to you about queries.
Speaker 4 (15:05):
I think we've talked about this in the past, But
what came out of the process is that Chrome is
a hot commodity. Right your boss assigned a fifty billion
dollar value, but we hear from Yahoo and open ai
that they're interested in it. What I'd appreciate you spelling
out for the audience is what would your business actually
(15:25):
get in purchasing or there being a change in the
ownership of Chrome, particularly in light of that Chromium the
underlying source base or source code is open source anyway.
Speaker 11 (15:39):
So if you are a big tech company and you
are trying to make money, which is of course the goal,
and you have advertising, the fact that the most popular
browser in the entire world would be up for sale
is in enormous value.
Speaker 5 (15:56):
I mean, if you think about the kids that's going.
Speaker 11 (15:58):
On just downstairs from the a search case, the metacase
meant about WhatsApp for nineteen million dollars, sorry, at nineteen
billion dollars, the worth of Chrome is at least double that.
You can imagine any big tech company that has an
ad service would put ads on a Chrome that they own,
(16:19):
and that could create endless monetization opportunities for them.
Speaker 4 (16:25):
I believe that you would like to have access to
Google's click and query data.
Speaker 5 (16:30):
What is the benefit of that to you? Please?
Speaker 11 (16:33):
Yeah, So the benefit there is, you know, Google has
a massive scale advantage now when compared to other search engines,
and that scale advantage means they see much more clicks
and queries than other search engines, which means that they
can improve the quality of their search engines faster and
(16:53):
just overall have a better quality than others. Can you
know our CEO talked about yesterday, right, Let's say you
look something up on duck duto. You're trying to go
to a pharmacy or a restaurant, and you might see
that the hours aren't correct, but they are on Google.
And oftentimes that's because of that kind of clicking query data.
(17:16):
More people are clicking on the correct hours and thus
giving Google the information that this is what you should
be displaying to users. And you know, you don't want
someone switching to duc dout go and having them try
a few things out and end up rage quitting at
the end of it. And so by sharing this data,
(17:38):
you can level the quality playing field while also making
improvements to it. Because as I think people have seen,
you know, Google has said, you know, whether it's I
overviews or telling people to eat rocks and put glue
on pizza, you know, there's a lot of opportunity for
better integrations and better services. And so this is not
at all a copy and paste. This is asking for
(18:01):
a level of playing field on which to compete.
Speaker 3 (18:04):
You feel that Google should be forced to give you
that data.
Speaker 11 (18:10):
I think that is how you can level the playing
field for other search engines.
Speaker 2 (18:15):
And it's more just about leveling the playing field.
Speaker 3 (18:17):
Remind us of the benefit to the consumer here, because
I mean, it's all very well that your business wants
to do better, but me as a consumer, is really
rather happy with my experience thus far.
Speaker 11 (18:26):
You know, I think that there's a little bit of
a Stockholm syndrome happening with Google and that everyone's like, well,
this is great, I'm enjoying this, but you're also somewhat
captive to this because you've never been exposed to alternatives.
I mean, you know, anyone watching here, try and switch
your search engine right now and see if you can
finish it. By the time we're done. It is too
(18:47):
difficult to do it. And that's not an accident, right.
Google is extremely good at designing products to get users
or do exactly what they want to do, and in
this case, what they don't want to do right as well.
Speaker 4 (19:00):
In Google's counter would of course be that Chromium's open
source and the four penalties or targeted remedies of the
Dog combined Go Way Beyond and are Way Too Punitive.
Kamil Barzbars, SVP of Public Affairs with GO, thank you
for joining us on the story. Now coming up, Apple
looks to accelerate a manufacturing shift from China to India.
Speaker 5 (19:20):
Will have more. This has been bo technology.
Speaker 3 (19:31):
It is time now for talking tech and first up,
Meta Well. It's laying off over one hundred people in
its reality Labs division.
Speaker 2 (19:37):
It's acording to a person familiar with the matter now.
Speaker 3 (19:39):
The cuts will impact staff focused on creating the r
experiences for Metaquest headsets, along with operations focused employees, as
as the company looks to streamline work being done across
two different teams. Plus Apple Well, it's stripping its secret
robotics unit from the AI organization under John Gianandrea.
