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Apple’s Ternus Takes Reins as CEO With AI a Priority · Bloomberg Intelligence

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  Speaker 5: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 6: All right, Scarlett, we have been talking all morning about Apple,
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  Speaker 6: and it's one of the biggest companies in the world.
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  Speaker 6: It's getting a new CEO. It has a new CEO.
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  Speaker 7: Effective today. John Ternes is in. Tim Cook goes upstairs.
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  Speaker 6: I guess he goes upstairs. He probably still gets the
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  Speaker 6: good parking place. But we have the perfect person to
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  Speaker 6: talk about this with us, Mark Gurman, Bloomberg News Managing
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  Speaker 6: Editor for Global Consumer Tech.
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  Speaker 1: Mark, welcome.
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  Speaker 8: Thanks for having me.
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  Speaker 6: All right, Mark, this is a huge passing of the baton.
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  Speaker 6: Talk to us about this moment. How do you see it?
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  Speaker 8: This is a major change for Apple.
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  Speaker 9: In some ways, it's a bigger change than the transition
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  Speaker 9: from Steve Jobs to Tim Cook.
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  Speaker 8: When Tim Cook had.
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  Speaker 9: Taken over from Jobs in 2011, obviously that was a
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  Speaker 9: blockbuster with Jobs being the company's.
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  Speaker 8: Visionary and product creator.
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  Speaker 9: But Cook had already served as interim CEO three times
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  Speaker 9: by the time he took over full-time as CEO, right?
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  Speaker 9: And it was more sudden, so he was sort of
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  Speaker 9: thrown into that. Jobs, obviously, unfortunately, wasn't around. Cook is
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  Speaker 9: now going to be around, and this is going to
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  Speaker 9: make things a little bit more interesting. It'll be fascinating
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  Speaker 9: to see how quickly Ternus is able to reshape Apple
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  Speaker 9: in his own image.
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  Speaker 7: Tim Cook was a supply chain genius. He was COO
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  Speaker 7: before he became CEO. What he was able to do
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  Speaker 7: is really perfect how Apple sourced the materials for its
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  Speaker 7: various products. What is John Ternus' genius? What area has
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  Speaker 7: he perfected that he brings to the table?
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  Speaker 9: So remember when you had an iPhone, I don't know, five, 10,
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  Speaker 9: 15 years ago, and you would drop it and it
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  Speaker 9: would shatter immediately or get a giant dent and the
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  Speaker 9: glass would be everywhere. When was the last time you
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  Speaker 9: dropped your iPhone and the thing broke into a million pieces?
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  Speaker 8: Can you remember? Probably not.
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  Speaker 1: I don't know.
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  Speaker 6: I've been dropping it quite a bit, but it stays intact.
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  Speaker 1: The case gets dented a little bit, but that's about it, right?
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  Speaker 8: Yeah.
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  Speaker 9: Yeah.
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  Speaker 8: So that's the hallmark of John Ternus.
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  Speaker 9: What he's done is he's made Apple's products a lot
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  Speaker 9: more reliable, using better materials, better processes to make them
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  Speaker 9: longer lasting, right? And so Ternus is going to continue
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  Speaker 9: with hardware innovation. They didn't necessarily replace him with a
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  Speaker 9: new hardware chief. They elevated Johnny Sruji, who was running
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  Speaker 9: the hardware technologies group. But Ternus is still going to
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  Speaker 9: be setting the agenda when it comes to Apple product
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  Speaker 9: development and heavily involved with that as CEO. I mean,
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  Speaker 9: he told employees that Tim Cook told him the best
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  Speaker 9: thing he can do is pick his spots. And those
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  Speaker 9: spots should be where he could add the most value.
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  Speaker 9: And he believes adding the most value will be through
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  Speaker 9: hardware engineering and product development and conception. And he's going
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  Speaker 9: to leave a lot of the nitty-gritty stuff, the operations side, procurement,
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  Speaker 9: supply chain, legal, government affairs, services software to his lieutenants
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  Speaker 9: on the executive team, leaning on them pretty heavily, as
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  Speaker 9: Cook did in many areas.
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  Speaker 6: So stocks have been going up. Apple stock has been
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  Speaker 6: going up. It seems like investors are excited about this change,
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  Speaker 6: but it also seems like this is a pretty pivotal
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  Speaker 6: moment for Apple. There are new, very splashy products online.
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  Speaker 6: Scarlett and I were just talking about the foldable iPhone
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  Speaker 6: that everyone's kind of anticipating. Is this a very high
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  Speaker 6: stakes moment or do you think this is a pretty
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  Speaker 6: safe transition?
