Leveraging Inclusion Beyond DEI

Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio.

One of our guests, the Dean Dean Mao, came in here and asked how long we'd been co hosting together.

This is a sad story, and it's fun.

You laugh because it's always good to laugh.

Yeah, otherwise you cry.

And the reason you're laughing is because we have a long history of doing other show. You're filling in for Carol now, but we have a history of doing other shows, other shows that have been canceled.

We used to have a daily streaming show, Quick Take Stock Rest in Peace. Then we had a crypto show to We had a crypto show, a weekly crypto show. What a blaze of glory?

Uh Crypto I RL.

Yeah.

Yeah, it was a great show.

It was a great show. What a weird time though, to have a crypto show. We had it. Of course, one of the events that happened was FTS collapsed, so that was interesting to cover in real time.

It was the crypto winter.

Yeah, well it was the start of it, the start of it. Yeah, for a while it was the crypto summer, it was like Crypto on the Sun.

Well, that's kind of a perfect segue to get to our next guest. Adam Sullivan is the CEO of Core Scientific. The ticker is CORZ. And the reason why I say that's the perfect segue is because this is a company that's intimately familiar with the ups and downs of the industry at once. For once, it was the at one point it was the largest public bitcoin mining company by computing power, but it went bankrupt back in December of

Thank you for having me on.

You still are doing bitcoin mining, but you're looking more at the computing power to do other stuff right now.

You're absolutely right. So we're a digital infrastructure company at heart. We've developed eight hundred megawats of infrastructure that allowed us to be the largest bitcoin mining company for the past three years, and now we're utilizing that infrastructure to be one of the largest data center companies in North America.

Talk to us about the bankruptcy process and sort of what you were able to do with the fresh start.

It was a pretty tumultuous process, right, you know. I came into the company about four months into the bankruptcy process, and there was a big fight over the valuation of the company because bitcoin is volatile. Bitcoin mining reterms of volatile. So the valuation of the company that you have to set four months before you come out of the bankruptcy

Now, can we talk a little bit more about bitcoin mining and data centers because not to quote Harry Styles again, but it is a real sign of the times here, and it's interesting. It sort of feels like how Facebook became Meta, but now they're really in an AI company and Meta is sort of an afterthought. I mean, how do you identify as a business? Are you a bitcoin minor. Is that how you introduce yourself or do you introduce yourself first? With the data centers.

We're a digital infrastructure company, and so what we develop is very application specific data centers. We've been developing them for bitcoin mining facilities for the past seven years, and now we're developing them now for specifically for high performance computing, for artificial intelligence.

Why make that change.

Well, artificial intelligence and high performance computing provides us with long, steady contracts with large counterparties. So we just signed twelve year contracts that total more than six point seven billion dollars in revenue over the next twelve years. So it really takes away the volatility and provides us the opportunity to make countercyclical investments into bitcoin mining.

How much of your revenue now comes from bitcoin mining?

Nearly all of it does today, And so.

Even though you signed these contracts, this contract.

These contracts are for delivering twenty twenty five and twenty twenty six.

So what's the ultimate goal in terms of portion of revenue from bitcoin mining versus high performance computing. Yeah, so if you can have that distinction.

Yeah, Well, we'll be developing these sites over the course of twenty twenty five, in twenty twenty six, So as we look forward to twenty twenty five, it's going to be you know, a lot of high performance computing revenue, but as we look at twenty twenty six twenty twenty seven, it's going to be much more heavily weighted towards the traditional data center revenue.

I want to talk a little bit more about the mining piece in particular. Remind me when of the last having was.

It was in April this year.

It was an April of this year. That feels like a year ago, so it was an April on this year. I mean, how do you handle the having as a miner? Of course, for those listening who aren't super acquainted with the language, of course, the having is basically when you have to solve a lot of you know, puzzles and computer problems, and then you get bitcoin as a reward as a minor, and then that reward is cut in half every four years. So I mean, how does that

Yeah, So the expectation is that when blockerard gets cut in half difficulty drops or how hard it is to find a block in this previous having difficulty did not really fall off, and so mining revenue did get cut almost nearly in half in April in a single day. And so what we saw over Q two was much more challenged mining economics, and we handle it a little

Really interesting, and I mean bitcoin, it's the actual price itself has been interesting, and that it's been really boring. I feel like we've been hovering around sixty thousand dollars since basically the end of February's the.

Current the ETA after the ETA.

Yeah, we got the ETFs and then we go up, we go down, but really we're in the neighborhood of sixty thousand dollars. What is the current break even level when it comes to bitcoin price?

Yeah, so for us we announced in Q two our break even bitcoin price was about twenty nine thousand dollars.

