From the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Lovelow.
Live from New York. I'm Caroline Hyde.
And I'm Mike Sheppard in Washington. This is Bloomberg Technology coming up.
Tech CEO's flock to the inauguration of Donald Trump in Washington. Plus President Trump gives a temporary reprieve to TikTok, granting a seventy five day delay from a US ban. And live from the World Economic Forum in Davos. We'll hear from Bag of America Ceo'brian Wynihan later this hour, but first we check in on these markets.
Look some anxiety.
Being shaken off as we see President Trump take office, then as that pushing up, and indeed the NASAK one hundred up about a tenth of a percent as many looked perhaps the economic potential of this next administration. However, on the downside hasn't been some key names. Bitcoin is at one point three percent one hundred and three thousand absolutely took off ahead of the inauguration. We'll get into some of those mun coins in a moment, but let's move on to some of the individual points drags or
indeed Apple being the key one. I want to focus in on TSMC for a moment though. We're at one point nine percent on its ADRs. This is its restored operations, that factories it evacuated after a six point four magnitude earthquake struck at the island's south look at injured four people, key chip maker.
Fabricator, to Nvidia and indeed to Apple. But Apple being drag.
Lower the worst day we've seen since September of last year, in fact, three point eight percent lower.
Why this is yet more downgrades.
Coming from Jeffrey's, coming from Luke Capital analyst worrying about sales of the iPhone and in particular Chinese weakness. Look, this is going to be top of mind for Tim Cook, who yesterday was one of the who's who are.
The world's wealthiest people in hech elite surrounding President Donald Trump as he took the oath of office, all gathering and combined get this, Mike net Worth exceeding one point three trillion dollars for the occasion, all sprinkled in among Trump's own family.
They were not just sprinkled in, they were seated ahead of Trump's incoming cabinet. It was striking to see how prominently Elon Musk and others were occupying that space in such a moment, and it really signals how much tech has arrived with this new administration. And really something else of note from yesterday was President Donald Trump scrapping the
Biden administration sweeping executive order regulating artificial intelligence. Let's bring in Bloomberg's balance of how our co host Kelley Lines to discuss this. Kelly, thanks for joining us and for all the great reporting yesterday on the inauguration. Trump started this with some shock and awe on the regulatory front. Talk about the direction of travel that we see in undoing this AI order.
Well, the direction of travel certainly is fast. Trump yesterday sent a modern day record for a number of executive orders in one day. There were twenty six plus four presidential memoranda, and of course as part of that, he rescinded seventy eight executive actions from President Biden. The executive action regulating AI. The sweeping order was one that was part of it. This, of course, during the Biden administration, was intended to create safety and transparency guidelines around companies
developing this technology. It also created the AI Safety Institute under the Department of Commerce that was essentially setting voluntary guidelines for how the development of this technology should work.
And now that goes away.
The thing is the President, while repealing this, did not say what is going to be replacing it, leaving a bit of a question mark. Certainly, we could expect David Zachs, the venture capitalist who is now the AI cryptos are in this White House, could be playing a role in what happens next. But it also could speak to buy and large a kind of hands off regulatory approach this
administration seems to take. And certainly that was a message frequently by Donald Trump yesternight and throughout the campaign.
And let's just talk about someone who's key to AI's future is Elo Musk. And indeed it feels as though he's been cementing his power over the last couple of days as well well.
Absolutely, in fact, it is now solidified through one of these executive orders, Caroline, that he will be leading this Department of Government efficiency, and he will be doing so by himself, as the person who was intended to be his co head of vag Ramaswami is bowing out to instead run for governor of Ohio in twenty twenty six.
There's been some reporting that there was a bit of consternation between Ramaswami and mar A Lago that may have played a factor, But it does clear the road for Elon Musk to essentially have the greatest degree of control over this agency, which will actually be part of the federal government. That was not the intent originally outlined by Donald Trump back in November, but through the EO yesterday, he made this part of the Executive Office of the President.
Through an executive order that will rename the US Digital Service, something that was created during the Obama administration back in twenty thirteen, to the United States Dode Service. That means Elon Musk is getting an actual White House email address
space in the eisenhow Our office building. It raises some ethics concerns given Elon Musk, of course, and his companies do contract with the United States government, and already this is drawing lawsuits Caroline, including from the largest union representing federal workers, saying that the Office Budget and Management Management Budget and the White House here are violating different rules
that are supposed to govern this. But certainly Elon Musk is going to have a close year of the president as this administration gets going.
A controversial weekend for Edol Musk, which we'll get to a little bit later in the show.
But Blue most Kaylee lines spectacular, thank you for joining us.