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  Speaker 8: Oh, I mean, I think it's both.
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  Speaker 9: I think it's a safe transition, but it's also high
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  Speaker 9: stakes in that they need to get these new products right.
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  Speaker 9: They've been working on this major new product roadmap for
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  Speaker 9: half a decade, and it's time to start seeing the
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  Speaker 9: fruit of that. And we will, starting with the folding phone.
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  Speaker 9: Next Wednesday, the 18 Pro and Pro Max, minor changes,
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  Speaker 9: new colors, better cameras, faster processors, watches, new silicon, new features,
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  Speaker 9: and what have you, related to fitness tracking and heart rates.
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  Speaker 9: But the bombshell is going to be that foldable iPhone.
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  Speaker 9: And then that big new smart home device will be
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  Speaker 9: coming this year as well. Facial recognition, you walk up
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  Speaker 9: to it, knows who you are, and it'll preload all
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  Speaker 9: your content. Basically like an Alexa Echo show on steroids.
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  Speaker 8: But with all your Apple stuff. So people are pretty
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  Speaker 8: psyched for that too.
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  Speaker 7: So I guess one knock against Tim Cook was that
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  Speaker 7: he probably did not move the needle enough for Apple
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  Speaker 7: and AI. Apple kind of lagged behind its peers and
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  Speaker 7: in some ways that might have worked out for the
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  Speaker 7: better as well, given that Apple didn't have to spend
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  Speaker 7: hundreds of billions of dollars the way that its big
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  Speaker 7: tech peers did. What does John Ternus bring to the
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  Speaker 7: table when it comes to AI development, AI innovation?
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  Speaker 8: Nothing.
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  Speaker 9: I look at this, it's so funny, like in the
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  Speaker 9: NBA sometimes or in sports in general, the team will
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  Speaker 9: fire a coach because they didn't like their performance in
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  Speaker 9: one regard or another. Then they'll elevate the assistant coach
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  Speaker 9: and he'll become the new head coach.
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  Speaker 8: And it's like, dude, you were there the whole time, right?
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  Speaker 8: Where was your impact?
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  Speaker 9: And it's like, there's always a hope that you bring
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  Speaker 9: in someone new who was already there and you're going
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  Speaker 9: to see a major change. I think job number one
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  Speaker 9: for Ternus is making those shifts related to AI and
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  Speaker 9: making it a bigger priority. But he's been there the
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  Speaker 9: whole time too. And the guy running AI now has
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  Speaker 9: been there the whole time too, right? That's their software chief,
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  Speaker 9: Craig Federighi. And so the big changes to AI leadership
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  Speaker 9: there happened already last year when Cook fired the head
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  Speaker 9: of AI, John Giandrea, and put in the head of
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  Speaker 9: the Vision Pro as the head of Siri. And so
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  Speaker 9: I'm not expecting anything majorly different under Ternus from AI
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  Speaker 9: in the short term than Cook did, because if those
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  Speaker 9: changes were going to happen, they would already be in motion,
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  Speaker 9: and I'm not seeing that. But again, these things take time,
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  Speaker 9: and so we'll see what happens. But I don't think
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  Speaker 9: the shift from Cook to Ternus represents some major earthquake
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  Speaker 9: of changes that are going to happen imminently.
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  Speaker 6: Does Apple need to get into AI? I mean, I'm
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  Speaker 6: not sure, can it afford to not do that, but
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  Speaker 6: also maybe it's in a different space?
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  Speaker 8: It's a little unclear.
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  Speaker 9: I think once we see the IPOs of OpenAI and
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  Speaker 9: Anthropic happen, I think once we see how good these models.
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  Speaker 8: Get, you know, I was talking to someone yesterday. And
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  Speaker 8: where OpenAI and.
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  Speaker 9: Plot are heading is not just them providing models, but
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  Speaker 9: these being models that could build their own models that
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  Speaker 9: can build their own models. So things are about to
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  Speaker 9: get pretty scary here. And so it could be nice
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  Speaker 9: for Apple to take a stance against this, but it
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  Speaker 9: feels like it's something they fell into backwards.
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  Speaker 8: So we'll see what happens. I'm not expecting some sort
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  Speaker 8: of Apple AI revolution.
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  Speaker 7: Well, didn't OpenAI hire Johnny Ive and are building out
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  Speaker 7: their own hardware for their AI offerings? So if anything,
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  Speaker 7: OpenAI and perhaps Anthropic are moving into Apple space.
