Microsoft CEO on Sam Altman and OpenAI Drama; Hostage Talks Progress Between Israel and Hamas

On today's podcast: 1) OpenAI said it’s in “intense discussions” to unify the company after another tumultuous day that saw most employees threaten to quit if Sam Altman doesn’t return as chief executive officer. 2) Microsoft Chief Executive Officer Satya Nadella signaled that he’d be open to Sam Altman going back to OpenAI , rather than joining his company as part of a surprise move announced over the weekend. 3) The leader of Hamas said his group was close to reaching a “truce agreement” with Israel via Qatari mediation in rare public comments that suggest talks over freeing some hostages held by the Gaza-based group are progressing. 4) Nvidia’s quarterly r esults could still exceed sky-high investor expectations thanks to strong demand for generative artificial intelligence. Full transcript: Good morning. I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the controversy surrounding open Ai. A day after the founder, Sam Altman left for Microsoft, the firm says it is in quote intense discussions to unify the company. In an internal memo reviewed by Bloomberg News, Vice president of Global Affairs, Anna Macanju says open Ai management is also in touch with Aldman. In an interview with Bloomberg News, Microsoft CEO Satia Nadella signaled he would be open to Aldman going back to open ai. We really want to partner with open ai, and we want to partner with Sam. And so you respect to where Sam is. He's working with Microsoft, and that is the case on Friday, and that'll be that's the case today, and we will I absolutely believe that'll be the case tomorrow. Microsoft CEO Satia Nadella says, no matter what happens, open ai needs governance changes. Microsoft shares closed at a record high yesterday. Nearly all of open AI's employees threatened to quit and follow Altman to Microsoft unless the current board resign. Gene Munster managing partner at deep Water Asset Management thinks Altman will land back at open AI. The board's going to be gone. So when if Altman goes back, by the way, that is my prediction what happens here. I think he's actually going to return to open AI. If he goes back to open AI, they're going to be more aggressive at opening these models up. And if he stays with Microsoft, they're going to be more aggressive. And I think at the end of the day, you're probably going to see faster adoption of AI features. It's been coming at a neck break speed, but I think it's going to be even faster based on everything that's happened here. This is really allowing Altman to take his gloves off and probably do what he's wanted to do for the last eight years, and that's deep Water Asset Management's Gene Munster speaking to Bloomberg. Now, let's get to the latest from the Middle East. The leader of Hamas Ismail Hania says his group is close to reaching a truce agreement with Israel through talks mediated by contract President Biden has said both sides are near a deal to free some of the two hundred and forty hostages Hamas seized in the October seventh attack. White House National Security spokesman John Kirby says there would need to be a pause in the fighting if you're going to secure the release of hostages, and we certainly hope we're going to be able to do that soon. You got to make sure they can get from where they are to safety and do that as safely as possible, which means you're going to have to have at least a temporary, localized stop in the fighting. White House spokesman John Kirby says it's been difficult getting information on the hostages because Hamas has control of that access. Meantime, Israeli forces continue to engage in heavy fighting in the Northern Gaza Strip. Israel's taking control of much of the Alshifa Hospital, which it says Hamas used as a command and control center. Well Nathan, the White House is open accounts on Meta's social media platform as threads for the President and Vice President, and Bloomberg said Baxter has the details. The White House says it's just another way to meet people where they are. It says it's been using different forms of media since the beginning of the administration, and this has been in motion for several weeks now, but the timing does come in the wake of Elon Musk's endorsement of antisemitic content, and according to sources, the White House is not considering ending its use of ex accounts because of that, although they do say the Musk post angered Biden and his aides Ed Baxter Bloomberg Radio OK, thank you. A new front's opening in the US China chip conflict. President Biden is shifting focus to an emerging area of the contest for technological supremacy, the process of packaging semiconductors that has increasingly seen as a path to achieving higher performance. The US isn't alone though, in recognizing the potential of so called advanced packaging. China too is capitalizing on an area that is not subject to sanctions, capturing global market share and achieving progress that it was denied in manufacturing high end chips well staying with ships. Nathan Nvidia reports earnings after the bill. The high flying semiconductor stock is up two hundred and forty five percent so far this year year. Mandy Singh, senior technology analysts for Bloomberg's and Video shares closed at an all time high yesterday, and Karen was staying on the earnings front. Zoom reported better than expected revenue on strong enterprise sales. The company who signature video software became the essential communications tool for home bound Americans during the pandemic, has now turned its focus to business customers, as Zoom has added features for those clients, including word processing, and stepped up the use of artificial intelligence to buttress its main video conferencing service. Nathan Investors also have their eyes on