Bloomberg’s Caroline Hyde and Ed Ludlow discuss the impact of the stablecoin legislation that passed the Senate with White House AI and Crypto Czar David Sacks. Plus, Klarna CEO Sebastian Siemiatkowski talks about the startup's super-app ambitions; Zoox CEO Aicha Evans joins from the company’s new facility to mass-produce robotaxis; and OpenAI CEO Sam Altman claims Meta is offering bonuses as high as $100 million to OpenAI staffers to jump ships.
Bloomberg Tech is alive from coast to coast, with Caroline Hide in New York and Eva low into En frances Go.
This is Bloomberg Tech coming up. Open Ai CEO Sam Altman says Meta offered his employees signing bonuses as high as one hundred million dollars.
Plus it's a win for the crypto industry. After a stable coin bill passes the Senate, we discussed with the White House cryptos are David.
Sachs and another extension for the sale of TikTok. We have Frank McCourt Jr. To talk through where his bid stands.
Meanwhile, we talk about his market. The macro perspective, ED, is one of a FED decision in but a few hours, the fact that the Middle East tensions will we see outreach between the US in Iran. At the moment, we seeing a buying signal. We're up six percent on the NASAC. Most of those magnificent seven names training higher. But ED, you're focusing in on one particular name.
Yeah, I'm looking at Meta shares a kind of like modestly higher up half a percentage point. Meta, open Ai, Scale i AI have all been in the news a lot recently. The headlight right now is because of this.
They started making these like giant offers to you know a lot of people on our team, you know, like hund't mind our signing bonuses more than that comper years.
And I'm actually it is crazy.
I'm really happy that, at least so far, none of our best people have decided to take them up on that.
Bloomberg has reached out to Meta, but we've not heard back on a request for comment. For more on Meta and the competition for AI talent, Bloomberg's Jackie Duellis joins us. Now, Jackie, what we didn't hear in the rest of that conversation with his brother in Uncapped He went on to really say some damning things, perhaps about Meta and the fact that they lack innovation and ultimately is not losing talent because they want to stay for the mission of Open AI. How fierce is it out there right now?
Well, there's a few things that we can draw from his comments on the podcast. One, it confirms that there's this new chapter in the AI talent wars. It's always been fears, but it's reaching a new level now.
One hundred million.
Dollar bonuses is something we've never heard of before, and it's really telling of how much Meta is willing to pay to regain its edge in this AI race.
Altman's comments also highlight, like you said, there is confidence that it's going to take more than just money to bring the best and brightest to your team. If you look at open AI's mission statement, they say that they think about their work for the benefit of humanity. That's really bold and large and purposeful. Whereas Meta I looked up their mission statement earlier and it says we're advancing AI for a more connected world to accelerate the potential future META products for the benefit of people. It's not as deep if you really dig into it, Jackie.
A big part of the conversation that Sam Altman was having with the reasons why one hundred million dollars isn't enough to get open A employees to go to Meta. What was his argument.
Part of the.
Argument is this larger purpose and also that they're not as innovative that you know, people want to go to a place where they feel like they're going to be able to do their best work and some of that culture problem that we've seen with Meta, and you know they've also admitted in the past that they kind of have trouble with middle management and just kind of the almost internal bureaucracy of how you get things out there that doesn't exist to the same degree according to all men at Open AI. And so when you think about the people that are going to go over, they won't want to be able to have that assurance that their ideas are actually going to make it into reality.
And Jackie, they want to be on the winning team. They want to get to AGI first, and that seems to be the point of this. There's no point coming second. You need to be at the business that leaves the charge. And interestingly, those pay packages have led on some significant talent to the superintelligence team from DeepMind, from sesame AI.
That's right, it's but you know, we have to remember that they are working in a new kind of organization.
Meta at the end of the day needs.
To incorporate this technology into its products, which is, you know, the money maker they have shareholders they need to appease on a quarterly basis, and that kind of pressure could also affect the way the speed at which they work, how quickly they roll out these these tools. But AGI super Intelligence, this is new ground for Meta. They they haven't really shredded this sort of landscape before in the same way that open ai was really founded on these principles to to create a gi and so you know, you have the best and brightest, going, really intelligent people, but we've seen some uh friction, some tension and.
You know going on in.
Its own in its fair team, the the research team inside Mata, So they're not exactly going into a place that has this all figure it out.