Meanwhile, TikTok Whiplash Fight Dances US services were restored after Donald Trump acted to delay the band by seventy five days, proposing a US China joint venture, though it's unclear if the APPS Chinese parent can or even wants to secure a US backer. Not to mention if this is enough to appease Congress's national security concerns, Well, let's bring in a US representative, Jake Olkinlass from Massachusetts. Now, you served on the House China Select Committee last Congress, and we're
original co lead to the TikTok divestment legislation. So I ask you this, what do you make of the extension?
The extension appears to be illegal. The law allows for one ninety day extension if the President can demonstrate that a sale is underway and there needs to be more time for the negotiations. In the administration, that is not what's happened here. What's happened here is Trump has just declared seventy five days of a free pass for TikTok, and there does not seem to be any statutory support
for that. This is an example of how the social media corporations have really come to plunder the American town square. There's an old saying in tech that if you're not paying, you're the product. Well, big tech has productized Americans attention spans and our social lives for the last fifteen years, and both parties have failed to rain them in. And
now TikTok. Excuse me, now, Trump is not only inviting American corporate abuse of the town square, he's all allowing Chinese communist abuse of it.
Congressman, the order that Trump signed yesterday called for a review of the intelligence surrounding.
The risk posed by TikTok.
Are you concerned at all that the incoming administration might be glossing over or prepared to gloss over those risks in its eagerness to try to strike a deal and keep the app going.
Yes, And there's two core risks. One is, of course, american's personal data, geolocation data, personal contact information than a social graph of their lives. But the second, I think more concerningly actually is control over the algorithm itself. What content is suppressed, what content is amplified, That is ultimately dictated by the Chinese Communist Party, And we need to be very clear about this. There's a lot of handwaving
around this. Xijingping makes those decisions, and what that means is that Chinese kids see very different content, mostly educational, than American kids do. And I don't know why the United States would want to outsource the education and ideological
cohesion of an entire generation to our greatest adversary. Now you underlay this ignorance of that core risk with the fact that Trump just issued a meme coin that basically is the equivalent of him opening up a Swiss bank account, inviting foreign adversaries and foreign individuals and corporate interests to deposit money into it secretly and then show him the receipts. That opens up the way for monumental corruption in the sale of TikTok.
We'll talk about Trump Coin and indeed Milania's meme coin two a little bit later. But Congressman, I go back to the fact that you said that this extension is ultimately illegal. Now you've also said that there's hand waving now bite dance in.
And of itself.
Would say, look, control does not lie in China or Shijiping, but up to TikTok in and of itself. But going back to if indeed we did see some sort of joint venture more US ownership of TikTok, with that in any way a piece some of your national security consents.
As with many things, he says, I have no idea what Trump was talking about when he said like the US government would have a fifty percent stake or something like that. There's about seventy five unanswered questions in between that statement and the actuality of it. Here's what we want, though, Here is the goal of the bill. First of all, we don't want to ban TikTok. We don't want to ban any of the social media. They're here to stay,
just like radio and TV before them. But what we do want to do is reclaim control of the digital town square from this Chinese communist and American corporate malfeasance. And to do that we need TikTok to answer to US law. And then the second step is Congress needs to pierce Section two thirty and establish a duty of care for all of these social media corporations. That means that we can allow them to host things like deep fake pornography, which ninety eight percent of online deep fake
videos or pornographic content targeting women non consensually. These tech CEOs don't care. They don't have to care. They're not liable for it. Congress needs to end that.
When we're thinking therefore about the next steps.
You seem to be going more broadly.
We've had steps being taken by the CEO of Matter as well to reduce fact checking here in the United States. How has that been a cause of anxiety for you or is that something that you feel. Ultimately, yes, we could see more community focus on preserving what is said on the internet or not.
So, I'm actually sympathetic to Zuckerberg's claim that fact checking was not proving effective. Now we can debate how accurate the fact checking was, but the point is that people didn't believe the fact checking, and ultimately truth has to be communally acknowledged and so moving towards community notes, if he can demonstrate that that's more effective and building trust and building shared consensus about the facts, I'm receptive to that.
But the underlying point here is that any Web two point zero approach to doing this is ultimately going to be ineffectual because these are walled gardens controlled by corporations, and ultimately, these corporations monetize the attention span of Americans and sell off that product to the highest advertising bidder. And for so long as that is the case, they're always going to amplify the seven Deadly sins, things that foment pride and greed and lust and end be because.
That's what people click on.
We need a Web three point zero transition where people have more custody of their personal data and where the algorithms are answerable to communities in a pluralistic fashion, the way that Taiwan has done so under the leadership of the Digital Minister.
Congressman, do you see any role for government in trying to help in this area of moderation? We've seen the direction of travel in Washington move far away from that.
What do you see.