US treasuries, wondering if the world's deepest dead market will suffer a third straight year of losses, and we get more in this live report from Bloomberg's John Tucker. John, Good morning, Karen. Investors who anticipated twenty twenty three would be the year of the bond were instead hit by waves of turmoil, but the year may have a happy ending, as treasury sore this month, traders now bet the Fed is done with hiking interest rates and in fact will cut rates of the first half of next year. You hope that happy narrative gets support when the Fed today releases minutes of its last policy meeting. The surgeon bond price has also got a green light to continue yesterday after an auction of twenty year debt went off without a hitch. US treasuries have gained two point six percent this month through Friday, cutting the loss for the year to merely two tenths of a percent, according to data compiled by Bloomberg John Tucker Bloomberg Radio, All right, John, thank you. Finally, as we approach the Thanksgiving holiday, Black Friday and Cyber Monday, spending are projected to hit new highs. Consumers plan to spend an average of five hundred and sixty seven dollars during those two shopping events. That would be a thirteen percent increase from last year. That result is a record for Deloitte's annual Black Friday Cyber Monday survey. About eighty four percent of shoppers say they feel confident enough to stick with the budgets they set in September four and ten say they will finish their holiday shopping during this long holiday weekend, futures pointing to a month honestly hire open this morning on Wall Street. This is Bloomberg sor Ry Nathan. Thanks. It's time now for a look at some of the other stories making news around the world. For that were joined by Bloomberg's Amy Morris Amy, Good Morning, Good morning, Karen. Police in Ohio see a shooter opened fire at a Walmart, wounding four people before apparently killing himself. The attack took place last night out of Walmart and Beaver Creek in the Dayton metropolitan area. Beaver Creek Police Captain Scott Molnar says the four victims are currently being treated for their injuries. Centured four victims. The conditions of the victims right now is unknown, as they were all transported to area hospitals for treatment. Police did not immediately release the name of the gunman or a possible motive for the attack. Meanwhile, in Colorado, another mass shooting, police say three people are dead and fourth is in critical condition after a gunman opened fire in Custer County. Police say that gunman is on the run. They believe he was in a civil dispute with one of the victims over property lines. Donald Trump's gag order our hearing is over a panel of three federal appeals witnesses appeared reluctant to give Trump a green light to resume public attacks on witnesses, prosecutors, and court staff, but they did signal that they would be open to narrowing the scope of the gag order. Judge Patricia Millett, we certainly want to make sure that the criminal trial process and its integrity as truth finding function are protected. Use a careful scalpel here and not step into really sort of skewing in the political arena, don't we. The DC Circuit put the case on a fast track rather than a typical appeal, but did not say when it plans to rule. Trump's lawyers have already said they'll ask the Supreme Court to intervene if the Appeals Court doesn't lift the full order. Thanksgivings just two days away, but the travel rush is already underway by road, railer, runway. Millions of Americans are traveling this week. TSA expects this to be one of the busiest travel periods of the year. This traveler, flying out of the Oakland International Airport refuses to lose her cool if things go awry. I imagine there'll be a few, But how does your roll with it? Triple A says Today and tomorrow our peak travel windows, when nearly five million people will pass through airports, a million people will ride the rails, and fifty million Americans will be on the highway global news twenty four hours a day and whenever you want it with Bloomberg News Now. I'm Amy Morrison. This is Bloomberg Karen. All right, Amy, thank you what we do bring you news throughout the day right here on Bloomberg Radio. But as you heard Amy say, now, you can get the latest news on demand whenever you want it. Just subscribe to Bloomberg News Now to get the latest headlines at the click of a button. Get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app, Bloomberg dot com, plus Apple, Spotify, and anywhere else you get your podcasts at his time. Now for the Bloomberg Sports Update, here's John stash Hour, John Karen. Philadelphia Eagles coach Nick Sirianni admits the previous game between his team and the Kansas City Chiefs a little bit more important. That was last February Super Bowl won by k C. But the Eagles did get some revenge and a Monday night or at Arrowhead Stadium, winning twenty one to seventeen. They trailed seventeen to seven at halftime. Jalen Hurts scored a touchdown on the third quarter and then the go ahead TV on a quarterback sneak cappin in eighty yar drive. With six point twenty remain the Eagles are nine to one to the first team since the Colts in two thousand and five and six to start consecutive seasons with that good of a record. Quarterback change in New York no surprise the Jets benching the struggling Zach Wilson, turning to Tim Boyle, who's only made three NFL starts and has never won a game. Joe Flacco signing with the Cleveland Browns, although the Browns will keep Dorian Thompson Robinson the rookie as their starter, replacing the injury to Shawn Watson. Gino Smith as an elbow injury, hopeful that he can play for Seattle in the game Thursday night against the forty nine Ers, I'm sending the NBA. Charlotte beat the Celtics at overtime one