AI illusions and navigating The Money Trap with Alok Sama

Today on Equity, Former SoftBank Group International President Alok Sama joins Rebecca Bellan ahead of the launch of his new book THE MONEY TRAP: Lost Illusions Inside the Tech Bubble. Here's what the pair got into: What Apple's AI announcements could mean for startup innovation and companies like ARM and Nvidia Concerns about the circularity of investments and unusual follow-on rounds led by VCs. IPO alternatives in a slow public market High valuations, the risk of over-investment and how to know when a bubble is going to pop. Equity will be back on Friday, so stay tuned! Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Wednesday and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:11Rebecca Bellan?

  Hello and welcome back to Equity, TechCrunch's flagship podcast about the business of startups. I'm Rebecca Blon and this is our Wednesday episode where we home in on a trend in the tech world and dive deep. Today, we're talking to Morgan Stanley veteran and former president and CFO of SoftBank Group International, Alok Sama. Alok is also the author of The Money Trap: Lost Illusions Inside the Tech Bubble, on sale September 17. Alok, welcome to the show.

• 0:37Speaker 01

  Thanks Rebecca, fan of the show and great to be here.

• 0:40Rebecca Bellan?

  Yeah, I'm really excited to have you here and there's so many things I want to pick your brain on. I don't know how we're going to keep it to 30 minutes, but I guess we're going to have to try. I'd love to hear your thoughts on AI. And to kick that off, let's put into context a lot of the news that's been happening this week in relation to Apple. So for our listeners, this week on Monday, Apple had its Glow Time event where it shared its iPhone 16 lineup, which will be the first iPhones to ship with AI-powered functionality. And by AI, I mean Apple Intelligence, Apple's own brand of AI. And then it will also have a partnership with OpenAI. And there's a lot to be discussed, a lot of promises that are coming out later this year. Alok, I wanted to get your thoughts on what was announced this week and how you think that's going to affect Apple coming into this AI race.

• 1:24Speaker 01

  Yeah, I mean, there's so much written and said about AI and Apple that it's kind of tough to find anything original to add, to be quite honest. But to me, I mean, the comments I would make first generally on AI, I mean, one of the things I do is I'm a senior advisor to Wilbur Pinkus. You know, they are under the radar a little bit, but fantastic growth investors in the world of technology and kind of scared away from investing in LLMs, et cetera, but very focused on AI, more is applied to their portfolio companies. And I think what they're seeing, and you go back to, rewind a week or couple of weeks to Nvidia's announcement, what Jensen talked about, you know, he gave the example, I think he was talking about telecom company, Hamdok's, I think it was.

• 2:10Speaker 01

  Able to cut its customer service costs by thirty percent. I mean, I think those are the sort of things that mobile pink is seeing across its portfolio. So at the enterprise level, it's very real. It's not kind of nothing radical, nothing too sexy. I mean, you know, it's kind of got call centers and you've got AI and you've got AI replacing that and the productivity improvements are very real. At the consumer level, it's very early days. I mean, I haven't seen any apps. And for example, you go back, you talked about the iPhone. I vividly remember the first time I held the iPhone in my hand. And it was like, oh, my God, this is seriously cool, right? I don't think anyone's really felt that when it comes to AI at the consumer level.

• 2:53Speaker 01

  I for one have great expectations in terms of how Apple, which has always been cutting edge in a consumer friendly way, kind of bringing new technologies to all of us. But it's very early days. I mean, they didn't announce that much, right? I mean, a cooler chip, which my old friends at ARM will benefit from, you know, kind of a an energy efficient chip with more processing power. And I think this team of AI at the edge of the network as opposed to in the cloud will be an interesting thing once Apple and others begin to kind of adopt it. So I think it will be in terms of what it does. We will see, jury's still out, right? I mean, you know, you sort of see the potential, but you know, you go back to the early days of the iPhone. I mean, nobody really saw Uber or all of these things coming.