Bloomberg, Jackie de Ballas, thank you very much. Let's get to a story that broke in the last hour. Open ai is phasing out the work it does with scale Ai, cutting ties with that company just days after Meta's fourteen billion dollar investment. Bloomboath Rachel Metz joins us with more So, I think there's a very important distinction of what's happening here. Open i has existing contracts with scale Ai, but what we've learned is that that relationship is going to change in the future.
Yes, open ai is phasing out the remaining work that is doing with scale Ai.
The company has.
Branched out a lot over the past few years as its data needs have expanded vastly, and also changed based on the kinds of models that it's building. So at this point Scale represents the companies puts as a very small fraction of its business, but over time it's going to now be totally phasing that out.
Chill.
These two stories, yours and Jackie's, are linked the narratives because of course Alexander Wang goes to the superintelligence team over at Meta and indeed takes a lot of the talent from SCALEAI. There other companies, perhaps not just open Ai, start to move away from SCALEAI. Are you hearing it elsewhere that maybe these contracts get undone in the future.
We are definitely hearing that companies that provide data and data services. It's a very fractured, fragmented space.
And there are a lot of companies.
That are much less known than Scale but that are also worked with by these companies like open Ai Andthropic, Google and many others. And I know they're seeing a surge of inbound interest and they also are hearing from some nervousness from some of their customers. Companies tend to work with a bunch of players, and it is possible that this tie up, even the Scale has said it will remain as an independent business.
It will make people nervous.
We should say that Scale ai did decline to comment on the story, just as Meta declined to comment on the Sam Outman claims on comp The history of Scale is interesting because there's an element of manual work that they're doing and they relied on this kind of army of contractors. Just explain that the basics of that, because my reading of your story is the open AI was thinking about the relationship over the past year before a lot of this happened.
Anyway, Yes, so Scale ai at You're absolutely correct. It started out as a business that had a large number of contractors that were paid to label data for AI models. Over time, though, the AI market has shifted and shifted quite rapidly, so at this point, while it still has that legacy human data labeling business, it's also expanded into a few other areas, and one of them is increasingly hiring experts, experts that might work a few hours on the nights or weekend, someone with a PhD or a law degree, and instead of labeling data directly, what they're.
Doing is coming up with difficult tasks for EI models to solve.
And that's also something that's become increasingly important to open AI, but it seems like skill is opening. I felt that skill was not quite up to the level that it needed to support its products with this kind of work.
Remokes Rachel Mets. We appreciate it, thank you. Let's just talk about Emil Musk's AI startup now xai. It is burning through one billion dollars a month, with expected losses of thirteen billion in twenty twenty five due to the high costs of building advanced AI models.
Now.
This is all according to sources, who say that to cover the gap, musk start up is currently trying to raise nine point three billion dollars in debt in equity. But even before the money is in the bank, the company has plans to spend more than half of it is the next three months alone it Amazon CEO Andy Jesse says he expects his workforce to shrink as a handles more tasks. In an email to employees yesterday, Jasi wrote that over the next few years, Amazon expects to quote reduce our total corporate workforce. Is the later CEO to warn of AI's impact on headcount. Now Amazon had over one and a half million employees at the end of March, mostly though in warehouse jobs ed.
Another company that's warned about the impact of AI on the workforce is Klana, embracing generatorve AI tools, though with some change of heart on hiring for customer services. Today, the startup, known for its buy and now pay Lada service, is entering the mobile market with plans to launch a thirty dollars per month service in the US, with plans to expand into the UK and Germany later this year. Klana's CEO Sebastian Schmierkowski joins us now welcome to the world of Mvno. It was a headline I didn't expect to see, Sebastian. I mean, the simple question for claner is why why do this?
It comes back actually to the fact that we do believe the future is a digital financial assistant that helps you save time, save money. And in this case, if we not only identify that one of our customers can save money using this, but we can actually put it, bundle it together and offer it by this seamless experience of just a button say yes, I would like to get a better price or a better offer, and here it is and it's live on my phone with virtual SIM cards. Now you can get it live very very quickly. That makes a lot of sense. So it's just a way for us to kind of bundle more services and value to our existing customer base.
The mechanism, right is that this is on the AT and T network forty dollars a month. Does Klana make any money on that arrangement?
We do, But most importantly this adds value to our customer base.
