Reid Hoffman on AI Investing, Trade Policy, and Doge
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From the heart of where innovation, money and power collide, in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde and Ed Ludlow. Live from New York and San Francisco, this is Bloomberg Technology. Coming up, Alphabet earnings impress Wall Street as Google's ad business stays resilient.

It's a different story at Intel, with investors preparing for short-term pain from layoffs and a company culture reset. And as Trump targets EU AI regulation, we discuss with billionaire founder and investor Reid Hoffman. But first, let's just check in on these markets. And we are significantly higher on the week. The NASDAQ 100 pushing up 5.25%. We've added $1.25 trillion in terms of market cap over the last five trading days, but it's

It's only the biggest move on a weekly basis since two weeks ago. We are used to this sort of volatility. Today, the consumer sentiment looking ugly. We just passed some of those increases that we've been seeing over the last three days. Let's move on and have a little look at what's happening on other risk assets of choice. Look, crypto having an absolute stellar run if you're looking at Bitcoin. Altcoins to the side, but Bitcoin up 12% over those five days. So clearly outperforming it. What are you looking at on the micro?

Well, let's start with T-Mobile down more than 10% on track for its biggest drop since March of 2020, basically missed on paid wireless subscribers. Really interesting week in that space. We don't have a lot of time today to go over it, but the size of the move, I wanted to bring it to the audience and maybe we'll find a moment to chat about. There are bigger names that we're focused on throughout the hour. One of those is Apple. A lot of Bloomberg reporting about what Apple was going to do in supply chain in response to potential tariffs.

and also what they're going to do with talent at the top of that company. We'll get to it later. Alphabet, you just pointed out, right? Up 2%, core search business good, revenue in cloud interesting. We're going to cover that in detail. And then there's Intel, still under pressure, still working out what to do, cutting middle management.

Signs that they had a good one queue because people were anticipating tariffs. We'll get to it. We will get to it, Ed. And more broadly, I know that you spoke with the CFO of Intel and how much that we're still seeing a seismic shift in our business, how much you're still seeing an overall concern about where Intel goes in terms of just trying to de-layer, trying to get rid of some of that middle management. The fact that NVIDIA is managing to bring in almost, well, more than three times the revenue of Intel on about...

a third less over the overall employee base is significant. But we return to Alphabet, which is actually coming off of those pre-market highs. We're up more than 2%, but we had seen a move of more than 6% in after hours after the numbers. Let's dig in. Davey Albers with us. You cover this company, and actually it just seemed to be relief.

Yeah, I think that a lot of people were sort of bracing themselves for the at least initial impact of Trump tariffs which are looming over these companies. But Alphabet's earnings were actually quite impressive, especially on advertising. YouTube and Search were up 10% year over year, and it really is a resilient and diverse business portfolio that they have, and the earnings reflected that.

Bloomberg's Davey Alba on all things Alphabet. Thank you very much. Let's turn to the other big mover, Intel. The company posted a weak second quarter forecast with plans to slash jobs, sending shares sliding. I spoke with Intel CFO David Zinsner, and he told me they'll reduce the layers and cut the bureaucracy out. It's an effort to scale back on OPEX and CAPEX. For more, let's bring in Bloomberg's Ian King, who was also on that call with David Zinsner.

There are many stories with Intel, most of them still negative. What's the need to know about this chip name? Yeah, I mean, short term, they confirmed everybody's fears, which is a nice first quarter. Things were better than we had feared, perhaps. But that's really a false dawn for the industry that a lot of this is what's called pull in, but basically people trying to get as much as they can ahead of any tariff impact. So that won't continue. And guess what? There might be a recession on the way. You use the R word. Longer term, people wanted

a more than just a diagnosis they wanted an answer this is what we're going to fix this is how we're going to fix it didn't really get that apart from as you just indicated this is what's wrong with intel's culture and internally this is what we need to fix and what on earth happens with the fabrication side of it ian king it was a great interview that you did with ed thanks so much more on google and intel and broader tech sector now ayoko yoshioka's with us wealth enhancement group portfolio consulting director ayoko

I start with Intel because it was the fabrication future that many are still left quandering. And much of that is because we don't really know what U.S. policy is in terms of money going to Intel. Just how difficult is it to invest in hardware in the U.S. right now?

