Reddit's IPO, Bitcoin's Rise, and SVB's Collapse

Reddit's IPO, Bitcoin's Rise, and SVB's Collapse

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From the hardware, innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. I'm Caroline Hyde at Bloomberg's world headquarters in New York. And I'm ed Ludlow in san francisco. This is Bloomberg Technology.

Coming up, we'll bring you the latest details on that Reddit IPO as the social media company is raising nearly a $750 million for its public offering. Plus, Bitcoin tops $72,000 for the first time as the digital currency continues its rally. Ophelia Sneider of 21 shares joins us to discuss. And later this hour, we'll be joined by venture capitalist Vinod Khosla to talk one year since the collapse of Silicon Valley Bank and of course his thoughts on open AI and so much more.

But now let's turn our attention to the public markets and look a little bit of caution still surrounding these tech names. We sold off on Friday. We continue that into Monday as we eye big macro points from the CPI, from the CPI, basically, where is inflationary pressure taking us? Well down only by about a 10th of a percent on the Nasdaq. And I'm looking at a ten year yield up only some two basis points now. So we're just fading some of that initial sell off, but still carry over from Friday.

Interesting that globally speaking, we're seeing a little bit of bottom picking happening in China at last, at least it seems, after we wrap up the focus on the overall party and indeed the future of the economic trajectory of China. We're up about 2.6% on those Chinese traded names here in the US. That's the Golden Dragon index I look at. Let's have a look at what's happening in

the area that just moves apart from the risk concern that we see in the equity market and continues to pile up power ever higher. Ed, we'll dig into why the U.K. is looking more favorably on some spot Bitcoin. ETNs. I'm looking at 3.9% higher on Bitcoin 72,000 eclipse today. What we've got on the micro well, unsurprisingly, in the equity space, you do see crypto related stocks moving higher.

Coinbase kind of the main ones up 4.3%. I think at one point in the session trading at its highest level since 2021, its year to date gain now beyond 50%. That often happens right when rallies in Bitcoin continue.

So did the crypto related equities side. The story matter to the downside. Biggest drag on the Nasdaq 100. There's no kind of clear news headline out there, but I would note that Trump This morning, former President Trump reiterated his comments that a ban on TikTok is bad because it would benefit matter and he thinks matter is bad. I'm not drawing a causal link between the move and that narrative, but it's the only thing really that's out there. The top story is about a name that will soon be publicly traded, and that is Reddit. We got the amended S-1, and this is what

it looks like, 22 million shares in the upper end of the range, $34 a share in terms of the pricing. And if you take it on a diluted basis, the valuation about $6.4 billion. It's interesting to go through the S-1. It's kind of as much about what you learn on the company and what you don't some of the stuff that's missing. But we've been waiting for this one since 2021 when they file confidentially and they kind of missed what was a banner year then the US IPO's. Have they got the timing right now.

Key question is perhaps we come off the boil a little bit when we look at the tech names as of late. Bloomberg's Ryan Gould joins us for more on all of this. Ed and Ron, what did you learn from the filing? And as Ed insinuates, what do you feel was really left out? I think there was a little bit left, sort of a little bit of a question mark around, you know, exactly how much how much is going to be offered. I think there was some question as to

whether or not there would be more. And I think, you know, Ed is drawing attention to the valuation discrepancy. I think, you know, there have been some calls that I've had this morning. Is it 5.4? Is it 6.4? I think that is a that is a valid question. Obviously, on a fully diluted basis, it does extend as much as $6.4 billion. But you remember we wrote that, you

know, early testing the waters meeting said that they should target sort of 5 billion as a as a as a minimum. And I think, you know, that's sort of in the ballpark of the days that they've gone to. But what I do think is interesting from the filing is that, you know, this 8% that is going to you know, they're saying we say investors, it's their employees, it's some of their existing shareholders. And also, you know, the fact that a lot of those shares aren't going to be locked up. So come tomorrow, if there's a pop, you

could you could be selling these shares. If you are if you feel so inclined and not only sort of what we would call insiders staff, but if you're a redditor or a moderator on the platform, you can get access to the shares, too. And Ryan, you and I were talking the other day, right when they sent out that memos, Redditors, their pitch was basically like, hey, you can get in on the IPO at the same level as the Wall Street institutional investor. Look how fantastic this access is. How big a factor, though, if it's just 8% of shares and that there's no lock down or lock on them, how do you think that's going to impact trading in the day? And I think I'd put this in the sort of the ballpark of curious, just not least because, you know, there is this campaign on Reddit itself around, you know, amongst the Wallstreetbets crowd around shorting the stock on the open tomorrow. I think there's an obviously a lot of bravado around that. But I mean, you know, this is an IPO.