Speaker 2 (19:58):
Now it's moving to AG division.
Speaker 3 (20:00):
According to sources, the move is part of a broader
Apple effort to catch up rivals in the AI space
and its second major project to be removed from aichief
in the past month. And Sticking with Apple, the company
says it plans to build more iPhones to the United States.
Speaker 2 (20:14):
In India, Apple aims.
Speaker 3 (20:16):
To roughly double its annual iPhone output in India to
all than eighty million units, moving production away from China.
Mid of course, the US trade war ed coming up.
Speaker 4 (20:26):
Divergences in tech, Intel issues and outlook warning as Google
posts strong ad sales results, yet both companies face headwinds
from renewed tariffs and global uncertainty. That's going to be
our topic of conversation next. Let's get back to a
recap of where the markets stand. It's been a decent
five days at the index level, and as that one
hundred looking strong but kind of losing a bit of
(20:48):
momentum on the Friday. Now Bitcoin caro ninety five, six
hundred US dollars per token. If I say this is
behaving like gold and a haven asset, someone will clip
it and put it on social media. So I better
not say that. But that's what the writing on the
Bloomberg terminal states. And as you just covered, I think
Apple is really interesting. Google is out the way, and
(21:08):
when we think about next week, it is Apple that
I think we really really focus on. It answers or
hopes we will answer many of the questions around trade
uncertainty in tariffs. It is down half a percentage point,
but You've just outlined some of the Bloomberg reporting on
why that's the case. Stick with us. Much more to
come than this is Bloomberg Technology.
Speaker 3 (21:38):
Welcome back to Bloomberg Technology. I'm Caroline hid in New.
Speaker 4 (21:40):
York and I met Ludlow in San Francisco. Let's get
a check again on what the markets look like. Look
and now's that one hundred. I always go to it
very tech heavy index. On the basis of five days,
we're up almost five and a half percent, rebounding from
the drop of two and a half percent we had
last week. But Friday we've kind of lost some momentum.
There is some economic angs about all the headlines from
President Trump and trade, which we'll get to shortly on
(22:02):
the show, but also the mixed bag of corporate earning,
speaking of which, shall we take a look at a
couple of them. The story I think with Intel is
pretty clear. On the product side, they still haven't worked
it out. On the scale side, they haven't worked it
out cutting OPX, cutting CAPEX, and they will do significant layoffs.
But we don't have a full sense of the strategy
(22:22):
from the new CEO. Alphabet up two percent core search business,
but the eagle. Iide of you, Caro, the eager eide
well has spotted that profit got a boost from somewhere,
maybe surprise.
Speaker 3 (22:33):
An unrealized gain for an investment in a private company
ed to the tune eight billion dollars.
Speaker 2 (22:41):
And you know what that private company is.
Speaker 4 (22:43):
Right, Yeah, it's SpaceX. So Google has been an investor
in SpaceX Elon Musk's Space company since twenty fifteen. And
it's an unrealized gain, but sort of eight billion on
paper boost. That's pretty good going, isn't it. The question is, like,
you know what happens long term in the few future.
But I would also note that one of Google's executives
(23:03):
has a board seat at SpaceX, which is important to note.
Speaker 3 (23:05):
Well, when you taken a billion dollar chunk years ago
alongside Fidelity, I can imagine you kind of want to
board seat at the same time.
Speaker 4 (23:12):
Men, Yeah, exactly. And also the thing is that satellite communication.
It's slightly analogous, although I think we should track that
story over time.
Speaker 5 (23:20):
Yeah, right, let's stick with Google.
Speaker 4 (23:22):
Parent company Alphabet did post a first quarter sales beat
as its search ad business sees strength despite tariff uncertainty.
Morning Star Tech analysts amed Cahn, writing, while we believe
investor concerns around a tariff induced digital ad spending slow
down and antitrust related impact to Alphabet's business are valid,
we think the sell off in the firm shares has
(23:42):
been overly punitive, creating an attractive buying opportunity. Armed joins
us now, and I think the selling you refer to
is kind of a year to date selling, right as
opposed to to what we're seeing happen in the session.
Your main point from the print we got last night
about the search business.
Speaker 12 (24:00):
First of all, thank you so much for having me ed.