Sure. Just given the overall uncertainty that is in the market and as well as just with policy, it's very difficult to make long-term business decisions in general, whether it's Intel or anybody else. And so I think that's what's being reflected in the markets. And then for Intel specifically, they really do need to make a lot of changes and they are going to be longer term in nature.

really in order to re-establish themselves, but it's table stakes at this point for Intel. Ayoko, can we just talk about the pull forward that Ian mentioned? One queue was better than the street thought, the two queue outlook worse, the logic, customers bought chips in the first three months of the year because they knew tariffs were coming.

Do you think about that as a sort of solely Intel problem? Or do you give them a pass in that this is an everyone problem at the moment in this chip space?

No, I do think it is an everyone problem. And it's not just for chips, right? I think a lot of business executives made the decision to pull forward some of the needs, anticipating that there might be some turmoil going forward related to trade policy. We did start to see a lot of the sort of news come through, whether it was with Canada and Mexico in February. And so I think there was a little bit of angst

And there was likely a lot of pull forward across not just the chip sector, but across a lot of different goods. Google's core search-related ad business is doing well. What does that tell you about the world we live in right now? Sure. So I think

I think with Google, it's been a little tough. Google is inexpensive. It trades at 16.5, 17 times. And search has been strong. Search and YouTube up 10% year over year. And so strong numbers there. And Google Cloud was up over 28%. And they showed

great profitability in that segment as well. So things are moving along really well for Google. It's just that the narrative and those existential issues aren't going away. You have those regulatory issues and you also have

You also have the AI issues still lingering with the-- - Dig into that, IOKO, because we all know about the antitrust issues and we're gonna talk about that at length with DuckDuckGo in a moment. But I'm interested in the AI issues because people are using AI overviews. People are seeing a capex spend of $75 billion being committed to and sort of are okay with that infrastructure rollout. What more do they need to do to prove that they're the winning one here?

Sure. So I think because so many, you know, there's so many competitors in the AI space that,

But we just don't know, and we still don't know how it's going to monetize properly for Google. We know that even when they do monetize some of it, they're still cannibalizing some of their own search revenue. And so I think that's the part that's still just not going away. And until that mix sort of levels off, we won't have a true answer there. And I think that's what's keeping a lid on the overall multiple for Google search.

at least in the near term. When the numbers hit, other mega caps rose, Meta, Nvidia, for example. But I want to bring back that chart we had a moment ago. 28% growth is great, but it's a deceleration year on year, quarter on quarter. There's micro focus on the ad business, but how did this set us up for the rest of earnings season, in particular, our sort of commitment to living or dying by capital expenditures numbers? Please, Ayoko.

Yeah, you know, I think it's more of an overall industry CapEx spend that we're looking at, right? So it's not just Alphabet's spend on CapEx, but it's also Amazon and Meta and Microsoft's overall spend, because a lot of that is then going to go to NVIDIA with the chips and the overall AI technology.

build out all the data center providers as well will be beneficiaries. And so I think that's where we're all focused on. It's still relatively early. And despite the fact that it was a deceleration from a Google Cloud perspective, I think that you're still seeing

cloud growth, cloud computing grow in this 15 to 20% range for the next five plus years. And so I think you want to lean into that for the long term and not just look at the overall one quarter deceleration relative to last quarter. Ayoko Yoshioca of Wealth Enhancement Group, great to see you. Thank you very much.

The Trump administration, while it's pressuring Europe to ditch an AI rulebook that would place stricter standards on transparency, on risk mitigation, on copyright rules for advanced artificial intelligence. Let's get more on this with Bloomberg's Mike Sheppard. This is basically a voluntary AI code of practice to accompany the AI Act. What is the US dislike here?

Well, the U.S. dislikes the idea that it could be compelling companies to have to comport with rules that they see as restrictive and potentially restricting innovation and stifling innovation. And this is a refrain that we have been hearing from the Trump administration really since they took office. And they're targeting this, even though it's a voluntary code of conduct, it's designed to serve as a set of guidelines for obedience.

obeying the Blocks AI Act. And under that law, companies that violate it run the risk of some pretty hefty fines. And that would be up to 7% of a company's annual sales. And if you look at Google's results from yesterday, that could be upwards of $5 billion.

But there's more at stake here than just the money here, Caro. It's also just this idea of regulation. And it's a question we've heard the administration articulate time and again, especially with relation to the EU here, Caro. I think a lot, Mike, about the administration's approach to the bloc. This is just one example, right, of this administration's attitude towards the European Union, particularly in the context of tech.