You're about, you know, trying to strike, you know, equality for for Reddit's and its employees, it's customers. I think Reddit wouldn't have got to this place had it not been for those those very loyal users who have stuck behind it for in this past three years, because a lot of them have been waiting for this moment. Some of them may not agree that, you know, the part the public is is the right one. But, you know, this is a this is a transition for the company. This is something that they're looking

to move past and sort of get behind, because there's a whole lot of stuff to be done as a public company after trading, which is expected to be next week. Well said. And we have had glimmers of light within the IPO space more broadly among sports came out. We also know that there's a a key air name that's backed by Intel that's looking at the markets as terror labs more broadly. If this does go well, do we think more

technology names will follow behind Caroline? For sure. Not least because I think this this window that we're in now, this March window, has been one that there's been so much written about and so much said about it. Reddit is really a bellwether. It's going to be a very significant

bellwether for names like Rubrik, for names like Tyro, Waystar, a lot of the sponsor backed tech names. You mentioned the Star Labs that is feeding directly into the sort of AI chips frenzy is another name, Cerebro Solutions that we have also covered. You know, that's all said, you know, there is a huge backlog of tech names that are really look, we know with eyes on today, tomorrow into next week not least to see how the book builds because, you know, we should get a sense into Wednesday or Thursday of this week as to how the book is building early next week. We should get an indication as to how firm the demand is across the price range. And I think that will feed directly into the momentum that will follow all eyes on some of those lead banks. Morgan Stanley Goldman, Jp morgan, Bank of America.

Yeah. Well, also I point out for the aficionado or the redditor out there that on Wall Street bets for and thousands upvoted a post that was calling for Reddit stock to be shorted on the day it starts trading. And that sums up the relationship between its user base and management of that company pretty much.

Ryan, go. Terrific reporting. Now coming up here on the show, we'll sit down with Ophelia Snyder of 21 shares as Bitcoin hits a new record 72,000 USD per token, in fact, above that card. Yeah. Let's just focus in on another publicly traded stock, obviously global stock, Taiwanese semiconductor. So TSMC, we're all by well, it had been off by some 3% throughout US trading and indeed in its own trading.

But the fact that we've now seen it eclipsed from an overall market capitalization perspective, Broadcom means it is back in the top ten of the most valuable companies in the world. So they managed to push on higher. This is Broadcom. This is all, of course, still a bet on artificial intelligence. This is Bloomberg Technology. Bitcoin just still on its tear, surging to a new record, $72,000 per token today. In fact, digital assets have scored another win, it would feel like more globally speaking.

The London Stock Exchange said it will soon accept applications for ETNs exchange traded notes backed by Bitcoin or ether as joined now 21 shares. Co-Founder and President Ophelia Snider, 21, says is the world's largest issue of crypto exchange traded products. Already got your presence here in the US and in Europe so I can imagine with the latest on two eyes these things, what you're looking at, how you start to cross those TS dot those highs. Yes, absolutely. So I think this has been a quite a while coming and we're quite excited that the UK is now looking to allow these these listings domestically. It should be quite a important change for the European market. What's interesting though, is that still

reticence from the UK market on allowing retail ultimately to be having access to such overall assets that are traded in this way. What is the difference that you're seeing between us, between Europe and potentially between the UK as to whether this is really institutional money they want to bring in or still allow easier access for a retail investor? So we've seen a pretty broad mix. Europe has for a long time, including Switzerland, allowed both retail and institutional investors and that's been our bread and butter has been really catering to both for the last five years as we brought these products to market. I think what we're seeing in the U.S., it's a little bit different. It's still quite early for for big institutions in the US. Mostly they require typically 90 days to assess products and due diligence to allow listings on wire houses. So that has barely begun.