Government needs to revoke Section two thirty so the tech industry will claim that Section two thirty protects free expression, and it's just laughable. James Madison did not write Section two thirty. It was wrapped in the nineteen nineties, and it is an industry specific shield for the social media corporations and not be liable for toxicity, for defamation, for cyberstocking, and intimate privacy violations.
Things that are already illegal.
I want to be clear about this, things that are already towards under civil and criminal law. They are not susceptible for a duty of care. To prevent them, we need to make them liable for it. And then we need to bring in the blockchain industry under regulatory clarity so that we can transition to a Web three point zero approach to social media governance. Because what's working in Web two point zero has worked well for the tech CEOs, it has not worked well for American children.
Those are both pretty ambitious goals. Congressmen, do you see enough of a consensus in this Congress between Democrats and Republicans to be able to get both of those things done, Especially with respect to Section two thirty, which we've been hearing about for so long.
You're certainly right to the tech lobby has been effective at crushing even marginal steps towards revoking Section two thirty. I will note, though, that last Congress the chair and ranking member of the Energy and Commerce Committee on which I said, and which has jurisdiction over the tech industry, jointly wrote an outbed in The Wall Street Journal calling for the sun setting of Section two thirty. Now it didn't happen last term, but that is a significant step
forward where you see bipartisan leadership towards revoking it. I think we are hitting an inflection point where Americans are tired of having toxicity pumped into the national discourse by people who get richer the more time their kids spend scrolling on their smartphones. It is time for us to move away from this phone based childhood towards a play based childhood. But to do that, we've got to reclaim
ownership over how we talk to each other. Section two thirty is the first step, and I do think we're building bipartisan support for it.
I hate you, but there was a lot of bipartisan support to ban TikTok, and then suddenly, as the hour drew near, we saw some real one eighties from across the aisle. Congressman and I go back to the TikTok case, in particular because the fact they keep on talking about web three point zero. You're talking about decentralization here, Well, we've heard that from a pitch of one of the wanna be owners, Frank McCourt, and indeed, working with Kevin O'Leary,
they want to be seeing potentially this project liberty. What are you thinking more broadly about their particular offer, because they don't want the algorithm.
Yeah.
Web three point zero fundamentally is about open governance. It's about creating pluralism and creating a sense of community ownership over this. In the same way that Americans insist that our actual town squares are places where communities have an interest in upholding order and providing freedom of expression, we need the same thing for our digital town square, because that's where Americans are spending four to six hours every day taking in news, information, and entertainment.
I think too many Americans just.
Assume that the status quo over the last fifteen years is all that we can expect from social media. But if you look back at every other media innovation from the printing press in the fifteen hundreds all the way through TV and radio, you will see that there was a moment of disruption and then new norms, conventions, and laws where established to help bring some harmony to this
new way of disseminating information. The challenge here with social media is that we've had to digest this tech innovation in a much shorter amount of time. We've had less than half a generation to do it, and so the disruption has been even greater. But I do think that we are hitting an inflection point where we're going to start to adopt new roles in governance structures.
US Representative Jacocinclaus from Massachusetts, Thank you. Coming up, we'll hear from Bank of America's CEO, Brian moynihan out of Davos.
Next, this is Bloomberg.
Bloomberg is live at Davos, and Bloomberg's Jonathan Faraoh and Lisa Bromwitz are sat down with the Bank of America's CEO.
Hey guys, great to be with you, day two of the World Economic Forum here in Davos, Switzerland, minds firmly elsewhere in Washington, d C.
Isn't that right?
Least twenty four hours of conversations about how great America is and how the rest of the world will struggle with the incoming President Donald Trump.
Yeah, station here at Davos has been what's America going to do? How can I leverage myself to be in the best position possible? And oh yeah, what's the latest headline?
Brom Monahan alongside us, the chairman of CEO of Bank for America. We're going to cover all of that through the next eight minutes or so. There's an important occasion to mark fifteen years at the top of Bank for America.
Now, it's been an honor lead to company and we've had some fun and it was interesting to start. For the last ten years or so, we've been on a role just producing responsible growth and the team does a great job and we can take pride we've put the company to.
Where it should be. Is one of the great companies in the world.
Beyond interesting.
Fifteen years ago it was the absorption of Countrywide Financial.
It was Meyril.
It's a very very different bank and a very very different moment. That phrase you use is one you've used so many times, responsible growth. There is a feeling that maybe we moved towards something house in the world of banking over the next few years. Some might say it's sort of reckless growth, which is going to go for it? How would you describe the future.
So what you're hearing is enthusiasm for in the investment banking side, it particularly transactions. Right, for a long time, for last couple of years, it's been hard to get a transaction through. And what stops a seller from selling or buyer from buying is this thing is delayed.
I'm exposed and so what they'll do is they'll push it through. So there's a lot of.
