Rapid Recap: Google’s exodus, Spider-Man’s odyssey, Taco “Hell”, and more

AI is full of possibilities. Enterprises run on realities. That's why Pega combines the world's most powerful AI with the governance, transparency, and control enterprises demand. So you can move faster, adapt faster, and scale AI with confidence. All the power of AI, none of the uncertainty. Learn more at pega.com slash AI. Hey, I'm Bob Safian, and we have a special episode of Rapid Response today. I'm joined by my senior producer, Alex Morris. Alex, say hello to everybody. Hey, Bob. Happy to be back here doing this again. It's been a few months. Yeah, so I figured every now and then, Alex can ask me some questions and we'll let you guys listen in on the kinds of conversations we have internally. Absolutely. We're in the middle of summer right now. Obviously, everybody's heard of, like, what is the song of the summer? What to you is the business story of the summer right now? Oh, thank goodness you didn't ask me the song of the summer. I definitely wouldn't have gotten that right. Listen, I can't not start with the Strait of Hormuz. I think what's happening there in the Mideast, no one knows what's going to happen next. As we're talking now, it seems like maybe there's, going to be, you know, a resolution and the Strait's going to open again. But by the time this reaches listeners, who knows what, you know, what the situation is going to be. We had a guest on, Amy Harder from Axios, as you recall, who talked about, like, this, it's never going to go back to normal. And so anybody who thinks the oil markets and the energy markets and what's happening there are going to go back to normal are kind of, you know, deluding themselves. I think she's probably right. You know, we're in a different kind of world. And to me, that's the story that a lot of different things are hinging on. I've heard you say before that it's like the only certainty now is uncertainty. It's easier said than done to tell a leader, like, that's what you need to now get comfy with. It's just that being the new normal. What advice do you have for CEOs to be able to kind of get comfier with that? It's not just the international geopolitical environment. Everything is moving really fast, right? And I just think that's what's required of a leader right now, you know? And if you're not comfortable being uncomfortable as a leader, then you have to maybe ask yourself whether, you know, am I the right person to be leading this organization, this enterprise, this effort right now? Because there's very little that we can rely on, you know, firmly, or at least we have to be extremely focused about what we're doing. We have to be extremely focused about what we're doing. What are the things that we can control as opposed to the things that are, you know, that we're going to have to respond to or are moving, you know, moving around, around us. I was surprised that you didn't answer that the story of the summer is still AI. Are you feeling like AI is not the main headline of the year right now? I guess I feel like AI is like, it's less of a story and more of a deluge. This is a seismic shift that just keeps surprising us, right? We have. We had Uber COO Andrew McDonald on the show back in the spring, and he talked at one point about, you know, token costs for AI, which seemed kind of wonky in some ways, but, you know, suddenly it was everywhere, right? Everyone is talking about the cost of AI, which wasn't talked about just before that. We had Aravind Krishna, the CEO of IBM, I talked to, and he talked about how people look at their AI like the wrong way. It's like, if you took an 18-wheeler to take your kid to school, you'd be like, yeah, you could get to school that way, but it's not the right tool necessarily, the right vehicle, you know, ideally for that task. And so that conversation is part of what's happening in the AI world right now. What's the right kind of AI? What's the right price for you to pay? You know, and of course, all that gets more complicated by advances of open source, or as they call them, open weight models, out of China that are so much cheaper. So all of that is, you know, just a piece of all the things that are going on in the world of AI. Yeah. The fatigue around the cost right now. Do you think that is a definitive shift, or is it just like a course correction? Oh, I think it's a real shift. There was a point where everyone was like, I need AI, I need AI. And I think what Andrew McDonald was pinpointing is, is businesses realizing like, hey, wait, this is costing me a lot of money. You know, am I getting enough value for what I'm spending, right? I think a lot of businesses are starting to say, what is the right expense? What return am I getting on it? Should I be paying for an 18 wheeler? Should I just be taking a bike? You know, when should I walk on my own? Like, those costs are real. And I think that a sophisticated assessment of that will be more and more important for how businesses deal with AI going forward. - We are seeing so many of the major AI players being able to use competition with China as kind of an excuse to reach further and further. I'm curious whether they could have done some of the moves that they're doing if they didn't have China as the big bad wolf to point to. What do you make right now in terms of the US government pushing for this framework to be able to review models before they're released? - Certainly China sometimes