And it's a little bit earlier in its adoption cycle. I think you'll see something similar in the UK over time that we'll see a little bit more retail participation, but it's early days still for that. Markets. I really appreciated Caroline's question because I feel like we're still trying to understand both kind of what short term and long term drive is are at play with Bitcoin in particular, right? I always look at the chart over the weekend because Sunday rolls round, it trades 24 seven and there always seems to be this kind of like start the week with momentum trade on bitcoin. What do you think has happened in just the last four or five days alone? So I think you're seeing and this is not just the last four or five days, but I think the last four or five days are a big part of this narrative, is we're seeing institutional adoption in the US.

It's quite early still because obviously not all of the warehouses, not all institutions have access to it, but you're actually beginning to see those types of investors come online, and that's changing Bitcoin's market structure and biasing it towards weekday trading in a way that hasn't historically always been the case when this was a more retail dominated market and a market that quite frankly had a lot of focus on Asian market hours, you're seeing that come more towards the US from a trading volume perspective, and it's largely being driven by ETF flows which are trading on the US hours and trade is going to ask you, well, I was going to ask you, what are the datasets that you look at each day beyond just the spot price at any given moment? So actually I don't spend much time looking at the spot price at any given moment. I am typically more interested in in fundamentals and what's happening from an on chain metrics perspective and what's happening within the blockchain community in the blockchain ecosystem. The reason for that is that it's quite sometimes challenging to see signal to noise purely in price action, whereas on chain metrics are a bit more sophisticated in that way and a bit tell you more about what's actually happening within the blockchain.

And so that's actually the basis of one of the products that we operate in. The US is actually turning prioritizing those types of metrics into an ETF, But those are typically the things that I look at. What's been so interesting, of course, is the Bitcoin exuberance.

Yes, it solidified it in terms of the dominant player, but still all boats seem to have lifted to a certain degree. I mean, we're starting to talk about mean coins and some of them affiliated with politics. Others I mean, don't with for whatever reason just catching the meme site.

GEIST But you also offer there's other products out there that you have and you have exposure to the likes of Tesla. I'm looking at what you've got. Avalanche Uniswap How are you seeing real desire to be going outside Bitcoin and ether? So we've seen obviously a lot of concentrated desire in Bitcoin at the moment because of the arrival of the US ETFs. We'll see if that dynamic also spreads to ETH as the regulatory process in the US moves forward.

I think beyond sort of those top two names, we've actually seen quite an uptick in demand, including from institutional investors in that longer tail, and we're quite a unique firm in that capacity. We're really the only people who offer that broad of a suite. It's about 40 products outside of the US covering all sorts of different assets.

And what we've seen is an. Interest in that longer tail being driven by some of our largest clients who are now looking at blockchain applications and adoption of blockchain applications in a very different light. I think know a key name. There would be something like Solana

where we've seen an enormous amount of interest over the last several months, and that's continued as I think the overhang from some of the Black Swan events has dissipated and the bankruptcy of states have have come undone. And you're starting to look at those on chain metrics that I just mentioned and you're seeing that actually there's some interesting things happening within those communities and within these ecosystems that may or may not be priced in at this point. The institutional clients, I'm assuming, looking for not just a store of value but a utility here, I mean, the main points are the opposite of that. It's just about sort of greed for greed sake and that not always being a bad thing, but it's more of a speculation trade. But institutions want to see what how is

this changing dynamics exactly? How is it changing dynamics? What are people using them for? Why are they using them? What do you what do these blockchains offer and what do these applications offer in terms of actual utility? I think that's actually a very big shift versus prior market cycles, and it's coming partially from that institutionalization. I think it's going to ultimately be very positive for the space. Every time I post on social media about a fresh Bitcoin height as this one Veg Cassius, who replies almost every single time going, I like this stock referencing, you know exactly what he's referencing. The one thing that the Bulls and Bears agree on is that Bitcoin and other crypto currencies or tokens are likely to go up before having a significant pullback or have a pullback now. But later rise. What's your kind of big picture outlook? Do you have a kind of one year Bitcoin core one? What is it based on? So I think a lot of that discussion around a potential pullback in the market centers around the having the point in time at which the rewards to you blockchain might or through bitcoin miners actually reduces by 50%. The reason people are assuming this is

