AI Backstop Debate, Musk’s $1 Trillion Pay Package
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This is Bloomberg Tech. Coming up, open AI execs U-turn and David Sachs says no on a federal backstop to fund AI infrastructure. Markets react.
Plus, Musk's $1 trillion compensation package gets approved by Tesla investors. With over 75% of votes cast in favor, we dig into the bold new promises.
And we break down more tech earnings with the CEOs of Affirm and DraftKings later this hour.
We go to these markets, though, in sell-off mode, Ed, on the day and on the week. Over the past five days, we've shed more than 4% in market capitalization. It is the worst week since April for the Nasdaq 100. And anxiety is really building when it comes to AI infrastructure and whether people have got the money. You're digging into it.
Yeah, here's a story that's played out driving markets. We begin with OpenAI and Wall Street's anxiety that followed fresh comments about potential government financing in the AI race. Speaking at the Wall Street Journal's tech conference this Wednesday, OpenAI CFO Sarah Fryer called investors' attention after hinting at a potential government backstop for AI chip investments. A remark interpreted by some as Friar signaling open AI had federal guarantees for the costly infrastructure behind large AI models. David Sachs, the White House AI and crypto czar, seemed to be paying attention and posted on X Thursday there will be no federal bailout for AI. The U.S. has at least five major frontier model companies.
If one fails, others will take its place. That, in turn, prompted OpenAI CEO Sam Altman to step in and clarify on X, writing, we do not have or want government guarantees for OpenAI data centers, emphasizing that the company is not seeking a federal safety net. Let's get the latest. Bloomberg's AI editor, Seth Figerman, joins us now. Where do we stand? This is a multi-day story. Markets paid attention to it. What's the net result, at least from OpenAI's perspective?
What's funny here, Ed, is that really the intention behind Sarah Fryer's overall remarks at that event was to kind of calm people's nerves about what has felt like growing anxiety this week on the markets about AI spending. And instead, the takeaway was what felt like an off-the-cuff and vague remark that just heightened those concerns. I think where things currently stand is the company has repeated up and down that there's no discussions or plans for any kind of federal backstop. Instead, they're hinting at, well, maybe there's a role for government to invest in its own AI infrastructure that might somehow reduce some of the capital burdens here or other indirect ways in which government could help the wider market.
But suffice it to say, the message that she intended to deliver seems to have been completely lost.
Sam Altman went to great lengths to try and reverse, autocorrect in whatever way, make clear, and talked about maybe chip manufacturing.
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