Trump Eyes Chips Act Funds for Intel Stake

25:47Look, regulatory filing on Thursday showed that Pershing had accumulated more than 5.8 million Amazon shares. Jackie Bezos, mother of Jeff Bezos, has died at the age of 78. According to the Bezos Family Foundation website, she passed away at her home. home in Miami after a long battle with Lewy body dementia. Jackie Bezos was an advocate for early childhood education. Alongside her husband, she was in fact the first to invest in Amazon in 1995, Ed.

26:20Welcome back to Bloomberg Tech. I want to go back to Intel. The reporting is that the US government's thinking about using Chips Act funds to take a stake in Intel. Caroline, believe it or not, on the course of the week, this stock's up almost 25%. If it continues to chop around and climb just a percentage point higher, it will have its best five-day gain, its best weekly gain on record ever. Just seven days after the president said that its CEO should resign after ties with China. Later in the program, we're going to do so much more on Intel. But when you go into the data in the Bloomberg terminal, you can always surprise yourself because in aggregate over the course of the week.

26:59What an astonishing stat that is. It is quite the stat. Six straight days of gains for Intel. What a winning performance. 25 % that you can see it in all its glory. Let's get into the world of generative AI now, though, because we are joined by Brett Taylor, Ed, whose extensive Silicon Valley resume includes Google, Meta, Salesforce, OpenAI. His startup Sierra AI helps companies build agentic customer service tools. You work with the likes of Ram with Clear, among others, Brett. And boy, is it competitive out there at the moment? How are you seeing your customer-facing Agenda KI products being taken up right now?

27:38Yeah, I've never quite been in a market like this. And as you said, I've been in Silicon Valley for a long time. I've started three companies, one in sort of the early days of the internet, you know, one, call it about, you know, a decade ago. And we have never seen this kind of customer interest. I've never seen this kind of revenue growth and customer momentum. But as you said, a lot of competition too. I think if you look at what is the impact of AI in society, there's probably two areas being impacted most right now, software engineering and customer service. We're in that latter category.

28:11We have the privilege to be the leader of serving, as you said, traditional companies like ADT Home Security and DirecTV and the fastest growing companies in Silicon Valley like Ramp. And it is such a privilege and so much fun to be in the middle of this right now. I'm not sure. The competitors, particularly the older guard of SaaS, some that you help work with, like Salesforce, love the enthusiasm of the way that you're shaking things up in terms of pricing, though. I mean, outcome-based pricing models. How are you seeing that really change the cadence of which others can sell and how they're selling?

28:42It's such a great question. If you look at the history of software, these technical shifts have also given rise to changes in business models. So kind of famously, when Mark and Parker started Salesforce, the world went from buying a perpetual license to software to software as a service and subscribing to it. Now our view is that Sierra, these agents aren't just helping you be more productive, but actually solving problems for you. And the best business model is to actually pay for a job well done. So at Sierra, we only charge our customers when it solves the problem autonomously for that customer.

29:17We call it outcomes-based pricing. And we think it's going to really disrupt the software industry because if you think about it as a business, what a great alignment of values with your partners. You only pay us when we actually save you money and solve the customer's problem delightfully. And I think it really aligns the software industry with all of our partners. And I think it's a really positive trend for the industry as a whole. Brett, you founded Sierra with Clay in 2023, right? And I think back to when you came on the show in February, 2024, it had grown so quickly, the company. update us on what Sierra looks like today?

29:53Well, we have customers across a wide range of industries, from some of the largest health insurance companies to banks to some of the fastest growing companies in Silicon Valley, like Ramp, which we're also a proud customer of. They power all of our corporate credit cards. What's remarkable is just the size of customers that have aligned with us. So over 20 % of our customers have over$10 billion in revenue. Over half have over a billion in revenue. These aren't just early adopters, right? These are some of the most traditional financial services firms, healthcare firms that are really saying, hey, I don't want my customers to have to wait on hold or press two for service.

30:28Can we have a multilingual, delightful AI agent just pick up the phone and solve problems automatically? And what's remarkable is just how well it works. You brought up Ramp at the beginning of the call. Their AI agent is actually solving 90 % of customer cases completely autonomously. and you know that's obviously great for ramp as a business but for me as a customer of ramp it means i don't have to wait on hold 90 of the time it's completely transforming the industry and it is so fun to be able to help brands really in every industry transform their customer experience brett i'd still i'd still like to learn more about sierra so you talked about you haven't seen growth like this in your career would you share with us an arr figure what sierra's financials look like, number of team members, how aggressively you're hiring?