Enthusiasm that they'll be better growth United States. There a lot of enthusiasm by the bankers saying these deals can get done, so I can go have this future conversation. It's just not another idea that goes through the system and everybody says, that's a great idea, But that can be a great idea, let's go do it, or a great idea, I don't.
Want to do it.
But it's a more of a substance space than it is more of a worry about the environment.
Right.
Are you basically saying that there's more enthusiasm, that there is conviction and will to actually get stuff done.
Yeah, I think you saw some deals getting announced and you'll see more deals getting announced in our sector in banking, especially in the United States. The consolidation is still far away from being.
Done.
They'll always be big banks or always be small banks, but you'll let people make a decision what they.
Want to do.
And there haven't been a lot of bank deals done. Bank to bank deals we can't do them, it's not legal, but as investment banking we can help other people do them, and it haven't been a lot done because just uncertain you're getting caught in a transaction and having issues. So the belief that they should promote the banks consolidate and getting more efficient, passing that through to customers, passing that through to small businesses, et cetera is different.
Will be a change.
Well, there's the banking sector specifically and some of the deregulation and whether some of these mergers and consolidation will be a looted, and.
Then there's a broader corporate sector.
As some of the enthusiasm we've seen and we've heard from the cities, a head of banking from JP Morgan, how much do you see that being maybe a little premature based on some of the policies coming down the pike and the uncertainty around debt, deficit and rates.
Well, I think you have to divorce a little bit some of the fiscal work that has to be done, and in coming Treasury or Secretary and others have to take very seriously this question of how do we manage the revenue stream, the expense stream, and the amount of debt and get it all to work out. That one of the ways that that becomes easier if you have more activity and more things going on.
So I think the enthusiasm.
Here from the bankers is more structurally. The belief is that even starting yesterday, you don't have you don't have the constraint that you have, so you can go. If there's more that enables more, that's good stuff, but right now it'll stop it going in the wrong direction and look hard. Medium small sized businesses their biggest complaint last summer.
Last time I was here and we.
Talked to the administration about it was the biggest complaint was you're in my pocket. You're slow me down. I can't get things done. I want to permit to do something,
it takes forever. I want your labor rules. All this stuff was going on just over and over, and small medium sized business don't have the thousands of people that big companies have to figure it all out and they're figuring out their own The same person's running the business at nice sitting Anders say, so, what does this new taxation strategy on so security mean to me?
How does it apply? How I have to change all my systems?
And so they're just saying, if you just stop, you know, things will get better.
So you're on the number one lene to small businesses in the United States, give us the read on things right now? Are they already making those decisions to make a move to make those investments that they were on hold over the last four years doing? Are they already making that most so.
If you come over the last say, six eight months or so that it went from regulation and inflation, the inflation has kind of come down as their worry. Right now, what's actually interesting is they're going back to labor shortages and rightly now the interesting thing about that that has a question about immigration and all this stuff going on.
But what they're feeling that is demand.
I need people to do things, and so they're starting to feel the demand steady. They remember when the Fed was raising rates high, their cost of barring went up a lot. They went from three hundred basis points over an index that went up by five hundred basis points. That's a big number, and so that caused them to say, let me be careful and then if as the rates come download but they feel a little better and now let's say, Okay, I have the opportunity to grow, but
can I get the people? And remember that was the twenty twenty one twenty two timeframe, so in there there's got to be a solution this immigration. It doesn't constrain those small medium sized business for growing or they're going to start letting.
Would you say, just to jump in, would you say we are supply constrained? Do you think we are prone to have these in flight?
Yes? And no, And.
We don't know honestly because because the stimulus after the pandemic, there was so much more than there maybe had to be by technical economic discussion, you know, it's hard to say whether we're supply constrained and other things.
And it were supply constraints because it.
Cut off a supply and the stoppage of goods coming in a country and shipping and all that stuff that we went through. So you haven't gotten to a real normalized side of that yet. But that's the blame for the current thing. I think the supply shortages can mitigate. If you know, we got to be a little care about labor supply, We've got to be a little care for about the.
Terriffs impacting supply and things.
But I think people the second sourcing's gone on, people are finding places to get stuff.
So I'm not quite sure that's going to be the issue.
But a lot of what we think it was the issue is actually the pandemic, the stimulus and the impact the pandemic on supply that's worth the sort of system.
So John started with the fact that you've been in Bank of America for fifteen years. We keep hearing about succession plans in different places. What's your success should plan?
But you're trying to throw me out, No.
Not at all.
I'm just wondering because this is something that we.
Lost.
Questions the way, the fascination with all this is interesting, and one just means we're all getting older.
So what they're out is we run.