Absolutely. And they are taking aim at a series of measures. One, on the whole trade question, they have questioned the Digital Markets Act, seeing it as a restriction on free trade. They are also complaining about content moderation, that the bloc is much more in favor of than here in the United States. And they see that as a restriction on free speech. And then when it comes to artificial intelligence, back in February, you'll recall that during

the big AI summit that French President Emmanuel Macron hosted in Paris, JD Vance made an address there where he drew a line in the sand. And he cautioned the entire bloc and other countries as well against over-regulating AI and targeting American companies in the process. Google has spoken out about it. So too has Meta. Bloomberg's Mike Sheppard. We thank you.

Turning back to Washington now, where a court continues to hear arguments on remedies for Google's search monopoly. One beneficiary of a breakup, well, potentially its search rival, such as DuckDuckGo. We're joined now by Camille Basbas, DuckDuckGo's Senior Vice President of Public Affairs. How has this remedial discussion been going from your perspective? Have you been hurt?

Yeah, so we -- our CEO just wrapped up almost six hours of testimony yesterday in the trial. And it's our belief that, over the last 15 years since both the case was filed and the time that the case addresses,

Google has illegally monopolized the search market. And so throughout that time, we've never had a fair playing field to compete. And the remedies in this case can change that. Well, the remedies, Alphabet would argue, go too far. Spending off Chrome, for example. We'll get to a price point for Chrome in a moment. I know Ed's need to talk to us about that. But there's other ones in terms of...

Whether it's selling off Chrome, whether it's sharing data, realistically, what would you like to be done that makes it more of a level playing field? Yeah, well, here's the thing. Each of the remedies that have been proposed by the government are necessary but not sufficient on their own. We're talking about undoing more than 15 years of illegal monopoly. So you think it doesn't go far enough?

I think that everything in there deserves to be there and has a very targeted purpose and specifically addresses what the judge put in his ruling. There's both a distribution advantage and a scale advantage. So you need access to users, right? Right now, most users don't actually pick Google. That decision is made for them by the fact that they're the near exclusive default everywhere people access search engines.

When you have that advantage, it means you have a scale advantage. And you heard multiple CEOs from different companies over this week talk about that scale advantage and how that makes getting quality search results difficult. Even OpenAI was saying that it's an 80/20 thing. They can do 80%. But then when it comes to the 20% of what's called long tail queries, these are specific queries that aren't done a lot, even they're struggling with it. And Google still has the best index.

Camille, I do want to talk to you about queries. I think you've talked about this in the past, but what came out of the process is that Chrome is a hot commodity, right? Your boss assigned a $50 billion value, but we hear from Yahoo and OpenAI that they're interested in it. What I appreciate you spelling out for the audience is what would your business actually get from

in purchasing or there being a change in the ownership of Chrome. Particularly in light of that, Chromium, the underlying source base or source code, is open source anyway.

So, if you are a big tech company and you are trying to make money, which is of course the goal, and you have advertising, the fact that the most popular browser in the entire world would be up for sale is an enormous value. I mean, if you think about the case that's going on just downstairs from the search case, the meta case,

Meta bought WhatsApp for $19 billion. The worth of Chrome is at least double that. You can imagine any big tech company that has an ad service would put ads on a Chrome that they own and that could create endless monetization opportunities for them.

I believe that you would like to have access to Google's click and query data. What is the benefit of that to you, please?

Yeah, so the benefit there is, you know, Google has a massive scale advantage now when compared to other search engines. And that scale advantage means they see much more clicks and queries than other search engines, which means that they can improve the quality of their search engines faster and just overall have a better quality than others can. You know, our

Our CEO talked about yesterday, right? Let's say you look something up on DuckDuckGo, you're trying to go to a pharmacy or a restaurant, and you might see that the hours aren't correct, but they are on Google, and oftentimes that's because of that kind of clicking query data. More people are clicking on the correct hours, thus giving Google the information that this is what you should be doing

displaying to users. You don't want someone switching to DuckDuckGo and having them try a few things out and then end up rage quitting at the end of it. And so by sharing this data, you can level the quality playing field while also making improvements to it. Because as I think people have seen, Google has said with its AI overviews or telling people to eat rocks and put glue on pizza.

there is a lot of opportunity for better integrations and better services. And so this is not at all a copy and paste. This is asking for a level playing field on which to compete. You feel that Google should be forced to give you that data?