• 3:35Speaker 01

  So we will see, and you know, smarter people than I are betting tons and tons, hundreds of billions on something radical happening, but we shall see.

• 3:43Rebecca Bellan?

  Yeah. So, you know, you mentioned really quickly that ARM will be benefiting from this. Uh, if you could just break that down for our listeners, because, you know, obviously iPhone sixteen, they're really focusing on this new chip. Um, and I believe is ARM producing that chip?

• 3:58Speaker 01

  Well, ARM doesn't produce chips, ARM design chips. So I think the phenomenon I'm talking about is AI at the edge of the network and the edge of the network being cars and smartphones. You know, it's less about fridges and toasters, which people talked about and, you know, kind of how like there's something particularly cool about that. But certainly the smartphone, I mean, I think that's something we are missing the palm of our hand, cars too. So I think. Energy efficiency is really important and that's always been ARM's edge. And ARM doesn't manufacture chips, they design chips.

• 4:26Rebecca Bellan?

  Right.

• 4:26Speaker 01

  So as a ARM design chips, which they collect royalties on, I think you'll see more and more of those more expensive ones at the edge of the network. And not to suggest that that's displacing or eating into what Nvidia is doing, but Nvidia's strength is in data centers, right? I mean, it's the thirty to fifty thousand dollar Blackwell hopper. I don't know how they come up with these names, by the way. I mean, that's chips that go into data centers that people like Microsoft Cloud and Google Cloud buy. Right, I mean, I think that is more investing, arguably ahead of the enterprise, but it's the enterprise head of demand, but that's the enterprise market that they're after. I mean, you know, the Google Clouds of the world, that's the market they serve.

• 5:07Rebecca Bellan?

  Mm hmm, yeah. Obviously, we're seeing really high valuations in a range of companies in the AI space. Anthropic, I think, is pulling around eighteen point four billion. OpenAI, over a hundred billion. XAI, that's twenty four billion. And, you know, we spoke last week on equity about VCs having FOMO, trying to snatch up shares in AI startups on the secondary market, and a lot of those companies are commanding a thirty percent premium in secondaries. A lot of your book talks about hype cycles in venture capital investing. Obviously, a lot of people say we're in an AI bubble right now, but I'd love to hear your thoughts on that. Do you think we are?

• 5:42Speaker 01

  Yeah, I think, let's just talk about Nvidia for a minute. I mean, if you look at Nvidia and you look at the way it's performed, I mean, it's not disconnected with reality in terms of how their revenues and profits are growing, right? I mean, I think Nvidia trades at somewhere in the region of, depending on, you know, what your projection might be, thirty five to forty times forward earnings. That's not outrageous. Outrageous was Cisco, which was trading at, if you want to go back and kind of look at history, Cisco was trading at two hundred times earnings, right? If you'd invested Cisco back in two thousand, twenty five years, twenty four years later, you'd still be losing money, right? I mean, that's, that's a real bubble. Nvidia, I think, you know, the worst thing you could say about Nvidia, its competitive position is as strong as it's ever been.

• 6:25Speaker 01

  I think you could debate whether its biggest customers, which is The hyperscalers, I think they're together a god for forty five percent of revenues, hyperscalers being Google Cloud, Microsoft Cloud. I think the exact number is forty five percent of revenues. Are those guys investing, over investing, investing ahead of demand? And is there a hiccup along the way? And since, you know, kind of public markets tend to focus on quarterly results. Do you have an accident in terms of missed earnings? But that's not too radical, right? It might bring down the stock ten, twenty, thirty percent, but that's not disaster. The company is just, it's on a tear. Its competitive position is as solid as it's been. I am somewhat benused at the valuations in the private market.

• 7:09Speaker 01

  I think OpenAI is interesting. Now, OpenAI's run rate revenues, I think the number is three point five billion, you know, which is terrific. And I don't know what their bottom line is. And obviously, they're growing. They've got the profile. We talked about Apple and as we know, Apple Intelligence is going to be powered by ChatGPT that will unfold over time. And and we see how cool and how, you know, how people make money, how OpenAI makes money, not obvious yet. What I'm intrigued by is, and again, we're talking about announcements of a rumor deal as opposed to actual deals. Is OpenAI being valued at one hundred and twenty six billion in its latest round?

