Jay Hoag, TCV founding partner, joins 'Money Movers' to discuss how companies are handling the geopolitical unrest and the next steps for tech and AI investors.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Jay Hoag, a founding partner at TCV and board member of companies like Netflix and Zillow, shared insights on how technology firms are navigating ongoing geopolitical and macroeconomic uncertainty. He noted that while boards focus on providing value and monitoring global trends, predicting the impact of such factors remains difficult. Hoag emphasized that technology, particularly AI, continues to show strong promise, with rapid innovation and widespread adoption, as seen with platforms like ChatGPT.

However, Hoag cautioned that the AI sector is still in its early stages, and not all companies will succeed. Drawing parallels to previous technology waves, he pointed out that many firms may not survive, despite the current optimism and influx of investment. Hoag also noted that while some AI companies are financially healthy, others are struggling with low margins and high cash burn, reminiscent of the dot-com era.

There will be many losers across the AI space, says TCV's Jay Hoag

Grappling with how to navigate all the geopolitical turmoil. Joining us here at Post 9 is Jay Hogue. He sits on the board of Netflix, Zillow, TripAdvisor and Peloton. Also founding general partner of TCB. He's been investing in technology for decades. It's great to see you. Welcome. Glad to be here. Thank you. How do boards navigate these complex geopolitical risks? What are the conversations like? I'd say, you know, generally speaking there's a tremendous amount of uncertainty out there. This, you know, this weekend, tariffs, trends in enterprise spend, consumer spend, etc. I'd say boards that I'm involved with, technology boards, by and large, focus much more on the micro. You know, are we providing tremendous value to consumer or business? Of course, you have to, you have to pay attention to the global macro trends, but, you know, predictions on that realm are very, very hard to make. As far as the uncertainty goes, do you think it's leading to any sort of pullback or strategy changes for companies at this point? It will, I'm sure, vary by sector and vary by company. You know, one of the things as a long-time technology investor is, it's not supposed to be easy to grow big businesses. A lot of companies struggle, and so in tougher macro times, they'll struggle more. But that rare set of companies can really build something that endures over a long period of time, can thrive through any environment. And, you know, as you mentioned, I've been doing this for decades. The list of crises that I've operated through is very, very long, but if you look at the results of the best companies, they've been able to grow throughout all environments. It sounds like maybe the current setup where you do have a lot of disruption in the macro, but the trends in AI, the trends in media, the trends in crypto almost ignore all of that backdrop. I think that's, you know, it's obviously, you every day have to deal with all of those headlines and try to make sense on a very short-term basis, but it is inexorable that better, faster, cheaper technology devices utilized by tremendous entrepreneurs who see something out there that they want to build, the future for technology is always bright. Psychology can change in a heartbeat, as it did in 2022. Currently, obviously, markets are generally near all-time highs, so psychology is quite positive. It's not going to be a straight line, but ultimately, it's up and to the right. How do you distinguish winners from losers in AI? In AI? So AI, I think, is both an area of great promise and potentially also great peril. I think we're really, the rate of innovation is amazing. The market adoption is huge. You know, the stat I read the other day, ChatGPT got 5.6 billion visits last month. That's an enormous number. If you think about the install base of devices, be it desktops, laptops, mobile phones, is huge. But we're still in the early days, and there are a lot of companies, particularly in the private markets, there's an enormous amount of capital flowing into a lot of these AI companies. Some will be really successful, but not all, and that's one of the things technology has shown us. If you think back to prior big wave shifts, go way back to search. You know, Google wasn't the first search company. You probably don't remember Lycos and AltaVista. I remember Netscape. Browser, Netscape and Spyglass. In mobile, the original dominant players were Nokia and Motorola, this pre-iPhone. So I like to remind people, it's going to play out over a long period of time. In many segments, it's not clear who the market leader will be over the next five to 10 years. So that's where the peril part comes in. Just because a company has AI in their name doesn't make it tremendous. It might be, but there will be many losers across lots of areas. Do you agree with that? We use analogs to the late 90s all the time. But one argument is that this generation of influential startups and giants are net-net healthier financially than those dot-com, boom, money-losing, high-valuation companies that eventually went away. I would say there are a number of companies that are doing well. Maybe, but there are a lot of companies who use gross margin as one measure of health, who have pretty low gross margins and are burning a lot of money right now. So go back to the dot-com era. There are some parallels there. Again, out of that came Amazon, Netflix. Apple was written off for dead in 2000. So those are the positive cases. But there were a lot of companies that ended up being roadside killed, for lack of a more elegant term.