I think also, like one of my beliefs is that if you have if.
We're going to have truly digital financial assistance that can recognize can come to you and wake you up in the morning and say I can save you on the carrier bill, I can save you on electricity bill. The only thing you need to do is say yes, and I'll take care of all the switching. I'll do everything, you all the paperwork. So you're just going to save ten dollars a month or whatever it is.
The point is.
What that means is the excess profits that have existed in utilities, in banking and all these things will have to come down because we are predominantly stuck with our existing providers, not because we love them, not because they're awesome, but because we hate switching and we hate leading reading boring legal terms.
To realize is this offer really better or not? Right?
So the point is that, like we believe that their marginsy in these services will be significantly lower going forward.
And that's why. Also it's smarter of us to who are.
A new entrance into this industry, to come in with a very attractive offer from day one, rather than believe that we can lure people into some long, lengthy contracts and make too much money on them over time.
New entrants that already serve twenty five million active users here in the United States, many users who associate you really would buy now, pay later. How is that narrative shifting? How were starting to see you as everything happ instead?
Well, definitely a neo bank at least.
I think that the neo banking concept again comes back to that digital financial assistant, that we want to help people save time, save money, and have them not worry about their finances. We want to help them with all of that, and that is kind of what banking was supposed to do. But at some point in time that banker got a little bit too smart realized you didn't really have that good understanding of your own stuff and put you in some pension funds where they were charging you to I fees on it.
Like that has to change.
We have to come back and be in customer obsessed and offer it the greatest value at the lowest you know, in the highest quality, at the most affordable price.
So that is what we're doing.
And to us, it's everything related to you know, your every day spending, and phone is part of your everyday spending, right, It's a every day.
Cost for you. So this this falls very naturally into that.
You the Trump organization, everyone is getting into the phone companies. But I'm interested, Sebastian, and you say your customer obsessed. To be customer obsessed, you have to be employee obsessed. I'm interested on the shift you've made when it comes to customer services. You've come on the show before and said we're all in on general to AI, I could place, I could replace myself as CEO. I'm replacing customer services. I don't need to add in terms of people and headcount. But you've changed your mind on that.
Well, Partially what we've said is that, like, look, I think in many countries you'll see that in the last ten to twenty years, our doctors and nurses have spent less and less time with patients and more and more times on administrative tasks. In addition to that, the cost of administration in healthcare has risen much faster than the amount of money spent on actual doctors, nurses and being available to patients. So what this AI technology can enable us to do is to again take all the administrative burdens out, make those be processed by AI and allow doctors and nurses to be available and actually spend time on patients. And this is the same for us as a company. We can use ais AT technology so that when people want to speak to us and if they want to speak to a human, which we want to make sure that everyone who wants to speak to human should always be able to do so, we also want to make sure that those humans have less administrative task and can actually spend more time. So to me, the value of human connection rises in the world of AI.
It becomes more valuable.
It becomes more expected that you have people that have time to talk to you properly, not rushed in the customer service center, that can actually sit down with you and resolve your errands and so to us two things can be so true. At the same point of time, we can use AI to take and automate the boring and mundane task away, and we at the same point of I must recognize that people will expect a human connection Sebastian.
Being an everything app or everything platform is a goal and vision you share with others. X has similar ambitions, particularly in finance, right, But Uber would also say there are elements of its platform that in the future it can move into the areas you're talking about. Where do you see yourself sitting and who are your rivals in that domain?
It's the billion dollar question, my friend, in the silicon value right now, will there be one assistant to serve all, one ring to forge them all or will there be multiple assistants?
Right?
And the answer is nobody knows.
I at least for one, need to know that our assistant digital financial system needs to be the best in the world at what it does for our customers, and hopefully people want to use it for that now. On the other hand, as much as some people are yeah, of course, it's just going to be one. I've been around twenty years long enough to remember in two thousand and seven, when Facebook was supposed to be where all of Internet happened, and all of Internet was going to happen inside Facebook, that didn't.
Actually materialize that way.
So I'm still probably in the camp that there will be a few really smart assistants that help you on different topics and that you trust more on specific topics than others.
But this is the billion dollar question.
And we're old enough to remember that Klan is older than Facebook Meta. So the IPO not happening this year, mind it next year.
Well, I would say market conditions look brighter than they did back in April, but now, as you know, I can't comment on.
