Nvidia Eyes Intel, TikTok Faces Scrutiny, and Visa Tackles Payment Fraud | TSG Ep. 927

Hey, everyone. If Microsoft can invest in Apple, why can't Nvidia invest in Intel? You're watching Textron Gang.

Hey everyone. Happy Friday. Wow, man.

This week went like this. It's Friday. We're happy to have you here at Techstrong Gang with us.

We've got a great gang lineup today, including, I hope, a special guest star where we're waiting to fly him in. We in the green room getting makeup or I don't know something, but, um, I, I mentioned the Nvidia Intel deal. We're gonna come back to that in our B block today.

We're gonna kick things off in our A block with this YouTube versus TikTok angle. Let me introduce you to our gang members today. I'm really happy to have Fred with no, no hat Fred, no hat Walmart today.

Fred, good to see you. Great to be here. Thank you.

Nice, thank you. Joining Fred, I is Ann Alhoa after all this time. Alhoa Award.

Ann, good to see you. Good morning. Nice to See you.

Also from our, I guess our Texas contingent, we have two people from Texas. Uh, future analyst, uh, visible Impact, uh, CTO Co-founder, guy Coer. Hey guy.

Hi. Good to be Here. And our man in Silicon Valley, John Schwartz.

Hey, John. How's it going? It is busy, busy, busy.

Yep. Uh, absent is our Chief Content officer in Yankee fan, Mike Ard. He's at a harness event today, so no, no ard, no joy in Mudville, uh, though the Yankees did one last night.

Anyway, let's jump into stuff. Today. We've got this YouTube versus TikTok thing going on, and do you want to, uh, kick us off on that?

Absolutely. There, there's a kind of a mixed basket of things happening this week with the two companies that are in the headlines. Uh, first notably with YouTube, they celebrated their 20th anniversary.

They launched in February, 2005. They announced and signaled that they're leaning into AI with auto editing tools, intelligent product link integration, speech to song conver, uh, conversions. They're really trying to let creators know that they're here for AI tools.

They're still cool. Don't forget about them. Uh, and they've also rolled out some additional monetization features, uh, which I think are them trying to emphasize how much they believe they're paying creators.

I would love to see the audit on this. They claim a hundred billion dollars has been paid out to creators since 2021. I, I would love to see someone independently audit that, but I also, I have to wonder what percentage, uh, how how many of those are in the top 5%.

Uh, that actually reaps some financial benefits. But anyway, um, TikTok has also had a kind of big Newsweek because the Trump administration reached a framework, uh, to deal with China to keep TikTok operating in the us, uh, with an investor Oracle, uh, who seems to be everywhere between this and the open AI stuff. They seem to be everywhere all the time right now.

Oracle's having a moment. Um, but what was not really explicitly announced with the TikTok announcement was whether or not what this means for the intellectual property and the licensing of the algorithms. Because the algorithm of TikTok is the secret sauce.

And that recommendation engine is the biggest part, I would say, arguably, of the security concerns that people have expressed and why this whole thing happened. It's not really clear yet how separate or neutral that's going to be, uh, the US version of the app and how much will bite dance be involved in its development or support? How will the data protections be?

There's really a lot unknown, but in terms of, if you put the statistics of the two companies head to head, TikTok was technically the most downloaded app globally last year with, uh, 700 and I believe 700 million downloads. Uh, their user base is about half of what YouTube's, but they have more engagement time. The average adult in the US spends about an hour on TikTok, whereas they spend about 45 minutes on YouTube a day.

Yikes. Um, but they're both very close in the statistics when it comes to children's viewing times. So their neck and neck and poor Instagram is there with about half the view time.

Uh, they're, they're trailing, but they have a loyal user base. And so what I think is interesting is both platforms are also sort of signaling that long form video is starting to perform better. So I think we're gonna see a shift from all this short form getting into more longer form.

We've seen TikTok try and signal this move. Uh, so there's just a lot happening. Uh, but a lot remains to be seen about this TikTok deal.

And I'm really glad that you brought up the algorithm coverage of this. And I, I don't think it's unclear at all what's happened with the algorithm, uh, by dance has maintained control and ownership of the algorithm. And this new entity, because it's essentially a new entity in the United States is going to license it.