We really like to report. I mean, you know, the
search business clearly is showing resilience. There's been a lot
of you know, sort of investor concerns about search disruption
happening at the hands of like, you know, these generative
AI chatbots such as CHATGPT your perplexity, but if you
actually look at the number of queries and the number
of monetizable or commercial queries that actually increased, So that
(24:24):
kind of stands in contradiction to this overall narrative that
that investors have kind of like jumped on about the
death of Google Search, which we do not agree with one.
Speaker 3 (24:34):
And a half billion monthly users I think is what
we heard from the CEO coming for search and actually
like a billion podcast listeners on YouTube. Just this strength
and the bases of this business is significant, But that
is why it's trying to be broken up. Just are
you factoring in, in any near term sense an impact
on a sale of Chrome or an ability to have
(24:56):
to share the data?
Speaker 12 (24:57):
Well, first of all, when we're thinking about anti trust,
it's important to separate the near term and the sort
of medium to long term. In the near term, you
have some headline risks, but there's actually like very little
actual business risks because Google is going to appeal where
Alphabet is going to appeal the decision that Justice Metha
sort of puts out in the summer of this year,
and that appeals process may take some time.
Speaker 8 (25:19):
Now.
Speaker 12 (25:19):
As long term investors, though, that still is a valid concern.
Speaker 5 (25:23):
The way we think.
Speaker 12 (25:24):
About it is that there's a sort of range of
antitrust outcomes, and we think some of the more uh uh,
you know, value destructive remedies, such as the divester of
Chrome or potential divester of Android, we do not think
is likely. We think more sort of behavioral remedies such
as like the the end of exclusive revenue sharing agreements
(25:45):
or even certain certain other sort of like you know,
uh changes that that that alphabet would have to make
with their deals with these OEMs end browsers would probably
you know, be the forefront of the eventual remedy.
Speaker 5 (26:01):
Then that's where we're marbling in.
Speaker 3 (26:03):
I'm i con it's great to have your analysis, morning star.
We thank you. Now, look if there's another name we're
watching today, and it's Intel. Shares down significantly after the
company issued a pretty bleak second quarter forecasts.
Speaker 2 (26:13):
In an interview with you Ed. In fact, the Intel.
Speaker 3 (26:16):
CFO said the first quarter saw upside from tariff, saying
it probably pulled some demand and softened up the second
quarter for more. We welcome David O'Connor, a BMP parabat
Exan joining us. Now you've got around to perform and
a nineteen dollar price target, and there we are, nineteen
dollars ninety. We've erased all of this year's games on
the stock and rightly so from your perspective, you just
(26:38):
didn't get enough from the new CEO of how they're
going to rectify the business.
Speaker 8 (26:42):
Yeah.
Speaker 13 (26:43):
Thanks, for having me Karlyne.
Speaker 8 (26:45):
Yeah.
Speaker 13 (26:45):
Absolutely, you know we're underperform the stock. The stock today
the moves reflecting the tariff concerned. Also, investors didn't like
the message on their is structuring. I think the well,
we thought it was a kind of a positive message
from Lipoo and what needs to be done to restructure business.
The overall the overriding takeaway I think from investors it's
(27:05):
going to.
Speaker 5 (27:06):
Take a long time. David.
Speaker 4 (27:08):
On the one hand, people will say, Okay, we give
Lipboo the benefit of the doubt, he's only been in
post a few weeks. On the other hand, some say
cutting is not a strategy for growth or to fix
the product's issue. How much time are you willing to
give lipbou Tan and David's intner the benefit of the
doubt on both those things?
Speaker 13 (27:27):
Yeah, good question ed. I think there's a lot of
goodwill in the industry for Lipoo, and you know, he
keeps reiterating this will take time. The issues that they're
facing are not a quick fix. They're not really on
the kind of strategy side of things. It's more about
execution and that is where kind of they've fallen down
in the past. Intel and you know, Lipoo has acknowledged that,
(27:49):
and he's taking quite decisive action now. You know, he's
talked about changing the culture at Intel, which we haven't
heard before, stripping back all that added layers of bureaucracy,
going back to a focus on products and engineering driven.
Now all this needs to be done, but again it's
to take multiple years in our view to get there.
