Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, two big interviews. A rare sit down with CEO and co-founder of healthcare platform Hims and Hers. You've seen the ads, Andrew Dudum.
What that did in the ecosystem is it showed consumers and the drug companies these medications can be brought to consumers at a price that everyone can afford.
How the company that started with telehealth and personal care products is defining itself as AI native while remaining consumer focused.
I would provide every American citizen a HSA FSA type budget of cash that they can then use on service providers to tackle their health. That would then create a marketplace dynamic where players like Hims and Hers and everybody else would have to compete.
Bringing artificial intelligence to life with Genies, the AI character platform that learns how to act like real people, like anyone we know. Genie CEO Akos Nigum joins us.
A stylized avatar is a vessel that somebody can use in order to experience the upside of what AI personalities can offer, which is an interactive personality that is clearly here not to replace the actual physical person.
Plus, the rest of today's news and the real life succession drama playing out in La La Land over who owns the Lakers. Alex Sherman has the story.
Bob Iger actually already made an on the record statement saying that he was open to working with Jeanie Buss as the governor of the team. Although he did throw out a very ominous comment about it which was something like if things change, they change.
It's Tuesday, August 18th. Squawk Pod begins right now.
Good morning everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is out today.
Meanwhile, we've got some opening arguments set to begin today in what could be a landmark social media trial. Meta facing allegations its products like Facebook and Instagram have fostered addictive behavior in teens and children. Now, lawyers representing California, Colorado, New Jersey, Kentucky. They're going to be arguing that case against Meta. It began back in 2023. Includes attorney generals from 29 states. If Meta loses, it could be forced to change features like infinite scroll and its products, as well as videos that autoplay. Now, Meta's attorneys have said the trial could lead to $1.4 trillion in damages. Lawyers representing the states told the presiding judge the $200 billion is a more likely amount, but a lot of folks watching that case and we'll see actually if it has an impact in Washington as well.
Yeah. And I think the big focus is on what it does for kids. What the state attorneys general have said a time and time again is they don't want kids getting alerts in the middle of the night when they're supposed to be sleeping, notifications for some of these things. And that endless scroll feature that you mentioned that kind of gets you into this addictive loop.
I am too. I think their concern is what happens with kids in these issues. So we'll see.
Anthropic's annualized revenue run rate hitting $65 billion at the end of July. That's roughly $20 billion more than just a few months ago. Sources tell CNBC that the company shared that figure in an update to investors. One source said that Anthropic also gave a preliminary second quarter revenue figure of $11.5 billion. That would be a 14-fold jump from just a year ago. Anthropic is gearing up for what could be Wall Street's largest ever IPO. The company confidentially filed its prospectus with the SEC back in June. It's been holding meetings with potential investors. We had someone on the show yesterday anticipating maybe in October.
I keep hearing I think early to mid-October is the current timeline.
We'll see. And we're watching SpaceX. And then by the way, whatever happens with this has a huge impact on OpenAI and has a huge impact on the whole ecosystem.
CNBC's Alex Sherman reporting. Los Angeles Lakers Governor Jeanie Buss is opposing the potential sale of her family's minority stake in the storied NBA franchise. Alex Sherman joins us right now with more on all of this. And Alex, this is a twist and turn in the story here.
Yeah, this is a little bit of a roller coaster which should not be of any surprise to those familiar with the Buss family and the various disagreements that have gone on in that family for many years. Let's rewind the story back to last week. That's when we found out initially that Mark Walter was going to sell his majority stake to Bob Iger and Josh Kushner. So this story that I'm about to tell you doesn't really have anything to do with the Walter majority stake sale. That is moving forward. We can talk about that if you want in a second and why that's happening. But let's get to the Buss family part of this. For those that don't remember, when Mark Walter bought the Lakers, which by the way, that deal closed less than a year ago, he bought that majority controlling stake from the Buss family. Well, he didn't buy a 17% minority stake. And what's important with that minority stake is it maintained Jeanie Buss as the governor of the Lakers, is in essence the person that still ran the operations of the team even though Mark Walter would own the financial majority of the team.