is an excuse. I think there's also a clear reality that like China's technological prowess is much better than a lot of, you know, Silicon Valley and US-based technologists, and not just technologists, but sort of observers expected or were prepared for. You know, so there is absolute reality in that competition. The efforts by government and others to figure out how to assess or oversee the development of AI, like that is the wild west. The safety of AI, no one knows how these systems really work, right? So they are, you know, in tests, jumping out of their test sandboxes and hacking into things that we didn't expect them to hack into. So there is need for some oversight, but development of the technology is happening so much faster than oversight discussions, let alone processes. And for those of us who are observers of all of it, you know, yes, everyone has an ax to grind, right? Like the US versus China, open AI versus anthropic, you know, the federal government versus states or other regulatory or non-government, or oversight, like there's nothing easy in all of this. It is all uncharted territory. That's why I say like, this is a deluge. It's not just one story. It's multiple stories that all, you know, overlay around it. And I mean, it's fascinating to cover as a journalist for business leaders and for us culturally, you know, as a society, it's torturous, it's torturous. I mean, we've seen these security risks from both open AI and anthropic. And, you know, anthropic has been able to have the reputation of being more of the responsible developer. I'm curious whether that actually is holding water or whether they're just telling a better story about their company more. Is there that much of a difference between the two right now? - Well, that's, that's a great question. I mean, I think there are clear sort of value and principle differences between some of these different organizations. And I don't think anthropic is simply playing a marketing and positioning game, although it has accrued to its favor. But now it's getting some backlash about it. And by the way, you didn't mention in this like Google, which is not to be discounted and is also a tremendous player that's continuing to advance dramatically in these areas. I don't think you can necessarily trust that all of these businesses will always act in the way that is best for everyone. They all have their own interests that inform and impact their worldview. But is there like a qualitative difference between I'm going to use anthropic or I'm going to use open AI or I'm going to use Google? I think that's very hard for us to know for sure. At this point, they're all doing work with the federal government. They all have to be mindful that the federal government might regulate them. And so it's not that they're necessarily working together. They want to differentiate themselves from each other. But, you know, I think for all the rest of us, we want to treat them as if they're a united entity. So we know, you know, where we're all going. going from here, you brought up Google that was new. this week that uh four members of top ai talent including jeff dean are uh leaving the company to form discovery loop a startup that is a uh non-profit research lab where have we heard that before um we will see whether it stays that way uh they will have no problem getting funding for sure um what does it say about the state of google right now and because of who this talent is does it immediately make the startup want to watch obviously whenever you know you lose talent it's rarely a good thing i'm not particularly worried about google they have a lot of talent they have a deep bench there are a lot of new players on the scene and the new players need to be proven that doesn't mean people aren't gonna you know give them a fair amount of money to to get started if they need to but we don't know who's gonna have staying power i mean we are still so early you know we're still in the early stages of of social media the big players were like myspace and friendster and facebook was just small and like tiktok hadn't even been thought of and so we're gonna see sort of similarly volatile and unpredictable developments with ai players there is an advantage in compute in having a lot of compute that may give you some advantage but someone may come up with something new who hasn't even been created yet that's going to be the leading company we're going to see a lot of new people coming in and we're going to see a lot of we recently saw the record ipo from spacex since then they have stumbled quite a lot in the market do you feel like spacex right now is overvalued do you think it's a long-term bet the initial valuation the takeoff on spacex stocks was extraordinary and i don't think anyone really can be surprised that it has settled down i think lots of tech companies are what we might call highly valued i don't necessarily want to say overvalued because it kind of depends on your time frame you know i think spacex is among the tech companies who are spending a lot of money on compute they're investing a great deal of of the capital that they have um that is great for progress quote progress or terrifying as we discussed about you know not being sure where this technologies are going to go but there's also no clear line to return on that investment this is the fear uh that is the other side of all the optimism about ai because right now ai is driving the economy i want