because there's an assumption that that dynamic is priced in in some way. And so there'll be some overbought dynamics. I think this is a little bit different than what is currently being discussed, quite frankly. I think that's a little bit overblown that the size and impact of the halving relative to the size of institutional flows is so asymmetric, I'm not sure it will create as much of a you know, that. Sell off event, as I think has been predicted, primarily due to just that this is not as impactful of an event from a purely numerical or to book standpoint as it would have been in previous market cycles. I think as we look longer term, I see

quite a bit of upside. There are the having while it can introduce some short term turbulence does further restrict the supply side of this market that ultimately as long as demand continues should be a positive indicator for price action. Yeah, that will take a little bit of time. I think you'll as long as you can.

You do see increased institutional adoption and demand for these for the U.S. ETFs, for the European ETFs. More broadly, from the international investor community, I think that's where you're going to see price continue, continue to come up. And it's something that I'm quite bullish looking towards this year.

Ofelia Snider, we thank you. 21 shares and what's coming up. Okay. Coming up, Covariant announced a new robotics foundation model that would allow them to do just that. Robotics RFM one. We'll have the details for you next.

The software behind the hardware. This is Bloomberg. Okay, let's talk robotics. Covariance is seven year old AI robotics company that works with retailers and logistics providers across apparel, health and beauty. Pharmaceuticals as well has announced a

new robotics foundation model all and one that will give robots a human like ability to reason. And with that a deeper understanding of language and the physical world. Delighted to bring in covariant co-founder and CEO Peter Chen. We talk increasingly about humanoid robots, robotics broadly. On this program you are working on the software side, not the hardware side, correct? Just explain the approach of covariant. So what Kibo in this building is really

the beauty of robotics. So think about it as the general purpose brain that can sit behind any robotics hardware that gives it the ability to see the world, think about what's happening around it and make decisions intelligently. And this is a big contrast with traditional robotics, which is really programming robots to do the same thing again and again, which just doesn't cut it in today's warehouse environment, manufacturing environments where you have constant changes that are coming in. And the unique covariant approach here is we don't just build a single specific A.I. that can solve one task. We are really approaching it in a

similar manner that, for example, like large language model is approaching chat bot are the language locations as a single model powering multiple use cases. But here's the thing that you don't control the hardware side, right? Take Tesla as a comparison. I don't know your thoughts on the Optimus program, but they are developing both the hardware and the software. They obviously have Dojo that they're working on in-house. What are the risks and benefits of just focusing on software if you're not too also doing purpose built hardware to match it? Yeah.

So first of all, on Ultima, we think it's an amazing robotics program. Like it's a really great humanoid hardware that is being built, is being iterated very quickly from a career in perspective, we believe there's not a single hardware form factor that would rule robotics to come because the physical world is very diverse, like there's not going to be a single software, a single hardware at all. And we believe there are going to be multiple kinds of robot houses, some in the human life factors, some in the industrial and form factors, some with maybe a mobile robot with a manipulator on top of it. And all of these different hardware form factors still need to make sense of the same physical world. And covering this building exactly that, the same brain that can power multiple kinds of hardware to make sense of the physical world. So Peter, talk to us about the inputs here.

How hard what are the intricacies you need to go about building? What is the largest dataset ever to train this new robotics foundation model? That's an amazing question. So we have seen the explosive success of large language model and what is really behind its amazing generalization power is the fact that is trained on the whole Internet of text. And if you want to build a robot A.I. that is as smart as, for example, large language model.

But in the physical world, you also need to build the same kind of data set. But there's no internet to scrape in this case. So you need to deploy a large fleet of robots in the world doing diverse and dynamic things and collecting the video data, images, data, robot actions and the outcome of those robot actions in order to really train a model that understand the world in all kinds of settings and be robust, even in the wear long tail scenarios and truly deliver a human level performance to our customers. And the reason you've been able to get such a wide, varied underlying dataset is because the amount of countries you're in, the amount of companies you're already working with.