We run across in our company through the top three layers, including for the CEO succession. Every six months, we go through everything who the media successors for every one of our teammates jobs, and we have a slate, and we go from a slip because if we run a company, people leave for a whole, they retire, they get another job, whatever, and you're always filling jobs.
And so with the way the board will make a choice at.
Some point, I'm not going anywhere unless they throw me out.
They know that.
But my job, and one of the biggest jobs I have, is preparing people for the what it would be like to run this company out there and and and then and and that's important. So we do a lot with our team to get them used to experiences and get them to learn more about the trade offs you have to make at the top of the house, because if you come through a business or come through a function, you haven't made those trails. That's part of our general strategy.
And so we talked to our board. But you'll never hear us discuss A is in and B is not. That to me is the worst thing you can do. I went through that process in the end of two thousand and nine. Whether it's day to day speculation, that's.
Not the way to do it.
Well, thank you for that very much.
You'll be the first first one.
Okay, thank you.
I appreciate that.
We only have about thirty seconds. You said something to us when we were at Bank of America that AI would basically keep the staff the same size but increase the footprint of business.
Do you stand by that?
Yeah, there are two facts I'll give you. One is we run the company.
On the nominal amount of dollars of expenses we did ten years ago almost now, nominal or not not inflation just and we run it on thirty thousand less people. That is all digitization, and AI is an extension of automation, digitization models, et cetera, automating work, taking out work and automated.
Therefore you don't need and I think AI keeps going.
The idea is, if we're good, we'll keep adjusting where the teammates end up. So it might not be the same two hundred twelve thousand people two hundred and thirteen thousand people doing the same thing ten years from now. Yeah, but my guess is that our employment levels will stay relatively said if you work towards stuff that can't be replicated near turn by.
Air Bran and you've been super generous with your time, and you show me up every year because you always come out here with a suit jacket on and I'm sitting here with like a winter jacket. Yeah, but yeah, I know, I know you've been influenced by Brian.
No, it's actually just a lot more Thanks for.
America CEO and chairman. Bye, Thank you guys Banks.
See you ending in artificial intelligence. We so appreciate it out in Davos. Fantastic conversation. Welcome back to bluemog Technology. I'm Caroline Hyde in New York and.
I'm Mike Sheppard in Washington.
Quick check on these markets, Mike, because look, we've got a little bit of a reprieve in the markets as we try to digest a whole host of executive orders and moves made by the new administration as Trump takes office. We're currently up two ten percent on the NASAK one hundred, investors wanting to see the growth potential rather than some of the the trade hindrances for now. But Apple in the spotlight down more than four point three percent. This
is the worst day since August of last year. It's currently training in the lowest September twenty twenty four. This again is China anxiety. Apple intelligence not really feeding through in demand for the iPhone as much as analyst anticipated, Loop Capital and Jeffrey's cut their overall view of Apple from a hold or indeed one indeed saying to a cell let's move on and have a look at what's happening in the.
World of crypto as well, because no executive order.
When it comes to bitcoin, I'm afraid we're up two point nine percent, but we're still above one hundred and five thousand dollars micro strategy.
On the downside, a lot of the crypto exposed.
Names are on the fact that maybe we didn't get an EO out the gate when it comes to the approval of bitcoin and cryptocurrencies more broadly by.
The new administration.
Microstratuy, you're by two when it's buying yet more bitcoin as we know an eleventh consecutive week. But there was good news over the weekend into the inauguration for many crypto holders. Let's go to it, Blu MiGs Isabelle Lee, is here an extraordinary announcement coming from the incoming at that point President Trump. Now is President Trump and Milania both having a mean coin? What does this mean for the space?
I really thought it was a joke when I saw it online, because you see a lot of parodies, but then it was real. I mean, now we don't know yet if this is related to Trump or not. His team is behind it, but we have his son Eric Trump saying that this is quote, the greatest digital meme on earth. So what to make of this?
Two things?
Really, On one hand, it's a great thing. It's really signifies a new regime, the fact that you have a coin named after Trump and also Milania. When Milanna was launch launch, by the way, it sucked some of the air out of the Trump point, but still at one point it was as high as sixty billion.
That's great.
But on the other you have if you're long in the space, it's great, yes, yes, But.
On the other you have people saying this highlights the memification of the industry. How will the traditional finance people take us seriously? Because what is a meme coin? What is a meme style? It's just really a joke. So it has no underlying asset. They're speculative, they're volatile, it's like what is doage coin? You know, but still the whole market is one hundred million in valuation, so it's
an expensive joke. But well this last who knows? So it's really interesting, but lots of activity and billions of dollars changing hands at.
That Isabelle, Are you sensing any bruise feelings in the industry from not seeing an executive order on day one from Trump on crypto or even a mention during his inaugural address after being sworn in.