Uh, there's very been very little coverage of the algorithm. It's all been, there's been a little bit of political coverage because I really didn't think we were in a company where the president of the United States, uh, starts making business decisions and interfering in commercial transactions where you been, you've been sleeping under a rock. Actually, I did know that.

Uh, we are in that country. I was, yeah, being, whatever the word is, sardonic, there's been some coverage of that. But here's the thing.

TikTok has been operating illegally, thanks to said, president of the United States and the current administration for nine months now in the United States. It was banned that ban by, by Congress. That ban was upheld by the Supreme Court and, um, the executive branch of the United States and the president who is supposed to, whatever the constitutional words are, take care to faithfully execute the laws of the United States, has not been doing that at all.

But why was TikTok banned? The algorithm is why it was banned. The algorithm, the influence it provides, and the algorithm remains under the ownership of Byan, which is a company like every Chinese based company that is partially controlled, if not essentially veto controlled by the Chinese government and the Chinese Communist Party.

So that to me is really the story here, uh, more than the corruption and government interference and paybacks and all that other kind of crap, because we've seen that maybe for the hundredth time already. So the new news to me and the main news, um, which John, uh, you missed in your story, um, uh, may be understandably so, otherwise it was an excellent roundup. Um, is the fact that the algorithm and the reason for the fan, it remains, you know, uh, uh, uh, continues and, and in fact it's now will continue, essentially endorsed.

Yes, It'll continue to exert their influence through the licensing of the algorithm through intellectual property arrangements. That is very clear to me. It hasn't been explicitly denied, but I think we all know what that means.

We can read between the lines. So Ann, you make a great point there. You know, for all the talk about the videos and the length of videos, the real secret sauce of TikTok was that algorithm and the fact that we haven't done anything to take it out of the Chinese Communist party's hands is to me a perfect indication of taco, our taco presidency, right?

Because we talk a good game. And then at the end of the day, we, we bring in one of our chosen oligarchy friends who are going to make mint money off of it. And we let people go about doing whatever they were doing before, in this case, the, the chosen oligarch is Larry Ellison, who's now worth over $400 billion.

We're going Oracle stock going up like 34% or something this past week. And I'm going to get into that in a second. But, and, and it's, and it's not just Larry Allison, it's his son too.

'cause he, he bankrolled his gun, I think it's called Skydance or whatever, the company that bought Paramount and his, you know, and of course that was, that had to get approval from the FTC, wink Wink who, how do you get approval today? We we're seeing it play out. Um, there's talk about them putting in a, a, uh, a, uh, a bid for NBC universal Discovery or whatever that entity is called these days.

Warn Warner Brother Warner Brothers, Warner Brothers discovery, By The way, um, this is why they, you know, Stephen did a lot of people say this is why they, they sacrificed Stephen Colbert at the, at the altar of this deal, that Ellison maneuvered. And let's talk about Larry Ellison and the recent runup of Oracle stock. Right?

What a great deal this is, you want to talk this, this JP Morgan and the robber barons themselves would be proud about this deal. Oracle stock bounced 34% up, or more than that based upon their $300 billion deal with OpenAI. They're selling OpenAI, GPUs and data center supposedly for $300 billion.

Where OpenAI is getting that $300 billion from is another story, right? Maybe they could go public, maybe they can't. That's That's their, that's their plan.

Think No, but lemme tell you where it's coming from. 'cause at the same time, Ellison goes in and invest in OpenAI, they take that money that he's investing in OpenAI to give it to Oracle, which boost Oracle stocks. So Ellison gets more money, invests more of it in open ai.

They invest, they buy more Oracle stuff. Oracle stock goes, but more Ellison gets more money. Invest more in OpenAI.

Look, this would make jp, it's a, and the Vanderbilts proud. You know, there was a video last night from the state dinner in, uh, London or England, uh, England with the, the Trump visit and on, and they had a video, uh, showing some folks in the crowd. And there you saw Jensen, Sam Altman, uh, Tim Cook, Blackstone, CEO, and you know, Is it any different than the gas and oil guys sit around Vlad Putin?

Oh Yeah. It's same thing like the Godfather. It's the same thing thing Around the table.

And you, you carve up the empires, you carve up the business Guy. I know you have feelings about this. Do you want to contribute?

Uh, well, I mean, after my rant about, about the algorithm, I just, I do think that this is almost more a political and social story than anything else. That, that, um, the algorithm is the thing, and it's even worse than you say, Alan, because that story is buried. It's, it's not even really buried.