(28:11):
In the short term, ed I would say, the first
thing they really need to do is to stabilize the
market share. Stabilize the mark share and PCs servers. This
has been the core problem for Intel where they've lost
share to AMD and to ARM as well.
Speaker 4 (28:26):
David O'Connor, p and p Powi bag Zan, thank you
very much. Now coming up, Reed Hoffman from Graylock Partners
joins us to talk about his latest AI startup aiming
to cure cancer. The broader AI and political landscape much
to discuss that is next. This is Bloomberg Technology, a
(28:53):
top technology story today. The Trump Administration's putting pressure on
Europe to ditch stretcher standards AI developers. The EU says
this voluntary framework is intended to help tech companies comply
with the blocks New AI Act. The US says it's
another example of overreach that unfairly targets American companies. Joining
us to discuss that story his own work in the
(29:15):
field of AI investing and global trade wars.
Speaker 5 (29:18):
Read Hoffman.
Speaker 4 (29:19):
Read is a partner of bench firm Greylock, co founder
of LinkedIn, Inflection AI and now Mannus AI, and joins
us here in San Francisco. Welcome to the program, Read,
and thank you for coming back. You know you have
experience of working across jurisdictions. This administration's approach to Europe's
AI industry and that specific piece of news on the
(29:40):
AI Act, how do you interpret it?
Speaker 14 (29:43):
Well, broadly, I do think the European Union tries to
need to regulatory against future development of technology versus asting
to actual things.
Speaker 5 (29:52):
You agree on the overreaching, I agree on the.
Speaker 14 (29:54):
General overreach part, and I think that the it's actually
bad for Europe.
Speaker 8 (30:00):
It's not just a question of like different philosophies.
Speaker 14 (30:02):
I think I already know of US tech companies that
are deploying outdated or older models because you go through
the certification process and they go, fine, we'll just leave
that and as we do the next year at development,
you get development.
Speaker 8 (30:15):
So fast that like much less good for consumers, much
less good for industry.
Speaker 14 (30:20):
There Now this specific one is it's actually more the
questions about the regulations in the Act, the actual playbook,
as I understand it, is to say, here's yourself safe
harbor boundaries, which is actually in fact a good thing
to do generally in regulation, which you're like, if you
drive within these lines, there's not unspecified liabilities and stability
is actually in fact a.
Speaker 8 (30:41):
Good thing for the development of business.
Speaker 14 (30:43):
I mean, that's part of the problem with all the
craziness around the tariffs.
Speaker 8 (30:47):
Stability is important.
Speaker 4 (30:48):
Well, you make the point that the European Union moved
to codify what they wanted the rules to be. You know,
I think about the first four months of the administration,
we've had David sex on the program as the AIS are,
but they haven't really codified what they believe the rules
for AI should be in the same way that they
did with crypto.
Speaker 5 (31:08):
Which would you agree with that?
Speaker 14 (31:09):
Yes, because look, part of what business needs is stability
to invest in developing it. Even if you disagree with
the particular regulation, you at least know how to navigate it.
If you say it's unspecified, it's going to change, it's
gonna come, it's going to go. That just makes everything retrench.
So it's good to have that kind of thing. Now
that being said, you know, with Superagency, and you know
(31:29):
the book I just published recently on all it's actually,
in fact, we're going to have so many better features
for both great things like medical assistance but also safety
features in the future that we shouldn't be trying to
impede that through regulatory slowness.
Speaker 8 (31:42):
So that part of it I agree with.
Speaker 14 (31:44):
But you also want the stability and clarity and the
rule book, as I understand it is an effort in
that direction.
Speaker 3 (31:50):
Without that stability here in the US, you're investing. Nonetheless,
you're creating mannus Ai, which is about really important work
discovering drug discovery, particularly against aggressive cancer.
Speaker 2 (32:02):
Why do you have that commitment to do this in
this environment?
Speaker 14 (32:04):
Read Well, generally speaking, I'm always an optimist, and so
I'm always building the future, you know, kind of no
matter what, because that's how we create good futures is
by saying this could be great. Now with manis trying
to cure cancer. This is a multi year effort, like
most of my investments are like ten year efforts.