Well, yesterday afternoon it came out that ESPN broke the story that the Buss family was now suddenly going to sell this stake, this 17% minority stake to Iger and Kushner, thus uniting the entire Lakers ownership under Iger and Kushner. But a few hours later, I obtained a letter from Jeanie Buss's lawyer saying, 'Wait a second, not so fast. Just because her siblings may want to sell the stake in the team does not mean that Jeanie Buss wants to sell the stake.' And because Jeanie Buss is the controlling owner, she needs to sign off on a sale, which was something that was hashed out in court back in 2017 during an earlier dispute between the siblings where basically the language says that the controlling shareholder has to sign off on any sort of sale. And that still holds water even though the Buss family now only owns a 17% stake because Jeanie is still the controlling shareholder. So that's where we are today. We're almost certainly headed to some sort of settlement or court.
Yeah. If what we're hearing about the trust is correct, and it sounds like Jeanie, Joey, and Janie Buss are the three co-trustees, but the trust forces the board to vote to ensure that minimum 15% ownership requirement is maintained so that Jeanie Buss is the controlling owner. If that's the case, it sounds like it's pretty clear-cut that if she doesn't want to sell, they're not going to be able to sell.
Well, that was the purpose of what Jeanie Buss has tried to establish over the past decade. Jeanie Buss has never wanted to sell the team in terms of her leaving. That's why she maintained this structure with Mark Walter where she would still be the controlling shareholder despite this large stake in the sale. The question is as a sort of tagalong effect from the Walter sale, does anything change in the language of that family trust? I don't know. I have not seen the exact language of the trust. I don't think anybody really has other than the family itself. So, I think that's the part that may still be up for debate if there's any sort of change of control provision that goes along with the fact that they sold financial majority control even if they didn't sell this sort of governorship control. But again, that's for lawyers in the court to decide.
Alex, one of the questions that I was thinking about was just the overall financing scenario for how this transaction is taking place. Josh Kushner has his fund, Thrive, has a particular fund built just around these sort of longer term legacy kind of investments away from AI. I believe that fund, the way the NBA's structured, you tell me, can own about 20% of a team but can own more and then it's on an individual basis. So how is this getting syndicated out to other people? What does this look like?
Andrew, your questions are my questions. We don't know the answer to that yet. It's like do the math. You would have to think it has to get syndicated out to others. Again, think about this. You're absolutely right. Any private equity firm can only own up to 20% of the total value of a team. That's any individual private equity fund. As an aggregate, private equity can own up to 30% of a team. But even at 30%, let's say the percentage that Mark Walter is going to sell to Iger and Kushner is somewhere around 75%, 80%, maybe even a little bit more than that, whatever that number is, at a $12.5 billion valuation, we're talking about $10 billion-ish here.
So private equity can only own $3 billion of the $10 billion. This leaves $7 billion left over.
And Bob Iger is not a multi-billionaire. I mean, I don't know exactly what his net worth is, but he's not some sort of tech founder. So now you're left with Josh Kushner really footing the bill for this. Is he footing $6 billion, $7 billion or others who came in?
Hey, Alex, that raises the question, why do they want the other 17.8% that the Buss family owns at this point? Wouldn't that solve some of the problems? Is this a situation where they can't work together and they don't want her as governor?
So, again, we don't exactly know the answer. We can only know a little bit around it. So, Bob Iger actually already made an on the record statement saying that he was open to working with Jeanie Buss as the governor of the team, although he did throw out a very ominous comment about it, which was something like, 'If things change, they change.' It was reminiscent of that 'if they die, they die' line in the Rocky movie. You know, so I don't know exactly why he said that. But maybe what he was hinting at is this relationship is probably not built for the long term and the sooner we get it cleaned up the better. He very well may be open to buying that stake and putting his own people in charge of the Lakers while also being open to the idea of working with Jeanie and having her as the controlling owner. But that's why this particular part is valuable because it would allow Kushner and Iger to put in their own people to run the team.
Right. Well, the idea of majority control, a majority stake without actually having control is always a difficult one and lowers the worth of what you're holding and what you're owning. But it does sound like this is ripe for a negotiation and that may be just what's happening here. Alex, excellent reporting. Thank you for bringing us up to date on what's happening.
