Former Chief Executive Officer, ACTIVISION BLIZZARD INC
Former Activision Blizzard CEO Bobby Kotick on new venture, impact of AI and China trade relations
CNBC’s Julia Boorstin and former Activision Blizzard CEO Bobby Kotick join 'Squawk Box' to discuss his latest philanthropic ventures, the impact of AI on the economy and the workforce, the need for a reciprocal trade with China, state of the 2024 election, and more. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/42d859g
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About Robert Kotick
In a July 2023 interview, Kotick discussed the pending acquisition of Activision Blizzard by Microsoft, noting that 98% of shareholders approved the transaction and describing it as a "great deal." He stated that the company extracted "significant additional value" through a short extension, a dividend, and a termination fee he characterized as one of the largest in history. Kotick expressed personal concerns about the economy, citing interest rate increases and a deficit substantially greater than GDP, and said he did not believe any business is recession-proof. He also identified Chinese companies like Tencent, ByteDance, and Alibaba, along with Nintendo, Sony, and Netflix, as major competitors in the video game industry. Earlier, in 2016, Kotick described the acquisition of King Digital, the maker of "Candy Crush Saga," as an opportunity to enter the fastest-growing mobile game market and to attract a female audience, noting that 60% of King's audience was female. In 2010, he stated that over 60% of Activision Blizzard's profits came from online-related games and described Facebook as a "great platform for gaming" that could grow to be significant over five years, though he noted it was then too small to influence the company's operating profit. He also said the company was "platform agnostic," aiming to make its games playable on any device with a display and microprocessor.
Transcript (20 segments)
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Melissa Lee0:06
Full swing in Idaho. Julia Boorstin joins us with a special guest. Julia?
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Julia Boorstin0:08
Thanks, Melissa. Joined by Bobby Kotick, former CEO of Activision Blizzard, focused now on a number of philanthropic ventures. Bobby, A.I. is a huge topic here in Sun Valley. And all of your not-for-profit work comes back to A.I. and how it can be used as a tool to drive change in this economy. What are you working on right now?
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Robert Kotick0:27
So it's really exciting if you see the amount of progress that's taking place from a lot of the new tools in A.I. Large language models are uniquely suited for certain kinds of work. So if you think about education, especially K-12 education, right now we have two generations of failed public school education for a variety of reasons. But if you can actually give kids the opportunity to learn in a way that is appropriate for the way they learn. So if you're a visual learner, and we can assess that, test it and then provide you with a visual learning experience on a core curriculum you really need to know, A.I. tool is uniquely suited for doing that. If you're an auditory learner, change it. Look, Sal Khan at the Khan Academy, the most forward-thinking person figuring out how to use A.I. One of the things I like about that model, it's not limited to a school. He goes direct to the kid or direct to the family and so I think you can see lots of opportunities to have direct-to-kid opportunities for the way we change how you learn.
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Julia Boorstin1:37
And also very focused on veterans employment. When it comes to employment and concerns about employment in this country, there's a lot of concern that A.I. is going to be taking jobs away and sort of replacing a whole swath of workers. Are you concerned about A.I. having a negative impact in the workforce?
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Robert Kotick1:56
No. A.I. will be the exact opposite, in fact. I think what you'll be able to do, and it goes back to what I just said in K-12, assessment and the training will change dramatically. My employment focus is for veterans. Think about the population of veterans today that are able, capable and unemployed, something like 300,000 to 400,000 able and capable unemployed veterans, all of whom have skill training opportunities for new categories of employment. So A.I. I think will be a really important way for us to train, educate and develop new skills that are going to be necessary for the economy that aren't necessarily taught in the military.
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Julia Boorstin2:39
Well, a nice optimistic note about A.I. providing jobs instead of taking them away. You have a new venture, philanthropic venture you're working on. Center for Government Accountability. Haven't announced this yet. What is it? Tell us what this new initiative is?
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Robert Kotick2:55
Look, over the last, let's say, 15 to 20 years, one of the things that's happened is you've had an increase in corruption in government, municipal governments, state government, federal government. But the tools to be able to actually identify things that then give you, in law enforcement, the ability to prosecute those corrupt public officials, have actually weakened. And one of the benefits of A.I. is that you'll be able to do things -- a great example, freedom of information requests that are important for your work or public records requests. The automation of that process, the ability to actually synthesize all of what you gain in a Freedom of Information Act request or a public records act request can be automated through A.I., and you can then provide district attorneys, attorneys general, even the DOJ with access to tools and technology that they won't be able to easily get on their own.
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Julia Boorstin3:58
So you're going to be working to provide those tools, and how quickly will that launch?
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Robert Kotick4:02
Well, we want the tools to be robust. It's going to take time, but I think when you look at law enforcement, you look at district attorneys, attorney generals, they don't have the money to be able to get access to the very best A.I. talent or the very best custom A.I. tools, but they need it.
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Julia Boorstin4:21
When it comes to the government and accountability, sort of more broadly, you've been pushing for reciprocal trade with China, saying if they limit the way video games or social media is distributed in China, you want reciprocal trade. What's happening here in the U.S.? The president spoke about this last night. What's your perspective on reciprocal trade now and what should happen with China, especially given a big panel here on China when the secretary spoke on yesterday?
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Robert Kotick4:55
I think the secretary's actually been leading the charge on this within the government, but if you think about singling out a single company, like ByteDance, that's not the most effective way for us to think about trade in China. You know, we have an enormous amount of trade with China, and right now the rules and regulations don't allow U.S. companies to operate without being in a joint venture that's usually owned and controlled by a Chinese company. The government in China will have the choice. For example, Tesla can operate in China on its own. I think if we add a reciprocal framework employed in China that industry, the Chinese companies are participating in an industry with joint ventures in the U.S., many of those technology-related industries could have information security requirements, security clearances. But it would give you the opportunity to create hundreds of thousands of jobs, billions of dollars of value and allow the Chinese company to know they are operating with a partner providing security that they're required to provide for companies in China.
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Julia Boorstin6:13
Do you feel the government is moving in that direction or what's the chance of that happening?
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Robert Kotick6:17
Think about it. The president last night largely focused on NATO, but he actually specifically brought up reciprocal trade and the need for this reciprocal trade framework. Leader Schumer has been focused on it. In a bipartisan committee led by Mike Gallagher focused only reciprocal trade. Probably the most bipartisan piece of legislation discussed right now in the government.
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Julia Boorstin6:44
Speaking of the president, a huge focus here on this coming presidential election. Opinion looking big picture at the administration and you're talking about the different pieces of this. What kind of administration do you think would be best suited for economic growth and for business? Businesses like the one you recently sold to Microsoft?
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Robert Kotick7:02
Well, you know, think about the federal government. It's the largest, most complex organization in the world, and you know, the people who are running it should be the most sophisticated, capable people who run large complex organizations.
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Julia Boorstin7:18
A very brief answer. I'm guessing you don't want to name any names here?
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Robert Kotick7:27
That's not something I spend a lot of time on.
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Julia Boorstin7:30
A quick question. It's reported you're interested in buying TikTok. Speaking of ByteDance.
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Robert Kotick7:39
I read that, too. I'm more interested in China.
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Julia Boorstin7:43
Yes or no on TikTok? Future CEO of TikTok down the...