I think that is how you can level the playing field for other search engines. And it's not just about leveling the playing field. Remind us of the benefit to the consumer here because, I mean, it's all very well that your business wants to do better, but me as a consumer is really rather happy with my experience thus far. You know, I think that there's a little bit of a Stockholm syndrome happening with Google in that everyone's like, well, this is great.

I'm enjoying this. But you're also somewhat captive to this because you've never been exposed to alternatives. I mean, anyone watching here, try and switch your search engine right now and see if you can finish it by the time we're done. It is too difficult to do it, and that's not an accident. Google is extremely good at designing products to get users to do exactly what they want to do, and in this case, what they don't want to do as well.

And Google's counter would of course be that chromium's open source and the four penalties or targeted remedies of the DOG combined go way beyond and are way too punitive. Camille Basbas, SVP of Public Affairs for DuckDuckGo, thank you for joining us on the story. Now coming up, Apple looks to accelerate a manufacturing shift from China to India. We'll have more. This is Bloomberg Technology.

Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

At EY Consulting, technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But

But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge. But here's the best part. You

You can build with confidence, knowing that Microsoft's security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft. And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.ai. ♪

It is time now for Talking Tech. And first up, Meta. Well, it's laying off over 100 people in its Reality Labs division, according to a person familiar with the matter. Now, the cuts will impact staff focused on creating VR experiences for MetaQuest headsets, along with operations-focused employees. That's as the company looks to streamline work being done across two different teams. Plus, Apple, while it's stripping its secrets

robotics unit from the AI organization under John Gianandrea. Now it's moving to a hardware division, according to sources. The move is part of a broader Apple effort to catch up rivals in the AI space and its second major project to be removed from AI chief in the past month.

And sticking with Apple, the company says it plans to build more iPhones for the United States in India. Apple aims to roughly double its annual iPhone output in India to more than 80 million units, moving production away from China amid, of course, the US trade war. Ed.

Coming up, divergences in tech, Intel issues an outlook warning as Google posts strong ad sales results. Yet both companies face headwinds from renewed tariffs and global uncertainty. That's going to be our topic of conversation next. Let's get back to a recap of where the markets stand.

It's been a decent five days at the index level. NASDAQ 100 looking strong, but kind of losing a bit of momentum on the Friday. Now, Bitcoin, Caro, $95,600 per token. If I say this is behaving like gold and a haven asset, someone will clip it and put it on social media. So I better not say that, but that's what the writing on the Bloomberg terminal states. And as you just covered, I think Apple is really interesting. Google is out the way. And when we think about next week,

IT IS APPLE THAT I THINK WE REALLY, REALLY FOCUS ON. IT ANSWERS OR HOPES WE WILL ANSWER MANY OF THE QUESTIONS AROUND TRADE UNCERTAINTY AND TARIFFS. IT IS DOWN HALF A PERCENTAGE POINT. BUT YOU'VE JUST OUTLINED SOME OF THE BLOOMBERG REPORTING ON WHY THAT'S THE CASE. STICK WITH US. MUCH MORE TO COME. THIS IS BLOOMBERG TECHNOLOGY. WELCOME BACK TO BLOOMBERG TECHNOLOGY. I'M CAROLINE HYDE IN NEW YORK.

And I'm Ed Ludlow in San Francisco. Let's get a check again on what the markets look like. Look, NASDAQ 100, I always go to it, very tech-heavy index. On the basis of five days, we're up almost 5.5%, rebounding from the drop of 2.5% we had last week. But Friday, we've kind of lost some momentum. There is some economic angst about all the headlines from President Trump and trade, which we'll get to shortly on the show, but also the mixed bag of corporate earnings. Speaking of which, shall we take a look at a couple of them? The story, I think,

with Intel is pretty clear. On the product side, they still haven't worked it out. On the scale side, they haven't worked it out. Cutting OPEX, cutting CAPEX, and they will do significant layoffs. But we don't have a full sense of the strategy from the new CEO. Alphabet, up 2%, core search business. But the eagle-eyed of you, Caro, the eagle-eyed, will have spotted that profit got a boost from somewhere maybe surprising. And I'm

gain for an investment in a private company, Ed, to the tune of $8 billion. And you know what that private company is, right?

Yeah, it's SpaceX. So Google has been an investor in SpaceX, Elon Musk's space company, since 2015. And it's an unrealized gain, but sort of $8 billion on paper boost. That's pretty good going, isn't it? The question is, like, you know, what happens long term in the future? But I would also note that one of Google's executives has a board seat at SpaceX, which is important to note. Well, when you take a billion-dollar chunk years ago alongside Fidelity, I can imagine you kind of want a board seat at the same time, then. Yeah.