So you're having a great time.

Yeah, So we're still as long as the price is above twenty nine thousand, right.

Well, the expectation is if bitcoin price fell, you'd see difficulty come off the network or network hash rate drop, and so you expect the break even price to then drop in tandem with that.

I'm wondering about the infrastructure that you own and how easy it is to switch that from bitcoin mining to high performance computing. Is it impossible?

No, but it's not easy. It takes a very talented team. So much of our team comes from the traditional data center industry, and so the way our facilities were originally constructed was with the idea in mind that we're going to be a we're going to be able to some of these facilities to traditional data centers in the future. So our facilities look much more like powered shells with the opportunity to convert it based on the end specifications of the user.

You mentioned flexibility when it comes to power costs. This is a huge determinant and how profitable a bitcoin minor is because it is the main determinant. Yep, what do you do for power?

We're entirely on grid, but we participate in multiple different load programs that provide you know that it gives us downtime of about one two three percent depending on the depending on the time of year, but it's a significant reduction in power costs.

What are the.

Politics there, Because I remember with a lot of the bitcoin miners, something that we explored in cryptoiurl Rest and Peace was of course that the miners came under a lot of fire for the electricity usage. It feels like data centers haven't quite experienced that same criticism, probably because I feel like as a society we're all interested and excited about the possibilities of AI. What are your thoughts there, Yeah, I.

Think both data centers and bitcoin miners have been underfire. Data centers were under fire prior to the bitcoin miners being an underfire, but I think where we sit today is a lot more states and a lot more regulatory bodies that are starting to understand the benefits of bitcoin mining, and so it's actually provided a big opening for utilities because utilities have to count data center demand against peak demand, but bitcoin miners do not kind of against that peak demand.

We only have thirty seconds left. But make the case for the benefits. People might be listening say, wait a second, that benefits of bitcoin mining, like, I don't care about an I don't see any benefits. What are the benefits.

The benefits allow new generation to come online even if it's not economic to run one hundred percent of the time. Bitcoin miners can take that base load, so that in the five to ten percent or twenty percent of when that power is actually needed, that can be supplied back to the grid. Well, the bitcoin miners are paying for the power the rest of the time.

Adam, good to see you. Good to see you, Thanks for joining us on Bloomberg Business Week. Adam Sullivan is CEO of Core Scientific cor Z is the ticker. He's here in the Bloomberg Interactive Broker's studio. Well, our next guest spent more than thirty years at AT and T. She ultimately rose to become the CEO of AT and T Business. She was the first woman and first woman of color CEO in the company's history. Now she's on

Thank you so much, Tim, it's great to be here with you.

Hey, we got a great big chunk of time, so we're going to get to the book in a few minutes. But we'd be remiss, after more than thirty years in the telecom business if we didn't talk a little bit about what's going on out there, because it's kind of wild with the news that you have. Verizon last week announcing a deal for Frontier sort of getting more into the broadband space. This deal was a little prizing to me because I thought wireless was really the future that

Yeah?

So, Tim, as you know, I've been out of the industry for a couple of years, a.

Couple of years, but I'm sure you still follow it a little bit right.

A little bit, a little bit, But what I would say is that, you know, convergence is really where it's at. You know, as you think about the wireless network and wireless capabilities.

Yes, I mean.

That's that's that's critical to the functioning of society, But ultimately it all comes down to a fiber network, comes down to a wired network as part.

Of that infrastructure.

So that's uh, you know, that's what I think. You know we're seeing out there is that coming together and you know, I'd love an opportunity to talk about this leadership in general and you know, inclusion.

Oh yeah, well, well well we're gonna we got a lot of time, we're gonna we're gonna get to that. But but but I just thought I thought that with with how expensive fiber is and with the advanced that we've made in wireless, moving forward, we'd see more wireless nodes than you know, people digging fiber. Are you saying that we're still going to be having fiber coming into homes and businesses and not going to be going wireless?

Now what I'm saying.

What I'm saying is that the way that networks will continue to evolve as they always have will be based on the latest technologies, right, and the demands of the marketplace. Right.

Certainly, with the needs for.

Storage and the high capacity computing and the emergence of AI, there will always be a need for networks and a high capacity, high powered, you know, fast networks.

And so all I'm saying is that as the technology.

Evolves, that's where it will be, right And ultimately, if you look at any network, right, a mobile network, it includes stuff in the ground, it includes wired capabilities. That's all I'm saying. And I'm sure you could have plenty of other experts who could talk about costs in a much more specific way than I could.