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  Speaker 9: I can't speak to Anthropic. I don't know if they're
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  Speaker 9: doing that. But in terms of OpenAI, yes. And Apple
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  Speaker 9: is suing them to a very large degree. And they
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  Speaker 9: keep throwing pot shots at each other. And so we'll
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  Speaker 9: see what happens there. OpenAI put out a filing overnight
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  Speaker 9: that basically said that they can't get anyone from Apple
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  Speaker 9: anymore because everyone from Apple is too scared to come
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  Speaker 9: to OpenAI now, thinking they're going to be sued too.
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  Speaker 8: So we'll see how this shakes out.
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  Speaker 7: Mark, do you get a review copy of this foldable
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  Speaker 7: phone when it comes out?
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  Speaker 8: Absolutely not. I'm going to have to buy my own.
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  Speaker 9: My colleague, Chris Welch, hopefully will get a review unit
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  Speaker 9: and he'll review the copy that Apple provides and I'll
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  Speaker 9: review the one I bought. And between the two of us,
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  Speaker 9: hopefully Bloomberg readers will get a really good idea and
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  Speaker 9: probably different perspectives on what this phone is like.
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  Speaker 8: I come from the Apple ecosystem. Chris is, you know,
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  Speaker 8: ingrained in the Android ecosystem.
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  Speaker 7: Oh, okay.
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  Speaker 9: And so, you know, you'll see a perspective from someone
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  Speaker 9: who's deep in Android and see a perspective from someone
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  Speaker 9: who's used an iPhone the last 20 years.
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  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 5: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
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  Speaker 5: you get your podcasts or watch us live on YouTube.
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  Speaker 7: Let's stay on the tech theme because yet another deal
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  Speaker 7: in the AI computing world that's actually tied to NVIDIA.
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  Speaker 7: And it involves one of the hottest companies that has
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  Speaker 7: yet to go public, and that is Anthropic. Let's bring
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  Speaker 7: in Ed Ludlow. He is our B-Tech anchor joining us
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  Speaker 7: from San Francisco. This is one of the big tech
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  Speaker 7: stories of the day. Ed, and it's about how Anthropic
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  Speaker 7: has sealed this $ 35 billion cloud deal with a company
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  Speaker 7: that is backed by NVIDIA.
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  Speaker 1: Just talk us through what's happening here.
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  Speaker 2: It is.
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  Speaker 8: Lovely.
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  Speaker 4: Thank you for having me. Anthropic has agreed to pay
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  Speaker 4: $ 35 billion to Lambda, which is an NVIDIA-backed compute platform.
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  Speaker 4: It's kind of a hybrid between a NeoCloud and a
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  Speaker 4: company that's worked on its own inference-based platforms. This is
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  Speaker 4: for a data center in Texas developed by a developer
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  Speaker 4: called Hut8, which isn't really a relevant part of the story.
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  Speaker 4: But what's interesting is the journals added a bit to
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  Speaker 4: the reporting saying that NVIDIA itself holds the lease on
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  Speaker 4: the facility. And it's kind of another example of NVIDIA
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  Speaker 4: being a conduit, right? We talked a lot about circular
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  Speaker 4: financing where NVIDIA invests in or backstops the financing of
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  Speaker 4: certain projects. But in this case, it greases the wheels
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  Speaker 4: by holding the lease and then allowing for a third party, Anthropic,
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  Speaker 4: to rent the compute, which is very interesting. It's a
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  Speaker 4: different model from some of the other data centers that
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  Speaker 4: are out there.
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  Speaker 8: Yeah.
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  Speaker 6: Why is NVIDIA doing this? Because from what I understand,
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  Speaker 6: it does a lot of kind of bankrolling and backing
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  Speaker 6: up of these kinds of deals. What is in it
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  Speaker 6: for NVIDIA?
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  Speaker 4: Yeah, it depends on the specific case study and how
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  Speaker 4: you define circular financing in that case study. But in
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  Speaker 4: this case, what NVIDIA argues is that there is a
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  Speaker 4: generation of startups, Anthropic included, which is a bit rich.
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  Speaker 4: because Anthropic has raised hundreds of billions of dollars in
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  Speaker 4: the private markets and is about to try and match
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  Speaker 4: the biggest IPO of all time. But the basic NVIDIA
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  Speaker 4: argument is, historically, those startups don't have access to the
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  Speaker 4: levels of capital they need to grow. You think about
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  Speaker 4: how venture-backed companies in particular have worked historically. They raise
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  Speaker 4: a few million dollars, then tens of millions of dollars,
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  Speaker 4: then hundreds of millions of dollars. Out of the gate,
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  Speaker 4: these companies need billions of dollars. And so NVIDIA says,
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  Speaker 4: we have that. We have the money. Why not use
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  Speaker 4: it for something good? It's not immediately obvious what else
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  Speaker 4: they'd use it for off their own balance sheet anyway.
