Trump Orders US Agencies to Drop Anthropic After Pentagon Feud

17:24Tim Stenovec:Yeah, because that gets to the affordability issue too.

17:28Carol Massar:Yeah. I mean, I think, look, the reality is affordability, as you said, is much more than just supply and demand. Although supply and demand are probably the major ways to attack the problem. But a part of this is you have to have more ways to qualify people. You have alternative ways to look at things like credit. You have to think about reform. You have to think about wage. Are you doing that? You have to think about self-employed. We have diversified the way that we look at our population. I mean, you look at things like the creator economy. You look at the self-employed economy. So you have different ways that people make income, have credit.

17:58Carol Massar:And it's really important, I think, to acknowledge that and to diversify the way you qualify folks. So the idea, the big picture, is you increase supply. you get more homes listed out there it frees up inventory for people to buy that that first home robert but yeah go ahead so you mentioned developers yeah look unfortunately that will just take too long if we attack the builder side that will take two years to have even the most modest impact the bigger and that's not really where you play the bigger impact exactly well we play on both um but the bigger impact is on existing home sales and that's where there's there's been less inventory because so many homeowners are locked into low mortgage rates and they don't want to lose that low mortgage rate to transfer to a 6 % mortgage rate.

18:40Carol Massar:So the way to expand the existing home sale market is to reduce the barriers to entry. And so let me give you some examples. Why do sellers say, hmm, when's the right time to list? There shouldn't, there shouldn't be a right time to list, but they're worried about days on market. Why are, why is there a fear of what price should we go at? Well, there shouldn't be a price drop history. That shouldn't be a conversation. You know, my, my wife would never want to sell her home, but if you ask her, is there a price you'd sell your home? Yes. There's a price. There's always a price, but don't those, don't those histories inform the potential seller.

19:12Carol Massar:Doesn't that data show, uh, and help inform a buyer? Doesn't that provide more information to the market? So look, if I were buying your company, I would love if your investment banker told me how long you've been trying to sell your company, how many times you dropped the price, but that's not what I'm buying. That's a negotiating point for leverage. If buyers deserve to know price drop history and days of market, sellers deserve to know how long has that buyer been searching? How many times they put in offers that fell through and fell out of contract? And so we believe if you, the buyer, what you need is you need more inventory.

19:43Carol Massar:So to help you, the buyer, the best thing that we can do is just let the seller sell however they want. And if we do that, there'll be more inventory.

19:50Tim Stenovec:So then wait a minute. So then now does the seller have more information or you're just getting rid of it and it's just kind of a through?

19:57Carol Massar:We're just getting rid of it for the first time.

19:59Tim Stenovec:So you just list it and you go.

20:01Carol Massar:If you go to Australia, the word days on market and price drop history are not on the sites. They don't exist. The reason why is that system was built for sellers. Here it was built because everyone's forced to put in the MLS. It was built for buyers. And so we're just trying to bring the pendulum back and give individual homeowners the same advantages as the builders. builders market without days on marketing price drop history. So we should give homeowners the same opportunity.

20:26Tim Stenovec:What makes you so sure this is going to work in terms of the affordability issue? Because I also wonder if you remove some of that information to Tim's point, if there have been price drops, that ultimately brings down the cost of the price of housing. But if you don't have that and it just kind of stays and maybe doesn't really indicate what's happening at the broader market, doesn't that lead to price appreciation? And that doesn't get to the affordability issue.

20:47Carol Massar:Well, I think there's two things to point out. I think the first thing is I think no one can disagree that today there is no inventory, right? Like we have an issue with the way the system works today, which is that we looked at some Redfin data. And so half of the homes that are listed right now have been on the market for 60 days plus. So we have a lot of stale inventory. You don't have a lot of new inventory.

21:07Tim Stenovec:I even spend my neighborhood because I like to check and keep an eye in terms of valuation. There's not much inventory coming on market.