to ask you about something a little bit more fun spider-man i believe it beat the avengers endgame uh record for the opening weekend in north america is spider-man a case study in that hollywood isn't dead well first of all spider-man's a new yorker so you know i have to be in favor of spider-man and a very a very human uh superhero right which i think is appropriate for these ai times people were talking about you know the marvel universe sort of had run out of steam and this seemed like you know how did that happen how did it happen like it's it's a good movie you know it's like a well-executed movie with emotional overtones it doesn't just rely on you know action and cgi and ai and all those other things right and and that's what connects with people and so that's why like hollywood as an industry may be under different kinds of pressures and it may not be as big a business going forward the box office but when you have a story that's well told that you know makes it worth people spending their time in that theater right then people will flock to it we do love that experience together i mean the other movie that's been doing well this summer is the odyssey and i keep thinking like who is in that pitch meeting where someone said hey there's this you know old mythic story from thousands of years ago why would that work it works because you know christopher nolan figured out how to make it work and again it's the storytelling it's the emotion it's the romance it's the action it's all of those things coming together that you know that's what ultimately drives hollywood success you can have a spider-man 15 and it'll work if it's a good story but it won't work just because it's a fight spider-man 15 right you have to do more with it than that a not so good story that the grammys didn't really want to tell is the boycott from bts the boy band this is because of the grammys launching a best asian pop music performance category we've seen how much the k-pop community is ride or die i'm curious about the k-pop community whether you feel like this is going to be a real hit for the grammys in the ratings in their reputation where do you see this going so um we had on the show the ceo of the grammys harvey mason jr and he is the the villain in this story right and when he was he was on our show he talked about how like the goal his goal with the grammys was to expand the audience and i i think as far as i can tell the idea of the k-pop community is that it's going to be a real hit behind creating an asian pop category was to expand was to give more attention to you know a genre of music that maybe wasn't getting more or certain artists i should say because i don't want to describe asian pop music as it's as a genre in that way because that's part of what bts was reacting to but they're they're artists that were not getting as much attention as uh from the grammys as they're getting from listeners and from the public clearly the way this was executed uh didn't go well right it just it just it just didn't work out and whether that's because you know harvey or others at the at the grammys didn't have appropriate conversations with bts and others in that community um this is something that could have been avoided i think if maybe the naming of it had been different maybe it had been a little clear about what they were trying to do i've seen uh the grammys quoted as saying like you know we respect bts and you know but it doesn't sound like they're rethinking this at all which in some ways i think is a mistake maybe they should be having a conversation with bts and trying to see like is there some way they could resolve and sort of connect these things to make everybody a little bit more happy um but for all i know maybe they've had those conversations and it wasn't as it was impossible there was backlash when they created the latin grammys uh of the idea of whether it is um siloing versus celebrating yeah and you know are you doing a better job to honor a community or a genre by letting it have its own night or its own category versus integrating and weaving it into the core product i remember having a our versions of these conversations when i was at fast company and we were um talking about doing special coverage for women executives you know i had been at fortune and fortune does the most powerful women's series it's like well should we be doing our version of most powerful women and we decided instead to make it more of a priority to integrate women into some of the other coverage we were doing right to not set up a separate category um but you know so that's the and harvey you know the grammys should have the lesson of you know their their experience with latin music to try to address this i also think maybe you know they just didn't communicate clearly enough that like the broad categories you know will still include artists that would be honored in this other category like it's additive it's not it's not taking away that was the hope by the grammys but you know again they the the communication wasn't executed the right way and they're they're paying for it when you've built substantial wealth through your business it's often tied up in a single equity position the upside is real but so is the risk and knowing when to act isn't always obvious creative planning works with business owners to build a strategy around concentrated equity when to diversify how to manage tax risk and how to protect what you've spent years