Absolutely.
We have bitcoin soaring to a record high on Monday, and then it paired back some of those gains from one hundred and nine plus thousand, it became one hundred and three. And I asked some of that analysts because I was on on Monday. I was like, why is bitcoin pairing its games? And they were like, because Trump didn't mention.
It in this speech.
But take note of that.
The fact that bitcoin faithful, their crypto enthusiasts are expecting Trump and the incoming president at that point, the president of the United States, they're expecting him to mention it in his inaugural speech is already one thing that really just means that crypto is becoming mainstream, or if it isn't mainstream, t you just yet.
So it's really something.
But you know, with Trump focused on tarriffs and energy and trade, but they were really hoping and banking on the fact that Trump will say something about bitcoin.
Bloomberg isabell ye, thank you.
Heading back to Dabos Now, where mistraw AI CEO Arthur Mench spoke with Bloomberg TV's Frendcine Lac about the company's expansion plans and about his thoughts on Europe's regulatory and competitive landscape.
I like to look at it from a positive point of view. Europe has a lot of strength. In particular, the talent poolt has access to. The people that are building AI, including in the US, are actually mostly Europeans, and so the opportunity we had, and that's also the thing that we provide to our customers, is the expertise. And I think Europe can come together today and realize that we've been innovators. We're continent of innovators. We need to keep being innovators, and AI is an opportunity to
continuously innovate. There's a lot of other companies that are building that. I'm thinking of ace Email and thinking of all of the AI startups that we're working with in France and in London, and so let's not look at the bad things. Effectively, we have a tendency to play a little too much referee in the trillion dollar raise. But we have the strength and we just need to have the will to create in Europe and to innovate and create value there.
Do you think that there's a first mover advantage in this industry or is it really execution and innovation.
That will win.
I mean, as in any industry, you have first move or advantage. But the AI is going to be a revolution. It's going to be long lasting revolution. It's going to take decades to actually be rolled fully to enterprises role fully to the way we actually behave and the way we actually deal with computers, so and a lot of things. And we are realizing that enterprises are a bit struggling
with realizing the value of AI. And that's where you need to partner deeply with someone that can help you get the expertise, distill the expertise of your company into AI systems that can then help you drive the productivity
that you're expecting. So the we're only we're only five percent there, and so everything that is sitting on top of model, all of the orchestration part, all of the managing data, all of the customization part of things that we still need to figure out, and I think we have a very good headstart there.
I was mis Rasieo Arthur Mench along with Francin Laqua. Meanwhile, another closely watched interview at Davos was the Open AI CFO Sarah Fry. She's spent with Bluemoks showing Fari about rising enterprise use of chatchipt and the company's growth.
Take listen.
We have had to do an extraordinary amount of fundraising. Luckily we also have a business model that supports it. I already talked about chat ChiPT for consumer over three hundred million users today and it's a workhourse when it comes to revenue, revenue growth and ultimately profitability. But we are seeing now enterprises of every size embraces technology, and
we really see ourselves also as the enterprise company. There's a really good symbiosis between those two areas because often when I meet customers, and I'm meeting a lot of them here in Davas, it's actually their personal experience they start with. When I say, hey, how are you using chat GPT, They'll actually give me a personal anecdote first.
And for those of you who sell into enterprises, you know that if you've won your customer heart in just their day to day, being able to go in and then sell them into their enterprise environment gets an awful lot easier. And so that enterprise model is really building across every sector of the economy, every type of company, every scale of company, And I'd be happy to talk
through examples. Morgan Stanley is a great example, since we're talking financing, and they're also a good partner in that front, but they're using our technology and areas like wealth management, in areas like even their investment banking, and they've been doing it now for multiple years. So in terms of the future from a financing perspective, I suspect we will continue to have to finance at pace, but we will do that on the merits of our business as well.
How about an IPO, what would that look like for open ai?
You mentioned profitability? You know, how far do you think we are from that? What are you know? You're someone who's taken two companies public. What would the steps be for open ai to get there? And how far are we from profitability?
Yeah?
So, as I've told every company I've been associated with on an IPO, it's it's not a destination. An IPO is just a marker on a journey, and if you get wrapped around the idea that the IPO is a destination, is a very kind of dangerous world to live in because there's a feeling of finality and maniland, going public is just the beginning of another very interesting part of your journey, like what are the positives?
And IPO number one.
I think it's a very strong credentializing moment for any company. I love that moment of sunlight, of being able to show your financials externally, to show how your business is building. It's the best disinfectant in any room. It's a great way to fundraise because it opens the door not just to equity and selling your equity in that moment, but it also starts opening the door to many more areas of financing, starting with mezzanine debt, structured debt, and so
on and again. In a world where we're buying a lot of compute, we need to get there fast because equity is an expensive way to raise capital and to deploy capital. We need to make sure we continue to bring down that weighted average cost of capital.