31:19I won't share any of our numbers, sorry, but maybe when we do, I'll come back on this show and you can hear it first. But I'll tell you, we have hundreds of employees. We've opened offices in New York, Atlanta, London. We're planning our expansion into Asia. We're the leader in this space. We'll do hundreds of millions of phone calls on our platform this year, hundreds of millions of digital chats. We're the highest volume company in this space. And really that scale benefits all of our customers. It means we support more languages. It means that we've dealt with some of the most complex regulatory landscapes from HIPAA compliance to the compliance regimes that apply to the financial services industry.

31:57We're really trying to be the best and safest bet for every company in the world who wants to transform their customer experience with AI. And to do that, you're scaling and I'm sure there's a little bit of a fierce fight out there for talent, and that costs money. Before we get into the talent wars a little bit, Brett, what about having to raise more money? Because you did back in 2024. Do you need any more? Have you got a good runway? We have a good runway, but it's a great question just because I do think that we really want to grow as quickly as possible. There's this great, I attribute to Albert Einstein, as quickly as possible, but no more quickly.

32:34And, you know, right now our business is working. I've never seen product market fit quite like this. And we're always asking ourselves the question as a management team, how fast can we grow? Because if you look around the world, the application of this technology is not limited to one industry. It's not limited to one country. How can we best serve not just multinationals based here, but in Europe and Asia as well? And so if raising more money will enable us to achieve that end, we're absolutely open to it. Thankfully, we have a really healthy business model and it's not something we need to do, but absolutely something we're always open to considering.

33:07Because in many ways, look, you raised$175 million last year, led by Green Oaks Capital. I'm thinking like$200 million is now what Meta's willing to pay to get one person in, in terms of talent, Brett. Yeah, we all chose the wrong profession here. You didn't. But, Brett, I mean, I'm no coder. But, Brett, tell us a little bit about trying to get that sought-after talent. Do you need it? And how fierce is it? Well, first, you know, I do think there's a slight difference between the really small handful of researchers building these foundation models at the research labs. And, you know, Sierra, we're an applied AI company.

33:44So you can think of us not necessarily as the folks doing the R &D to build these frontier models like OpenAI GPT-5, but really taking all of those models and fine tuning them and applying them to a solution in the marketplace. So you can really think of the market, I think of it really in three areas. You have the companies building these frontier models, OpenAI's models are obviously the leading and frontier models in the space. You have companies building tools. So what are the tools you need if you're applying AI in your business? These are companies that can do data labeling and data transformation and data storage.

34:19And then you have companies like ours and Cursor and Harvey that are taking all of that great technology and making a push-button solution so you can just solve a problem without a lot of implementation time. We just went live with an international retailer in 15 markets in six weeks and are solving 85 % of their customer service cases automatically. That's what really an apply data company does is makes it easy to consume, easy to deploy. So thankfully, we're not competing in the market for some of those, I think, widely publicized researchers. But as you said, it's a competitive market. It's a competitive market for talent as it always is in the Valley.

34:57You know, Brett, over the years, I got told a lot of stories about you in meetings, like in the Salesforce context. And, you know, basically people say you're pretty frighteningly effective when you talk to customers, but you're also, you know, you're a busy guy. You have a very unusual dual role, right, as chairman of OpenAI and chairman of its board. That's an unusual gig. How do you spend the time? You know, I love to work is the short answer. So I work from the moment I get up to the moment I go to sleep, and I love every minute of it. And, you know, some weeks I'll spend more time at, some two weeks less.

35:33It's really what the organization demands. And you know, it is a lot of work, but it is such a privilege just because while I'm very excited about what CIRA's doing, to be able to spend time with, I think, the greatest research lab in the world developing, I think, the most important consumer product in the world in ChatGPT is such a privilege. And it makes me a better leader. I understand AI with more depth and nuance. And then similarly, hopefully my experience having scaled a lot of companies in the past is helping open AI. I think it's scaling faster than really any company in history. And so it's so fun.

36:08I wouldn't have it any other way. Sleep is for the weak. Right. The big question our audience has for you in the OpenAI context is how much you're working on this relationship with Microsoft and how much you personally are focused on the restructuring or the move to a new or different corporate structure. Well, Microsoft is OpenAI's most important partner and has been for years. So it's a very important relationship. The board's role is really specific. OpenAI is a not-for-profit. Our fiduciary duties on the board are really related exclusively to our mission, which is to ensure that artificial general intelligence benefits humanity.