21:12Carol Massar:So to me, it's less about some of these metrics. It's more just like, how do you create more inventory? More inventory creates more competition. It reduces scarcity and that creates pricing advantage. And so the bigger picture for us is just how do you attack the supply problem? Because without sellers, you're not going to have buyers and every seller ends up being a buyer. And that's really what we're focused on here. Robert, you were a data driven guy. How do you measure if this actually works? Like what's the metric? We will see more inventory come to the market. How much more inventory? Before restrictions came into the industry through something called clear cooperation, which forced every individual American homeowner to put their listing in MLS after 24 hours, 90 % of our listing started off outside of the MLS system.

21:59Carol Massar:And when that rule came into effect, we saw less inventory. And so I can't give you the exact number, but we will see how much more inventory we will bring to market and we'll share that with the public.

22:10Tim Stenovec:Will this work in any rate environment?

22:12Carol Massar:Absolutely. Just there should be no fear to list. There should be no downside to list. There should be no barrier to list. You should be able to list however you want. Do you want to not disclose the price and say price upon request? Do you want to have how many photos you want? Do you want to have no photos? Do you want to have an address that just says Fifth Avenue Luxury Penhouse without seeing the exact unit number? Whatever you want. If you take away all those barriers, you will have more inventory.

22:38Tim Stenovec:Help me understand, too. What does this do to the selling process? the real estate agents who are selling properties who often sometimes I would say covet certain properties. Does that change any of that?

22:49Carol Massar:Well, obviously I believe deeply in real estate agents. My mom is a real estate agent. All my clients are agents. Is your mom calling you and say,

22:56Tim Stenovec:what the heck are you thinking about?

22:57Carol Massar:My mom supports this idea. Okay. She supports the partnership, but no agents are at the center of this. And you know, we, both our companies with loan officers and real estate agents, we, we are empowering the real estate professionals that are required to make the transaction happen. The other thing I would add around the rate environment to that question.

23:15Tim Stenovec:Because you guys did kind of smile when I said what was going on with the 10-year and how we saw rates move down. So it does impact this market.

23:22Carol Massar:It's great to see rates moving in a good direction. We think that gets more buyers off the sideline. But I think what's unique about... Unless the economy's slowing down and nobody's going to be working. That's right. What's unique about Rocket in particular is that Rocket has the home search experience. We have a servicing book. And because of that, we can acquire clients at a lower cost. And when you can acquire clients that are lower cost, you can help save them money on the overall transaction. And so you eliminate a lot of the friction. You become more efficient by using technology. And that turns into real savings in terms of lower rates and lower fees.

23:55Carol Massar:And that happens in any rate environment. That's what's unique about our business model.

23:59Tim Stenovec:Some of the mortgage origination costs, some of these things will go away or be reduced or what?

24:03Carol Massar:That's right. Right. And that's because many of the clients are buying, they're already homeowners that we service, and then they're buying their next home. And so the cost to acquire that client becomes significantly lower. And because we do a good job servicing them, we can then provide them with their next purchase, a cash out refinance, a home equity loan. And we can do all of that more efficiently because that cost of acquisition has come down significantly. Well, we have a couple minutes left, and we want to talk a little bit about the macro environment and the individual companies. As Carol mentioned, both of you guys reported earnings late yesterday.

24:36Carol Massar:Compass shares down about 1.5%. The company forecasts first quarter revenue that topped analyst estimates. When you look out at the landscape right now, where are you seeing signals of strength and where are you seeing signals of weakness, Robert? So overall, we have more inventory, which has been the key bottleneck over the last five years, which has not been enough inventory. So we have 9 % more inventory than we did this time last year, but still less than pre-pandemic levels. Prices are basically flat to up 1%. We have 4 % more pending contracts than we did this time last year. So things are okay.

25:08Carol Massar:We're not out of the woods yet. Mortgage rates being at three-year lows at just under 6%. I think the key is, can we see sub-6 % mortgage rates, not for a day, not for three days, but for a season? If we do, then I think we will see strength in the market.