Keys will be next. Still to come on Squawk Pod, the AI is calling from inside the house. Our morning with a Becky Quick bot thanks to Genies, the AI character creation platform. CEO Akos Nigum on the opportunity he sees in real life.
Every single surface of the internet or future digital experiences are going to have an AI personality or become an AI personality. So, for example, AI agents, AI celebrities, AI customer service, AI companions, not like romanticism, but like there's a different version of an AI personality you can interact with.
Welcome back. This is Squawk Pod from CNBC.
We've been working on a little behind the scenes magic with Genies. That's the AI avatar technology company that makes AI personas that look, think, and behave like actual living people. Let me introduce you to the newest member of our team. We're calling her Becky Quicker.
My creation started with just a photo of Becky, which Genies used to auto-generate the fully rigged 3D avatar you're looking at. Then, transcripts, videos, and audio from Squawk Box taught me how Becky thinks, talks, sounds, and even moves. It all comes together in real time. So the voice you're hearing, the expressions you're seeing, and the way I'm responding, that's the whole system working at once. Pretty neat, right? Akos Nigum is the CEO of Genies, and he joins us right now. And Akos, we have been talking to you over the years, for several years at this point. You've got investments from companies like Silver Lake, Bond, Bob Iger is an investor in the company, and you've now got some big customers like MLB Players, the NBA Players Association, the parent company of Hello Kitty. There have been a lot of questions around avatars and there have been people trying to figure out what to do with these things. It's kind of been like an interesting thing to this point. What is the real life application of some of these avatars?
So you know we've been building this company for a long time as you know. You know when we first started when I would tell people we were building an avatar company people thought I was talking about the movie Avatar. So it's been like quite some time. And the word avatar has definitely evolved in definition throughout the years. I remember first hearing about avatars in like the 1990s, the late 1990s.
100%. And like, you know, we do a lot of business in Japan and Korea and so forth. They're like, you know, we've had mascots and avatars for a long time.
The way that we view it is there's going to be a need for a visual representation for all these interactive AI personalities that are dominating the surface of the internet, right? Like I think we believe in two truths. Number one is every single surface of the internet or future digital experiences are going to have an AI personality or become an AI personality. So for example, AI agents, AI celebrities, AI customer service, AI companions, not like romanticism, but like there's a different version of an AI personality you can interact with. Number two is we believe these AI personalities need a face. Right now they exist as text. Sometimes they transition to voice, but just staying there would be like if the radio never got television. So, we've invested in this suite of different tools, an avatar framework that allows anybody to be able to bring these AI personalities to life as characters that you could interact with.
Why have cartoon-like avatars instead of what AI does right now with deep fakes, which is sometimes undistinguishable from the real thing.
So, I actually think that's a really important point to make here. A stylized avatar is a vessel that somebody can use in order to experience the upside of what AI personalities can offer, which is an interactive personality that is clearly here not to replace the actual physical person.
Absolutely. Right. And so like you know like Hollywood has been covered as like we don't get along with AI at all, but the reason why we've been able to partner with so many people in Hollywood is because this isn't the celebrity themselves. This is the celebrity's genie. It's kind of like their separate vessel that they can use to engage with their fans in really unique ways. And again, not really on the companionship end. This is a utility based product. You can imagine how athletes can use it versus musicians. Musicians all of a sudden could release instead of posting a song on Instagram that all a million fans see as the exact same song, they can introduce their song in a million unique ways, something that's going to be relevant to the actual consumer themselves. Or you can learn maybe from an athlete different types of education and so forth where they can visually show you as well, hey, if I take a basketball shot, tell me the circumference of the arc of the basketball shot that I just made and then you're teaching somebody maybe about math, right? So there's a variety of different use cases, but we're utility based first.
Part of it is the interaction and we did get the chance to sit down yesterday and kind of work through with this avatar that you created. I got the chance to sit down and meet this genie version of me and ask her about things that are in the news right now.