• 7:48Speaker 01

  And the participants in that round, led by Five Capital, the participants being Microsoft and Nvidia. And what really struck me about that is the circularity, right? Because if you think about it, if you've got Microsoft investing in OpenAI. Well, what does OpenAI need money for? Right? OpenAI, you know, apart from employees, which is crucial, obviously. AI engineers, very expensive. They're going to buy capacity. And where are they going to buy it from? Well, Microsoft Cloud. So the money goes to Microsoft Cloud. Nvidia is an investor. What is Microsoft Cloud going to do with the money? Well, they're going to buy Nvidia Blackboard chips or whatever else Nvidia comes up, right? I mean, Jensen's kind of, he's on an annual upgrade cycle, so.

• 8:32Speaker 01

  It's money literally round tripping. That's not to suggest anyone's doing anything that is even borderline illegal or whatever, absolutely not. But it is interesting to see, right? Because you've got money coming from these investors, goes to the company and goes straight back to them. Thrive was led the last round at eighty six billion. Very unusual to see VCs leading follow-on rounds, that the last one at eighty six was secondary, this one's primary. But still, you know, VCs generally have a preference for seeing other people lead follow-on rounds. You know, you just, their LPs and VCs themselves like to see validation, independent valuation. So I kind of wonder at that and wonder if it's overdone in all these SPVs, which you alluded to that have been created. I'm a

• 9:17Speaker 01

  pass on those. I mean, you know, I could be wrong. I've been wrong before. I usually am when it comes to, you know, some of these hypergrowth opportunities. But there you are. I mean, you know, I don't think in the public markets, we're in a bubble, kind of kind of summarizing.

• 9:30Rebecca Bellan?

  Yeah.

• 9:30Speaker 01

  But we're seeing some unusual bubbly sort of things in the private market.

• 9:34Rebecca Bellan?

  Mm hmm. Okay. So kind of a bubble. I mean, in the public market, it's not necessarily actually a bubble because the risk is really under investment, not over investment for a lot of the public companies. But then meanwhile, within the private sector, and I guess probably that overlaps into the public sector.

• 9:49Speaker 01

  Yeah.

• 9:50Rebecca Bellan?

  Maybe less bubble adjacent activities, but also like an incestuous bubble where.

• 9:56Speaker 01

  It is. I think incestuous is the right word. That's right. Yeah. And the other thing you've got to keep in mind, you know, the people who are over investing, these are the smartest CEOs, Satya Nadella for one. I mean, they know exactly what they're doing. And they're flat out, when, you know, Satya on his last earnings call, you know, kind of flat out said that the risk of under investment outweighs the risk of over investment. So they recognize they might be over investing. And, you know, I think the number for Microsoft was thirty five, for Google it was twenty five in terms of what they invested in data centers. I'm talking about buying real estate and building data centers, which is expensive, capital intensive business. But it's very different from the two thousand bubble, which I've lived through when I was a telecom tech banker, mostly telecom. And, you know, you

• 10:39Speaker 01

  had companies like Global Crossing, which is worth a hundred billion dollars. I mean, that went to zero. That was a public company that went to zero. So, you know, you've got investors who got hurt and, you know, that's a huge hangover. I don't see any, there's very little chance of that.

• 10:51Rebecca Bellan?

  Right. So that, yeah, it's not like these nobody companies come out of nowhere, investing all this money with insane valuations and then the valuations drop. This is like, these companies have businesses in the bank. They are, you know, they're pretty much untouchable.

• 11:02Speaker 01

  They have, exactly. Bulletproof balance sheets, not relying on leverage, you know, hundreds of billions of dollars in cash. And they can afford to over invest to the tune of five or 10 billion dollars. I mean, it sounds ridiculous to talk about, you know, be so cavalier talking about numbers that big.