25:24Tim Stenovec:Varun, same question to you. What are you seeing when it comes to the macro? How does it compare from last year, a year ago, six months ago? Yeah. Your visibility on the outlook.

25:32Carol Massar:Yeah. I mean, generally, when you look at all the different industry forecasts, we expect the mortgage market to be bigger in 2026 than 2025. I think the question is just how much bigger and how far up into the right.

25:42Tim Stenovec:So more activity.

25:44Carol Massar:More activity, more purchase behavior, more refinance behavior. Obviously, as Robert said, we see inventory starting to creep up a little bit, which is good. We're starting to see rates cooperate, which is good. And I think that for the first time, you're starting to see a five handle on the rate environment. And that's going to bring a lot of buyers off the sideline. And so we do expect 26 to be better than 25. But a big part of this is just some companies have built a business model to be able to thrive in any rate environment. And that's kind of what our focus is. We know the president is so focused on affordability.

26:15Carol Massar:He's focused on making sure that people can get into homes. Have either of you guys had conversations with the administration? We have. I mean, we have great relationships with everyone at the administrative world. And we support reform. We support affordability. We support new programs, new initiatives. Anything we can do to create more buyers and sellers and improve the supply challenge that we have in this country, we support.

26:41Tim Stenovec:Was there anything in terms of a specific program that you would like or policy that you'd like to see the administration support?

26:48Carol Massar:Yeah, I would very much like to see them eliminate NAR, the National Association of Realtors, clear cooperation rule that forces homeowners to put their listings in MLS. It's not NAR's home. It's the homeowner's home, and they should have the freedom to market their home when, where, and how they want.

27:06Tim Stenovec:Great stuff. Please come back. Let us know how this partnership's going and the impact that you guys are seeing. Really appreciate it. Robert Refkin, founder, chairman, and CEO of Compass International Holdings, and Varun Krishna, president and CEO of Rocket Companies, joining us right here in studio. Gentlemen, thank you again.

27:21Carol Massar:Stay with us. More from Bloomberg Businessweek Daily coming up after this.

27:29Carol Massar:Hello, hello. Hello, I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business?

27:45Tim Stenovec:My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side.

27:52Carol Massar:For example?

27:53Tim Stenovec:If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today with the goal of being 70 % more productive.

28:17Carol Massar:Yeah.

28:17Tim Stenovec:So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things.

28:36Carol Massar:To listen to the full conversation, visit ibm.com slash smarttalks.

28:46Carol Massar:This podcast is brought to you by WISE, the app for international people using money around the globe. When it comes to sending money abroad, many providers claim to offer free fees and competitive rates. But don't be fooled. This can be code for inflated exchange rates. With the Wise account, you can send, spend, and receive money in over 40 currencies without ever having to worry about hidden fees. Sending pounds across the pond? Most transfers arrive in 20 seconds or less. Spending reals in Rio? The Wise Travel Card gives you the mid-market rate on every purchase. No costly markups on your bill.

29:18Carol Massar:Getting paid in dollars for your side gig? avoid hidden fees, and get the real exchange rate every time. With 24-7 access to live support, your international transactions with WISE are quick, transparent, and safe. Plus, WISE runs over 7 million daily checks to catch and prevent fraud. 15 million people already trust WISE to manage their money internationally. Be smart. Get WISE. Download the WISE app today or visit WISE.com. Terms and conditions apply. Adobe Acrobat Studio, your team's home base. collaborate within a shared PDF space. You've got your docs, your plans, your specs, and then invite the crew to build what's next.

29:56Tim Stenovec:They talk off the teamwork.

29:57Carol Massar:You can update it render. They think that this design could be a contender. But when somebody wonders, what's the next step? AI helps you finish the rest. Bolts are tight. Now your plans are fine. Run a smoother business when you're all aligned. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern.