Can you just give us an idea of what this model is already being applied? How are we starting to see it in our everyday lives? Yeah, so we have already to deploy the covariant AI to more than dozens of customers in more than ten countries, and they are powering the warehouse operations, the e-commerce fulfillment operations in a lot of places. So very likely like if you have order an item, for example doing Black Friday, there's a really good chance that that item has been touched by one of the covariance robots this operating around the world. Peter, very quickly, we have 10 seconds. Your favorite use case for the robotics you're working on. My favorite use case for the new Robotics Foundation model iPhone one is really the ability to talk to it instead of robots that are just rigidly doing the same thing again and again.

We now have the ability to communicate with robots in natural language, very similar to how you would talk to Chhatrapati or Gemini in natural language and ask questions, really democratizing access to AI. For a lot of people, we're really doing the same with robotics, which I found one covariant co-founder and CEO Peter Chan. Great to have you here on set. Carrot Loving Lewis Robotics Chat. Meanwhile, coming up, interestingly, Peter is an alumni of Openai. We're going to be discussing that much more. But first, also the VC ecosystem when it comes to the.

Implications of Silicon Valley Bank's collapse. Remember a year ago what we learned because the Venture's founder, Vinod Khosla, joins us. On that particular element, first and foremost. But let's also check on what's happening in the public markets right here, right now. Your worst performer on the Nasdaq 100 Marvel technology. The numbers came out Thursday and Friday.

Trade, We saw weakness. We're worrying about the fact that A.I. applications of mobile technology thus far not making up for weakness and the rest of its networking business is the Bloomberg Technology. Welcome back to Bloomberg Technology Ed Ludlow here in San Francisco, Caroline Hyde right here in New York, getting you a check on your markets because, well, we are eyeing plenty of macro data to start this week. We're going to be looking at what p CPI, basically the inflationary prints bring us and the direction of travel. Is it a shock once again to the overall system when we think about inflation pressures still having to be dialed up again? I'm looking at the Nasdaq just off about 6/10 of a percent. We're only off about a 10th of a cent to

start the show. So accelerating some of the losses. One of looking at the big board, NASDAQ 100. I'm looking at what's happening in the two year yield space as well, actually yields pushing up higher as we anticipate perhaps a little bit more stress coming from inflationary pressures later in the week.

So yields up some five basis points. Let's call it Bitcoin, though, just managing to separate itself as an asset class today. We're not looking at tech more broadly as a spillover effect. In fact, it's going its own path and we're up another 4.3%, 72,000, a level never seen before with bitcoin. We want to see what are the individual

stocks that are on the move today. And I want to be focusing in on what has been happening with Moderna. It is leading the charge when it comes to the Nasdaq 100. Why? Well, maybe it's going to be able to find its application of its technology, its biotechnology throughout into the skin cancer space. And that's something that they're going to be teaming up with work on. We're up 8.8, up more than 10% at one point.

Most are looking what's happening with PDS and the Chinese names managing to get a lift. And in fact, some notes coming from analysts saying that the geopolitical risk is overdone for this particular name. They still like to move entering the overall US market. I think it's going to do well.

We're up some 3%. Lastly, don't matter on the downside and you pointed this out to start the show rose by more than 4%. No real fundamental catalyst other than, well, of course, former President Trump on CNBC earlier today really talking once again, reiterating what it says on trade social that he feels any ban of tick tock could actually be a negative because it would empower embolden the likes of Facebook, which owns Facebook Instagram. So the better parent of course, on the downside on the back of that potentially today.

Ed, what've you got? Yeah, a year ago today, fear was spreading in the technology and startup community following the collapse of Silicon Valley Bank. And it was swift. In a matter of a few days, we went from plans for an emergency sale of its stock to VCs and start ups pulling their money out to us regulators taking control. For a while, it even looked like the contagion could spread throughout the US banking system. Now, just a year on, where do we stand? I want to bring in Coastal Ventures founder Vinod Khosla.

Good morning to you. Good morning. I wanted you to come on the program in part because you were one of the first VCs to look at what was happening and offer to make personal loans to the founders of the startups in your portfolio. But you're also a Silicon Valley veteran and had a close association with Silicon Valley Bank by virtue of doing business today. What was the net result of all of that? Well, the net result has been minimal, to be honest. People have moved on. They have other banking sources. Some of the people involved in Silicon Valley Bank are still around working for other firms or other entities.