That, so I'm sorry.
I would love to say something more than that, but I think at least it's great to see that markets look better.
Sebastian is always great talking to you. Thank you, Knnescio. Sebastian instrum Kowski.
Robotaxi firm Zekes has opened a production facility in the Bay Area that says has the capacity to turn out ten thousand robotaxes a year. The Amazon unit's been testing its purpose built robotaxis that have no steering wheel wall pedals in locations across San Francisco and Las Vegas.
Zooks.
CEO I S. Evans joins us from the new facility, and the obvious question is, like ten thousand robotaxes a year at full scale, it's a lot of potential, But what's the reality. I've always known you to be very pragmatic. Give me the sort of target for this year and next year for what we'll roll off the line.
Yeah, the reality is really, first of all, thanks for having me ed.
Good to see you.
The reality is that we're just ready. We are, as you know, we're very excited. We're finally headed to our commercial lounge in starting in Las Vegas. Ladis is here and from there you have more and more robot taxis coming in than we have San Francisco. Right after that Austin and Miami coming up, and so we're gearing up to basically be ready because as you know, with our robot taxi it's purpose built serial production in the United States, So putting the capacity in place and then turning it on little by little as we go city by city.
The ten thousand numbers important in the context of federal rules. Right right now, there's a limit on the number of vehicles that can be on public roads that have no driver controls, just like your vehicle. But Nitza's looking at it. How are those talks going with nitzer And do you think you'll get that exemption to really scale up in the coming year or two.
So, as you know, we want the self certification route, that's all that was available at the time. I have to say we're very grateful to the administration for the progress in this innovation is happening worldwide and so making sure the US is prepared is really key. And the talks aren't going really well. I've always said that this is a huge transformation in transportation and working hand in hand with the regulatory authorities is key. And really really impressed with the speed so far.
How about Amazon support as well? How much are they loosening the purse strings? How much budget have you got Asia.
So I don't know about loosening the first string. We want to be every day. Were still a startup. We have a lot of work to do. This is very expensive and so what I can say is that Amazon has been very supportive. They ask us good questions, they support us, and you know, of course we come in with a budget.
We discuss it.
We come in with what we have to what we say we commit to doing, we have to do it. And if we don't do with their questions as there should be. But frankly, super super happy. It's been five years, so way past the dating period and a greatful to Amazon.
Full of relationship. What's interesting is they're also eyeing others on the block. I'm sure the competitors just tell us about the robo taxi competition weaimo and particularly from Tesla. Is this narrative good for you? How much has that impacted the government?
Look, we've always said this is a huge market right at scale after a sort of shelter meaning homes, apartments and dwellings. Transportation is one of the most important and also costly things. We know that it could be a lot safer than it is right now on the road, and so it's a big market, it's a big industry. It's good to have multiple players. I've been a public that we're super proud of way Moore, especially if you live in the areas they serve. I live in the San Francisco Bay area and I call them the cute Casper ghosts. They are roaming around and as far as Sessler, I've also said the more the merrier, I know they have their own path. I don't like to comment or criticize others. I'm sure they have their path laid out, and we all have to be on the same roads, and we're all subject to the same regulatory authorities.
I'm sure I've taken the Zoo's vehicle on the strip in Las Vegas, right, and you're inching towards commercial service, But I think people would really appreciate the literal understanding of what you'll do. Number of zoos vehicles on that strip, the pricing in charging fares for all of those tourists.
All right, So in terms of numbers right now, we have over a dozen or so roaming around the strip. I mean, you know, people could count them, so there's no point in not telling you the number. And they write every day because we have to learn it's not just self driving is the underlying technology. But at the end of the day, what the customer cares about is a wonderful experience that makes them feel special, that they are picked up where they want it to be picked up, dropped off where they wanted to be dropped off, and that it took a reasonable amount of time and they have a great experience while doing it, and then you also have operations behind that.
So you can expect us to be just.
You know, adding tens and tens and tens and serving the market and then controlling that relative to the demand. As far as pricing, obviously, I'm not going to get into the details of pricing, but customers are already used to a certain pricing, and we intend to be competitive, and we also intend to be ready for what happens at scale.
Ay.
Sure, Evans, it's great to talk to you. The CEO of Zoos or a backdrop, Welcome back to Blomberg Tech.