Well, I am curious to talk a little bit more about AI. AI is in every conversation. We talk about it all the time, How it relates to different industries. Of course, mostly you know, we talk about it in terms of the chip makers and sort of the picks and shovels right now, maybe a little bit with the iPhone given what we heard yesterday, how do you think it'll affect AT and T in the industry of course that they sit in.

Yeah, so, Katie, I wouldn't say that I'm the expert.

Right, right, just broadus strokes.

Yeah, so I mean I can talk about what I think ABOUTI and how it will impact.

The need to be even more inclusive if you will, right.

And so what AI does, It helps us and gives us as you know, as humans, as leaders, the opportunity to actually advance our human skills, right, which means that because AI will help us with more basic computing tasks, help elevate our intelligence, no pun intended, pun intended, we as leaders have now got to figure out what are the kinds of skill sets we need to develop in our people, what kind of talent we need to complement and utilize those tools that are now just simply emerging

Mm hmm.

Do you think about I'm just thinking about, like how many things around our home we plug in and charge and are connected to the network. Is is that do we see you talk about convergence? Do we see more and more individual items connected to the network? The Apple Watch? For example, you're in a garment, but I'm pointing because you do have a somewhat of a smart Watch. But that's not that's not connected to the network, that's like connected to your phone, right, Yeah, yeah, you can get

Yeah.

Again I'm not a hardware expert, but what I do believe will happen is right, there is more And this is really what AI and computing is all about.

It's about the data. It's about the intelligence. Right.

So, as we see a more need for data, whether that's in how healthcare evolves, right, so the watch, fitness and health, health monitoring, or in other aspects of you know, monitoring your water levels or your utilities. These are all things where if more data is more helpful to us as a society, that innovation will occur. Right. There will be more connected things and that will help generate you know, more need for data, more need for computing, and more need for connectivity.

Okay, so how how do you make sense of all this data that is out there?

It makes sense?

Yeah, I mean how does a company make sense of all this data? How does a leader make sense of all this data? Because if you think about everything that's monitored today, you have so many inputs. I mean, you could probably as the CEO of a company, have an understanding of when people are badging in, when people are badging out, when they're more engaged, when they're not engaged. A lot of this has to do with how you create a workforce that is aligned with what you want to accomplish.

Yeah, absolutely, right, right, And so the first the first part of biger leadership of inclusive leadership. And let me first say what if what is inclusive leadership? It is simply and leading bigger is simply about widening your person to have greater performance and impact. That's all that is, right.

Speaking of getting where you need to go, I'm always so interested in people who spend almost their entire careers at a single company, especially. I brought this up yesterday, we did.

Yeah, we were speaking, of course, the former CEO of Dow.

Yeah, and he spent more. He spent thirty two years, just like you did at DOO. But it's so hard to find somebody early on in their career, except for Katie, who spent their entire career at a single company.

Is that right, Bloomberg?

Yeah, yeah, Katie was born here.

Born in this building. I don't actually leave. Okay, okay, I live here.

But you had a long way to go before thirty two years.

Yeah, got eight in the bath. I'm on my way.

But do you think that? And you teach school, You teach business school students. So do you see that still as a typical career path for somebody or do you see them jumping around more? Yeah?

So, I do actually get this question quite frequently. Or do we see the younger workforce, the emerging force, having this idea that they're going to be in a place for thirty plus years? Right?

The answer is absolutely not right.

I mean, I think that the pace of change today is nothing like we've ever seen it. I think that there is a desire and a transparency for what opportunity is out there in today's workforce. I happen to have two gen Z daughters, so I spent yeah, yeah, I do. I do and spend plenty of time with gen zers.

Right.

And what I'm so excited about, so hopeful about, is the fact that they are even more courageous and bold about what they want and what they don't want.

Right.

I know plenty of gen Zers who will only work in a work environment that's hybrid as an example, right, And that is a requirement. Do you rather not have a job than hybrid?

Right?

And so that is something that as a old gen x er I would have never I would have never embraced right. I would have said, Hey, my job is like my foremost thing. My job is necessary to have the life I want to live, as opposed to knowing what I wanted in my life and then having my job fit that. So I don't think it's a paradigm, Tim or Katie that long term loyalty. But what I think that puts the pressure that puts on bigger leaders is we have to we have to lead differently.

We have to evolve with the times, right, you.

Can't count on institutional knowledge that is indigenous over the decades. And in fact, when you think about long term planning from a strategic standpoint, you know, can we really predict what's going to happen in five years? Yeah, let alone five Right, So fundamentally the pace of everything has accelerated.