30:24Tim Stenovec:Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. Shares of Duolingo are tanking today. The stock, in fact, right now down about 17%. It did, though, hit its lowest intraday since February of 2023. Now down more than 80 % since May of 2025. And about 22 % of the float is short. So there's some real negative sentiment on the name. Shares sliding after the company said its drive to gain subscribers would mean slower earnings growth and narrower profit margins in the short term. Tim, you keep reminding us that there's a lot going on with the company, some transformations here.

31:03Carol Massar:Yeah, the company said it would step up investment in AI and sacrifice some degree of monetization in order to accelerate user growth and engagement. The goal, double the current number of daily active users to 100 million in 2028. Great to be talking again with a member of the Duolingo C-suite. Back with us, Luis Von Ahn, co-founder, chairman, president and CEO of Duolingo. He joins us from New York. Luis, always good to see you. We're going to talk about the quarter and the outlook in a minute, but I want to start big picture with AI because, I mean, you've been thinking and researching AI for decades at this point.

31:34Carol Massar:You're a recipient of a MacArthur Genius Foundation grant back in the year 2006 for working on AI. This is nothing new to you, what's happening right now. But answer the question for investors, is AI a threat to your business? Well, first of all, thank you for having me. You know, I think that we're in a unique point in time where, because of AI, we're going to be able to teach significantly better. And, you know, Duolingo is by a wide margin the largest app in education in the world. And I think because of that, we're going to be able to really take advantage of this AI boon to be able to teach significantly better.

32:17Carol Massar:And our sense is that within the next few years, we're going to have an app that teaches as well as a one-on-one tutor, but also is as fun as a mobile game. And if we're really able to do that, I think there's just so much more that we can capture. So that's what we're doing. We're really shooting for that.

32:33Tim Stenovec:So jumping on the AI bandwagon, I mean, I guess what investors want to know is what is Duolingo's advantage over potential new AI learning apps?

32:46Carol Massar:Well, you know, at the moment, we're not particularly concerned with competition in terms of, you know, other education apps. We have, for example, for language learning, we have about 85 percent of the market share of all daily active users of people who are learning a language. So we have huge scale. And what differentiates us is that because of that scale, we just have more data into how people learn than anybody else. And we can use that to train our own specific models. So we just have the advantage of scale, being able to watch literally billions of exercises every day by people who are learning different things.

33:21Tim Stenovec:But as you know, this is going and this is moving pretty quickly, the AI impact, it seems. And to be fair, you are right. Like, we'll see. Many say this is, you know, we're kind of early in on this process and the impact. But what does Duolingo offer that can't easily be replicated by a large language model? And how do you kind of view that competitive landscape evolving?

33:43Carol Massar:Yeah, I mean, there's a number of things. I mean, for one, with Duolingo, what we do is we try to build a habit of learning. I mean, for example, 15 million of our daily active users have a streak of longer than 365 days, meaning they have been using Duolingo for a year or longer and haven't missed a day. So we're really trying to build a habit for that. And this is why Duolingo is part game, part education. and that's, you know, I think that's just the right thing. It just turns out the hardest thing about learning something by yourself is staying motivated. That actually the content to learn has been there for a long time.

34:21Carol Massar:So for example, it's, you know, you've been able to learn a language by just reading a book for hundreds of years. That has been there. It's just what we do differently is we motivate people to continue doing it. And that's hard to get right. So what are investors not getting right in your view? Carol mentioned some of the stock moves and now down at a point that you haven't seen since February of 2023. What are investors missing here? I think it's a matter of timing. On our end, we are trying to build a company for the very long term. We're trying to do something that, for example, in our shareholder letter, we said that we're shooting to have double the daily active users that we have now.

35:04Carol Massar:I mean, at the moment, we have a little north of 50 million daily active users worldwide. We're trying to have more than 100 million. But we're saying that that's going to take some time. And so we're concentrated in the long term. And, you know, what we're doing is we're trading off this year's, you know, financial metrics for a much larger thing in the long term. Yeah, go ahead.