I'm Caroline hid in New York and I met Love Love in San Francisco. I wan look at the chip sector real quick, because there's bits and pieces of news driving markets. Two names I'm looking at are Marvel and Intel. Marvel best performer and then that's that one hundred and the socks. The news well, it's just been talking up its competence in AI at a conference. Frankly, Marvel does ace right custom silicon, but that's a significant gain and a lot of sales siders coming out and saying we like what we're hearing about Marvell and where it's going to fit in in that custom silicon landscape. Then you have Intel up two percent or so, a restructuring, new engineering leadership, new chief revenue officer, and the market's cheering it, although in a more muted way, probably carried than Marvell's getting. But always keeping an eye on the semiconductor space.
Now you are. We're also always keeping an eye on TikTok because the US deadline to divest or be banned, it's got a third count them, third extension from President Trump, the administration delaying the ban by another ninety days, allowing the social media app just keep on operating in the United States as it proceeds with negotiations. For more on the future of TikTok, Project Liberty founder long time bidder for TikTok, Frank mccott, JO Junior joins US. Now, Frank, this is a never ending story, is it not?
Well, it just yeah, it does seem that it's it's taking a long time to get a deal made here. You know, you had the two hundred and seventy days and then the two seventy five day extensions, and now another ninety days. So yeah, it's been a while, but you know, I've learned to be very patient, hang around the hoop.
A lot of good things get done when that happens.
And you know, my sense is and this is not a you know, this is pure, purely my opinion, but I think this is the last extension. I think ninety days, not seventy five days, is significant, and I think something gets done within the next ninety days or not.
But does it involve you. Have you been on the phone with the Vice president? Have you been involved in the negotiations.
You know, we were very much involved during the first extension and less so during the second.
Things have been relatively quiet as a.
Matter of fact.
So I don't know if I should, you know, draw any inferences there, but it's been fairly quiet overall. Look, I still love our chances, Caroline, because look, the legislation is very very clear on what is mandated. Our bid, as far as I know, is the only bid that actually qualifies, that actually meets the criteria in that legislation where we completely disentangle from.
The Chinese technology.
So, Frank, I want to get really detailed on this because on the other side of the table in this bidding process, there is a coalition of different individuals and technology companies whose proposals I understand it is outside what's legislated for, in other words, some element of collocation of data and licensing the algorithm. Would you just explain how your bid is distinct from that. Yeah, well, and I think you've hit the nail on the head. And what we are we're.
Not looking to co host the data or to use the Chinese algorithm.
Project Liberty is about empowering individuals, not exploiting them. So we're not interested in scraping people's down to surveilling them, right, spying on them, scraping their data, aggregating it, and then micro profiling people and then using a black box algorithm to manipulate them.
That's not what we're interested in.
And that's why TikTok is so attractive to us, because we can not only solve the national security issue, but we can move the user base in the data onto this new, clean, made in America stack, which doesn't rely on Chinese technology, doesn't surveil on people, and as a matter of fact, empowers people to permission the use of their data and get paid for it.
This is going to be the new Internet. It's going to happen sooner or later.
How many more days can go by where we're going to read about another horror story that is occurring with the current Internet technology, which is highly exploitive and highly predatory. The current model is not sustainable. In my opinion, it's going you change, we bring the sooner it change is the better, Frank.
As the extensions keep coming and the process continues, does the price for TikTok go up or down or stay the same?
Well, from our perspective, it stays the same because what we were buying, assuming the user base stays the same and there's no change in the numbers. As far as the value to others, I can't, I really can't comment on that, and I'd only be speculating. But you know, our view is we can put a really clear value on TikTok, the US TikTok, with the current user base, with the data, with the brand, without the algorithm.
Frank, we asked you, and we thank you for being so transparent about your conversations with the administration. What about with China? What about with byte dance, Because we understand much of the elongation of the process is they don't want to let go of the algorithm and they want to keep it INtime.
Caroline, I think that's a really important question you're asking. I don't think any of us know what China is ultimately going to do here, and I think it's a big if in this whole transaction. If I think, one thing we do know is they're not going to let.
Us TikTok go with the algorithm or with the IP.
So any chance of a deal, in my opinion, would be a deal that disentangles from their technology. And the deal that disentangles from their technology, I mean, why not make the deal then? Because if there's not going to be a deal and the only option to shut down, why not sell.