I'm so glad you brought up the hybrid point because I do think that. I mean, you think about the effects of the pandemic, maybe some of the lasting changes is that hybrid structure. I mean, in my own life, I think about the time. I still spend a lot of time at the office, But I used to be here, you know, eight to six pm every single day, and I don't do that anymore.

But you're still getting those hours out.

Oh yeah no, But I go home and I work. I have to be here every day because you know, I'm on air. But and then a lot in my personal life, my friends, I have a lot of friends who move jobs for that hybrid flexibility. They're all millennials. But I when you think about leaders today, I always wonder is it sustainable? I mean, do you think that

Yeah, well, you know, the very last chapter of my book is actually called flexibility.

Right there you go.

I fundamentally believe that flexibility is here to stay, right, I personally cannot stand the moniker of return to the office or back to the office. Has anybody have actually found a way to go back to the past.

No, I dock in back to the future.

That's right. I actually with the DeLorean and a right, you can do it.

That's capacity.

Lost capacity can do anything. Jigga wats however possibly have? So But on that note, right, what leaders have to do now? And nobody has been taught this right, how to lead in this way. Nobody's been taught how to deal with a workforce that is geographically disperse, you know, a combination of different modalities which could change every single day who is in a work site versus.

Who is not. So, in my view, flexibilities here to stay.

It's here to stay because we want as leaders access to the best talent possible. We want access to as diverse a customer base as possible.

We want access to.

The most diverse, compelling investor base right. And as you know, as every generation emerges, every generation.

Becomes more and more diverse in terms of what.

Their needs are, you know, the clarity of their of their purpose. And it's incumbent upon us as leaders to figure out how to operate this way. But what I will say is that you have to now treat the office or presence with great intention. You cannot just assume that because people are present physically in the office, that they're more productive, that they're happier, that they're more engaged.

Was pre COVID, we were all in the office. Engagement was a fact because that's the only way we knew how to work.

Sit tight, because we're gonna do some news and then we're gonna come back more with Ann Chow. She's the author of the new book The Lead Bigger, The Transformative Power of Inclusion. She spent more than thirty years at AT and T. She's on three boards of publicly traded companies. That's next on Bloomberg BusinessWeek. I want to get right back to an Chow. She's former CEO at AT and T Business. She spent more than thirty years at the company.

So as a leader, you know, I will tell you tim that and I appreciate the question that I think DEI has largely been misunderstood.

I personally don't like the acronym because it, you.

Know, in some circles it means one thing, when it's actually three different things with it's diversity, equity, and inclusion.

You know.

My view of that is that diversity is just simply a reality of the modern world. Right, every generation that comes forward becomes more and more diverse. There are many different dimensions to diversity, you know. Equity is just about fairness, and inclusion is the topic. As to what I wrote a book, right, inclusion means wide being your perspective by including everyone that you know that is in your ecosystem,

For why those companies made those decisions. And I think that each of us as leaders has just got to be prepared for us. We serve a set of stakeholders.

That we intentionally make sure that we message and care for the other stakeholders who may be impacted in those decisions.

And it's a pretty nuanced and pretty nuanced communications coming from different companies. So I want to clarify what Ford did. Recently, Jim Farley wrote in a note to employees that the external and legal environment related to political and social issues cantinues to evolve and the company no longer will speak publicly on polarizing issuesbout the day.

Well to that point, I mean, this conversation that we're currently having in society around DEI and this pullback that we're seeing from certain companies, it kind of reminds me about ESG, for example. I mean, there was a whole kerfuffle over ESG a couple of years ago. And you think about these three letter acronyms. You could look at these different conversations and say, it's inevitable that these sort of conversations become politicized, and it's hard for the c

Don't? I don't necessarily? Right?

In my view, leadership is a choice that we all make. Leadership has no gender, it has no age, it has no color, it has no politics, that has no religion, right, And leadership is all about rallying and aligning up a group of people to go get something done, to do work. That's what it has always been. You know, I've never been a you know, sort of political kind of person.

Just today but tomorrow.

It's all of those things that make really just good business sense, right. And are gender and race included in that scope, Yes, but it's not just that.

Do you think companies should speak out on issues that are not related to their businesses?

I do not. I do not.

I feel very strongly that companies and leaders need to stay focused on their purpose, on their values, and on their stakeholders right and how performance is being measured. And you know that doesn't mean that there are issues. If there are issues out there that are that are causing you, or they that they directly go against your purpose and your values, then you are in fact compelled to right

Are not just your own.

So how do you balance that with some of the contingents issues that are important to voters? For example, like I don't know different regulations around a woman's right to choose in different states, Like how do you how do you figure that out in a presidential election?

Yeah?