• 11:15Rebecca Bellan?

  I know.

• 11:16Speaker 01

  But the reality is, you know, a company like Microsoft, they could, they know what they're doing and they can afford it.

• 11:21Rebecca Bellan?

  Yeah. Well, you said that, you know, no one's doing anything illegal here, but I wonder if, you know, if the only companies are the ones like Microsoft that have all of the money to be able to spend and over invest on AI, then you don't really leave room for competition.

• 11:35Speaker 01

  Well, that is true. But then you also had deep pocketed players like my old friend, my ex-boss, Masayoshi Son, he's out there.

• 11:42Rebecca Bellan?

  Right.

• 11:42Speaker 01

  You are seeing people, you know, there's a company called Cerebras, which has gone public, which I happen to have a small indirect, actually one of those SPV dot D is investment on. I don't, I think it's, it's really grand to think of a company like Cerebras as a challenger to Nvidia, but then similar to Graphcore. I mean, they are coming at it with a slightly different angle. You know, Graphcore has this notion of an IPU or an intelligence processing unit with Cerebras is these wafer scale. I mean, kind of each chip very different from Nvidia chips. For example, is the size of a, kind of an individual pizza pie, right? So they're a little bit different.

• 12:17Rebecca Bellan?

  Right. So kind of like what Tesla's said that they might do with Dojo, right?

• 12:21Speaker 01

  Well, yeah, exactly. Yeah.

• 12:23Rebecca Bellan?

  Wafer scale.

• 12:23Speaker 01

  Wafer scale. Yeah. So, yeah, there are a couple of people coming at it with different ways, but I don't really, candidly, Nvidia's position that CUDA software platform, the customer relationships they have, I mean, it is bulletproof. It's really solid.

• 12:37Rebecca Bellan?

  Yeah, and you mentioned previously, you know, before the call started that, you know, in the past, a lot of the conversation had been about the public markets, actions that were going on in the public markets, but public markets have been a bit slow.

• 12:47Speaker 01

  Yeah, let's just look at the numbers. I mean, you look at the number of IPOs, second half of 2020, the number was 480. 2021, it was 1,035. Now, 613 in 2021 was SPACs, right?

• 13:02Rebecca Bellan?

  Oh, God, the SPACs.

• 13:04Speaker 01

  We've forgotten about SPACs, but a lot of those SPACs merged with operating companies, and a lot of them were technology companies. And one of them, by the way, was WeWork. So you've seen companies, you know, all of them, the way SPAC works, you go public at a $10 share price. In the case of WeWork, went to zero. Enjoy Technologies, $10 to zero. Viewglass, $10 to zero. 23andMe went public at $10, trades at pennies now, right? So, you know, the value destruction for all those companies, all those IPOs, was massive. I mean, another company, which is a great company and it's doing well, SoFi, which I used to be on the board of, made terrific company, Anthony's a great CEO, you know, went public

• 13:43Speaker 01

  at $10, stock created as high as $20, company's doing fine, but the stock's at $7 or $8. So, the value destruction was massive. And you go back to the year 2000, when you had, you know, 400 IPOs, which was massive at the time. It took almost four years for the market to reset. So, now you've gone from number of IPOs in 2021 being over 1,000 to the number in 2023 was 150. You know, first half of 2024 was 75, 80, right? I mean, so the IPO markets, they're not there.

• 14:21Rebecca Bellan?

  Yeah.

• 14:22Speaker 01

  ARM is the only kind of huge success story you could point to, but I think that once you see those markets open up, I mean, that kind of gets getting into a different subject in terms of what's going on in VC land and the recycling of capital. You know, that's very, very different from the type of bubble you saw in nineteen nine, two thousand, which is all about public markets.

• 14:41Rebecca Bellan?