It's just, you know, what people are looking at. If they're looking at it critically, they're looking at it as the, the, the continuation, the oligarchy, and here's how businesses fall in line and here's how, you know, uh, uh, a government exerts pressure to, to, you know, uh, affect, you know, business decisions and all that other sort of stuff. Instead of this thing of like the whole, the whole ball game was influence of consumers of media through these algorithms whose sole purpose may be commercial to keep people stuck on the screen, but whose social effects are great.

No, no. But there was an insidious, more insidious part of it, which was the Chinese communist party was getting all this information on people. I'm just generalizing it, Alan, I'm just saying even if you like, like, let's say for example, meta is not particularly interested.

They're just interested in being huge and making money and spreading around the world and being even more powerful in that sense. Not, not a political, uh, uh, agenda, but the, the YouTube al algorithms do the same, actually. So we can move to Google.

All the algorithms have been designed intentionally to keep people stuck on the screens and the, and, and scroll. It's starting to be more documented that the way you do that is with outrage and with feeding conspiracies and like things like that. And, and, And radicalizing people.

Yes, exactly. Let's jump To people their silos. I give a chance, Anne, we're coming back to you.

Go ahead. I mean, I don't trust China, but I trust China to be China and I, I don't think this deal, and I think we're all agreeing this deal has no, it's all facade, Right? It's stopped being about China.

Hey, We solve this, we solved the TikTok guys like, yeah, Mo, and, and the thing is, the average American consumer does not care. They don't Care. Fist bump, and let's move on.

That, that, that's exactly what it is, unfortunately. And that's the world we live in. That's the world we live in.

It's, it's, They don't care how the meatloaf gets made. They want their funny videos. People wanna buy the product.

The influencers wearing this is, this is where we've shifted as a society, and we can, we can cry about it. Or we, we can, as leaders in technology say, okay, let's, let's try and teach people how to responsibly use these platforms. This is why I've been on TV 95 times.

I go on to educate people about how to curate their information diets, how to avoid social media addiction. So all we can do is educate people, which is what we're doing right here. You know, I, I read an interesting, uh, story.

I've, I'm remembering if it was Finland or Norway, where they're doing like mandatory education of kids about, you know, using social media responsibly, separating conspiracy and craziness from facts. Uh, you know, and, and it, It sounds like Finland to me. And to be fair, I'm finished.

Yeah, my father was from Finland, but, Okay, so, okay. They also knew finished the whole time. That's when we got Al Ho, I remember, but a hula, but no, but Aula, but a hula.

But they're doing it there and it works. That's the point. It works.

Well then the society have prioritized truths over lies. They, they are not looking for truth. What A novel lies Idea, which is what the US does.

Can I throw a little, so hang on, let's, let's look at the last word. Go, Fred. Can I throw a little dissenting, uh, uh, opinion on this?

Uh, sure. So, so I appreciate the context and also the color given the current political environment we live in. But there's also an opportunity here to reshape the, they, they can license the algorithm if they choose to.

I don't, I don't know if there's enough details. I'm, I'm anxious to hear today what happens, uh, in the conversation with, with China to, to ferret this out. But I mean, even if you've licensed the algorithm for a year to figure out the, both the trend and behavior, the US has been very broad breaching in the sense that all of any US company and the reach of any US company globally for folks that access or utilize that company also have the ability to go get all the data.

So, you know, if, if, if I were sitting in a chair thinking three years out and I thought, Hmm, I don't have this algorithm, I want this algorithm, this is a great opportunity to gimme a licensing opportunity and access to 170 million people using it. I could probably figure this out. And in addition to that, I can also revoke the license in a year and roll our own thing.

I can also start to customize the way in the behavior that people utilize the app for the current things they do today. So there is a possibility here that there is something larger at scale. I, I, I don't disagree with the assertions you guys are making, but I, I would hope that there's an opportunity here where we can take you know this and turn it into something broader.

Uh, it's certainly a big enough deal that we should, Well, but Fred, that's an excellent point. And here's the thing. You know what, what was the company Windsurfer or something?