Yeah, exactly. And also, the thing is that satellite communication, it's slightly analogous, although I think we should track that story over time. Yeah. All right, let's stick with Google. Parent company Alphabet did post a first quarter sales beat as its search ad business sees strength despite tariff uncertainty. Morningstar tech analyst Ahmed Khan writing, while we believe investor concerns around a tariff-induced digital ad spending slowdown and antitrust-related impact to Alphabet's business are valid...

We think the sell-off in the firm's shares has been overly punitive, creating an attractive buying opportunity. Ahmed joins us now, and I think the selling you refer to is kind of the year-to-date selling, right, as opposed to what we're seeing happen in the session. Your main point from the print we got last night about the search business...

First of all, thank you so much for having me, Ed. We really like the report. I mean, you know, the search business clearly is showing resilience. There's been a lot of, you know, sort of investor concerns about search disruption happening at the hands of like, you know, these generative AI chatbots such as ChatGPT or Perplexity. But if you actually look at the number of queries and the number of monetizable or commercial queries,

That actually increased. So that kind of stands in contradiction to this overall narrative that investors have kind of jumped on about the death of Google search, which we do not agree with. One and a half billion monthly users, I think, is what we heard from the CEO coming for search. And actually, like a billion podcast listeners on YouTube, just the strength and the vastness of this business is significant. But that is why it's trying to be broken up.

Just are you factoring in, in any near-term sense, an impact on a sale of Chrome or an ability to have to share the data? Well, first of all, when we're thinking about antitrust, it's important to separate the near-term and the sort of medium to long-term. In the near-term, you have some headline risks, but there's actually very little actual business risk because Google is going to appeal or Alphabet is going to appeal the decision that Justice Mehta sort of puts out in the summer of 2020.

this year, and that appeals process may take some time. Now, as long-term investors, though, that still is a valid concern. The way we think about it is that there's a sort of range of antitrust outcomes, and we think some of the more value-destructive remedies, such as the divestiture of Chrome or potential divestiture of Android, we do not think is likely. We think more sort of behavioral remedies, such as like the

the end of exclusive revenue sharing agreements or even certain other sort of changes that Alphabet would have to make with their deals with these OEMs and browsers would probably be at the forefront of the eventual remedies, and that's what we're modeling in.

I'm Akan. It's great to have your analysis. Morningstar, we thank you. Now, look, there's another name we're watching today, and it's Intel. Shares down significantly after the company issued a pretty bleak second quarter forecast. In an interview with you, Ed, in fact, the Intel CFO said that the first quarter saw upside from tariffs, saying it...

probably pulled some demand and softened up the second quarter. For more, we welcome David O'Connor of BNP Paribas Exxon joining us now. You got around to perform and a $19 price target, and there we are, $19.90. We've erased all of this year's gains on the stock. And rightly so from your perspective, you just didn't get enough from the new CEO of how they're going to rectify the business?

Yeah, thanks for having me, Caroline. Yeah, absolutely. I know we're underperforming the stock. The stock today, the move is reflecting the tariff concerned. Also, investors didn't like the message on the restructuring. I think the way we thought it was a kind of a positive message from Lipu in what needs to be done to restructure business. The overall, the overriding takeaway, I think, from investors is it's going to take a long time.

David, on the one hand, people will say, OK, we give LipBoo the benefit of the doubt. He's only been in post a few weeks. On the other hand, some say cutting is not a strategy for growth or to fix the products issue. How much time are you willing to give LipBoo Tan and David Zinsner the benefit of the doubt on both those things?

Yeah, good question, Ed. I think there's a lot of goodwill in the industry for Litboo. And, you know, he keeps reiterating this will take time. The issues that they're facing are not a quick fix. They're not really on the kind of strategy side of things. It's more about execution. And that is where kind of they've fallen down in the past, Intel. And, you know, Litboo has acknowledged that and he's taking quite decisive action now. You know, he's talked about...

changing the culture at Intel, which we haven't heard before, stripping back all that added layers of bureaucracy, going back to a focus on products and engineering driven. Now all this needs to be done, but again it's take multiple years in our view to get there.

In the short term, Ed, I would say the first thing they really need to do is to stabilize the market share. Stabilize the market share in PCs, servers. This has been the core problem for Intel, where they've lost share to AMD and to ARM as well.