  Hmm. Just quickly, you seem to have a lot of ready stats about how many companies are going public. Do you have similar insights into M and A activity? Because one of the things that I'm curious to ask you about is whether the fact that going public is, it seems to be more difficult. So I wonder if investors are pushing their startups that, you know, they invest in towards M and A or towards being acquired so that they can have their exit and if that's affecting, you know, M and A rates.

• 15:10Speaker 01

  Well, they will, and I don't have to answer your question. Statistics off the top of my head when it comes to the M and A market. But the other impediment to, and this is actually interesting, it's a little bit technical, but still interesting to talk about. And it's an impediment to a company, a private company going public is capital structure and preference, right? I mean, when you've got deals done at very, very high valuations, unraveling those investors with preference, if you want to do a down round, are you going to go public at a lower valuation? You know, if I'm an investor and I came in at a headline valuation that's two X, where the company gets sold, I goes public and I lose my preference, or it has implications that the company is being sold

• 15:53Speaker 01

  to, how that buy gets carved up, that's a non-trivial impediment. It's a very big deal in terms of trying to figure out what you do with the business. So that's a lot of what's going on with boat rooms when you think about raising capital.

• 16:03Rebecca Bellan?

  Hmm.

• 16:04Speaker 01

  And there's companies, funds created that are kind of offering all kinds of structured solutions to get around that, you know, debt disguised as equity and so on and so forth. That's another interesting kind of phenomena that is kind of off our times, so to speak.

• 16:18Rebecca Bellan?

  Yeah, you do bring up some of that in your book and you go over the early rise of tech companies in Silicon Valley and how investors and tech companies both set a precedent of high valuations based on growth expectations and about scale and any cost. And I'm wondering, has that shifted at all? Or are we still kind of operating completely in that mindset of the growth expectations, setting the valuation of the company rather than revenue? That's actually coming in.

• 16:45Speaker 01

  It's tricky. I mean, there's an anecdote in my book, which is very interesting to talk about. And it's when Massa and I have dinner with Mark Zuckerberg. Massa had the opportunity to invest in Facebook at a $10 billion valuation. Now, Yuri Milner did that deal, Massa didn't. You know, people don't think of Massa in that fashion, but that was a case of Massa saw in having kind of real valuation discipline. But that came back to haunt him.

• 17:10Rebecca Bellan?

  Hmm.

• 17:11Speaker 01

  And that's just the reality of tech investing, you know, when you, when you're talking about some of these technologies. And by the way, again, in the social media space, I wasn't personally involved in the deal. But when ByteDance came along, TikTok, Massa recognized that AI engine, how powerful it could be, how disruptive it could be to social networks, to Facebook. And he said, whatever it is, any cost, I want in, right? And he went in at 75 billion, which may have seemed an outrageous valuation at the time, but you know, he's well in the money on that trade. So, I mean, as a banker and business school, old school finance, discounted cash flow, et cetera. Some of that really needs to go out that door, right? And I felt that working for Massa, I mean, remember early days of negotiating rights sharing deals? These companies had negative revenues.

• 17:56Rebecca Bellan?

  Right.

• 17:56Speaker 01

  But again, you know, Massa sounds thinking about a world where not just competing with tech, he's just thinking about a world where nobody owns cars anymore. And when something is that transformational, you don't get hung up on discounted cash flow and valuations. That's not to suggest you don't focus on business models, which again, it's two dimensions. I equally talk about when I'm in the middle of doing some of these other crazy deals, sort of the boomer millennial thing. And you know, what are you talking about, man? You know, kind of when I ask about revenues and business models. So there's a lot of that too, and I saw a lot of that and you can get carried away.

• 18:28Rebecca Bellan?

  Yeah. Well, you really got to weigh it out because it seems like there's a pendulum swing, right? Of, you know, there's been periods where it seems like investors have done no due diligence and they're like, sounds great. Oh, we work as a tech company? Sure, what? Why not?