That was open AICFO Sarah Freyer from Davos.
So one of the things that we shared, as you said at the beginning, is that we are moving away from the way that we were utilizing third party independent fact checkers and moving now to much more of a community notes program. We're starting that in the US and then we'll see how that goes as we move it out over the years. So nothing changing in the rest of the world at the moment. We're still working with those fact checkers around the world, but in the US that's that's the direction of.
Travel to start with Meta's head of Global Business Group, Nikola Mendelson in Davos, and as is, the company is gearing up to remove third party fact checking here in the United States.
But Blue Mugs Kat Wagner is joining us now to talk.
About the timing of all of this, because just last week a lawyer representing Meta quit accusing the CEO, Mark Zuckerberg of what he called a descent into toxic masculinity and neo Nazi madness. Then there's a controversy swirling around gestures made by Elon Musk this inauguration. We can this feels as though conspiracy theories are kind of running wild at the same time as fact checking is taking a stand back.
Yeah, and that's just unfortunately the reality of what's going to happen. When you take away fact checking, you sort of open the door for you know, inaccurate information to spread pretty wildly on the platform, right, And so I don't think that's going to be a coincidence. I don't think this is the end of that reality for us, right, I don't. I think community notes is sort of an
interesting concept. I don't think it is a fool proof concept when it comes to fact checking at scale, and so I'm sure the metal will learn that, you know, if not already then certainly over time. I think the interesting thing about this fact checking timing for them is that you know, clearly they usually test things outside of the US and then bring them to the US when they are ready for prime time, because this is the
most valuable market. It's interesting that in this case they're doing the test here in the US and leaving it
in the rest of the world. To me, that's a signal that this is more of a political decision for them right to appease the Trump administration than it is a reality that the fact checking was a major problem to begin with I see this more as you know, something that they're doing to appease the Trump administration more so than this was a huge ding or knock on the you know, the platform's ability to thrive.
Bloomberg's Kurt Wagner, thank you. Sticking with Meta. Remember this moment from a Facebook town hall back in twenty eleven.
My name is Barack Obama, and I'm the guy who got.
Mark to wear a jacket and time.
That was former President Barack Obama joking with Meta CEO Mark Zuckerberg. Things certainly have changed for the Facebook founder and other tech leaders, as we saw during yesterday's inauguration. For more in the industry's relationship with politicians, we are joined now by Margaret O'Mara, Professor of American History at
the University of Washington. Margaret, I have to ask you, how are we going to look back at this moment yesterday where we saw such a lineup of tech leaders and billionaires at the inauguration, seated so prominently, what.
Was really extraordinary?
I mean, it remains to be seen how the relationship between tech and the Trump administration will evolve over time, but we have never in American history seen a lineup of business tycoons occupying a place of honor at a presidential inauguration like we did yesterday.
Silicon Valley has long had ties.
With Washington and different presidential administrations, but this does feel like uncharted territory.
And how does this translate into the priority list that each of these CEOs may be bringing to the administration. How much does that proximity count.
It counts a lot.
And look, we've again we've seen Silicon Valley leaders have very close relationships with the Obama administration, the Clinton administration, with other administrations other than Trump.
So this again is not entirely unknown, but there are really.
High stakes, and we see both on the regulatory side and in the spending and.
Tax policy side.
On the regulatory side, the promise to have a light hand on AI regulation, as well as Trump's boosting of crypto, underscored by his and the First Lady's personal involvement issuance of their own coins in.
The last couple of days, is something.
That is a real sea change for the industry, of real difference in attitude than what the Biden administration had approached.
And then also we.
Have the promise of tax policy being corporate friendly generally, and also things like defense contracting, which is the Defense Department and the National Security Establishment does a lot of business with Silicon Valley companies, and that only seems poised.
To increase Margaret, take us back from a historical perspective, have there been as many ethical questions when we've seen such relationships, perhaps not so flamboyantly demonstrated, but certainly close and previous administrations there haven't.
Well, there have been questions, but they have been resolved.
And let me point to a really interesting example from Silicon Valley's past. David Packard, the founder of Hewlett Packard now HP, kind of a legendary Silicon Valley founder. He actually joined the Nixon administry as Deputy Secretary of Defense in nineteen sixty nine, and he was a very wealthy man, and he famously put his wealth in a blind trust while he was in office to resolve any ethical questions there might be about HP profiting from defense contracts.
Which it did have while he was at the Defense Department.
Let's just I.
Mean, thinking of what you've written, in particular, the code Silicon Valley and the remaking of America is Silicon Valley aren't the tech leaders that we see remaking America from a political perspective right now, Margaret, I say that with the words of the previous administration still bringing on O is that this is some sort of oligarchy.