How are you feeling about the state of cyber security given everything we've seen with AI and how there have been some pretty surprising breaches? Cyber security is the top concern among CEOs right now and AI is accelerating the threat. Adversaries are using it to automate attacks and exploit vulnerabilities faster than defenses can adapt. Sriram Krishnan made a good point recently. This is an arms race, but he's optimistic the industry will respond with a wave of AI-driven security startups. The real gap isn't technology. It's that permissions and accountability enforcement aren't keeping pace. What sectors got your attention on this?
First, I have another question. Do I talk with my hands like this a lot? Because she is. Maybe I do, too. I don't know. Is that part of what you trained her on?
Yeah. The behavior. Yeah.
Okay, that's weird. I didn't notice I did so much of this.
Also what she was telling, what Becky Quicker was saying back to me were things that she had picked up on Squawk Box last week when I was out. Andrew, she had kind of gone through all of the shows, so she knew things I didn't know and brought that into the conversation, too.
I actually think for you guys, this is a very valid use case, right? Like people tune in every single day. They want access to your opinions. But if they have the ability to get access to your opinions in a really creative and interactive way that is not here to replace you, but again to extend yourself. Let's say something happens like 6 hours later today and they want to ask your opinion on it. That can actually be quite fruitful.
So I have a question about your company doing this. Which is it seems to me today, even today, I could be wrong about this, but I feel like if you gave me maybe 48 hours, I could build something. It may not be like this exactly, but between using Eleven Labs on my voice and a couple of other services on my avatar and Claude or ChatGPT which has a corpus now of a lot of my own material over the years, that one, a bunch of these models collectively could create something. And so the question that I have about all of these things and this is sort of a larger question by the way about AI and anybody who's trying to create a new business and what kind of moat exists. What prevents somebody longer term from creating something that looks something like this?
So let me actually answer that first part because I get what you're saying on the avatar part right there's a lot of video avatar-based systems out there that is very different than a character rig system. So what we've done is we've built a character rig system. This makes it much more cost effective that you can do it at scale. If you do a video-based avatar system, which is what you're alluding to, that's like the visual layer for, you know, the AI Andrew Ross Sorkin. Even if it's a hyperrealistic or non-hyperrealistic version of you, it is rendering every single pixel of that avatar every single frame. This is a character rig. So even though it's not a video game, it's been built like a video game. That was the gamble that we took when we raised that round from Silver Lake. We actually came out with a blog post titled Farewell. We said typically when you raise a round like that, you go into the media, you go like, you know, do a bunch of partnerships, whatever. We actually said we're going to go dark for the next couple of years because we want to double down on a vision and a tech stack that we know is going to take longer than a video-based avatar system, but is going to pay off long term. And so now this is 50 to 100x cheaper than a video-based system. And so that's why these IP partners and so forth, we've only announced five of them. There's another five that are coming out too. They can do this at scale. So that's number one. Video-based avatar systems are prohibitively expensive. Number two is they don't have utility. So because it's built like a video game, these characters don't just talk to you, right? But they can go do stuff with you too. So you can bring them to apps, you can bring them into games and so forth. So they become interoperable. And then number three is for a video based system, there's breaks per frame, so they don't carry the consistency all the way through. Whereas again, she will react to you in real time. If you talk to her and then in the middle of the conversation, you pause her, she'll stop and then she'll react to you. She's an embodied character versus a video file. So, you know, that's a big reason why these partners have signed on is because we checked off a lot of their boxes that they have.
The question I'll ask though is some of the partnerships you have like with MLB and with the NBA, I will admit when I first talked to her yesterday, this avatar of me, it was a little weird. She's got my voice. She knows a lot of things and it was a little unsettling like, okay, I don't know what's going to happen with this avatar. Who does that? How do the players feel about the leagues making these decisions? Is everybody on the same page with that?
Well, look, like you guys started covering us, like I said, in like 2020, 2019 or so. We had a lot of players, athletes from the NBA, the NFL, and the MLB and so forth that have started to use their genies naturally on Instagram, on Snapchat, and TikTok. So, by the time we formalized these deals with the players associations, it was kind of a formality. Like, a lot of these players already leverage us. Now, some players are a lot more inclined and want to be able to utilize like this full capability. Some of them are like let me do a crawl, walk, run, right? Like you can imagine like this spans everything. Like right now we're talking about entertainment and media, but really like we feel like this is going to dominate all different sectors, enterprise, creators and more as well.