• 18:39Speaker 01

  Yeah, well, that's the formal thing. You get carried away. And you know, kind of individual brilliance kind of transferring into collective insanity. We've all seen that movie before. I've seen it before. I fall victim to it. And when you're in the middle of it, you sort of know it, which you can't predict is you just don't, you have no idea how it's going to last, right? The other thing you talked about, which is also interesting to talk about, you know, we were maybe as an interesting case at point, not to harp too much on Adam Buman. He's been beaten up enough by lots of people. But split scaling or scaling.

• 19:07Rebecca Bellan?

  Right.

• 19:07Speaker 01

  That works brilliantly for platform models. But that's not like, I think it's a great concept. Reid Hoffman is gonna make that part of everyone's kind of venture investing vocabulary. And Masas embraced that too. But it works brilliantly for platform models. It doesn't apply across the board. They take up real estate, but it's one building, it's local. It's a hyper local business, one building at a time.

• 19:27Rebecca Bellan?

  Right.

• 19:28Speaker 01

  So you gotta get away from that. You gotta get much, much more granular about things like ROI and margins when it comes to a lot of businesses.

• 19:35Rebecca Bellan?

  Yeah, so it's like software, that kind of thing works, but yeah.

• 19:38Speaker 01

  Exactly. You know, infinite scalability, zero variable cost, right? I mean, that was Masas' kind of mantra. Well, that's the SaaS mantra.

• 19:45Rebecca Bellan?

  Hmm. Do you think that where, you know, investors and entrepreneurs are starting to learn their lessons? Or is it just, are we one more hype cycle away from getting into group think mentality and throwing caution to the wind?

• 19:57Speaker 01

  Well, I think the answer is both. Nothing I've said, I mean, every VC in the valley, I think, will agree or would be absolutely aware of everything I said.

• 20:07Rebecca Bellan?

  Hmm.

• 20:07Speaker 01

  But there's always gonna be, it's human nature and I fall victim to it, I have to say. Whether it was two thousand or whether it's two thousand and twenty, twenty one, I've been a victim too. It's human nature.

• 20:19Rebecca Bellan?

  Yeah.

• 20:19Speaker 01

  You just cannot legislate against it. People will get carried away and mistakes will be made. And a lot of people are going in. And again, it goes back to the fact that the biggest investors are, in fact, people who can very well afford to make mistakes. It's Microsoft and Google. And they have said it in no uncertain terms, that the risk of under investing outweighs the risk of over investing.

• 20:41Rebecca Bellan?

  Hmm.

• 20:42Speaker 01

  Very tough to argue against that when it comes to transformative technologies like AI or the way the internet was or the way smartphones were.

• 20:56Rebecca Bellan?

  Now, to close out, I wanted to maybe get some predictions from you about future of AI and where we might find the next investment going into. But before I do, I just wanted to point out a really great quote from your book. And now this is right after you describe Elon Musk's increasingly aggressive and immature antics on Twitter and the literal quote dick measuring contest with Mark Zuckerberg. And you say, quote, "With Silicon Valley man reduced to his pair of dangling appendages as the primary neural processor, women are our only hope in this race against AI."

• 21:29Speaker 01

  Um.

• 21:30Rebecca Bellan?

  Do you still, so.

• 21:33Speaker 01

  Yeah, I mean, that is something based on my experience on Wall Street, even more so than Silicon Valley, I completely believe in.

• 21:44Rebecca Bellan?

  Hmm.

• 21:44Speaker 01

  I think male egos, competitive instincts are a reason things get overdone. And I genuinely believe that, you know, a lot of what, you know, the wokeness and D E I, et cetera, I'm not completely sold on, but I think more female representation at the C E O, at the executive level, at the board level, I just, I think it's great for business. I think people would make, companies would make fewer mistakes and would be less likely to do stupid things.

• 22:12Rebecca Bellan?

  I mean, I obviously agree. Is that something you look at when you're going to invest in a company? Do you take into account, you know, the makeup of their board and of their executives to ensure that, you know, there are women who are going to keep things level headed and maybe put fewer beanbag chairs in the office?