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  Speaker 8: All right.
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  Speaker 1: Thank you for that context.
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  Speaker 7: We look forward to more announcements tied to NVIDIA. It
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  Speaker 7: seems like every cloud deal out there that's in the
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  Speaker 7: tens of billions of dollars somehow involves Jensen Huang and NVIDIA.
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  Speaker 7: Before we let you go, Ed, John Tucker was talking
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  Speaker 7: about Apple earlier, how there's a change at the top
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  Speaker 7: for that company. If you go to the MGMT function
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  Speaker 7: on the Bloomberg terminal, you can actually track how the
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  Speaker 7: stock has performed under different leaders. And of course, today
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  Speaker 7: marks the first day of John Ternes' as CEO of Apple.
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  Speaker 7: His first order will be the big unveiling of the
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  Speaker 7: latest products.
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  Speaker 1: When is that and what are we anticipating?
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  Speaker 4: Yeah, I'll be at Apple Park Cupertino next Wednesday, September 9th. And,
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  Speaker 4: you know, it is with immediacy that John Ternus is
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  Speaker 4: on stage, right, delivering the next generation of Apple hardware,
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  Speaker 4: which we anticipate to be a folding iPhone along with
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  Speaker 4: the iPhone 18 generation. Other than that, you know, if
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  Speaker 4: you go on the Apple website, they've updated who the
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  Speaker 4: CEO is. So there aren't that many immediate changes that
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  Speaker 4: are expected. You know, Tim Cook's not going very far.
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  Speaker 4: He becomes executive chair effective today, but much more focused on.
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  Speaker 4: Apple's relationship with governments around the world, its trade policy,
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  Speaker 4: particularly with the view on China. For John Ternes, he's
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  Speaker 4: a hardware guy and a product guy. And Apple has
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  Speaker 4: a very large management team that are good at finance, sales, legal.
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  Speaker 4: And a lot of the reporting is about how John
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  Speaker 4: Ternes is going to lean on them. But it will
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  Speaker 4: be interesting to see if some of the changes he
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  Speaker 4: makes in the near term are to the leadership at
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  Speaker 4: the top of Apple and those around him.
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  Speaker 6: It seems like Apple stock has been doing quite well.
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  Speaker 6: Is that a vote of confidence for the new CEO?
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  Speaker 4: It's very interesting because Apple was penalized for such a
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  Speaker 4: long time for not having an AI story. And then
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  Speaker 4: it flipped completely where Apple, from a stock perspective, was
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  Speaker 4: cheered because it did not have the same capital expenditures
• 12:35
  Speaker 4: story that the other biggest technology companies had. They basically
• 12:38
  Speaker 4: were like, good for you, Apple. You're not spending hundreds
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  Speaker 4: of billions of dollars. And they wouldn't need to, right?
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  Speaker 4: That's not their business model. But that was a boon
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  Speaker 4: for the stock. Indeed, since Apple announced this transition, Tim
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  Speaker 4: Cook to John Ternus, there has been more buoyancy. And
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  Speaker 4: so it will be very interesting to see how the
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  Speaker 4: stock reacts to the release of those iPhone generations next Wednesday.
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  Speaker 4: That will be a catalyst in one direction or the other.
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  Speaker 4: Though I would caution, like, go back and read Bloomberg,
• 13:06
  Speaker 4: Mark Gurman's reporting. You know, he is very or more
• 13:10
  Speaker 4: than often right about what's coming and the details are
• 13:13
  Speaker 4: already out there, which has some impact of how it's
• 13:15
  Speaker 4: priced into the stock.
• 13:17
  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
• 13:24
  Speaker 5: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 13:28
  Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 13:31
  Speaker 5: Auto with the Bloomberg Business app. Listen on demand wherever
• 13:34
  Speaker 5: you get your podcasts or watch us live on YouTube.
• 13:38
  Speaker 7: Let's move on to the medical device equipment space.
• 13:42
  Speaker 1: Medtronic coming out with results.
• 13:44
  Speaker 7: The stock is higher this morning after it had a
• 13:46
  Speaker 7: beat last quarter. Matt Henriksen is our senior medtech analyst
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  Speaker 7: joining us from Princeton, New Jersey right now. Matt, you
• 13:54
  Speaker 7: say that these results help set the company up well
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  Speaker 7: to pivot to a robotic strategy. Just walk us through
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  Speaker 7: the results and how they help do that.