They licensed their IP and everyone said, oh, they, what's left of the company? They licensed the ip and then, then they got sold a couple days later because there was more. Because what happens, Fred, and we don't know the particulars, you're right, maybe they licensed this algorithm as it exists today, and now you could go do what you want using this algorithm, but in the meantime, the Chinese are gonna continue to develop that algorithm and make it better.

And I don't ne you don't necessarily get a license to the next versions of it, right? I'm, you get, you get licensed version two, but as I come out with version 3, 4, 5, and six, you don't have that. Yeah.

So the curious thing is whether or not we top the tree here, uh, I think that's what, that's what's gonna be intriguing to see happen. Absolutely. Alright, we spent a lot of time on this one.

We're gonna come back to our, uh, B block, the Intel Nvidia d maybe we'll have a special guest. You're watching Text on Gang Discover Textron Group, the epicenter of tech innovation. We are your go-to for reaching IT leaders and practitioners worldwide.

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Hey, I promised you a, uh, a special guest for today and, you know, sometimes it works out. I was able to grab a couple of minutes of Daniel Newman's time Fu, CEO here, and, and he's kind of a much more of an expert than I am on what goes on in the semiconductor space and markets and everything else. Daniel, welcome to the Gang Against.

Great to have you on. How's everything? Good morning.

It's been busy since 4:00 AM Pacific time here. Uh, some big announcements today. Yeah.

But, uh, in this AI cycle, there really is no safe slow weeks. Even the ones you think aren't gonna be busy seem to end up busy. And so all, all, well, Alan, thanks for having me.

A pleasure. So guys, look, the big news Daniel's referring to, of course, is Nvidia taking a stake about a 4% stake in Intel for a mere $5 billion, 4%, 5 billion, sounds like a bargain. Um, you know, I, as I teased in the opening to today's show, it reminded me sort of where Microsoft invested in Apple, because, you know, back then they did it so that they wouldn't be an M word, right?

They, well, they were an M word Microsoft, but they didn't wanna be the other M word monopoly. And so by propping up Apple, they had a viable competitor, not the case here. Daniel, I'm gonna ask you to kick it off.

What do, what's your take on this deal? Well, there's two parts to the deal. There's the investment part, and then of course there's the technology partnership.

There's a commitment between the two companies to build, uh, it's, you know, a chip design that's going to sit on the, you know, on the X 86 system that's going to basically enable NV link, uh, and data center designs. And then on the RTX designs, basically C-P-U-G-P-U connectivity in these future A IPC designs. So it's an interesting one because there's like all these different moving pieces.

First of all, um, this was a very defensive move by Nvidia, as ARM has been pretty vocal that it is planning to enter the AI and custom AI chip space. Uh, it corners a MD because a MD's had a ton of success with their data center CPUs and their A MD Epic CPUs with NVIDIA has been a popular combination. So, you know, accelerating, uh, NV link versus PCIE is going to give some advantages to an Intel Nvidia solution.

And then of course, um, you know, Nvidia also knows that at some point it might may want to take advantage of Intel's foundry capacity, and this investment is gonna give it some merit there. And it's also gonna give it, uh, a bit of a boost. We saw a 30 ish percent bump in the stock.

So for Nvidia, it wasn't a big, it wasn't really all that big of a risk. There are five billions already worth seven and a half. Uh, they made money instantaneously.

So, and there's one other thing, and no one's gonna probably, you know, be as fast as say this as I will here, but, uh, it probably doesn't hurt Jenssen's relationship with President Trump that he's now backing the US chip champion and the US Foundry champion that they want to anoint. So there's a lot of winning here. Um, for all the players, it, it props up Intel, which is, it needs, it basically corners its competition and it's going to drive a, in, in my opinion, a a significant cycle, uh, and market, uh, growth run for Intel that it's direly needed for some time.

Absolutely. But, you Know, you, I think it's really interesting. Go ahead, guy.

I think it's really interesting, Daniel, that you mentioned the, the stock price and the stock bump. 'cause that was one of the things I noticed about it. What do you think about the fact that, um, NVIDIA was able to buy the Intel stock, you know, at market rate?

Because normally with these kinds of investment, there's at least a little bit of a bump incentive, but in this case, I didn't see that. Well, these investments at these size actually often come at a discount. And, uh, if you remember the us they were able to buy at a discount when a SoftBank came in, they were buying at a discount.

But you realize now you have something over 10% of the company is now held by Nvidia SoftBank in the US government. So closer Than 20%, No, it's like 12, right? It's something like, Well, no, the US government has 10% itself.