Speaker 8 (32:22):
Or you obviously hope.
Speaker 14 (32:23):
To get you know, kind of return like kind of results,
you know, one year, two years, three years, but you're
you're you're.
Speaker 8 (32:31):
Playing it out in the future.
Speaker 14 (32:32):
So the fact that there is kind of regulatory uncertainty
around AI in the US right now, doesn't you know
kind of you know, doesn't slow down my startup efforts.
Speaker 4 (32:41):
Can I just jump in and counter with something manus
AI long term ten year project with Inflection AI? And
I note your position on Microsoft's board that you turned
that around quite quickly, and then you know that we
call it an acqua higher in that context, is there
opportunity for you to do that with MANSAI with a
(33:02):
Biggert B stool?
Speaker 5 (33:03):
Is that an unfair question?
Speaker 8 (33:05):
Well, it's not.
Speaker 14 (33:06):
Look part of when you're a smart entrepreneur and you're
a smart investor, you're always thinking how do I transform
an industry? But also what are pivots or changes you
might make along the way as kind of plans B
And the decision with Inflection, which I think was a
solid decision, is the consumer agent where you have to
spend billions of dollars building a model before you actually
(33:26):
understand the revenue model. Actually in fact is harder for
startups to do yes if you're doing it. So it's like, okay,
let's change to a B to B model. It's still
going They got a whole bunch of different B to
B clients and let's do that. But the consumer thing
will actually have to be done by other players. And
so obviously if we made a similar decision with Manus,
which we're nowhere close to, then of course we have
(33:49):
various plans B in terms of how we operate, but
the goal is always to change in industry.
Speaker 3 (33:53):
Thank you and prosper and prosper with AI. And that's
where your book Superagency really comes in and you talk
about this cognitive industrial revolution that we're going through that
is going to have short term pain. I go brought
a picture here and just think about the short term
trade anxiety. How much is that playing into the fact
that the bogeyman we like to make of China in
the US, well, it's China getting ahead in terms of
(34:16):
it's cognitive industrial revolution because of the instability we're creating
here in the US.
Speaker 14 (34:21):
I do think that one of the things that the
that the tariff, you know, kind of Chernobyl kind of
catastrophe is actually in fact aiding China across its entire industry.
Like for example, you know, Europe says, well, if China
is a more stable trading partner, you know, for not
just manufacturing, but technology and all the rest, and we
(34:43):
can rely upon them better, that creates better global markets
for China and worse for the US. And so I
think that part of being smart about you know, kind
of what we're trying to do is we want trading
partners and trading allies for our own you know, kind
of industries and our own prosperity and jobs for American citizens.
And so I think that is creating It's very funny
(35:05):
because the rhetoric, of course is very competition with China, but.
Speaker 8 (35:08):
The actions in terms of.
Speaker 14 (35:10):
You know, kind of attacking our allies and friends and
partners is anti our efforts.
Speaker 3 (35:18):
What's interesting as well is whether some of the real
winners that come out of China come over here to
the US. Now, the latest news is actually an American investor,
Benchmark Capital, are putting money into not related to yours,
man us Ai, which is owned by another company which
is an actually consumer agent. They're just putting in money
(35:39):
because they want to expand that Chinese offering here in
the US and abroad.
Speaker 2 (35:43):
How do you feel about.
Speaker 3 (35:44):
Some of the wins that China is getting on the
consumer agent side and whether US should be investing in it.
Speaker 14 (35:51):
Well, I'm actually I actually think coopetition is the right
way to approach things like China. As you say, co authoathetition. Yes,
so you're both competing, but you're also cooperating. I think
that creates better prosperity and better kind of peace and
all the rest through the world. And so I'm actually
positive on kind of US investors investing in in kind
(36:11):
of general markets and all the rest. But obviously part
of what we want is we want like level playing fields.
We want you know, kind of equal access. Like I
actually think that the general discourse with China to say,
look at you, you restrict all of our technology industry
from playing in your field. So we're going to put
restrictions on you here. But I think the investment and
the ties are actually still good. Now that being said,
(36:34):
I think man use is actually not per se.
Speaker 8 (36:37):
Leading in the agent space. I actually see.