Yeah, So what what I know I will be listening for tonight, you know, is I will be listening for bigger leadership. I will be listening for leadership that you know, focuses on individual rights but also focuses on what is right for our country as relates to policies and programs. And like I said, leadership has no politics, all right, leadership just is. I will also say that leadership is about leading all the people, not just the people who may agree with you. And I think that's what inclusive

And chall former CEO of AT and T Business. She's also the author of the new book Lead Bigger, The Transformative Power of Inclusion. She joins us here in the Bloomberg Interactive Brokers studio.

This is Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio and television.

It is Bloomberg Business Week. That is Katie Grafeld in for Carol Masser. I'm Tim STANEVIEK Katie, what are you doing tonight at eight o'clock?

I told you already. I'm taking magnesium. I'm taking my miltonin. I will watch a little bit of our coverage. Of course, the debate doesn't start until nine pm, but we're going to have some great coverage on Bloomberg TV and Radio. Klee Lines, Joe Matthew, David Gura. What an all star lineup?

That was perfect?

Thanks.

It was very enthusiastic promo.

Yeah, and it was the best part was that I'm being sincere.

I am excited.

I'm going to be watching it on the Bloomberg Business as you should. Hey. Speaking of politics, Kamala Harris proposing a tenfold increase in the small business tax deduction for startup costs. It's a new weapon in her arsenal as she vised with Donald Trump to show voters who can best assuage their anxieties about the economy. Trump, for his part, has touted lowering the corporate tax rate to fifteen percent. But what is a small business owner to do? What

Well, how do y'all? I'll probably take a millotone in two, so I'm with you. I get it look ed, Hello Elise. We serve one point five million small business owners with credit loans and different access to capital, and we talk to them all the time about what they're thinking, what they're worried about. And look, seventy percent of them have not decided who they're voting for, and it's based off

And it's interesting. I mean that you know, a significant portion have not yet decided who they're going to vote for, but they're definitely going to vote. I mean, that's sort of rais'es mistakes on tonight's debate. What will small business owners be looking for in terms of topics that they want to hear about from Kamala Harrison Donald Trump.

Look, there are thirty three million small businesses in this country. We have five times not opening than the history of our countries. Is a really critical population. Never one thing they want to know is taxes, taxes, taxes, taxes, and remember we're not just federal we're looking at state elections, local elections as well. The next is inflation. Cost of goods matters to these companies. Finally, we think about immigration in other terms, but hiring is a massive still ordeal

Interesting do you have have you done any research on how the small business owners feel after a change at the top of the ticket.

You know, it's interesting the undecided was much higher and now it's gone lower. So you know, we don't know which way that that is pushing, but it definitely was a change.

So okay, so before Biden dropped out, undecided were about twenty five percent, right, And yeah, what are undecided now?

So we're at thirty percent?

Interesting, so things have changed.

And look, here's what's really important about that is they are really listening tonight of what are those policies And you said corporate earlier. There is a big delineation between corporate and small business, So that's what they're really listening to. Those key words. The vast majority of jobs in this country are coming from businesses with less than thirty employees. So that's what I'm paying attention to and what our customers are paying attention to.

Yeah, it's a really nice reminder that, I mean, small businesses are the lifeblood of this economy. And I want to go back to the point you made about immigration. Of course that a lot of small business owners will be focused on immigration, and of course we are fresh off the last month's jobs report, the August jobs report, There's been a lot of questions about the labor market. What view do you have into how small business owners are feeling about labor availability right now?

Yeah, well, on one one hand, it's exciting because over seventy percent of them are hiring right now, so you know, that gets me excited that there is growth in the market. On the flip side, they are not finding the labor they need. We're still in these quote hiring wars in their own neighborhoods. And I'm talking about the folks that serve y'all every day, your coffee shops, your dry cleaners, your auto mechanics. They've got to have labor in order

You are president and CEO of a business. Have you have you decided who you're going to vote for?

I have, I have, But I am always listening and pushing till the day of to make sure that both campaigns are going to understand the policies that they need to step forward.

Do you feel like they're understanding the policies that effects I think they're owners.

There's a difference between understanding and listening. Right There's been massive shifts at the SBA. There's been lawsuits and litigation around Squire, diversity and supply chain, and so we have a lot to do. Capital is very expensive right now for small business owners. It is not accessible to everyone who needs it. I'm a big fan of US veterans and they're having a really hard time getting credit and loans right now. So there is a lot to talk about and a lot to do.

Elizabeth, really appreciate you taking the time and joining us on Bloomberg BusinessWeek. Elizabeth Gore is president and CEO of the Fintech platform for Small business Owners. Hello Alex, Hello Alice. Excuse me. She joins us from San Francisco.