35:25Tim Stenovec:Well, I get that, right? You know, companies have to invest in order to provide growth going forward. And I think it's fair to say that we understand why investors, I mean, they're not loving your forecast for first quarter adjusted EBITDA. That's missing the mark from what the street was expecting. 2026 revenue, also that forecast missing. Same story for 2026 adjusted EBITDA overall. So you talk about building this to double your daily active users to 100 million. How much will, how long will that build actually take? And what kind of visibility do you have on that to kind of maybe reassure investors that this isn't something that takes longer while the AI world continues to challenge established players?

36:11Carol Massar:Yeah, I mean, we're the way we're seeing it is we're going to spend this year really working on three things, really teaching better, improving the free user experience and also expanding to other subjects. I mean, by now, we already teach math, music, and chess. And, you know, we've been growing quite a bit. About 15 % of our active users are learning things that are other than languages. Our chess course has grown quite significantly. So these are the three things that we're working on, and we're going to be working on that for the rest of the year. And we're expecting that towards the end of the year, we're going to see some improvements in our year-over-year growth rate.

36:52Carol Massar:We're still growing. I mean, we've had five years of really phenomenal growth. We IPO'd in 2021. And since then, we've more than 5x'd our active users. So, you know, we expect that we'll continue growing pretty strongly. Luis, is the idea in making changes to the free tier, is it to get more people who don't use Duolingo now to use the free tier? Or is it to get those free tier users to upgrade to a paid tier? um historically what we have done is we have tried to you know the way the way we generate value on duolingo is there's two parts to it one is how many active users we have that's kind of like the size of the pie that has grown quite significantly and then there's how many of these people are paying us because we have this freemium model that's you know like the fraction of the pie that are payers historically we have worked on both we have worked on on growing the pie and also growing the fraction of the pie that is paying, which is why our bookings have grown really significantly over the last five years.

37:54Carol Massar:This year, we're mainly concentrating on just growing the pie. That is the number of people that are actively using Duolingo. Because it is our belief that because of the moment that we're in, we really want to have as many people as possible actually learning something meaningful on Duolingo. And once we're able to do that, I mean, one of the main advantages that we have, certainly against new entrants is scale. There's no other education app that has the scale that we have.

38:22Tim Stenovec:Well, great to always get a check on what you guys are up to and really appreciate it. Love to hear more, too, as we go out throughout the year, how things are going.

38:32Carol Massar:I'm at 355, I think, on my Duolingo. How many days? I'm almost at a year.

38:37Tim Stenovec:I think Sebastian actually said he's on, his streak is about 778. That's one of our producers. Hey, Luis, thank you so much. Luis Fanon, co-founder, chairman, president and CEO of Duolingo. When we come back, check on trading and stocks on the move. This is Bloomberg Businessweek Daily.

38:52Carol Massar:Stay with us. More from Bloomberg Businessweek Daily coming up after this.

39:00Carol Massar:Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale.

39:20Tim Stenovec:Don't pick the shiny little toys on the side.

39:23Carol Massar:For example?

39:25Tim Stenovec:If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive. Yeah. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things.

40:06Carol Massar:To listen to the full conversation, visit ibm.com slash smarttalks.

40:36Carol Massar:without ever having to worry about hidden fees. Sending pounds across the pond? Most transfers arrive in 20 seconds or less. Spending reals in Rio? The Wise Travel Card gives you the mid-market rate on every purchase. No costly markups on your bill. Getting paid in dollars for your side gig? Avoid hidden fees and get the real exchange rate every time. With 24-7 access to live support, your international transactions with Wise are quick, transparent, and safe. Plus, Wise runs over 7 million daily checks to catch and prevent fraud. 15 million people already trust Wise to manage their money internationally.

41:11Carol Massar:Be smart. Get Wise. Download the Wise app today or visit wise.com. Terms and conditions apply.