twenty one to one eighteen. The Hornets had lost four in a row. It ends the Celtics six game winning street. Jason Tatum scored forty five in the loss. The Warriors had lost six in a row, but Steph Curry back in the lineup, but he scored thirty two in a one twenty one one sixteen win over Houston. Six straight loss for Washington being home by Milwaukee one forty two to one twenty nine. Giannis Duntractempo scored forty two shot twenty of twenty three. Bruins lost in overtime at Tampa Bay John Station with Bloomberg Sports Ken all right, John, thank you. Coming up on Bloomberg day Break. You've been hearing a lot about Open Ai and Sam Altman and Microsoft. Of course, we'll be talking to the Microsoft CEO, Satia Nadella. He joined our Emily Chang, and he's going to discuss this entire story with us straight ahead. And ahead of that conversation, futures are lower with SNP futures down a tenth of a percent, down about five points. And this is Bloomberg from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on SYRIASXAM, the Bloomberg Business app in Bloomberg dot Com. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. We continue to follow the saga at open Ai after a whirlwind of events over the weekend led to the ouster of co founder Sam Aldman, only for Microsoft to bring him on. Microsoft CEO Satya Nadella joined Bloomberg's Emily Chang to discuss the hiring of Sam Maltman as OpenAI investors push for Altman to come back. They also spoke about Microsoft's partnership with the company and its goals for artificial intelligence. Let's bring you that conversation now, Satya. Obviously, it's been a very fast moving and dramatic last of seventy two to forty eight hours, and I want to start with the state of play. Where are we now? Open ai says it's hired a new CEO. We're reporting their efforts to get Sam Altman back. Tell us where things stand. Well, first of all, having it's great to be with you, you know, on Friday morning, we were very excited, committed and confident in our innovation roadmap to bring this next generation of AI to our customers. And we feel fantastic and capable of doing that. And we were partnered with open ai, and we were partnered with Sam and that's exactly where I am on Monday afternoon, if you will, because we think that we can. You know, we are leading in this next generation of AI technology. We continue to be committed to open ai, and we continue to be committed to Sam and Greg and the team in respect you where they are. And you know, I think about Sam has chosen multiple times now to work with us, and that's fantastic to see. And I think the real thing is that the capability that Microsoft has across the tech stack is what attracts great people like Sam, you know, and people like Sam, and you know, innovators like Sam when it comes to AI, to come to us, and we are thrilled about it. You incredibly quickly hired Sam as well as Greg. We are hearing that Sam wants to return. Investors want him to return to open ai. How would you feel about that? Yeah, as I said, we really want to partner with open ai and we want to partner with Sam. And so in respect you of where Sam is, he's working with Microsoft. And that is the case on Friday, and that'll be that's the case today and we will I absolutely believe that that will be the case tomorrow. So what are the conversations you've had with open AI's current board from their perspective, where do things stand? And have you talked with Emmett Sheer, the new interim CEO. Yeah, I've had conversations with Emmett, and again it's the same thing. There's no real difference there from where we were when we were working with Mira and she was interim CEO, when Sam was CEO and Emmett So my message to them Emmett is very clear, which is, hey, look, we remain very very committed to open ai and it's mission and it's sort of roadmap and they can count on us. And then, as I said, we also are very committed to Sam and Greg and team that want to join us. If they're not at open ai or anyone else who's at open ai wants to go somewhere else, we want them to come to Microsoft and continue to work here and win partnership with open ai. To your knowledge, why was Sam fired and to your knowledge was he involved in any wrongdoing? Has the board given you a reason? As far as I'm concerned, you know, we were, as I said, we were very confident in Sam and his leadership team. I've not been told about anything. You know, they published internally at open ai that there is not that the board has not talked about anything that Sam did other than some breakdown in communications. And you know, I'm not directly and was told by anyone from their board about any issues. And so therefore I remain confident in Sam and his leadership and capability, and that's why you know, we want to welcome him to Microsoft. Now, we understand that to support a return of Sam mom and too open Ai, Microsoft wants some changes to the board, to governance, to its overall contract with open ai, so something like this never happens. Again, what specifically are you looking for, for example, would you want to board see and if not, what else? Yeah, I mean I think we definitely will want some governance changes. So then you know, you know, surprises are bad and we just want to make sure that things are done in a way that will allow us to continue to partner. Well that's about it, right. You know, this idea that somehow, you know, suddenly changes happen without being you know, in the loop is not good. And we will definitely ensure that some of the changes that are needed to happen and we continue to be able to go along on the partnership with open AI. So how are you envisioning this role with the sort of you know, advanced AI team that Sam and Greg would be joining and leading. Can you explain that? And are they actually Microsoft employees right