The pieces and parts for.
A lot of money and achieve their objective, which is no sharing of their technology.
So I think that we just don't.
Know if they're even going to let us TikTok go without the algorithm.
We're betting they will, and that's been our bet from day one, But we'll see.
And what about the moon music of the user base. When this all first came to light under the Biden administration, there was fierce opposition from many of those users, but actually the US public at large actually wanted to get rid of TikTok. But now it feels as though we've moved the other way. Where is general public consensus on whether we want to kick out TikTok or not?
You know, I think it shifts and moves. I think right now what's happened is that because you know that.
This is the third extension, people are a bit anesthetized, and you know, you're not sure what's going to happen, and so are kind of not as it's it's not as front and center on the minds of the user base as it was when it was.
Threatened to be shut down with the legislation.
By the way, I believe us TikTok is going to be sold a shut down. The legislation is very clear, and something's going to give here. And I you know again I said earlier, and I have no I please, I have no proof of this, but I just have a gut feel this is the last extension.
Something's going to happen during this ninety days.
So Frank, sorry to interrupt you. So you've also you basically opened the door to a third path, which we discussed less, which is that the President could indeed decide, you know what, I don't want to go with. I've a bidder, and I will shut down US TikTok or TikTok in the US just explain, you know how you've You've been transparent. Contact with the administration has been limited in this period. But that seems a possibility.
Yeah, I think it is a third possibility.
And this is again I've said from the beginning, I think when push comes to shove, or when this process has come to a conclusion, TikTok will be sold without the algorithm.
But you're quite right, it may be shut down on the US.
Side and and or China may just not allow it to be sold. These are all distinct possibilities. So there is uncertainty here. But look, Project Liberty is continuing to build the technology onboard users and create this alternative Internet, which we think is we need now that the bottom line is we have an Internet that's that's broken, but nobody's not going to use.
It until there's an alternative.
So our goal is to build that alternative and then and then actually migrate users and build and by the way, build new apps in this new world, and to create user base there. So who would not be given the choice of an Internet that surveils you, scrapes your data, and it basically exploits you, versus an Internet where you're permissioning the use of your data. You get paid for your data if it's a commercial use case that it's used for, and you're in charge of you Again, you're at the center right now. We have an Internet, We have the platform at the center. Were are all just commandities? We need an Internet? Well, we're at the center.
We have agency. Again, we're in charge and we're respected quite frankly.
Frank McCourt, junior Project Liberty, one of the bidders as well of course for us TikTok. Thank you very much.
This is Bloomberg Tech and you are looking at a live shot for the principal room. Check out the premiere of Bloomberg Tech Europe this Friday, where we'll dive into all the key tech stories from across the pond. This is the bloemerg.
The US Senate voted to pass the Genius Act late yesterday, moving the country's first crypto legislation forward. A rare moment of bipartisanship in the Senate However, Republicans did block Democratic efforts to bar the president from profiting from crypto efforts he's affiliated to while he's in office. White House, AI and Cryptos are David Sachs joins us now in an exclusive conversation. David, good morning, Thank you for being back here on Bloomberg Tech. I think that the immediate question is the immediacy of how quickly the bill passes to the President's desk and how you see that happening.
Well, thanks ed, glad to be here. So the next step year is for the House to take it up, and I think the House is considering its options, but I think we're basically at the finish line here. The House already passed a similar version of the bill called the Stables Act, and I think that we're very close here to having a bill that can go to the President's desk.
There is also a lot of parallel interest from our audience, in particularly in the market structure efforts that are underway. Do you believe or see that the President considering packaging them together the Stable Coain legislation with market Structure.
Well, like I said, I think the House is still considering its options. The issue with packaging them together. Is that is that the Market Structure Bill has never been taken up by the Senate. It did pass the House and the last Congress, but it never passed the Senator or was even taken up by the Senate. And so you could say that the market structure bills on the ten yard line, whereas the whereas the Market Structure Bill is really just a few yards away from becoming laws. So I think there are different stages of the process, and if they were packaged together, it would slow down the stable Coin Bill, But those decisions still have to be made.
Let's just talk about what this could unleash. If it does go forward. Stable coins could swell to its high as three point seven trillion dollars by twenty thirty, that's according to City. But are we seeing perhaps a delay in regulation elsewhere that could stymy that sort of growth, Zizy saying, Look, if we don't see others getting on the bandwagon here, it could be limited to just five hundred billion dollars.