• 22:24Speaker 01

  Yeah, I'm not in a position sadly where I'm investing or doing anything at a scale where my opinions make a difference. But I genuinely believe, and I know that, you know, my good friend and my boss through the years, Nikesh Arora has built a fantastic business at Palo Alto Networks. And when we were building our investment team, that was certainly part of our ethos, investment ethos and hiring ethos in the valley and elsewhere.

• 22:47Rebecca Bellan?

  Okay, great. And then last thing, predictions about A I beyond, you know, the chat G P Ts. How are we advancing? What's, what's the next use case?

• 22:56Speaker 01

  Use case, very tough to call. I just make a macro comment, which I do talk about in the book, and that's all I'm going to say. It's less about my opinion, but more about contrasting the view, sort of the Elon Musk view of the world in terms of the risk, you know, we need to colonize Mars because A I might destroy the world. I actually don't really buy into that. I think the bar that we set for machines seems to be way higher than we do for humans. I mean, you know, and it's ironic that Elon would say that because I think the greatest example is self driving cars. There's tons of times where I trust a machine to drive way better than I do. You know, kind of late afternoon or if I've got to bed, had a drink or a glass of wine or whatever and it gets tougher with age. I'm much more in the Masasun school of the world.

• 23:40Speaker 01

  I mean, one of the first things, one of the things Masasun was working on. When I first started working with him was Pepper, the empathetic robot. To me, I kind of subscribe to that vision of AI. It's a productivity tool at the enterprise level. And it's a productivity tool at the individual level, too, but it's certainly an entertainment tool. I do think, which I also point out, I feel very, very strongly about is beware of those recommendation engines because I really do think that's a risk, right? I mean, I think all those algos that go and tell you what to listen to, what to watch, or what to read next. Those are dangerous. That's dumbing down the human race. That's the one thing I feel strongly about.

• 24:19Rebecca Bellan?

  Yeah, some I really is. Sometimes I'm like, oh, I feel like I need a new couch. I don't know. And then I'll, I'll just search couch and then I'll just let the algorithm tell me what I, what someone in my demographic might like.

• 24:30Speaker 01

  Right. You know, I give the example of, you know, kind of it's lots of musical references in my book, but I give the example of Paul Simon and Greysland, arguably one of the greatest albums of all time. I mean, how did I come to him? Not because, you know, Spotify, you didn't have streaming then, obviously, because someone told them to listen to whatever. It was because someone told him to listen to the street music of Sowita. And that's not something an AI algo would ever preach to. So it's originality, original thinking. That's not how machine learning works. By definition, it works by replicating, predicting what happened next, what pixel or word came next. And that's not what humanity, that's not what creativity is all about. It's the essence of humanity. And I think we lose that once we start being slaves to these engines.

• 25:15Rebecca Bellan?

  Hmm. Yeah, definitely. And one other thing that you talk about a lot in your book, aside from great music references, is excellent food and wine experiences. And I am extremely envious of the life that you've gotten to live and the places you've eaten.

• 25:30Speaker 01

  Thank you. No, it was fun. It was a blast. It was a great journey.

• 25:33Rebecca Bellan?

  Well, I'm so grateful for the time that you spent with us. I could talk to you all day. Thank you, Alok, for, for joining TechCrunch Equity. Yeah, where can our guests find you?

• 25:42Speaker 01

  Oh, boy. I mean, you know, you could find me on Twitter, on LinkedIn, or I'm, I'm around.

• 25:49Rebecca Bellan?

  You're around. Okay, cool. Well, thank you again for joining us on the show. And to our listeners, you can find me at Rebecca Boulon on X and then at Rebecca Boulon underscore writes on threads. And you can find Equity on X and threads at Equity Pod. Talk to you all Friday.

• 26:07Speaker 02

  Equity is produced by Teresa Loconsolo with editing by Kel. Bryce Durbin is our illustrator and we'd like to give a big thanks to our audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thanks so much for listening and we'll talk to you next time.