Speaker 14 (36:41):
A bunch of other you know, players, not just open
aianthropic Microsoft, Google. But I think there's a bunch of
folks who are doing very strong things, and there's nothing
that we've seen from them yet that suggests that they
are as yet, you know, caught up to some of
the things that are being built within American companies.
Speaker 4 (36:59):
You left open AI as a director in twenty twenty three.
I think I'm right in saying, but we've had you
on the program before to talk about it. It is
the leader in the field, shall we say, of frontier
models and now business and consumer facing applications of that model.
I have to ask you what you think the future
(37:19):
of open ai is in terms of instructure.
Speaker 5 (37:22):
You're close with Sam.
Speaker 4 (37:23):
And you speak with Sam, and you must keep a
very firm eye on that company.
Speaker 14 (37:28):
Well, yes, but in part because they're still doing their mission,
which is how do we make AI for the benefit
of humanity.
Speaker 8 (37:34):
The reason why they're shifting the structure is to realize
that mission.
Speaker 14 (37:38):
It's going from to a public benefit corp, which allows
the board of directors to make decisions for its missions
separate from the profit line, and that's actually, in fact
the way it gets the capital. Continue to do that now,
I think open AI continues to If people haven't played
with their recent kind of chain of thought models with
deep research. I mean, I try to do a deep
(37:59):
research every day because I think that that gives you
the lens to the amplification we're going to get with
these products as workers in the future.
Speaker 4 (38:08):
I've been using for every day. I also communicate more
with voice mode. It's a psychological thing that is a consumer.
You kind of have to get over this environment. More broadly,
a lot of capital is being deployed. Again, I note
that you're a board member of Microsoft, but the infrastructure
question is still very big. How far ahead do you
(38:30):
see the commitment to capital expenditures on the infrastructure side,
And is there anything about the willingness to deploy capital
that worries you?
Speaker 14 (38:38):
Read fundamentally, No, it doesn't mean that we might go, well, look,
the most optimum use of capital might have been a
slower ramp. But when you do the kind of the
two by two matrix and you say we don't do
the investment and then we fall really behind and building
the new franchises, or we do do the investment and
it's a little early and aggressive. The two by two
matrix is by far goes out to strategically to go
(39:01):
aggressive on it. Because the fact that AI is going
to redefine industries, that's not in doubt.
Speaker 8 (39:07):
The only real question is what year is it?
Speaker 14 (39:10):
This year, next year, the year after, and so going
aggressive is the right strategic model for both startup companies
but also of course are large tech giants.
Speaker 3 (39:19):
Can you remain bold in this environment? Read when, as
you say, the land is changing. We're trying to get
any sort of guidance from companies in this earning season.
How disruptive is this moment? How much you seeing a
freezing of business as we know it?
Speaker 14 (39:35):
So so far, what I've seen in every major AI
company has been a commitment to go as bold as
they possibly can. And I think that's actually a good
thing because it's partially again what I was saying is
like if you go well, it's going to work in
the next three years, it's not going to work in
the next three years for generating business returns, et cetera.
Speaker 8 (39:54):
And going heavy in investment.
Speaker 14 (39:57):
The chance of getting caught like basically well behind off
sides is much worse outcome than Hey, if I made
a mistake and I invested a little bit too much
in infrastructure in Capex. You know, twenty twenty five, twenty
twenty six. We know that adding intelligence to everything, like,
for example, one of the interesting questions for a program
(40:17):
like this will be when is it and this is
a small in number of years that we will have
an AI agent along with us in doing this program
saying hey, let's ask this question, or here's a fact
that's really relevant or so, and the answer to that
is small and years two four.
Speaker 2 (40:35):
I'm using one now read don't you worry, I'm using
one now exactly exactly well read boldness.
Speaker 3 (40:42):
You've been bold in continuing your political giving this year
as well, I think in the Wisconsin race, which was
more about judges. But I'm interested as to what you're
still feeling in terms of your political agenda here and
how much you have felt any impact of the money
you've given to ultimately the losing side of what kinrent
of administration is.
Speaker 14 (41:01):
Look, I'm still most fundamentally a kind of an American,
a kind of how we build prosperity here, and everything
I do is in that is in that vector. And
that's part of the reason why. Like, for example, when
you know President Trump was inaugurated, I was not saying
very many things because I wanted to be as many
(41:23):
good things to.