No, I mean, I think that the stable Coin Bill is very helpful, provides regulatory clarity and stability for the stable coin industry. Like you were saying, there's already something like two hundred and fifty billion dollars in float of stable coins, and that's out without there being a true regulatory framework in the United States. Right now, the number one issuer stable coins is offshore. And what this bill would do is provide like I said, the regulatory clarity and safety would bring the whole stable coin industry on shore. It would enhance consumer protection. The issuers of stable coins would have to get audited on a quarterly basis. Consumers could be confident that their dollar based stable coins were reserved on a one to one basis with actual dollars in US bank accounts, and I think this would increase confidence in the industry. And I think that you would also see banks getting into the act. I think you'd see traditional financial players getting involved in it, and that's why the float is expected to grow from call it roughly two hundred and fifty billion to trillions of dollars, and that would create more demand for the US dollar Internationally, I think you could see other economies start to dollarize the bottom up, as their citizens would prefer to use US digital dollars as opposed to whatever fiat currency they're using, and that would create potentially trillions of dollars of new demand for US Treasury. So I think this bill is a is a major piece of legislation. I think it is. It's a fantastic bill just on its own. I think that the House would go ahead and take it up, and I think they will take it up and lots that they're going to put it on the President's desk very soon.
What about businesses taking it up? As you say, people waiting in the wings reports Amazon, Walmart wanting to have their own stable coin issuance? What is the regulatory oversight kind of be like you say, of course it's put in stone in terms of the law, What about the resources for their regulation, because there's going to be a lot to analyze.
It feels like, yeah, so it's going to stable coins will be under the purview of the banking system, and banking regulators will look at that, and stable cooin insurers will have to go through a regulatory process and they'll get approved and like I said, they'll be quarterly audits. And I think that the bill will provide the framework that will give confidence to a lot of traditional financial players to enter the space. And so I think you're going to see new stable coin products, and I think you'll also see stable coins.
Being used as payments.
I think this is one of the really exciting things about the bill is that blockchain infrastructure will be used as a new kind of dollar based payment system. Yes, that's faster, it's more efficient, smoother, It's a payment system of the future. It's kind of ironic that when the crypto industry really started with bitcoin about fifteen years ago, what was anticipated is that you would get a new kind of currency, you get a non fiat currency. But as it turns out, a really important use case of blockchains has been to support digital dollars, to support tokenized dollars. And I think you'll see the extension of that payment system online with that legislation, and that's a really exciting thing. We don't want this being driven offshore right now. Like I said, the leading staple coin issure is offshore. I think that you will see this be a new US based payment system that emerges online.
David, I'm looking at it, for example, shares of coinbase and Circle and basically the market hearing the passage of the bill, you're basically talking about dollarization, and I wondered if you'd just reflect for a minute of how you feel that the final sort of composition of this legislation supports the goals, the bigger picture goals that you and the President had hoped for when you set out to do it.
Sure so, when the President first took office, and even before he took office, when he was on the campaign trail, he promised to make the United States the crypto capital of the planet and to replace the approach of the Biden administration, which was essentially regulation through prosecution. I mean, the Biden administration was doing everything it could to driveto companies offshore, and he promised to change that approach and make and provide regulatory clarity so that the innovation could happen in the United States. And I think that you know, the Trump administration has done that. Even before this bill, the President had signed in an executive order to make bitcoin a strategic reserve asset, providing I think a kind of legitimacy for the industry that it had been seeking. We also have formed a President's Working Group on Digital Assets that's been systematically hunting down and eliminating some of these war on crypto regulations that have been impeding in the industry. The bottom line here is that we just want a fair approach. What founders and entrepreneurs been asking for is just tell us what the rules are and will abide by those rules. So we've been trying to provide that regulatory clarity. But at the end of the day, if you want to make sure that the rules stay stable for founders, you need to enshrine them in law. And it's great when you can get the various agencies and departments the government to change their rules to take up better rulemaking, and we've done that. But again, the way that you provide long term protection against certain of you know, a new Garriginsler or something like that, just do you enshrining them into law. And that's what this bill, the Genius Act, would do, and it's also what the Market Structure legislation would do, and we want to keep that up.