36:47And so we're always thinking, how do we set up the organization over the long term to ensure that we can achieve that goal? And one of the things that we've talked a lot about is, since the company was founded as a small research lab, the level of capital expenditure required for the infrastructure for AI, I think, exceeds anyone's expectations that they had a year ago, let alone 10 years ago. And so really thinking about how do we ensure that we remain a mission-driven not-for-profit but also set up our organization so we can raise the capital we need to achieve that mission. So that's what I think the media has appropriately called the restructuring.

37:23It is something that we're working on. Nothing to announce at this time, but I think it's one of the most important things we work on as a board because your job as a board is to set the company up for the future, and that's really how we think about it. Do you think you'll get it done by the end of this year, Brett? I can't really comment on timelines and you know we're really just trying to work with all the stakeholders who have an interest in it and most importantly focus on the mission but no update on the time frame. Brad Taylor CEO of Sierra and chairman of the board for OpenAI thank you very much for your time.

37:57This is Bloomberg Tech and you're looking at a live shot of the printable room check out the Bloomberg Tech podcast you can find it on the terminal as well as online on Apple, Spotify, and on iHeart. This is Bloomberg.

38:17Okay, all eyes on Meta real quick. In the session, it's made attempts to hit all-time highs and at one point go beyond$2 trillion of market cap for the first time. Where will we close? We don't know, but it's exciting and it's one to watch. And we're also thinking a lot about Meta's AI app, which is facing mounting pressure with users complaining of an under-personalized and inconsistent experience. The tech giant admitting this is, quote, just the first of many steps as the company will continue to make updates over time. Joining us now is Bloomberg's Natalie Leung. This is the post-launch digest.

38:52Tell us what we need to know. Yeah, we have tested the app for a few weeks and asking it basic inquiries, asking it for personalized recommendations. and overall we found the experience rather inconsistent and it felt a little bit half-baked. For example, I asked it to give me recommendations on what to do over the weekend here in New York City. For some reason it knew my zip code. I might have provided it to an advertiser one time, but it wasn't able to personalize it to that area. And the unique thing about it, apart from Rivals, is that it has a Discover feed where you can see how others are prompting and interacting with the chatbot and there are like endless images there you can see.

39:34Endless images that perhaps aren't that relevant to you and sometimes the more edgy types of chatbots you might not want to interface with. Yes. Natalie, what's so weird as well is I interact with Meta AI actually more within the WhatsApp offering and maybe within the Instagram offering. Why is that not taking my data that I'm feeding it and bringing it over to Meta AI? Right now, all of those experiences are not connected, as you rightly pointed out. It is on WhatsApp, it is on Messenger, it is on Instagram, but they're not connected, which makes it a little bit fall short of some of the personalization ambitions that Zuckerberg has.

40:15Ramos, Natalie Leung, a real deep dive. Go read the analysis. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work, I'm Carol Masser. DoorDash, the largest food delivery company in the U.S., is building its own delivery drones and has gained the necessary FAA approvals to operate them commercially, the latest in its effort to delegate more orders to robots as a way of cutting delivery times. Bloomberg's Natalie Lung reports the company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period.

40:51The effort marks an expansion of DoorDash's in-house robotics efforts to reduce reliance on human couriers for some orders, as their wages constitute a key expense to the business. Drones are also a way for DoorDash to cut delivery times on orders from more remote locations that some dashers may not want. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com today by selecting Work Mode, available on Plus and Pro plans. Let's talk about healthcare for a second. It doesn't always work the way people expect it to.

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43:20For certain.

43:27Getting back to our top story, the White House is set to consider using Chips Act funding to take a stake in Intel. According to sources for more, Bloomberg's Ryan Gould is here, who helped break this story. It's been a very busy 24 hours. Do we have any idea of how much equity they could take for this? Not yet, Caroline. We're still trying to find out exactly how much the government is talking. I mean, just on the base of it, if you think about the problems that are facing Intel right now, you're probably looking to solve something as big as Ohio, to onshore manufacturing in the US. You're talking tens of billions of dollars that the company needs.

43:58Now, I'm not going to suggest that the government is going to go out and put that money in. We don't know. And the government has not obviously commented on this reporting yet. But I would say that the challenges facing Intel are vast, and I think most investors and analysts know that. I think just at the top of this, though, it's worth taking a step back and thinking about what a difference a week makes. If you think about Donald Trump calling for the resignation of Libby 10, the CEO, last Thursday or last Friday, I mean, a week later, we're now on the cusp of maybe a potentially game-changing deal, at least in the short term, for one of America's most beleaguered companies.