Okay, Becky Quicker was trained on my voice and personality, also on the history of Squawk Box and the topics and news events that we cover. And so let's take a look at a longer clip. It shows a little bit about the AI persona and how it learns in real time. I asked this genie if she realized that she was AI Becky talking to the real Becky.
You're testing whether I actually know who I'm talking to. Fair enough. Joe's been here since '95. Becky since 2005. Andrew since 2011. You're the one who just said yeah and waited to see what I'd do with it. That's a producer move.
Actually, actually, you're wrong. I've been here since 2004.
You're right. I was off. Becky joined in 2005, but you were already here in 2004. That's before the big revamp. So, you saw the Hannes era, the transition, all of it. What was the room like when they shook up the whole format?
Okay, that was impressive. I was a reporter before. I was an anchor starting in 2005, but I was a reporter on Squawk Box for that year before.
And you watched the whole thing unfold. Hands out, Becky and Carl in the 6 a.m. slot. Over 200 complaints hit the blog. What did the room actually feel like that first week? Not the press release version, the real one.
That's good. It was a lot. People don't like change in the mornings. I mean, I will tell you that is something we all learned and you have to find and develop your audience. A little bit of job security though, too.
Job security because you survived the revamp or because you helped shape it. Those are two different things.
Is she questioning me or I'm questioning her?
I don't know what the hell's going on. I'm sitting here thinking I haven't seen the genie just flip the... she just flipped the narrative. You're like, whoa, I'm driving this conversation. What's going on? Let's say that you were producing Squawk Box this week, what story do you think you would focus on at the top of your list? What do you think we should spend more time focusing on than we are?
The bond market. The yield moves lately are telling a story most people aren't hearing clearly. Equities get the headlines, but the fixed income side is signaling something about growth expectations that deserves more airtime. What's your read on why we undercover it?
Actually, I agree with you on the bond market. We tried to work some more material in on that today, but that's actually pretty good. That is something I think that we should spend more time on.
Just to be fair, Becky Quicker stopped learning on last week's shows. So, we did talk about it yesterday, and she hadn't been upgraded on what we had learned this week. I also got the chance to ask this genie what she had learned about Andrew.
Andrew's guilty pleasure is French fries. That's funny only because he looks like someone whose guilty pleasure should require a reservation. He also talked his way into a New York Times internship in 1995 by convincing a columnist to have lunch with him.
It was interesting. She learned things about all three of us. I asked her what my favorite color was, which was kind of a trick question. I don't really have one. And she said she didn't know on things. She said that Joe made his money first, his first dollars selling circulars which I didn't know either.
Question two, just two, I have two technical questions for you for anybody who's watching this. One is what model are you using underneath this because I'm listening to the language and I'm aware of certain things. I'm like picking certain things up. So can you tell us what model you're using?
So the visual layer itself is a proprietary model we've built but of course we open source the LLM itself. And so like I don't know that there's going to be that many businesses right now that should be developing their own LLM. What we've taken the position is we're going to be LLM agnostic. We know that again everything's...
So which LLM was doing the voice?
It depends on this... oh of the voice itself and the partner that we're getting...
Not the voice itself but the actual words coming out of their mouth.
That one specifically was DeepSeek.
DeepSeek. That's okay. That's what I thought. And then my second question is what was the give? What was the tell? There were certain words, certain sentence structures that are very akin to what ChatGPT used to be and that's what DeepSeek sort of had been trained on. So there were things happening that just sounded like that. And then the second question was how quickly, I don't know if you, how it was cut, how quickly were the responses coming?
So it depends right. So like yesterday because like the Wi-Fi here was like we couldn't get on the Wi-Fi we had to tether it, it was 3 seconds, but in the next 2 months it's going to be half a second. So the fact that you can go back and forth, right? Like I think that's going to be like a pretty significant change in the way that you can communicate with an avatar itself. In the video based avatar systems, there's going to be higher latency.
Akos, thank you for coming in.