41:31Carol Massar:Come on now, let's flex those tools. Drive, design, deliver, make it sing. AI builds the deck so you can build that thing. Do that, do that, do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern.

41:55Tim Stenovec:Listen on Apple CarPlay and Android Auto with the Bloomberg Business App.

41:59Carol Massar:Or watch us live on YouTube. The president posting about Anthropic and federal agencies. He's telling all agencies, the president that is, to stop using Anthropic. Federal agencies cease use of Anthropic's technology. Anthropic made a mistake to strong arm the Pentagon. This is now a redhead crossing the Bloomberg terminal. The president posting on True Social about Anthropic and federal agencies. The latest, the president telling all agencies to stop use of Anthropic's technology. We're going to have Katrina Manson on the program in the four o 'clock hour. There was a 5 p.m. Eastern time deadline.

42:33Carol Massar:Yesterday, Anthropics Dario Amadei came out just after our program ended and essentially said, we are not wavering from our position about our technology not being used for these two things. Mass surveillance of Americans. Correct. And fully autonomous drones. Fully autonomous weapons.

42:54Tim Stenovec:Right.

42:54Carol Massar:Yeah.

42:54Tim Stenovec:But talking a lot about in terms of mass drones being used. And my understanding was that the Pentagon was going to be talking with Anthropics. So we're kind of counting down to the wire on that as well. In the meantime, we want to get to our own Eric Wiener. Talk a little bit about the trade today, the week, the month. Ready to start a new one. Eric Wiener, senior editor, Equities Americas here at Bloomberg News in our interactive broker studio. Never a dull day. Interesting trade. Interesting trade. Where should we begin here as we are wrapping up February? It's one word to use. What?

43:30Carol Massar:Yeah, that's interesting is one word to use.

43:32Tim Stenovec:I mean, the market, stocks are down for the week overall. Should we start with banks? Well, yeah, because. Yeah. Well, yes. But I'm also confused about a hot inflation print, but yields are down. And I'm trying to understand that doesn't make sense to me. Is it just that we are so worried about the outlook here the private credit worries the private market worries Leading to yes what you said so homage to you tim in terms of banks

44:00Carol Massar:Did you did you say that because that's actually what's what appears to be going on I mean you can't get a straight answer directly from like the bond market um, but But uh, that does appear to be what's going on which is I mean the the keyword would be uncertainty There's so much up in the air Because it's not just You know private credit It's basically the whole Lending landscape Possibly being you know Under in risk At risk and so you're Looking at you're talking about Corporate retail

44:36Tim Stenovec:Individual everything well

44:38Carol Massar:Or what so there's Risk that there's Rising problems in credit cards. There is rising delinquencies across the lending spectrum. And then you have all of this private funding, which is less regulated and has been financing a lot of the technology growth that's been going on. So you have this big mishmash of of risks that are flowing in ways that we can't really predict right now. What we do know, though, is that the last time there was a blow up, it got really ugly. So that's really what like the first brands thing, you know, all of the stuff that happened a couple of years ago is really scaring people right now.

45:25Carol Massar:And if you look at who's exposed to it, it's much bigger companies and much more important and central companies, because you're talking about open AI, you're talking about Anthropic, you're talking about companies that are driving the technological growth that we need and that we're counting on. And if they can't get the funding that they are anticipating, then that spending that is ricocheting across the market could be pulled back. And that's really the underlying fear of everything going on with AI right now. So it sort of spills over into a whole bunch of different places. And we haven't even talked about Iran yet.

46:05Carol Massar:We're going to talk about Iran, but you've got me on the underlying fears about AI. And that's certainly one of them is the idea that maybe we won't see the results of all this spend. Another one is what happened with Block slash Square last night and a 40 % reduction in force. And it has people thinking, and I'm I'm sorry to beat a dead horse, but we've been doing this all day today because I think there are a lot of questions still about, you know, is this idiosyncratic to Jack Dorsey and to Square? Or is this something that is actually going to happen at many different companies with white collar jobs?