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  Speaker 2: Yeah, and I'll start with the 2Q results. Exceeded consensus
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  Speaker 2: expectations solidly this quarter, driven by their cardiac ablation business
• 14:13
  Speaker 2: and their cardiac rhythm businesses. You saw those type of
• 14:16
  Speaker 2: growth rates within cardiac ablation, 88%, and that's off of
• 14:20
  Speaker 2: a 50% growth in the second quarter of 2025. So
• 14:26
  Speaker 2: you're seeing that strong momentum there. This allows them to
• 14:31
  Speaker 2: then focus, you know, and be able to pivot on
• 14:34
  Speaker 2: these long-term drivers. And you saw that today with the
• 14:38
  Speaker 2: announcement that they were in a strategic partnership with Cornerstone
• 14:43
  Speaker 2: Robotic Systems in Asia. And that helps them create kind
• 14:47
  Speaker 2: of this multiple shots on goal approach. for the robotics
• 14:52
  Speaker 2: for soft tissue surgery to be able to augment kind
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  Speaker 2: of the Hugo robot, which is their internal development, and
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  Speaker 2: being able to provide options for these hospitals in Asia.
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  Speaker 6: So you mentioned the Hugo system. This is a robot-assisted surgery.
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  Speaker 6: Can you talk with us a little bit about that?
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  Speaker 6: What does that mean? What does that look like?
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  Speaker 8: Yeah, absolutely.
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  Speaker 2: And so basically it's a robotic arm and kind of
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  Speaker 2: a similar robotic arm that you may see in automotive plants.
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  Speaker 2: And it helps with the surgeons being able to create
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  Speaker 2: a more accurate placement or incision within the body, within
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  Speaker 2: the soft tissue. So if you're thinking of hernia repair,
• 15:36
  Speaker 2: if you're thinking of prostatectomies, these robotic arms allow to
• 15:39
  Speaker 2: get into places inside the body that you're really not
• 15:44
  Speaker 2: able to with an open procedure. They've launched their Hugo
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  Speaker 2: robot both in the U.S. and internationally. They highlighted 50,000
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  Speaker 2: cases done cumulatively, potentially by the end of this fiscal
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  Speaker 2: 2027 for them. And so adding this investment into a
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  Speaker 2: second robot just gives them that flexibility now to see
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  Speaker 2: if they can be able to branch out further into
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  Speaker 2: some of those international and some of those emerging markets.
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  Speaker 4: Okay.
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  Speaker 7: You say robotics, and I feel like that has to
• 16:15
  Speaker 7: be good for a big boost in the share price.
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  Speaker 7: I look at Medtronic's shares. They've done fairly well. They
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  Speaker 7: traded a multiple of 20 times reported earnings and 15
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  Speaker 7: times estimated earnings. Have investors priced in all the exciting
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  Speaker 7: robotic developments you've just been describing to us?
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  Speaker 2: I actually don't think they have. And one of the
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  Speaker 2: reasons is even though Medtronic is a large cap company,
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  Speaker 2: They're the David in this David and Goliath story within robotics.
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  Speaker 2: And Intuitive Surgical, which the ticker is ISRG, they're the
• 16:48
  Speaker 2: behemoth in this robotic surgery market. And when I was
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  Speaker 2: talking about 50,000 cases cumulatively, Intuitive has done 3 million
• 16:58
  Speaker 2: just in 2025 alone. So Medtronic has a lot to
• 17:02
  Speaker 2: catch up, but it's still a large market when you
• 17:04
  Speaker 2: think about that there's 20-plus million surgeries done worldwide. And
• 17:10
  Speaker 2: as we start thinking about, you know, conceptually using a
• 17:13
  Speaker 2: robot as a tool versus your open hand or you're using,
• 17:16
  Speaker 2: you know, your hands manually in open surgery, this is
• 17:19
  Speaker 2: a good opportunity for Medtronic to get in. It's a
• 17:22
  Speaker 2: long-term project, but it's still something that is the right
• 17:26
  Speaker 2: step for them as kind of these hospitals become more
• 17:28
  Speaker 2: automated and utilize these robots.
• 17:31
  Speaker 6: So the thing that is making Medtronic money now, you said,
• 17:35
  Speaker 6: is it to treat arrhythmia? It's ablation technology, is that right?
• 17:39
  Speaker 2: Yeah, it's cardiac ablation to treat atrial fibrillation and other
• 17:43
  Speaker 2: cardiac arrhythmias. The big momentum over the last few years
• 17:47
  Speaker 2: has been this technology called pulse field ablation. And basically,
• 17:50
  Speaker 2: it's a new energy source that kind of replaces the
• 17:53
  Speaker 2: traditional heat or the freezing technology that has been used.