building creative planning where wealth works together learn more at creativeplanning.com slash masters of scale humans will never be more intelligent than ai there's gonna be two types of companies those are great at ai and those that went out of business because they weren't how do we build a future that is human-centered i'm rana el-khaloubi and on my podcast pioneers of ai we answer that question and so many more as an ai scientist entrepreneur and investor i know what it takes to build ai that works for everyone every week i sit down with the pioneers shaping our future and we take you behind the scenes of the ai that's transforming our lives find pioneers of ai wherever you tune in hey listeners bob here if you listen to rapid response on masters of scale you may be missing half the show because every friday we release a Second rapid response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford CEO to NASA's administrator to the lessons from the Devil Wears Prada. It takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Whenever we have any of these conversations, we're most excited to get onto sports business. We've just seen recently a lot of backlash to Gianni Infantino, who runs FIFA, the guru of FIFA. He tried to make a move to privatize part of FIFA, which in theory is supposed to be a not-for-profit organization. There's still, as we record this right now, a lot of pressure for him to resign. He's saying that he will not. Is this an age-old issue for FIFA, whether it was Gianni Infantino, whether it was Sepp Blatter before? Were they just getting too greedy? Was he feeling like there was enough goodwill so soon after the World Cup for him to do this? First of all, I love your positioning him as the guru of FIFA. For those of you who are not familiar with Despicable Me, check it out. Check it out. We always just want to promote Despicable Me here. That's right. This year's World Cup, there was a lot of momentum that FIFA could build on. I think it's a lot of momentum. I think part of the reaction is because of some of the historical corruption, frankly, that has been part of FIFA and a concern that like, ooh, the culture of FIFA hasn't learned that lesson. You know, there's a higher standard that the World Cup represents and that FIFA could, I don't want to say should, but could represent to the world about sport bringing people together. And I think that's, that's what sort of rankled people. Like, isn't there any place in this world where things aren't going to be corrupted just by how do we, you know, maximize the amount of money we make out of this? I hope that that spirit persists, not just in FIFA, but for all of us as business people to recognize that, like, maximizing every dollar today isn't necessarily bringing us to a better place overall, especially when, and a lot of the people who are getting the money from that, those extra dollars don't really need them. Listen, I love sports. You know, I love sports. And part of the reason I love it is because it, it connects us so well. And, and so if you're going to do something that's going to disconnect people in sports, then maybe let it go. One thing that is splitting sports fans right now is the treatment of Kelshi, the prediction market, which has been sued by New York State for running an illegal gambling operation. The prediction markets are seemingly, to this point, able to run the same as most gambling companies without facing a lot of the same regulations. Do you feel like this is just about time? Do you feel like the state has a good case here? Listen, there's no question that, you know, Kelshi, Polymarket, people are using them for sports betting. That's undeniable. But because they have successfully gotten the money, gotten themselves to be already regulated as a futures market by the CFTC, that allows them to sidestep some of these other regulations as a very smart move. I think in the long run, these new models like Kelshi, they are going to be real players. They are attracting real audiences and they're being used for some fascinating stuff. I mean, I, thinking of your, looking at your Knicks hat and thinking of the Knicks playoffs, I don't know whether you remember this story, but during the Knicks finals run, there was a bar in New York City that decided to offer, you know, a free bar tab of up to $100 for all of its patrons if the Knicks won the game. Okay? And at the same time, they placed a countervailing bet on Kelshi for, you know, that if the Knicks won. So they knew that like, well, I might be losing, losing money here, but I'll make it back over here. It was like this really creative hedge that they were using Kelshi for that is in theory what, you know, an exchange like Kelshi could be used for. But I don't think that that's what most Kelshi users are using it for these days. I want to ask you about Saudi Arabia's public investment fund, which just acquired EA for $55 billion. You know, if I were Andrew Wilson, CEO, I don't know how I would feel about this in that you have a big influx of money coming in. Obviously, this is what happened at Newcastle United in the Premier League. It's what happened to Live Golf. You know, with those, there are these big dreams of for Newcastle, all of this money could have them be a rival to a club like Man City. For Live Golf, it's you could be a rival to the PGA Tour. But what we've seen over the past year is that, you know, PIF has frankly been fickle and they could