David O'Connor of PNP Paribas AXAN, thank you very much. Now coming up, Reid Hoffman from Greylock Partners joins us to talk about his latest AI startup aiming to cure cancer, the broader AI and political landscape. Much to discuss. That is next. This is Bloomberg Technology. Possibility surrounds us in digital innovation, evolving markets and disruptive ideas. And while promises can inspire dreams, proof is the catalyst for transformation.

At EY Consulting, technology unlocks value. It's data that sharpens your competitive edge, and it's our deep sector insights that can navigate a pathway to real outcomes. This is high-value transformation that drives real change and challenges competitors to keep up. With EY Consulting, it's about proof, not promises. The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But

But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge. But here's the best part. You

You can build with confidence, knowing that Microsoft's security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft. And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.ai.

A top technology story today. The Trump administration is putting pressure on Europe to ditch stricter standards for AI developers. The EU says this voluntary framework is intended to help tech companies comply with the bloc's new AI act. The US says it's another example of overreach that unfairly targets American companies. Joining us to discuss that story, his own work in the field of AI,

investing and global trade wars, Reid Hoffman. Reid is a partner at venture firm Greylock, co-founder of LinkedIn, Inflection AI, and now Manus AI, and joins us here in San Francisco. Welcome to the program, Reid, and thank you for coming back. You have experience of working across jurisdictions. This administration's approach to Europe's AI industry and that specific piece of news on the AI, how do you interpret it?

Well, broadly, I do think the European Union tries to be too regulatory against future development of technology versus adjusting to actual things. You agree on the overreaching part? I agree on the general overreach part. And I think that the – and it's actually bad for Europe. It's not just a question of, like, different philosophies. I think I already know of U.S. tech companies that are deploying –

outdated or older models, 'cause you go through the certification process and they go fine, we'll just leave that. And as we do the next year of development, you get development so fast

that like much less good for consumers, much less good for industry there. Now this specific one is actually more the questions about the regulations in the act. The actual playbook as I understand it is to say here's your safe harbor boundaries which is actually in fact a good thing to do generally in regulation which is like if you drive within these lines there's not unspecified liabilities.

And stability is actually, in fact, a good thing for the development of business. I mean, that's part of the problem with all the craziness around the tariffs. Stability is important. Well, you make the point that the European Union moved to codify what they wanted the rules to be. You know, I think about the first four months of the administration, we've had David Sachs on the program as the AI czar.

But they haven't really codified what they believe the rules for AI should be in the same way that they did with crypto. Would you agree with that? Yes, because look, what business needs is stability to invest and develop in it. Even if you disagree with the particular regulation, you at least know how to navigate it. If you say it's unspecified, it's going to change, it's going to come, it's going to go. That just makes everything retrench. So it's good to have that kind of thing.

That being said, with super agency and the book I just published recently, it's actually that we're going to have so many better features for both great things like medical assistance, but also safety features in the future that we shouldn't be trying to impede that through regulatory slowness. So that part of it I agree with, but you also want the stability and clarity. And the rule book, as I understand it,

is an effort in that direction. Without that stability here in the US, you're investing nonetheless. You're creating Manus AI, which is about really important work, discovering drug discovery, particularly against aggressive cancer. Why do you have that commitment to do this in this environment, Reid?

Well, generally speaking, I'm always an optimist. And so I'm always building the future, you know, kind of no matter what, because that's how we create good futures is by saying this could be great. Now, with Manus trying to cure cancer, this is a multi-year effort. Like most of my investments are like 10 year efforts. You obviously hope to get, you know, kind of return like kind of results, you know, one year, two years, three years.

But you're playing it out in the future. So the fact that there is kind of regulatory uncertainty around AI in the U.S. right now doesn't slow down my startup efforts. Can I just jump in and counter with something? Yes, absolutely. So Manus AI, a long-term 10-year project with Inflection AI, and I note your position on Microsoft's board, that you turned that around quite quickly. And then we call it an acquihire.

in that context. Is there opportunity for you to do that with Manus AI with a bigger beast, or is that an unfair question? Well, it's not. Look, part of when you're a smart entrepreneur and you're a smart investor, you're always thinking, how do I transform an industry? But also, what are pivots or changes you might make along the way as kind of plans B? And the decision with inflection, which I think was a solid decision, is

The consumer agent where you have to spend billions of dollars building the model before you actually understand the revenue model actually, in fact, is harder for startups to do. Yes. So it's like, okay, let's change to a B2B model. It's still going. They've got a whole bunch of different B2B clients, and let's do that. But the consumer thing will actually have to be done by other players. And so...