46:43Carol Massar:Because it does raise market questions. And yes, the stock reaction for Square today is up. But then when you start thinking about this, okay, if all these companies can do more with half the number of employees, where do those employees go? And then what does it mean for their spending power?

47:01Tim Stenovec:So is Citrini right?

47:03Carol Massar:Well, yeah. In other words. And we did all, I mean, look, I made my bones on that this week. But you're on the tip of the whole concern, which is that if you look at all of the technological innovation that has happened over the last 100 years or so, mostly it's involved things that may kill a job here or there but will ultimately increase jobs. The horseless carriage, for example. Yes, exactly. The automobile, which put buggy whips out of business but then created a whole transportation industry. So this specific technology is designed to make things more efficient in a very specific way, which is to eliminate the need for you and I to be intermediaries.

47:52Carol Massar:Yeah. And that's white-collar jobs. So the concern is very real. And Dorsey kind of got after it. I mean, he's running a successful business. They're making a lot of money. And if he can make things that much more efficient, then great for him. However, what we're hearing is that we are very, very far away from this. It's interesting, you know, the Pentagon attacking Anthropic. Nobody would say that right now you need automated weapons. You know, we're just not there yet. And the idea that we shouldn't have guardrails on this seems like very much being out in front. In the same kind of way that like thinking that everybody is going to be replaced tomorrow is being way out in front.

48:39Carol Massar:However, the longer term risk is, yes, that high earning job. This is coming after high earning jobs, which are really underpinning the economic growth, not just through production, but through consumption. And this could actually go right after those people that we need to be spending, which is scary. Fortunately, between now and Monday, if we don't get replaced AI, I think I can say this, that you're going to join me for a special live conversation on Monday morning. I'll send out the details of it, but it's at 11 a.m. Eastern time. And we're going to talk about this exact thing, Carol.

49:15Tim Stenovec:Yeah, I don't know. I do worry about this circular financing that's confusing. And, you know, I don't want to say Ponzi scheme or anything Because I think that But this idea of, right?

49:30Carol Massar:Did you look at the OpenAI deal today? Yes Do you know what I'm saying? I want to be careful I don't want to accuse

49:37Tim Stenovec:I'm not that smart This is the risk

49:40Carol Massar:This is the risk And then figure, take one step back And realize that it's coming from private credit So, like, if you look at OpenAI today Okay, Amazon is going to spend$50 billion And then OpenAI is going to spend$100 billion more on AWS And all of this is coming from Well, Amazon has cash But, well, their free cash flow actually is going to be negative next year But the idea is that they don't really need the private

50:10Tim Stenovec:Look at it, we're like, yeah, but it's okay

50:11Carol Massar:It's okay They don't really need the private market But OpenAI does So if all of that gets pulled back and they can't honor the$100 billion that they promised, that unwinds a whole bunch of expectations, including Amazon's expected revenues. So how do you value the stock? And that's really the question.

50:34Tim Stenovec:When I go to our AI expert, Rachel Metz, brilliant, smart on this AI, and we say to her, I want to understand open AI's balance sheet. And she's like, me too. And so that to me is, we talk about the importance of transparency and understanding value, and yet we don't quite have it. And I feel like we're going to have to do this. You have five seconds.

50:53Carol Massar:That is really, that's really it. That's the danger of the private. Now they're, they're going to go public, so they will have the stock, but this is the danger of private companies. Bow down to Eric Wiener. We do it because he is the best.

51:07Tim Stenovec:So killer. Eric Wiener. Thank you so much. Senior editor here at Bloomberg News. This is the Bloomberg Businessweek Daily Podcast. available on Apple, Spotify, and anywhere else you get your podcasts.

51:21Carol Massar:Listen live weekday afternoons from 2 to 5 p.m. Eastern

51:25Tim Stenovec:on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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