Okay, so it's ten five, And then you have 4% to Nvidia 16%. So it's, it's about 16%. Mm-hmm.

Um, and of course it's king making, you know, it's been anointed, you know, people can argue, do we want truly free markets or not? Uh, but now that it's been sort of decided at the administration level that Intel needs to succeed, I think this is a bit of a wave. SoftBank saw the wave, and that's why I said I, I wouldn't be surprised to see an arm, uh, an Intel Foundry relationship.

Now, Nvidia is doing the same thing. I can see some, you know, pressures coming in the long run from tariff and tax. So there's kind of the two sides.

Like the technology partnership's really interesting because the technology is going to create more powerful, more efficient, uh, PCs and data center designs that are going to encompass smarter networking in the, you know, in the, in the infrastructure itself. But like I said, on the other side, I think there was a bit of a chess move here for the longer term to give the company some leverage. And like I said, it, it puts in, it puts, uh, arm in a bit of a corner 'cause arm's now gonna have to make its run at its AI business, and it's going to probably limit the grace part of the, uh, Grace Black Wall Grace Hopper, because now they're gonna have a competitive alternative.

And I think it really corners a MD because MD I did. So that, that, that's my point. Yeah.

So Daniel, you spoke about the winners. Th those are the losers, right? A MD has been playing a second fiddle to Intel for as long as I can remember, and this sort of locks them into second fiddle.

They, they're kind of shut out on this. What about TSMC? Right?

Well, first of all, A MD was always and always has been and has been pretty happy being a strong number two and strong by like tiny market share. I mean, realistically, like it's, and and they've had a real growth though in CPU, which is why this is most influential is their data center. CCP has done well and especially in cloud and especially so, so it's interesting there because the company is gonna have to react to that.

Well, this is a now video started making NVIDIA's making an X 86 champion now. So they're picking a winner in X 86, um, T-S-M-C-I, I mean look, that's the number one name on our AI 15 future of equities name. Um, it's, it's an absolute monopoly.

You said that M word in the last block you were talking about, uh, Microsoft and or you said that about Microsoft Apple, which I also had that common, you know, lip Booo is no Steve Jobs, but there is a feeling of this sort of re you know, revival that's being put into place to enable, um, Intel to be successful. And I think it's to NVIDIA's benefit and you know, that Ntel does succeed. Um, but you know, I think TSMC has so much leverage because between Apple, Nvidia, A MD, Broadcom, Qualcomm, um, they get so much volume, they have complete pricing control to some extent.

This could be Nvidia, you know, who's kind of had to take whatever TSMC gives them price-wise and saying, look, we want to send a bit of a signal that like we are the king. You're not the king. And and like I said, I think Jenssen's doing that a lot these days.

It's the way he postures about China. It's the way he, uh, you know, it's the way he sort of, uh, you know, decides to law at a certain OEM versus another one. OEM has, you know, a partnership with a MD and another's all in on Nvidia, you'll hear Jensen say, go this company, not that.

So he's using his his power. He's even picking Neil Clouds, you know, they're investing in core weave. They're, you know, they're picking which company's going to get the, the, the volume.

So, you know, when you have a, you know, five growing towards $5 trillion company and you have the type of balance sheet, I mean, five billion's a rounding error for them right now. Yeah, I, no, this was a small, small investment. Let me talk about another potential loser here.

And that's the market, the market in general. You know, I saw an old video clip of Ronald Reagan that bleeding heart liberal talking about tariffs and court government protection of companies that initially it makes it sound like you are propping up intel and you're making Intel stronger. But in the long run is, is Intel gonna be in, in this sort of false bubble of competitiveness because of the government investment?

Because the gover, you know, the government has anointed them as a, as a favorite. And so Nvidia invested with them and arm invested with them, all the curry favorite here in the government, but as a result, Intel's not truly competing in the world marketplace. Right?

And and does the market in general suffer? Yeah, I, I, I, I think you, and I'll have a hard time finding common ground on this one. Um, foundry is just so hard, Alan, that, you know, there's certain things that I think the point is you don't want government intervening the problem.

And the reason TSMC has so much asymmetric power is because what they do, it's kind like as sml with, with ev, no one can do what they do. So they have the ultimate and power and control over the market. TSMC is the same situation.