obviously, if we made a similar decision with Manus, which we're nowhere close to, then, of course, we have various plans B in terms of how we operate. But the goal is always to change an industry. Thank you. And prosper. And prosper with AI. And that's where your book, Super Agency, really comes in. And you talk about this cognitive industrial revolution that we're going through that is going to have short-term pain. I go broad a picture here and just think about the short-term trade anxiety. How much is that playing into the fact that

the bogeyman we like to make of China and the US. Well, is China getting ahead in terms of its cognitive industrial revolution because of the instability we are creating here in the US? I do think that one of the things that the tariff, you know, kind of Chernobyl

kind of catastrophe is actually in fact aiding China across its entire industry. Like for example, Europe says, well, if China is a more stable trading partner for not just manufacturing, but technology and all the rest, and we can rely upon them better, that creates better global markets for China and worse for the US.

And so I think that part of being smart about what we're trying to do is we want trading partners and trading allies for our own industries and our own prosperity and jobs for American citizens. And so I think that is creating-- it's very funny because the rhetoric, of course, is very competition with China. But the actions in terms of attacking our allies and friends and partners is anti-warism.

our efforts. What's interesting as well is whether some of the real winners that come out of China come over here to the US. Now the latest news is actually an American investor, Benchmark Capital, putting money into not related to yours, Manus AI, which is owned by another company, which is actually a consumer agent.

they're just putting in money because they want to expand that Chinese offering here in the U.S. and abroad. How do you feel about some of the wins that China is getting on the consumer agent side and whether U.S. should be investing in it?

Well, I actually think coopetition is the right way to approach things like China. Did you say coopetition? Coopetition, yes. Thank you. So you're both competing, but you're also cooperating. I think that creates better prosperity and better peace and all the rest through the world. And so I'm actually positive on U.S. investors investing in general markets and all the rest.

But obviously, part of what we want is we want level playing fields. We want kind of equal access. I actually think the general discourse with China is, hey, look, you restrict all of our technology industry from playing in your field, so we're going to put restrictions on you here. But I think the investment and the ties are actually still good. Now, that being said, I think Manus is actually not...

per se leading in the agent space. I actually see a bunch of other players, not just OpenAI, Anthropic, Microsoft, Google, but I think there's a bunch of folks who are doing very strong things. And there's nothing that we've seen from them yet that suggests that they are as yet caught up to some of the things that are

You left OpenAI as a director in 2023, I think I'm right in saying, but we've had you on the program before to talk about it. It is the leader in the field, shall we say, of frontier models and now business and consumer facing applications of that model.

I have to ask you what you think the future of OpenAI is in terms of its structure. You're close with Sam and you speak with Sam and you must keep a very firm eye on that company. Well, yes, but in part because they're still doing their mission, which is how do we make AI for the benefit of humanity? The reason why they're shifting the structure is to realize that mission. It's going from to a public benefit corp, which allows the board of directors to make decisions for its mission separate from the profit line.

And that's actually, in fact, the way it gets the capital to continue to do that. Now, I think open AI continues to, like if people haven't played with their recent, you know, kind of chain of thought models with deep research. I mean, I try to do a deep research prompt every day because I think that that gives you the lens to the amplification we're going to get with these products as workers in the future.

I've been using 4.0 every day. I also communicate more with voice mode. It's a psychological thing that as a consumer, you kind of have to get over. This environment more broadly, a lot of capital is being deployed. Again, I note that you're a board member of Microsoft, but the infrastructure question is still very big. How far ahead do you see the commitment to capital expenditures on the infrastructure side? And is there anything about

the willingness to deploy capital that worries you, Reid? Fundamentally, no. It doesn't mean that we might go, "Well, look, the most optimum use of capital might have been a slower ramp." But we

But when you do the kind of the two by two matrix and you say we don't do the investment and then we fall really behind in building the new franchises or we do do the investment and it's a little early and aggressive, the two by two matrix is by far goes out to strategically to go aggressive on it because the fact that AI is going to redefine industries, that's not in doubt. The only real question is what year is it?

Is it this year, next year, the year after? And so going aggressive is the right strategic model for both startup companies, but also, of course, our large tech giants. Can you remain bold in this environment, Reid, when, as you say, the lay of the land is changing? We're trying to get any sort of guidance from companies in this earnings season. How disruptive is this moment? How much are you seeing a freezing of business as we know it?