Yeah, I think that they are trying to.
I mean, what certainly is the case and hasn't been the case in the past, is that the platforms that they control just thinks solely about the people who were on the inaugural dais yesterday in the Capitol rotunda, Mark Zuckerberg, Sunderbushai, Jeff bezo Elon Musk, that they have such an outsized influence over online communication, on online commerce, that there already is such an immense consolidation of power that again there have been you know, big power structures and successful companies
in the valley before, but this.
Is the next level. You know, the influence is tremendous.
Margaret, last question thirty seconds. These companies have a position to shape history as we will be reading it later.
Talk about that unique role they.
Do, just as the history textbooks now have Andrew Carnegie and John Rockefeller and them, and people around the world know those names, you know, regardless of what happens next we a century from now, probably people are going to be reading about Mark Zuckerberg and Jeff Bezos and Elon Musk And I think with great power comes from great responsibility.
This is part of the criticism that has been levied at tech over the last decade about what the you know, the ripple effects of their platforms might be.
Now, again, these are businesses, these.
Are people in the you know, these are for profit companies, and I think there also is a very important public sector government regulatory role that has been absent.
So that's one of the reasons that they have become this large.
So I think it needs to be a balance and we need to think more broadly about how this shakes out.
Margaret Omara, Professor of American History at the University of Washington. So appreciate your time coming up streaming jant Netflix and set to report it results after the closing bell, and look at what we can expect next, there's a bluemog technology Netflix. Oh, it's set to report earnings after the bell. What can we expect? Let's bring in Lucas Shaw and the shares had a phenomenal twenty twenty four. How was Q four from a profit and revenue perspective.
Well, we'll find out at the end of the day, but people are expecting.
A very strong quarter.
You know, they had the Mike Tyson Jake Paul fight in the quarter, which was the big live event they've ever done, one of the most watched things they've ever put out, and I believe due to according to some third party researchers, led to the biggest one day of spike and.
New customers they've had in years.
You know, they also had NFL on Christmas Day, they had season two of Squid Game, they had new seasons for a bunch of other hit shows. So most people are expecting it to be a very strong quarter, which will be, unfortunately for us, the last one in which they report their subscriber numbers.
Yeah, we suddenly have to read Teelee's in a whole new way. We are expecting strength coming from the live side of the equation, and I mean the market capitalization reflects that.
How much more strings.
Do they have to pull to outperform going into what analysts are pretty buoyant on the company.
Yeah, I mean it's pretty crazy to think that Netflix is now worth almost four hundred million dollars it's more than Disney and several other big media companies combined, and you have to figure that there should be some kind
of ceiling on this. But look, the Netflix position is going to be you know, these live events were going big into that area and it's going to boost our advertising business, which is one of the reasons that they want to stop reporting subscriber numbers because they believe that their revenue growth and their profits are going to look really good going forward. It just won't be as many new subscribers quarter after quarter.
And how technically robust has the live offering been.
Well, Look, they had well documented problems during the Tyson Paul fag that was largely due to too much demand, which is a good thing if you're trying to attract an audience. They didn't have a lot of problems during
the NFL match. I think, you know, these live events on streaming tend to have the same life cycle where there are issues early on where the company is newer to it and they have some issues usually when they put on something that people really want to watch, and then they figure it out over time.
Right, you know, we stream all sorts.
Of things live these days, so I think long term, it's going to be fine for them. The question is what are the events that they are going to collect that deliver or attract a big enough audience if they're not a major buyer of sports rights because they're trying to create their own events. But look, they just had the WWE debut. Everyone at Netflix is really happy with it so far. We'll see in three, six, nine months if that remains the case.
Don't even get our producers started on her love for all blimogs, Lucas Shaw brilliant.
Thank you very much.
Indeed, meanwhile, look and unlikely win it in the TikTok band saga of late has been JEWELINGO. Here's what the CEO had to say earlier on belie their open interest.
We do have a good number of people learning Manderin.
It's not our most popular language, but but it's definitely a popular language. Is among the top eight languages that people are learning, and we did see a huge spikes, and it's mainly because people who are When they thought that TikTok was going to be banned, they started trying some Chinese apps like red Note, and as soon as they showed up, most of the things were in Chinese, so they came and wanted to learn Chinese undoolingo because of that jewelingo CEO.
There are a reminder that many of the apps that TikTok uses flocked to during the quick US ban and turn around Mandarin based, so Luis van Hahn optimistic that actually the users will stick around even though TikTok back online. We start with TikTok, we end with TikTok. That does it for this edition of Bloomberg Technology. Don't forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify, an iHeart.
This is Bloomberg Technology.