Speaker 8 (41:24):
Come out of that as possible. I think that's what
we all want.
Speaker 14 (41:28):
And and look, I'm still hopeful for kind of changing
you know, kind of energy regulation and getting advantages from that.
I'm still hopeful for, you know, can we apply you know,
kind of software to make government much more effective in services.
I'd rather see that than illegal degportations. I'd rather see
(41:49):
that than trade wars that are damaging to you know,
like everyday American citizens.
Speaker 8 (41:54):
That That's what I'm still hopeful for.
Speaker 14 (41:56):
And so I'm still investing in that in that arena,
And that's.
Speaker 5 (41:59):
Very much nine.
Speaker 4 (42:00):
We've what DOGE purports to want to achieve. Right, could
you just give your views on DOGE and the work
of efficiency but also deploying technology to modernized government.
Speaker 14 (42:10):
Well, so if what you did is said, hey, well,
we're first going to do is build data analytics and
understand everything and do things where we then we refactoring
that in, that might have led to a very good
process at the beginning. But kind of going in and
saying hey, we're first going to just shut off all
payments and break everything like that's like a disastrous.
Speaker 8 (42:32):
Way to do these kinds of things.
Speaker 14 (42:34):
So I think there are doing a bunch of less
reported good work on like you know, trying to make
HR records you know, kind of more you know, digitalized
and a process all that in a much more time
and economically efficient way.
Speaker 8 (42:45):
I think that's great. But on the other.
Speaker 14 (42:47):
Hand, I think that they you know, like all the
cases that are reported, like you know, everything from like
a catastrophic mis handling of the university system, like not
understandingly when you shift the overhead costs, you're basically saying
we're not funding any of the science labs anymore. Science labs,
like like science is one of the ways that we've
gotten our American technology advantage. It's like literally like say, hey,
(43:10):
let's let's put you know, concrete overshoes on both legs
and run a marathon.
Speaker 8 (43:15):
It's like, no, no, don't do that.
Speaker 14 (43:16):
And so being smarter about like I don't mean gradual,
but iterative like understand first, then act as opposed to
just like you know, like like blow it up and
then figure out like, oh is there anything good here?
Speaker 3 (43:32):
Talking of HR and changes, I mean the tool that
you built within human resources LinkedIn is changing at such
a rapid pace right now read and I feel social
media is more broadly, just briefly, how do you like
the look of LinkedIn right now as we all swarm
it with our videos and our narratives and our high fives?
Speaker 14 (43:52):
Well, thank you for swarming it with videos and sor
I mean, I obviously you know, have a have a
sense of pride and happiness with LinkedIn or time, and
we've stayed, I think, very true to our focus, which
is how do we help people with.
Speaker 8 (44:05):
Their economic lives? How do we help people's jobs?
Speaker 14 (44:07):
How do we help people, you know, make deals, understand
the business world, all the rest of that stuff. And
so I think like that mission has stayed true. There's
always more work. Like when you ask a product tech
founder and you say, what do you think, it's.
Speaker 8 (44:19):
Like, oh, there's a lot more to do. I still
want to see a lot more.
Speaker 14 (44:22):
And I think, you know, the LinkedIn team is doing
a great job, especially.
Speaker 5 (44:25):
The first time.
Speaker 4 (44:26):
I think over the years we've got to ask you
about LinkedIn, And the point Carrie's point is we recognize
growth there. Gray Lock partner LinkedIn founder Reid Hoffman, thank
you for the extended conversation here on Bloomberg Technology.
Speaker 3 (44:37):
Carroc What a conversation, What a way to wrap an
extraordinary week. That does it from this edition of BlueBag Technology,
so much to check in on their end.
Speaker 4 (44:44):
Yeah, this is what markets look like at the end
of the week. It is again on the week then
as that one hundred a bit more muted by the way,
Tesla pushing higher. They were hearing a lot more from
the federal government on regulation and going back to Intel,
you know the conversation we have with the CFO. It's
very much a streamlining of this company for now. The
tech and product refocus. I think that's going to come
later from New York City and San Francisco. This is
(45:07):
Bloombo Technology.
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