And life goes on. The Valley has adjusted. You know, you noted there there were other sources of banking know it brought names like Mercury, what I would call alternative lending or transaction services to the fore. But if there was a lesson learned, it was the high concentration of SPV, Right? If you are, as I say, an early stage startup, you had your banking there, but you probably had some debt there as well or lending. And it was often the first place you

could get a check. Is that concentration risk still there? You know, the risk with Silicon Valley Bank had nothing to do with Silicon Valley in startups. It had to do with interest rate speculation, which the bank did so in a separate, irresponsible actions on their part in this. And on the interest rate side, from what

the business was, I think the business was a solid business in most of it has continued in the same way. I don't think it has changed dramatically. You know, the alternative banks, Mercury and others came up, but there's other banks that are still the principal banks for start ups in the valley. I don't know if there's as much concentration, but, you know, we don't worry about that too much, Vinod. What's been interesting is perhaps there was a moment of realization in a time of a crisis. Who could you depend on? There is so much fierce competition to get in money to the right startup. Yes, that competition perhaps faded a

little bit as the economy turned direction. But more broadly, has it brought you more business, do you think, by the fact that you were able to stick your neck out early and say, I'm here and I've got your back? Well, that was what was most disappointing about the venture community for me. I called a number of other leading venture capital firms and said we should all support our companies. It's a temporary crisis.

A couple of weeks, maybe, but I didn't get a lot of support. So we had to unilaterally go out and say for our portfolio companies where we were major investors or lead investors. We would support all of them. I think every firm should have done that because Venture likes to talk about how they help their portfolio companies. But when the going got tough, most

people didn't stand up to that scrutiny. But notice it stopped you going in to rounds with other players. No, it hasn't. We continue to work with the same players, but to be honest, we don't rely as much on other players to add value to investors when the going gets rough. V.A. at its core, because this is Bloomberg Technology. Right.

We're also looking at this from the point of view of the startups themselves. It was a discussion about access to working capital. The rate environment was part of the risk on the bank side. But today, do you think that there is a stronger access to working capital for startups of all sizes? You know, access capital depends on the area you're in. If you're an AI, you have lots of access to capital if you're not. It is somewhat harder because many of the funds aren't doing as well because they had to mark the 2021 and 2020 high prices down.

But it hasn't changed the reality. The robots, the scene is still very robust, both in AI, obviously, but also in other areas. I find the venture community is investing, but the startups are even more exciting and more impactful. I think we should have a conversation about artificial intelligence. Chrysler Ventures founder Vinod Khosla. You're going to stick with us and we'll continue the conversation.

We're going to take a short break. We'll be right back. This is Bloomberg Technology. Welcome back to Bloomberg Technology. Still with us is Vinod Khosla, Silicon Valley veteran and one of the first investors to write a check into open air. The startup continues to be in the headlines, but most recently that's due to a lawsuit filed by Elon Musk, who is accused open AI of breach of contract and failing in its fiduciary duty to its founding members because it no longer operates as a not for profit or pursues its original goal of building, quote, beneficial, artificial and general intelligence for the benefit of humanity. V.A. You took to X in a threaded series of

posts to basically say you think Elon Musk is wrong. What is your thesis on why Elon Musk is wrong? Well, it's very clear Elon Musk wanted Openai to go aggressively, but reneged on his commitment to put up to $1,000,000,000. You're referencing there what the general public learned as being emails that were redacted but open. I chose to post to its website and in

one of them, even though the names are redacted, Elon Musk forwards a memo which suggests that the scale of funding needs to be in the billions. But also that and I'm quoting as correctly as I can open a I attach itself to Tesla. Well, I'm referring to the fact that before that happened, he wanted open air to move aggressively and raise up to $1,000,000,000, and he would commit to making up anything they couldn't raise from other sources, since at that point it was a non-profit. That's when we realized from the emails that he pivoted to wanting it to be a subsidiary of Tesla. Tesla was driving was developing self-driving technology for their cars. It was part of the A.I. push, and he chose to try and take control, which didn't quite work for him. And that was the source of the conflict.