So, you know, we have an issue, and this is a, there's a lot of geopolitics at play here with, um, with TSMC. Like they're making these hundreds of billions of investment in the us which is great. That's part of the goal of all this posturing and, and, and, and fighting and taring that we're doing is to bring more manufacturing here.

Problem is they're not gonna bring their leading IP here. And so if the China Taiwan thing ends up becoming escalated and China invaded Taiwan, for instance, and they, all of the leading edge intellectual property sits in Taiwan, they're not sending their best people here. So they bring the, the technology here, but they leave the innovation in r and d back there.

And so we would basically be stuck on whatever node that would be at at that time, if there was some conflict or war or escalation in the us Unfortunately doesn't, didn't have. Now again, whether Intel and it's 18 a 14 A, these are the next generation shifts. These are the competitive nodes, these are the future.

And the US needs to bring the talent, they need the ip. This is what we're leveraging, this is what we're bargaining for. This is the fight that we're having is, you know, the US provides, uh, national security to Taiwan.

And Taiwan provides us, uh, the capacity in manufacturing of leading edge chips. So the question is, Alan, do we wanna solve that problem? And so, 'cause right now, the only company that could solve that problem, and they have not succeeded yet, they have not been able to get the yield, they have not been able to, to get the, the confidence.

So there is a bit of king making in the sense of the US wanting to force the hands of companies like Nvidia or a MD or Broadcom to use Intel boundary. But most of them are fighting that. But at the same time, I think they're fighting it now, but they're, they're saying we're willing to invest to help them get there because we don't wanna be completely beholden to not just Taiwan, 'cause Taiwan's our ally, they don't wanna be beholden to, to the potential risks associated with an ongoing conflict in China, right?

Taiwan's an ally, but it's, but it's a risky ally is what, what it comes down to. Oh no, there's Oracle, Larry, Larry has $400 billion. He's sitting on himself.

Why would an Oracle invest in this? Again, you've got SoftBank, you've got the US government, you've got Nvidia. This might actually be become a bit of a, of a, of a train in, in ways where you're gonna see, uh, Hawk Tan make a commitment.

You're gonna see Lisa Sue make a commitment. You know, at last year, Intel a MD announced a partnership on X 86 co-development. I mean, we are not beyond the point where every one of the FLI companies could be basically brought in a room beaten over the head by, by Secretary Lutnick to, and again, I'm not saying this is right, I'm just saying this is probably what is going to happen.

But what is right is to make sure the US can continue to innovate and build leading edge chips without being a hundred percent dependent on any other country. So that I just, is this the answer? It's the best option that we've had.

That's No, it's the leading option out there. You always want an option B and C, you know, I would hope we, we look at that. But Guy, you, you and Daniel, I gotta respect your time.

Last question. Go ahead, guy. Well, I wanted to add one, one technical, technological, technical element to this too as well, Daniel and, and, and, and team, which is software.

Um, A MD is, uh, roughly behind when it comes to enabling software. Nvidia is the clear leader in software for AI development, uh, and GP usage. Intel also has been the clear leader.

These companies have invested for years in top flight software platforms for development on their chips. And I think that that will bring the m word back. You're creating a semi monopoly here, um, to enable the market to use this, this tighter combination of chips.

I don't know if you have any thoughts on that, Daniel, but that's, well, that, that is something that I don't think has been as heavily covered. 'cause it's, it's more technical. It's more about development of the applications.

Well, I think a hardware lot of people, yeah, a lot of people understand guy that NVIDIA's Cuda for training development is certainly has a ton of lockin. I think there's also a lot of people that believe this inference era that's coming is going to, uh, abstract away some of the complexity. 'cause the need for software is different.

Um, but yeah, I mean, look there, the lack of ability for Rocko to truly dent the Cuda MO has been a big slowdown. And I mean, I've been the most vocal that AMD's lack of like, clarity on how much growth they see coming from their instinct and their GPU business, uh, while NVIDIA's, you know, in the hundreds of billions. And our forecast says 583 billion of AI chips, uh, AI data center infrastructure chips, uh, by the end of 2029.

And you know, NVIDIA's gonna have like almost 400 billion of that at this rate if, if a MD can't make it dent. So, and then Broadcom became the big number two by their custom business being so ed, the difference. Sure.