So far, what I've seen in every major AI company has been a commitment to go as bold as they possibly can. And I think that's actually a good thing because it's partially, again, like I was saying, if you go, well, it's going to work in the next three years, it's not going to work in the next three years for generating business returns, et cetera, and going heavy in investment, the chance of getting caught basically well behind in all sides is a much worse outcome than...

"Hey, if I made a mistake and I invested a little bit too much in infrastructure and CapEx 2025, 2026," we know that adding intelligence to everything... For example, one of the interesting questions for a program like this will be,

When is it, and this is a small n number of years, that we will have an AI agent along with us in doing this program saying, hey, let's ask this question or here's a fact that's really relevant or something. And the answer to that is small n years. Two years?

Four? I'm using one now, Reid. Don't you worry. I'm using one now. Exactly. Exactly. Well, Reid, look, boldness. You've been bold in continuing your political giving this year as well. I think of the Wisconsin race, which was more about judges. But I'm interested as to what you're still feeling in terms of your political agenda here and how much you have felt any impact of the money you've given to ultimately the losing side of what this current administration is.

Look, I'm still most fundamentally kind of an American, a kind of how we build prosperity here. And everything I do is in that vector. And that's part of the reason why, like, for example, when President Trump was inaugurated, I was not saying very many things because I wanted to be as many good things to come out of that as possible. I think that's what we all want.

And look, I'm still hopeful for kind of changing, you know, kind of energy regulation and getting advantages from that. I'm still hopeful for, you know, can we apply, you know, kind of software to make government much more effective in services.

I'd rather see that than illegal deportations. I'd rather see that than trade wars that are damaging to, you know, like everyday American citizens. That's what I'm still hopeful for. And so I'm still investing in that arena. And that's very much in line with what Doge said.

purports to want to achieve, right? Could you just give your views on Doge and the work of efficiency, but also deploying technology to modernize government? Well, so if what you did is that, hey, what we're first going to do is build data analytics and understand everything and do things where then we're refactoring that in,

that might have led to a very good process at the beginning. But kind of going in and saying, hey, we're first going to just shut off all payments and break everything, like, that's like a disastrous way to do these kinds of things. So I think they are doing a bunch of less reported good work on, like, you know, trying to make HR records, you know, kind of more, you know, digitalized and process all that in a much more time and economically efficient way. I think that's great. But on the other hand...

I think that they, like all the cases that are reported, everything from a catastrophic mishandling of the university system, not understanding that when you shift the overhead costs, you're basically saying, we're not funding any of the science labs anymore. Science labs, like science is one of the ways that we've gotten our American technology advantage. It's like literally like say, hey, let's put concrete overshoes on both legs and

run a marathon. It's like, no, no, don't do that. And so being smarter about like, I don't mean gradual, but iterative, like understand first, then act as opposed to just like, you know, like, like blow it up and then figure out like, oh, was there anything good here?

Talking of HR and changes, I mean, the tool that you built within human resources, LinkedIn, is changing at such a rapid pace right now, Reid. And I feel social media is more broadly. Just briefly, how do you like the look of LinkedIn right now as we all swarm it with our videos and our narratives and our high fives?

Well, thank you for swarming it with videos. And so, I mean, I obviously, you know, have a sense of pride and happiness with LinkedIn over time. And we've stayed, I think, very true to our focus, which is how do we help people with their economic lives? How do we help people with jobs? How do we help people, you know, make deals, understand the business world, all the rest of that stuff? And so I think...

that mission has stayed true. There's always more work. When you ask a product tech founder and you say, what do you think? He's like, oh, there's a lot more to do. I still want to see a lot more. And I think the LinkedIn team is doing a great job. It's actually the first time I think over the years we've got to ask you about LinkedIn. And Caro's point is we recognize growth there. Greylock partner, LinkedIn founder, Reid Hoffman, thank you for the extended conversation here on Bloomberg Technology. Caro.

What a conversation, what a way to wrap an extraordinary week. That does it from this edition of Bluebeg Technology. So much to check in on, though, Ed.

Yeah, this is what markets look like at the end of the week. It is again on the week, the Nasdaq 100 a bit more muted. By the way, Tesla pushing higher. They were hearing a lot more from the federal government on regulation and going back to Intel. You know, the conversation we had with the CFO, it's very much a streamlining of this company for now. The tech and product refocus. I think that's going to come later from New York City and San Francisco. This is Bloomberg Technology.

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