What's so interesting is, of course, in many ways go to the heart of the case, whether or not there's the legal grounding in it. There is this interesting pivot that ultimately open I had to make. You also articulately put in one of our articles on Bloomberg saying like, this is about survival. No longer feasible to have an open source model you spend $10 billion of R&D on and then hand it to everybody else. The economics don't don't make sense. Are you in any way having pause, though, about the closeness of open AI now with Microsoft, does any of that consider any time in your head about a worry for you? I am not worried at all about the Microsoft relationship. It's a minority relationship. They don't own a majority, and it's

structured such that both firms benefit. The larger sources of AI in the world are. Google, of course, has great A.I. technology and of course and we have it in Baidu, in China also.

My original reason to invest was there needed to be a source outside of China to help compete with China in this important technology. But I'm not worried about Microsoft's control, and I think the rumors and speculation about it is just plain false. What's so interesting is we talk of you as a veteran of venture. You are one of the most highly respected people in this space. The fact that you open source was sort of an area that you helped spawn within Sun Microsystems. I'm interested to know, did you ever

anticipate that you'd be drawn into basically memo arguments with the most wealthy at one point mountain in the in the world? How do you feel about having to take to X in this way? Well, you know, it's not about the argument with your line. The argument is really about our competition, our techno economic war with China, which I've talked about before. And if we have powerful technology, we shouldn't be open sourcing it and giving it to China and other bad nation states, Russia, North Korea among them. And they're benefiting a lot from the state of the art open source. I'm still a big fan of open source in almost all other areas, including other area eyes of A.I., which are not state of the art technology video you may have

seen on ABC's This Morning or overnight, Elon Musk posted to his account that this week Grok would be open sourced. Do you have an interpretation of what Musk meant by that? And and based on what you just said, you'd be supportive of that? Well, I saw the tweet. I'm fine with it. I don't think grok is state of the art,

but I haven't personally evaluated it and. It will get better. It's started only recently, but if it's state of the art technology, I think we should control the export of that technology as closely as we control nuclear technology or other national security technologies. To be clear, it is not just about national security with China. It's beyond that. It's political power coming from economic power globally because of how powerful this technology is. I actually wanted to go back and I probably should have asked this at the beginning, but we always say, well, you were one of the first people to write a check into open A.I.

and you have a really long standing relationship with what is an evolving business, right? Just explain to our audience what your relationship with Open Air is, how involved you are or not, day to day. Well, we are very early investors. I'm not day to day involved in every decision. I am very I was very curious to see this independent committee report, which, by the way, Sam insisted on at the time the board was being reconstituted. It completely cleared Sam of any wrongdoing. Beyond that, it really went on to say Sam did a great job in many of the functions a CEO was supposed to do and blamed the board playacting hastily. I do believe the board was irresponsible

in the way it acted before last Thanksgiving, and I'm glad the report clarified all that and validated all that in an independent sort of way. Let's look at the new board announced on Friday. And there's more diversity in terms of more women. One of them actually, of course, the CEO

of one of your portfolio companies. I'm interested whether you think ultimately there is now enough diversity from a racial perspective, what you make of this board being announced? Well, I think those are all accomplished people. I wouldn't call them just women. I think they are accomplished and very qualified to be on the board and add a lot. They've done very different kinds of businesses. There is some nonprofit experience, and I think the goal of Openai to benefit humanity hasn't changed. In fact, one of the reasons Sam worked with us because he realized we had a strong focus and large positive impact in all the work we did and I focus on.

And so I don't think the goal of Openai has changed from benefiting humanity. It needed a for profit arm and that structure is pretty common globally. We are for non-profit nonprofits, owned all or part of a for profit IKEA being Bosch being examples, Tata in India, Mozilla in the US, so many, many entities. So I you know my my view is the goals haven't changed. The board has experience in both for profit and not profit, not for profit. And that's a great thing. So interesting Mozilla Foundation

founder has been saying maybe Sam has lost his way in that respect of a for profit and not profit for Node. Ultimately, the mission is to best way to carefully steward AGI into existence is a gradual transition to a world with AGI is a better one than a sudden one. So interesting, you referenced China a lot being the concern that you have about open sourcing, open eyes overall technology. Because I was sat with CAI fully a few

weeks ago and he now feels as someone who is building over in China more, he's really worried about the speed of AGI, the progress that we're making more generally. He doesn't think that the pace of change is controllable at the moment. What do you make of that? Well, technology develops at the pace it developed.