44:34Bloomberg's Ryan Gould, part of the reporting team on an astonishing week for Intel. Thank you. Let's get more on Intel and Washington's chip goals and how this all fits in. Ben Bahrain, Creative Strategies CEO. Ben, for loads of people, this isn't actually an issue of money. For Intel, it's an issue of technology, and it's an issue of no customers. How did you react to Bloomberg's reporting in the last 24 hours? Yeah, I mean, I think we've been looking at this from some sort of a leaning in this direction for some time. I mean, obviously, when Trump came up and said what he said about Liputan, we felt that this was in light of wanting to do or at least have a broader conversation that had not had happened prior.

45:15If you noted, like Intel was not involved in a lot of the public displays of America first, even though everybody knows they're America first. And obviously his comments, right, on earnings about, you know, they may not go forward with 14A without help, I think was very telling. And I think all of that led to this moment, which is, you know, from a national security standpoint, and really anybody in security and knowing what's going on in chips in the U.S. should believe we want a U.S. company to make leading edge chips here in the United States, and that's Intel. So we want to see some resolution.

45:49is 100 % clear, like you said, they need customers and we need to figure out how to get some form of capital so they can keep going. Over the course of five days, Intel's up 27%. If it closes at those levels, it will be the biggest weekly gain on record on a closing basis, which, yeah. Is LipButan the man for this, Ben? Yeah, I mean, I think his approach is fairly pragmatic, right? It's not just about build and invest, it's build the right technology, but do so in a capital way that makes sense. I think that's really what the board wants. That's what investors want. You know, and I think really the strategy is, again, how much money do they actually need?

46:25I do think the tens of billions of dollars is right in terms of to get to 14A on top of what Intel will bring in customers. But the bottom line is, right, they can't do this on their own. That's what they're saying. Whether it's customers or whether it's the government, you know, there needs to be an infusion of capital that's not just Intel to make sure that Foundry is secured for the long haul. Ben, there is this chicken and the egg situation because Le Boutin is saying, I'm not going to build it and wait for them to come. They've got to tell me that the demand is there. Does in some way taking equity by the US government incentivise others to get behind the government and say, we'll buy them, we'll take them, if indeed you do innovate and get that 14A out there?

47:03I mean, I think it's got to be more than just the government stake. I mean, I think what everybody's been speculating is would that come along with some form of a tariff or something that strongly incentivized companies like NVIDIA, Apple, AMD, Qualcomm, et cetera, to not use TSMC, but then use some capacity of Intel, probably not 100%, but some of it. So I think it would necessitate that. Again, I think we want Intel to win on the merit of technology, which we think is very good on paper, but they just need to get some customer wins. And I think once that happens, the confidence continues, But again, they're at a need for capital.

47:41And so how that arises is sort of the root of the situation. Ben, that's interesting that you say the tariff tactic, because we've heard on Air Force One from President Trump today that maybe it goes far as 200, 300 % tariffs on semiconductors. But then there's all these carve-outs, particularly for companies investing in the US like TSMC, like Samsung, Intel's biggest competitors. Yeah, and I think the difference, though, is that Intel is more at the leading edge. So TSMC is not going to bring, and the Taiwanese government has been very clear, they're not going to allow them to bring the leading edge, so call it two nanometer, one nanometer and beyond.

48:16Samsung's equally struggling to hit that number even though they're trying. Intel's really the best bet. And more importantly, Intel is an American company. And so that's why I say like if this is a sum investment of private equity plus government, it makes sense that they want to protect that investment. so they will do what they need in terms of tariffs or some other form of regulations that just encourage customers to use Intel. But again, I still think it's better if Intel just wins on technological merit, which we think they have. But we need a bridge, we need a gap. And that's kind of where everybody's struggling to figure out where that comes from.

48:52Ben, Intel will not comment on Bloomberg's reporting. The White House hasn't said anything to confirm the reporting. But the chances you assign to this deal happening? Oh, it's a tough, it's a good question. I mean, I think it really comes down to, would they believe that they could structure this in a way that's fair, whether that's divesting of shares, right, or paying that back, like some of the ways where you've seen them when they have to do, you know, investments in companies. So it's not just a constant holding. I think anytime the government gets involved, it's very, very tricky. But again, right, they need customers.

49:31I'd say, I know this is an on answer. I'd say 50-50. It's okay. But, you know. Phone a friend. 50-50 phone a friend. Ben Hart and I have created strategies. Fantastic to get your opinion. Thank you very much indeed. That does it for this edition of Bloomberg Tech. An extraordinary week around Semiconductor Z. Yeah, like, the rest of the session, keep an eye on Intel. If it closes that level, best week on record. Recap everything we discussed in the podcast. You know where to find it on the Bloomberg Terminal as well as online on Apple. Spotify and iHeart from New York City and London. I'm taking a little break for a while, but we'll be back.

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