By coinnews 
00:00 Speaker A
Another story we are watching in Washington this morning. The CEOs of OpenAI, AMD, and CoreWeave testifying before the Senate on AI competition. I want to bring in Adam Kovacevich. He is the Chamber of Progress’s CEO and founder. Adam, great to get your insights on days like today because you have both the expertise in Washington and in tech, having worked in tech yourself. Talk to me about what we can anticipate hearing from Sam Altman as he is speaking on Capitol Hill today.
00:27 Adam Kovacevich
Well, I think you’re going to, I think two big things are going to come out of today’s hearing. One is that this is a space where it’s frankly intensely competitive. We have all the big players, Google, Microsoft, Amazon competing in AI, we’ve got upstarts like OpenAI and Anthropic. They’re all competing really avidly with each other. And that, that is great. That’s actually prompting the companies to innovate at such a huge, rapid pace and that’s been great for consumers. And so I think what you see when you see multiple CEOs testify like you, you have today, that competition is kind of alive and well. But I think the second thing that will come out is that we are in a AI arms race against China. And it’s really important that the government really put forward kind of a unified policy approach to beating China and AI. We don’t have that today. We actually have some cases where our government is at war with some of our leading companies, particularly on the antitrust front, who are going to be the ones who beat China and AI. And so I, I’d like to see kind of a more unified approach to how we approach our AI competition against other countries.
01:49 Speaker A
Yeah, and talk to me about that competition piece. Uh, we’re going to get to some of the headlines about Alphabet and Apple in just a second here, but do you think that there are going to be questions to Sam Altman about whether or not there’s enough competition in the AI space? How do you think that’s going to go?
02:05 Adam Kovacevich
There will be, but I mean to me, the answer is obvious. I mean, again, I think there, you know, there tends to be kind of focused on, well, you know, is there enough room for startups? But I mean, when you have five or six large companies competing with each other to be, you know, to really lead an AI, that is outstanding. And that’s really what we’re in the midst of, or that kind of intense AI competition. So I see nothing but upside for, for companies competing with each other to to be leaders in AI.
02:46 Speaker A
And Adam, Keith Lerner, my guest host, has a question for you as well.
02:50 Keith Lerner
Hey Adam, thanks so much. Great, great points. You know, when we think about the broader stock market, to us, you know, the stock market as I mentioned earlier is different than the economy. So as I’m talking to small, like small mid-sized business owners, they’re seeing some weakness with the AI side, the competition you said it is good. So do you think then the capital spending that we’ve been seeing is it going to just continue to accelerate like we’ve seen over recent quarters?
03:26 Adam Kovacevich
I do, but I think the big cloud over the whole space, both big and small, is Trump’s tariffs because, you know, yes, companies do want to invest, but there’s this uncertainty, right? And you know, Trump on the one hand says, I want to, you know, spur building here in the United States. But on the other, on the other hand, he’s giving exemptions to companies. That creates uncertainty. And then he on the other hand, he says he wants to use the tariffs as kind of a negotiating tool for other policies. So the tariff strategy isn’t, isn’t clear at all. That’s created huge amount of uncertainty on the part of business about, you know, do I have any predictability in terms of my investment? That’s also having downstream impacts on the small companies, the small suppliers. So you look at AI, okay, you think, okay, well, they’re building AI data centers. Well, those data centers are full of equipment, hardware that is subject to tariffs, right? And so, you know, the tariff policy has all these downstream impacts on the AI industry.
04:49 Speaker A
I, I want to pivot a little bit to talk to you about Apple and Alphabet here this morning. Adam Apple and Alphabet shares really both getting hit a little bit after Eddy Cue, he is Apple’s services chief. He said that he sees AI search engines eventually replacing standard search engines like Google, and he also talked about declines and search that we have been seen on Google’s platform. How do you read that as somebody who’s been inside of Google? How do you read the risk of AI to its search engine?
05:30 Adam Kovacevich
Well, you know, when I worked at Google, we said competition was one click away. And I think what you see right now is that the real competition for Google and Search is the next generation of search, which is really chat GPT and AI chat bots, right? So I think what you, what I take away is that this sort of shows the utter pointlessness of the Department of Justice’s ongoing antitrust trial against Google, right? Which is really focused on its, you know, years old distribution agreements with Apple and other companies about the traditional search results. Well, if Apple is saying, look, we’re thinking about shifting to AI services anyway, then, you know, these, these deals aren’t such an iron clad fortress for Google that the Justice Department thinks that they are. And I think this is a, this kind of goes to a regular critique of antitrust that it’s fighting yesterday’s battle and that technology has a way of making yesterday’s advantage obsolete. And, and this is why I think so many leaders in tech are sort of rightly paranoid about being ahead of the next thing, right? Because you can lose your advantage. You usually use your, lose your advantage through iterations in technology. And that’s I think, you know, what, what, you know, is a threat to Google right now. And so I think frankly, this, this kind of dynamic sort of undermines the whole argument of the Justice Department’s case against Google.
07:07 Speaker A
And Keith, I want to bring you into the conversation too because I wonder how investors should read this moment for a name like Alphabet. Obviously, search is key, but in their earnings print, they were able to talk about the idea that their AI run down, that wasn’t a headwind for search. So maybe they can put forward a bull case that AI is something they can benefit from and not just lose from. How should investors read that?
07:31 Keith Lerner
Well, I think the question really is the transition. Are they able to transition their AI? Are they able to be competitive as well? Because I don’t know that it’s a huge surprise, like, I’m not a fast mover and I do most of my searches now on Chat GPT. And I know a lot of other folks, even anecdotally as well. So I think that’s the question, but I also, I think the point made is how fast moving this stuff is. I mean, I remember and I was, I was, I’ve been doing this since the mid 90s, like there was something called the four horsemen back in the late 90s. It was Intel, Microsoft, Dell, and Cisco. And you say like, how many of those are the big leaders today? Well, Microsoft is, but it’s after hibernating for a long time. So I think the main point is like, this moves quickly and the leaders that we have today may not be the leaders of tomorrow.
08:43 Speaker A
Yeah. And Adam, I do want to end with you. Uh, get the final word from you on how you’re thinking about Google moving forward, especially as this trial is set to end on Friday. And I also want to hear from you about the potential forced sale of Chrome, which would obviously be a huge headwind. Do you think that that is a potential likelihood?
09:03 Adam Kovacevich
Well, I frankly think it’s on the outer bounds of likely remedies. And as the trials go, has gone on, I think it’s pretty clear that’s probably not going to happen. More likely is that the judge forces Google to not be able to pay for these search distribution deals. But one of the big questions in this trial that’s been going on is whether Google should have to give its search query data to rival search engines so they can be able to compete. And I think, you know, in some ways it’s kind of like, well, let’s say you’re, you’re a baker who’s been perfecting their cake recipe for years, right? And the government comes in and says, you have to give your recipe with rival bakeries. You’re going to be pretty demotivated to keep working on your future recipe, right? If, if you’re being forced to share it with your rivals. And frankly, the ultimate loser in all that is the consumers who benefit from all of that innovation in search. So I am concerned about kind of what that’s going to ultimately mean for just the quality of search results.
10:04 Speaker A
All right. Adam, we got to leave it there. Thank you so much for joining us. And of course, thanks to Keith Lerner of Truist, our guest host for the hour for his insights in the conversation as well. We appreciate it.