We can't predict breakthroughs in technology ahead of time. It does happen faster and we should be more cautious. Absolutely. Security research should be part of what

every university and every government funds. So I'm a big fan of that. But I don't think we need to slow down AGI development or AI development. I think we are far from it.

We are making rapid progress. And so I think that's a good thing. I think it would really, really benefit humanity. I've talked a lot about it. I'm a big fan of not slowing it down. Okay, let's try to move this moment forward. Elon Musk is an incredibly influential person.

He has a history of litigation in many of the fields in which he's operated. If you could give one message to him, I know it was a threaded series of messages and we're showing some of them now, but what is it that you want out of this situation? Well, I want to remind him that when Blue Origin Jeff Bezos sued SpaceX Sacks, he tweeted, Elon tweeted. You can't sue your way into space. I want to remind him he can't sue his

way into a guy He can do, hired great people, and he is hiring great people and building technology, which is the right way to compete. Well, I would try and get that message to Elon Musk. And our audience should know. We, of course, have invited Elon Musk on the program, but we are grateful that Khosla Ventures founder Vinod Khosla joined us here on set in San Francisco and explained what's been busy weekend for him on social media as well. Caroline It's a great deep dive with him. We thank him.

Meanwhile, coming up, well, what else is happening this weekend? Hollywood's old guard had a big night at the Oscars yesterday, but those streamers lackluster showing for the likes of Netflix only winning just one award Apple. And why with none. We'll have more on that next. There's a Bloomberg Technology. Time for talking tech. And first up, Apple is preparing to open its eighth store in Shanghai this month, adding to the tech titans largest retail network after the United States. As iPhone sales in China are slowing, the new store will be located in the center of the city, which already hosts the largest number of Apple stores in China's mainland. And tick tock. Chinese owners would be forced to sell

the social media platform. Under a bill the House plans to vote on this week if the bill advances through both sides of Congress. President Joe Biden said he would sign his strongest support yet for the proposal, according to Brandeis reporting.

Plus, the US could further tighten controls on China's access to sophisticated semiconductor technologies. Commerce Secretary Gina Raimondo giving us that signal. Washington may also intensify its campaign to prevent Beijing catching up in military capabilities, she told reporters in Manila. We will do whatever it takes to protect our people, including expanding our controls. And while it's going viral.

Yesterday, the Academy of Motion Picture Arts and Sciences held its 96th annual Oscar ceremony. While Oppenheimer absolutely cleaned up the biographical film about the inventor of the atomic bomb, which often people sought to associate with. Well, ultimately, where we are in AI right now, it picked up seven Academy Awards, including best Picture, best director for Christopher Nolan. And interestingly, the STREAMER'S posted a pretty lackluster showing. We've got to talk about the fact that

Netflix walked away with just one award, Apple receiving none. I mean, what happened to Maestro? It had so many, well, potentials to win and managed to walk away with anything. So many podcasts that I listen to would say, well, my story is going to take a lot of these. They did. And I just go back to basics, right?

It's no surprise you wake up Monday morning on Google Trends or X or even LinkedIn. Everyone is arguing about that point, right? Oppenheimer versus Maestro. And Bobby doesn't even get a look in, even though, of course, that was the big win from a monetary perspective. But it was back to those Universal

Pictures perspectives. It was back to Disney managing to count and turn out the goods. I mean, congratulations where it's due. It suddenly felt like a life event. I'm pretty sure it probably got the most

views that we've had in several years. And if we do a deeper post-mortem going forward this year, I would just say Apple TV, where is same? We always say, what about Netflix? Will Apple as well? It's kind of the old guard that did well and Ryan Gosling singing his heart out. That does it for this edition of Bloomberg Technology.

Please recap the show on the podcast. It was a pretty long conversation with Vinod Khosla. The pod is on Apple, Spotify, iHeart and of course we post it to the Bloomberg platforms as well one day into what's going to be a very big week from San Francisco and New York City. This is Bloomberg Technology.

2024-03-15 14:39

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