• 17:57
  Speaker 2: So it's been shown to be safer, nearly as effective,
• 18:02
  Speaker 2: and it's a quicker procedure time. So these surgeons are
• 18:05
  Speaker 2: able to get to treating more of these patients throughout
• 18:09
  Speaker 2: the year. And that's also a large opportunity there, too.
• 18:12
  Speaker 2: There's over 30 million patients in the U.S. that have
• 18:15
  Speaker 2: AFib alone. So being able to treat these patients faster
• 18:20
  Speaker 2: allows more patients to be treated overall in the long run.
• 18:22
  Speaker 2: So there seems to be a long runway for this
• 18:24
  Speaker 2: type of growth in the cardiac ablation space, which then
• 18:27
  Speaker 2: kind of circles back to that supports kind of that
• 18:30
  Speaker 2: earnings growth, revenue growth for the long-term projects.
• 18:35
  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
• 18:42
  Speaker 5: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 18:46
  Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 18:49
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• 18:52
  Speaker 5: you get your podcasts or watch us live on YouTube.
• 18:57
  Speaker 7: This is Bloomberg Intelligence. Stacey Vanek-Smith and Scarlett Fu here
• 19:01
  Speaker 7: with you. Paul Sweeney is off for the day. We
• 19:05
  Speaker 7: do want to talk a little bit more about big tech.
• 19:08
  Speaker 7: Bill Gates published an op-ed last week really being very
• 19:13
  Speaker 7: critical of AI in a way that was surprising, I think.
• 19:16
  Speaker 1: Did you read it?
• 19:17
  Speaker 6: I've read parts of it. I haven't read the whole thing.
• 19:19
  Speaker 6: It was like 6,000 words. It's quite long, but it
• 19:21
  Speaker 6: was very splashy. He really came out saying, we're not
• 19:24
  Speaker 6: prepared for this. This is going to be potentially really catastrophic.
• 19:27
  Speaker 6: It was quite something.
• 19:28
  Speaker 1: It was quite something.
• 19:30
  Speaker 7: And Gautam Mukunda, lecturer at Yale School of Management, as
• 19:32
  Speaker 7: well as a Bloomberg Opinion contributor, has also read it
• 19:35
  Speaker 7: and thought about it in the context of what Silicon
• 19:39
  Speaker 7: Valley's leadership has been doing or not been doing. Gotham,
• 19:42
  Speaker 7: I think back to the early days of, you know,
• 19:45
  Speaker 7: when people were excited about the internet, Google had this motto,
• 19:47
  Speaker 7: don't be evil. And everyone was trying to make the
• 19:50
  Speaker 7: world a better place. There was that HBO show Silicon
• 19:53
  Speaker 7: Valley where, you know, they kind of openly mocked that
• 19:55
  Speaker 7: idea of, you know.
• 19:56
  Speaker 1: We're trying to make the world a better place.
• 19:58
  Speaker 7: And it feels like Silicon Valley in 2026 is very,
• 20:01
  Speaker 7: very different from that.
• 20:04
  Speaker 1: Yeah, it really is.
• 20:05
  Speaker 3: And there's been a generational transition. There's been a transition
• 20:08
  Speaker 3: from people who are primarily technologists to people whose motivations
• 20:12
  Speaker 3: are primarily financial. There's just been a.
• 20:16
  Speaker 8: But.
• 20:17
  Speaker 3: there's been a set of behaviors where AI, I think of,
• 20:21
  Speaker 3: is a capstone, not the trigger for what's going on,
• 20:24
  Speaker 3: not the root of the problem, where, you know, like
• 20:27
  Speaker 3: if we were to do the list of Facebook scandals,
• 20:29
  Speaker 3: we would kind of be here for a few days, right? Like,
• 20:32
  Speaker 3: it's not a short list. There are any number of others.
• 20:36
  Speaker 3: And I think AI just finally became a place where
• 20:38
  Speaker 3: the public pushed back and said, this is a chance
• 20:42
  Speaker 3: for us to put limits on these people. In one
• 20:45
  Speaker 3: of my earlier columns, I said, in the United States,
• 20:47
  Speaker 3: every data center is a referendum. And Silicon Valley is
• 20:50
  Speaker 3: losing that referendum about as decisively as I've ever seen
• 20:53
  Speaker 3: anyone lose one.