now? Like who do they work for? Yeah, so they're all in the process of joining, and yes, I mean the thing is that you know, we have a ton of AI expertise in this company. You know, in fact, at Aurignite conference last week, we talked about all of the great work open aies doing and on Azure and all the models and tools that we built around it. And we also talked about all the open source models that are on Azure from you know, Lama and miss Stral and jas and everything you know. And then also you know, in fact, not only are we leaders in llms in partnership with open ai, but we're also leaders in SLMs or the small language models with five and we talked about that, which is all developed by Microsoft Research. So what we am excited about is sort of creating another team that's really going to have high ambition on leading edge advanced day I work that Sam and Greg are excited about. This is something that you know, we've talked a lot about with them. You know, what happens in twenty five, what happens in thirty What do we do to advance both the system side the science side. And that's the thing that we will be pushing on. Now. Many folks I'm speaking with don't see Sam as a sort of big tech company guy. He has all of these side product projects that you know, we've already heard about, we've reported on new projects. Would he be able to pursue these side projects while being employed by Microsoft? Yeah, I'm sure you know, Like you know, Sam has got broad interests and broad investments and so on, and we'll definitely, you know, work through the governance aspects of it. But most importantly, I think you would want to only work at Microsoft if he wants to spend his full time time on really pursuing the mission, just like how we were spending his time on open AI. And so that's kind of the idea behind having him lead this advanced research team around AI with Greg and others. And you know, that's an exciting thing for us to look forward to. I'm curious just your reaction to you know, the last three days of events. Are you now more concerned than ever about AI safety, given we've seen clearly how fragile these institutions are. It's a great point. I mean, the thing that I think, in some sense, I've always felt that we should think about the unintended consequences of any great advances in technology from day one, versus dealing with them later. So in some sense I welcome this dialogue, if you will, of safety and safety first, even in technology and technological development, right, I mean, that's I think in some sense it should be celebrated that we as a tech industry have gotten to a place where we don't think of this as a tradeoff, but we think about this as two considerations that are both first class. Right. One is how do we build technology so that everybody in the world can have a doctor, an X that they can reach, or a tutor or you know, a rural farmer in India has more agency because of technology that was developed in the West Coast of the United States a few months earlier. These are unbelievable things that democratize access on one side, but on the other side, being grounded on the here and now harms right, whether it's election interference or deep fakes or bias or bioterrorism and having the guardrails against it or even some of the you know, AI take off existential risks and the alignment research that is required. So I think that there is a real robust dialogue that's happening, which is and real work. Like when I think about Microsoft, we have done, in fact, some of the biggest most work around AI alignment, AI safety guardrails. So for example, even the open source models we launched last week all have benefit from all the guardrail work we did around open AYE models. So throughout the reporting process, we've heard, you know, concerns about potential regulatory issues and of course the power that Microsoft already has, the power that Microsoft has in AI. Have you, on your end work through all the potential legal issues at play here? I mean, I just spoke to one investor who said, you know, they're considering suing open ai, Like, you know, there's a lot of things that have yet it seems to be figured out. And do you know what Microsoft's legal liability is and open AI's legal liability is given your significant investment there, Yeah, Look, I'm I'm most focused on and most excited about our ability to continue to innovate. Emily I mean, I let the lawyers sort of figured out what liabilities are. But I think we have all the capability, all the IP and all the things that we need in order to continue to essentially control our destiny here so that we can continue to innovate on behalf of our customers. That's what matters, That's what makes Microsoft Microsoft, and we'll continue to do what we need to do. Okay, so quick, last question, this is today. Who's going to be CEO of open Ai Tomorrow? You tell me I will leave it to open Ai and it's bored. Microsoft Ceosatia Nadella says, no matter what happens, open Ai needs governance changes. Microsoft shares clothes at a record high yesterday. This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed at six am Eastern each morning, on Apple, Spotify, and anywhere else you get your podcasts. You can also listen live each morning starting at five am Wall Street time on Bloomberg eleven three to zero in New York, Bloomberg ninety nine to one in Washington, Bloomberg one oh six to one in Boston and Bloomberg ninety sixty in San Francisco. Our flagship New York station is also available on your Amazon Election devices. Just say Alexa play Bloomberg eleven thirty plus. Listen coast to coast on the Bloomberg Business app, SERRIUSXM, the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager and I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak See omnystudio.com/listener for privacy information.