Next to be sure, sorry to interrupt you, what is missing from the bill and what Democrats push for, What specific controls on the president and president's family in their ability to move within the corners of the crypto market with which they're affiliated. There's a lot of concern that that wasn't done. Is the concern justified.
I don't think so. I mean, so, first of all, you should ask them what they're doing, because I'm not involved in any particular company's products. I'm just an innovation advisor. But my understanding is that what they've said is the president's assets are in a blind trust. His sons are not in the government. They're adults, and they're allowed to engage in business, and they have a company. And I think that these are unrelated things.
You're an innovation expert, not just in crypto but in AI too. We shift there a little bit because you've hunted down rules that perhaps weren't serving some in the business entrepreneurship in a US, for example, the diffusion rule. But what follows it?
David Well, I think it's a good question about what comes next. I think the problem with the diffusion rule, this was the Biden difusion rule that was dropped at the eleventh hour by the Biden administration something like five days before the end of their term. I don't think it was really thought through. It was overly burdensome, and what it did is it required every sale of a GPU worldwide, it required a license from the Commerce Department or one of several narrow exemptions that also had to be lawyered, and so this was just incredibly burdensome. I think it impeded the global the US semiconduct business and the US data center business. I think it hampered its a market share worldwide, which should be an important objective of US policy is for the US to win the AI race by becoming the dominant tech stack internationally. So the diffusion rule I think would have shot our technology industry in the foot out of a concern to prevent chips from going to China. To be sure, I think that the leading American semiconductors should not go to China, but we have export controls on that, and I don't think we need a new global licensing regime on every single GPU transaction to achieve that objective.
David Jensen Wong was on the show very recently and he expressed his concern that Huawei has technology that is as performances in Vidia's H two hundred. There had been a lot of focus on AG twenty. I know that the Commerce Department has issued some assessment of how much Huawei can produce. I think they said two hundred thousand GPU capacity, but there are concerns, and actually that their ability to export to markets outside of America is much greater than that. What is your assessment of how China can compete with its own GPUs in markets outside of America.
Well, it is true that today China is supply constrained on how many GPUs they can produce, but I would expect that to change pretty rapidly because China has proven adept at working around our restrictions, and you saw that back in January. We had this Deep Seek moment where before Deep Seek people thought that Chinese AI models were years behind, and then Deepseak launch, we realized that maybe they're more like three to six months behind. I think today China is maybe one and a half to two years behind US in chip design, but Huawei is moving fast to catch up, and even before they fully caught up, I think you will see them exporting their chips for the global market. For example, there was a story out of Malaysia that they were creating a sovereign data center with Wawei send chips, and that story got walked back because because I think the government was afraid of the US reaction. But it was a minister of the government who did announce that they were creating a sovereign data center using Huawei chips, So I think that we do have to be concerned about Huawei competing on the global market. They may not fully be there yet, but I would expect that to change in the future. And I think that if we're overly restrictive in terms of US sales to the world, I think there'll be a time where we're kind of kicking ourselves saying, you know, when we're in all of a sudden, Huawei is everywhere, We'll be saying, well, wait, when we had this whole market to ourselves, why didn't we take advantage of that opportunity and lock in the American tech stack. I think it's very important that when we think about our goals here with respect to AI, we want the American tech stack to win. We wanted to become the global standard. We want to have the largest market share we can. We want all to be the partner of choice for the world. And I think it's a valid policy objective to prevent our leading edge seming conductors from going to China, but at the same time, we don't want to restrict them from going to our friends and allies. To be sure, we should name our security requirements, but our friends and allies are eager to comply with those security requirements.
So I think we can.
Achieve our objective here, our dual objective of preventing leading chips from going to China while also making the United States the global standard.
David Sachs, it's great to have you back on the show. Me thank you. Of course, the White House, AI and cryptos are meanwhile. That does it for this edition at Bloomberg Tech. What a wide ranging conversation with David Sacks. Have plenty of others. We've talked to autonomous vehicles, We've talked AI within super apps as well.
Yeah, and there's an intense focus on that bill, right, so I think go back and recap what David said about what happens next? That is the question. Recap it on the podcast. You can find the Bloomberg Tech Pod on the terminal all the Bloomberg platforms, as well as online on Apple, Spotify, I and on iHeart. From San Francisco, New York City, this is Bloomberg Tech.
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