• 20:54
  Speaker 6: Well, one of the big concerns that Gates brought up,
• 20:56
  Speaker 6: and I think that a lot of people have, is
• 20:58
  Speaker 6: about jobs and AI potentially replacing jobs. Bill Gates called
• 21:01
  Speaker 6: for something called human-reserved jobs within companies. Can you talk
• 21:06
  Speaker 6: a little bit about that and maybe a little bit
• 21:08
  Speaker 6: about what kind of a threat AI poses to jobs
• 21:11
  Speaker 6: right now?
• 21:13
  Speaker 3: Yeah, so he set out, he said that there should
• 21:14
  Speaker 3: be categories of jobs that only humans are allowed to do.
• 21:18
  Speaker 8: And he gave a couple of examples.
• 21:20
  Speaker 3: I'll say I personally am kind of skeptical about that
• 21:22
  Speaker 3: one as a solution. He himself said that those categories
• 21:25
  Speaker 3: are going to change over time and there'll just be,
• 21:28
  Speaker 3: you know, there's just going to be a huge amount
• 21:29
  Speaker 3: of dispute about what people, what categories would that be?
• 21:32
  Speaker 8: How do we assign them?
• 21:33
  Speaker 3: And market pressures where companies will sort of find ways
• 21:36
  Speaker 3: around those circles. But the fascinating thing about AI is
• 21:40
  Speaker 3: we've had an enormous amount of discussion about, like, AI's
• 21:44
  Speaker 3: job creating devastating jobs, and it just isn't showing up
• 21:48
  Speaker 3: in the data, right?
• 21:49
  Speaker 8: It just is not.
• 21:49
  Speaker 1: I mean, it is early days.
• 21:50
  Speaker 3: There's actually not any dispute about that. Nobody's going, oh,
• 21:53
  Speaker 3: we're seeing it in the data. Why we're not seeing
• 21:55
  Speaker 3: it in the data is a really interesting question, but
• 21:57
  Speaker 3: we definitely aren't.
• 22:00
  Speaker 7: So I guess to follow on that, at some point,
• 22:04
  Speaker 7: it's going to start showing up in the data. And
• 22:06
  Speaker 7: right now, data centers has become the issue that people
• 22:10
  Speaker 7: have really gathered around.
• 22:12
  Speaker 1: We're seeing it from.
• 22:13
  Speaker 7: Elected officials in places like Texas, where you don't really
• 22:16
  Speaker 7: expect it because it's such a deep red state. And
• 22:18
  Speaker 7: I believe Greg Abbott even called Texas the epicenter of
• 22:21
  Speaker 7: AI development. Yet, when we talk to political analysts like
• 22:25
  Speaker 7: Henrietta Trace of Veta Partners, she points out that, yes,
• 22:28
  Speaker 7: it's a big deal now, but post-election, post-midterm election, the
• 22:32
  Speaker 7: big tech companies are just going to give money to
• 22:35
  Speaker 7: whoever comes out ahead, including Democrats and Republicans. And all that,
• 22:39
  Speaker 7: you know, jawboning about data centers and we don't want
• 22:42
  Speaker 7: this in our backyard is going to die down and
• 22:44
  Speaker 7: they're going to move towards, like, let's create more things
• 22:46
  Speaker 7: to build more jobs once again.
• 22:48
  Speaker 1: How do you think about the political impact there?
• 22:49
  Speaker 3: So they are, and that process has already started, where
• 22:51
  Speaker 3: Facebook is cutting $ 10 million checks to both Democrats and
• 22:54
  Speaker 3: Republicans in this cycle. I am totally confident that that
• 22:58
  Speaker 3: is what the leaders of Silicon Valley are trying to do,
• 23:02
  Speaker 3: because it is way easier to write checks than it
• 23:04
  Speaker 3: is to engage in some introspection and actually think about
• 23:07
  Speaker 3: why people are, you know, actually sort of honestly trying
• 23:10
  Speaker 3: to answer the question, why do people hate us? But
• 23:13
  Speaker 3: I'm pretty skeptical it's going to work. And that's just
• 23:16
  Speaker 3: for a very simple reason. As far as I can tell,
• 23:20
  Speaker 3: in the history of polling, The issue on which liberals
• 23:25
  Speaker 3: and conservatives are most strongly in agreement is they both
• 23:28
  Speaker 3: hate data centers, right? Like we are a country united
• 23:32
  Speaker 3: by only one thing right now. We all hate data centers. Now,
• 23:36
  Speaker 3: you may think that's right. You may think that's wrong.
• 23:38
  Speaker 3: I'm not making an argument that that belief is correct.