Yeah. It's a, it's exciting, it's interesting. And I mean, it was a great moment for, for Intel for those, uh, that have been, um, you know, in on Intel as an investor or just those that were rooting for Intel because it's been a really, really dark ride for some time.

So Nvidia did definitely give it a, a lifeline here. I, I think, I think Intel, the prospects there are better than they've been maybe since the Pentium. But, um, anyway, Hey Daniel, I gotta respect your time.

I know you've got a lot of, you're gonna, I'm sure be on all the Fox Business news and Yahoos and CNBCs, but remember he was on here first today. Thank you, Daniel. We'll see you soon.

We're gonna take a break here on the gang. We'll come back. We've got more to go.

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Hey everyone, we're back here, ch we're going to go into our C block Friday, so this is our last block of the week. We'll try to end it on a, on a high note. Uh, this block is about AI agents go shopping, isn't it?

Every person's dream to have an an agent that would go out and do shopping for you, people would pay people to do this for them. Guy, what, what's this one about? Well, it's definitely my dream.

I mean, this is great. I think actually, like, so uncharacteristically, I, I, I think this is terrific. I'm not really seeing downsides.

I would like to hear about downsides, but I will say that, that, that there's a certain assumption here, sort of along the lines of what Fred said at the, the start of the show about, Hey, listen, you know, we're all going all negative on, on the TikTok algorithm and licensing and stuff. And he pointed out like, licensing doesn't necessarily last forever. Um, in the same way that that is a, that's an optimistic way to look at that.

And I optimistic, look, look at this as there's just simply no way that AI shopping will do that thing that you would fear of it buys a whole bunch of stuff and you have no way out of it, and you don't want this stuff, and you spend money and you're, you know, I just, I can't see that happening. There's a lot of deregulation of lack of regulation in commerce in the United States, at least these days, um, in various ways and lacks of, lacks of consumer protection and that sort of thing. But the, the market simply would not stand, um, AI agents buying stuff for you without, you know, Google is, is very helpful to, and Visa as well.

They're very helpfully talking about transparency here. Transparency is a good start, but ultimately you need to be protected such that an AI agent doing something for you, um, remains under your control and your ability to, um, easily and quickly, uh, return what's been bought or cancel an order or whatever else it is. This is just great.

I can just go through my life and maybe groceries will be shopped for, for me, and I can, you know, keep feedback, keep my feedback loop to the agents so that it, uh, only buys peaches of a certain shape or color or whatever it's gonna be that I happen to like. So this is one of these ways where our, our lives are gonna be improved. I will note one thing, which is that they will probably, our lives will probably be more improved with the more affluent or wealthier higher class or higher tier you are.

Um, but hey, there's nothing new there that's already going on on It's America baby, right? That's America. That's America.

I, that's the, that ain't even just America. Fred. Fred, You're our security expert.

What could go wrong here? What could be bad? I have A feeling c p's gonna get mentioned, Fred, I'm actually gonna leave MCP out of this for a second.

Oh, and the cool part about this is it operates with MCP and A two A, right? So there's an opportunity to incorporate this into every payment processing exercise you go through some of the cool things I think about here. Um, I mean, how many times did you wait in line at Ticketmaster to never get the tickets you wanted?

How many times do bots from, you know, uh, uh, people that get those tickets and then the scalpers resell them for some ridiculous amount, right? It takes a lot of this sort of secondary marketplace out and it reduces a lot of fraud. So what you get is you get this shopping agent, you get a merchant agent like you have today.

You get a, you know, a, a a retailer that you buy something from and you got a p person that's buying stuff, I want to get tickets, or I want to attract this particular airline flight and I'm not gonna sit there all day and do it and my bot isn't doing it for me. And then you have a credential provider and a merchant processor, right? Same thing that you have today.

Visa might be a, you know, a merchant processor, so obviously they're gonna get on board with this. And then you have a networking issuer. So the challenge we have today, right?

When you think about card not present transactions, there's still a ton of fraud that happens here. And what if you thought about the vehicle for something like this? There's inherently a chain of the transaction, every single transaction that happens from, you know, the shopping agent to the merchant agent, and it is provided to both.

So on the transparency, super good, you've got authorization, you've got authenticity, and you've got accountability. It's super, super powerful. And you've got 60 member organizations that are looking to utilize this in the same way that originally Visa's early warning and the whole Visa network part was, was aligned there.