lose interest when it's not showing returns quickly. And so for Newcastle, they've had an awful transfer season right now in the summer. For Live Golf, obviously, PIF withdrew their investment. And so what would you be thinking if you were inside EA right now? How would you be preparing for working with the Saudis? I think, you know, EA Electronic Arts, they are, I'm sure, thinking that we are quite different than, you know, the Saudi investment in sports properties. You know, we're a much bigger business with renewable revenue in a different kind of way and we're much more established. EA could have gone to the capital markets and raised capital in other ways. I think, again, this is my guess that they believe that they can remake and modernize EA to have it be a more valuable company when they're private in a way that would be more difficult when they were public. That the value of the company would fluctuate much more dramatically and maybe that they would become potentially subject to takeover efforts by financial partners that they would feel were less supportive than the Saudi Public Investment Fund. In the case of Newcastle, in the case of Live Golf, I just think, you know, other players when the Saudis come with their money, I think those lessons are there for people to say, let me make sure I'm asking the right questions. Let me make sure I'm pushing back the right way. And, you know, let me not get too dependent, perhaps, on this unending firehose of money that may actually end. I want to ask you about Taco Bell. They've been struggling with the cyclospora outbreak the last few weeks and I've been surprised that this story has kept on going. People are still talking about it. There are still cases being reported. It's become a real brand hit for Taco Bell and its parent company, Yum! Brands. If you were going into Taco Bell to advise them on recovering from this brand hit, what would you say? The first thing they've got to do is they've got to make sure that their supply chain is actually clean, right? Like, once you have a problem and really a scandal of this, this magnitude, at least magnitude in terms of public attention, you can't afford any other scares, right? And so anytime anyone has any difficulties with Taco Bell food, if that gets publicized, it's just going to reinforce this. I mean, this is something that Chipotle went through. You know, they had their own issues with, I guess, E. coli at some point that, you know, that dogged them for a while and it took them a while to get themselves back on track. I mean, when I was younger, you know, we used to call it Taco Hell. Like, everybody knew that the food there was, you know, you'd get sick. Yeah, of course, everyone would get sick at Taco Bell. I know. Taco Bell, don't get mad at me. That was just the talk that young college kids had about it. But they really got the brand to be sort of trusted and relied on. And, you know, they're just going to have to do all that hard work over again and it's not going to happen quickly. You know, it's just not. You had asked me earlier, was this good for, like, Del Taco or, you know, some of the other fast-food brands. And I think it's not. You know, I think it just makes people question, what am I getting when I go into a fast-food restaurant? I don't know that it's the only reason that Chipotle's stock has gone down or the only reason that McDonald's is seeing a slowdown in traffic to their stores. But it probably contributes. It's certainly not a good thing. A whole category has to be that much more careful about, you know, like, what is the quality of our food? You know, what is the quality of our service in responding to people who complain about how they feel after they've had our food? Those bars go up. That's good for us as consumers if they actually live up to that. That maybe we don't have to rely on regulation, which seems to be pulling back in some of these areas. But maybe, you know, market scrutiny will keep folks in line. We're still in August, but as the summer begins to slow down, I want to ask, what are you looking forward to seeing to? Where is the puck headed? What should we be paying attention to? I mean, of course, I'm looking forward to, on October 20th to 22nd, the Masters of Scale Summit taking place in San Francisco. For those listening or watching who have not looked into attending the Masters of Scale Summit, you can go to the website summit.masterofscale.com. It's going to be a great gathering, and I am deeply looking forward to that. Am I looking forward to the elections that are coming later this year? I'm not sure. I think it's going to be noisy and messy, and all the resolution that people are hoping will be clarified about America's direction will not be clarified, because as a country, we have not clarified where we want to go. But I hope some things get a little clearer in that. And listen, Alex, I'm a big fan of the Masters of Scale Summit. I'm a big fan of the Masters of Scale Summit. I'm always looking forward to whatever the next episode you and I are going to do together. We've had a lot of chance to talk to a lot of great folks, and I'm curious to see who we get next and share their ideas and sometimes their wisdom, sometimes their troubles, but always interesting perspectives. Absolutely. Thank you so much, Bob. And to everybody listening and watching, we'll see you Friday. Thanks, everyone, for listening to us all the way along. Appreciate it. Be well. Bye.