• 23:41
  Speaker 3: I'm just telling you that is the facts on the ground.
• 23:43
  Speaker 3: And however rich Silicon Valley is, it's not clear to
• 23:45
  Speaker 3: me you can buy your way out of that.
• 23:49
  Speaker 6: Well, I mean, Gates did talk a lot about the
• 23:51
  Speaker 6: impact that AI is going to have on all aspects
• 23:55
  Speaker 6: of our culture and our economy, including jobs. I mean,
• 23:58
  Speaker 6: he compared it at one point to 9-11, saying it
• 24:01
  Speaker 6: would affect national security, education, taxation, elections, all of that.
• 24:05
  Speaker 6: Do you think that's true? I mean, are we unprepared?
• 24:08
  Speaker 6: And he said governments were unprepared for this change. Do
• 24:11
  Speaker 6: you think that's true? Do you think this is something
• 24:13
  Speaker 6: governments need to really jump on and start really preparing
• 24:16
  Speaker 6: for a pretty catastrophic level change?
• 24:19
  Speaker 8: So I don't know, right?
• 24:21
  Speaker 3: There's going to be a huge– there's definitely going to
• 24:23
  Speaker 3: be change. My very strong suspicion is that change is
• 24:26
  Speaker 3: not going to look that much like we think.
• 24:27
  Speaker 8: It does, right?
• 24:29
  Speaker 3: So there's the whole wave of hundreds of billions or
• 24:33
  Speaker 3: even trillions of dollars of investment that are sort of
• 24:36
  Speaker 3: driving the frontier of these models forward and trying to
• 24:39
  Speaker 3: do that. from using them and from like sort of
• 24:42
  Speaker 3: watching how other businesses use them, it strikes me that
• 24:45
  Speaker 3: that may not actually be where the impact comes from.
• 24:48
  Speaker 3: That the impact may be much more likely to be
• 24:49
  Speaker 3: sort of low-end services that aren't frontier models, but that
• 24:53
  Speaker 3: provide things that people didn't have before. So if you
• 24:56
  Speaker 3: can't afford a lawyer, and Claude is a better option
• 25:00
  Speaker 3: for you than doing things on your own. If you
• 25:02
  Speaker 3: can afford a lawyer, then you definitely should be using
• 25:04
  Speaker 3: a lawyer. But for most Americans, having an AI is
• 25:09
  Speaker 3: better than having nothing. And better than nothing is pretty powerful.
• 25:13
  Speaker 3: That's something we really need to get a handle on
• 25:15
  Speaker 3: very quickly because you're going to start to see, as
• 25:18
  Speaker 3: for example, in elections, we're going to see that the
• 25:21
  Speaker 3: ability to generate infinite amounts of semi-plausible text freely is
• 25:27
  Speaker 3: already changing Internet discourse and sort of political discourse in
• 25:29
  Speaker 3: ways that we're just beginning to think about.
• 25:33
  Speaker 7: Is there anyone in Silicon Valley, any corporate executive that
• 25:36
  Speaker 7: you admire right now that you think is kind of
• 25:38
  Speaker 7: standing up and doing what you believe is the right thing?
• 25:42
  Speaker 3: So I think even when I don't agree with him,
• 25:45
  Speaker 3: I will say that I think Dario Amadai is completely
• 25:47
  Speaker 3: sincere in his belief that this is a huge problem
• 25:51
  Speaker 3: and that we need to get ahead of it and
• 25:52
  Speaker 3: try to do it. There are lots of other people
• 25:54
  Speaker 3: who seem to be primarily financially motivated and they're talking
• 25:57
  Speaker 3: their book. I have never met him. I have never
• 26:00
  Speaker 3: personally interacted with him. But Everything he does sort of
• 26:03
  Speaker 3: tells a consistent story that he thinks this is, one,
• 26:06
  Speaker 3: the most important thing happening in the world right now, which, again,
• 26:09
  Speaker 3: I'm not sure he's right about that, but I don't doubt.
• 26:11
  Speaker 8: That he believes it.
• 26:12
  Speaker 3: And, two, that he's willing to make real sacrifices and
• 26:15
  Speaker 3: even hurt the business interests of his company to stand
• 26:18
  Speaker 3: on what he believes are the right principles. Even when
• 26:22
  Speaker 3: I don't agree with him, I admire the willingness of
• 26:24
  Speaker 3: someone to say, like, hey, I will take a financial
• 26:26
  Speaker 3: hit to do the right thing.
• 26:27
  Speaker 8: Got it.
• 26:28
  Speaker 5: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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• 26:37
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• 26:46
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