Now to Anne's point, okay, if you took that moment and said, okay, well let's incorporate this into everybody's insecure use of MCP, well, you know, you have some opportunities there where this can possibly go wrong, but the question will be how much of that fraudulent behavior is lawn transactional? How much of that will we not see? How much of that is something that we can't also relegate to certain users that as Visa has done over the years, you're either a member bank or you're a non-member bank, you're either a member of this organization or not.

And if you, you know, can't securely transact, then you're gonna get kicked out of it. So ultimately today it's a payment processing problem and a percentage and all the things that we look at for the rate of fraud. So four to 6% of fraud, you know, for mass compromise and these other things, point of sale transaction stuff, this is probably going to reduce that to a much smaller number, and it's gonna make the American buyer so much more empowered to do the right thing with the money.

They don't have to call up their bank and argue about whether or not that's a legitimate charge. I think it's awesome. Yeah, I mean, I, I love the optimism from both of you guys, uh, but I think we can agree that AI agents are an attractive target for cyber criminals.

I think, I think that the exciting thing for me in this, all of this is the, you know, visa signaling, yes, we're using MCP because I love MCP, I'm hawkish on it. Um, but I think the value is that Visa is positioning themselves as the transaction trust layer, right? So they're providing all of that security to this.

So the hope is that this might be a good test case for other payment gateways, um, to expand their AI driven commerce, which sounds great in theory, but I'm just very, I'm very skeptical. Well, I think the thing that this does actually may be counter to what you suggest. I think this may be the thing that breaks visa's halt on the universe of payment process and for that, right?

I'm thrilled. Uh, so imagine that a smaller bank, right, has the same leverage and legitimacy to conduct transactions. Regional banks, uh, organizationally have the same level of credibility, you know, as a visa.

I think this could really change the playing field on the security side. I mean, there's a lot of concerns about what that introduces, but if you look at the conduit of what A to P provides, and AP two will authorize that, I think there's a lot of really important use cases around, you know, how that gets leveraged in a genetic behavior. And, and some of those simple use cases are like, Hey man, look like, I don't wanna like wait in line for stuff.

I don't want to have to track the price of ability. John doesn't wanna wait in line for his Taylor Swift tickets. I, I mean, who does, if I want go see Taytay, I want, I, I want access and I don't wanna get denied.

My daughter will call, I called Travis directly. Let, let, lemme throw a little red meat. Lemme throw a little, you know, They were living here Boca, by the way, but Let throw a little red meat at Allen.

So, so I think Visa's involvement here and Visa, uh, offering MCP services is a really interesting development. Maybe encouraging why? Because US law dating from the seventies protects consumers against credit card fraud and theft by holding the credit card companies and the whole, and the participating banks responsible.

And the result of that has been, I think, a little bit Visa's monopoly on transact or, or, you know, uh, uh, dominance of transactions because they help solve the problem. I don't remember the economic turns offhand right now, but you know, it becomes a collective problem. It's like insurance, like gets shared across many, many organizations of fraud and crime and everything, and the cost.

So the consumers don't bear the cost that card issuers bear the cost, right? And so now here is a new lever and mechanism, a commercial one potentially, I'm not saying certainly for helping to solve the MCP and prompt injection and all those other kind of problems, security problems around ai. And that gives this a greater, uh, uh, potential, um, beneficial impact outside of just e-commerce and transactions.

And Alan, it is all because of this regulation of an industry imposed in the seventies, that kind of regulation that we seem to be unable to impose anymore. That's my red meat for you. Ain't it?

The truth, ain't it The truth. Hey guys, we are, we're overtime, but we had a busy, it was a busy show. It's the end of the week, so we're gonna, we'll end it right here.

Um, and Guy Fred, John, as always, thank you. Thank you to Daniel for popping in. Thank you for watching.

It's been a great, I I had a lot of fun this week on The Gang. If you, if you can catch some of our earlier shows this week, go back and check them out on our YouTube TV channel or Textron, uh, TV or our Techron TV app, OTT app for Apple or iOS and Amazon and Fire, Amazon Fire Roku, and Google Play. Um, have a great weekend everyone.

We've got techron TV following this, so you'll be able to see that as well. And, uh, we'll pick it up on Monday. Until then, is Alan Shimmel, we're out.