Russia pummeled Kyiv with the largest drone attack of the war, injuring at least 23 people and damaging buildings across the capital only hours after U.S. President Donald Trump spoke with Russia's Vladimir Putin, officials said.

Kyiv

Ukraine Invasion

Russia hits Kyiv with largest drone attack after Trump-Putin call

U.S. President Donald Trump marked the passage of the new spending bill, which includes changes to food assistance, student loan programs, and clean energy credits. Robert Costa joins "CBS Mornings" to break down what's in the legislation.

Washington

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More than 80 Palestinians were killed in Gaza on Thursday (July 3), according to health officials, as Israel intensified its strikes, hitting a school-turned-displacement facility. CNN’s Paula Hancocks looks at the damage and humanitarian toll.

Jerusalem

More than 80 people killed in Gaza in one day

Ukrainian President Volodymyr Zelenskyy said Kyiv will do "anything" to advance EU accession talks. Zelenskyy spoke alongside Danish Prime Minister Mette Frederiksen, President of the European Council António Costa and President of the European Commission Ursula von der Leyen.

Ukraine will do 'anything' to advance EU accession talks: Zelenskyy

President Donald Trump said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on imports to the United States, a clear shift from earlier pledges to strike scores of individual deals.

Global Tariffs

Trump: Letters telling countries their tariff rate going out Friday

Indonesian rescuers on Thursday (July 3) temporarily halted a search for 30 people still missing after a ferry carrying 65 people sank near the island of Bali with the loss of six lives, the national search and rescue agency said.

Gilimanuk

Indonesia suspends search for 30 missing after ferry sinks near Bali

After marathon debate sessions in the Senate and House, President Donald Trump’s budget bill passed in the House. Republicans secured the biggest win of Trump’s presidency.

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Florida says the first group of migrant detainees have arrived at the new immigration detention center known as "Alligator Alcatraz." CBS News correspondent Shanelle Kaul has more.

Ochopee

First group of detainees arrive at "Alligator Alcatraz," Florida says

U.S. President Donald Trump said Thursday (July 3) that he spoke with Russian President Vladimir Putin and that he plans to hold a call with Ukrainian President Volodymyr Zelenskyy. CBS News White House reporter Willie James Inman has more.

Trump speaks with Putin, plans call with Zelenskyy

CNN’s Priscilla Alvarez reports on a lawsuit from lawyers for Kilmar Abrego Garcia alleging he suffered “torture and mistreatment” after he was wrongfully deported and held in El Salvador’s notorious mega prison.

Tecoluca

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Two contractors employed by UG Solutions spoke to the AP on condition of anonymity as they were revealing their employers’ internal operations.

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Democratic leader Hakeem Jeffries spoke for hours on the House floor about potential impacts of President Trump's "big, beautiful bill" that Republicans are looking to pass before July 4. Following debate, the House is set for a final vote on the massive budget bill.

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CBS News political contributor Caroline Polisi joins "CBS Mornings" to break down the jury's verdict in Sean "Diddy" Combs' federal trial and the judge's decision to deny bail for the music mogul ahead of his sentencing.

Manhattan

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Liverpool soccer player Diogo Jota has died aged 28, just weeks after marrying his childhood sweetheart. The footballer passed away in a car crash in northern Spain.

Madrid

Liverpool soccer player dies in car crash 10 days after wedding

The Pentagon said that U.S. strikes 10 days ago had degraded Iran's nuclear program by up to two years, suggesting the U.S. military operation likely achieved its goals despite a far more cautious initial assessment that leaked to the public.

Tehran

Iran Strikes

Iran nuclear program degraded by up to two years: Pentagon

Days before his 90th birthday, the Dalai Lama announced the Gaden Phodrang Trust, a non-profit he founded, will have the sole authority to recognize his future reincarnation, but China insists it will choose the successor of the Tibetan spiritual leader.

Lhasa

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New York

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Bryan Kohberger changed his plea to guilty Wednesday for the 2022 murders of four University of Idaho students. CBS News national correspondent Carter Evans has more on the case.

Boise

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The Wisconsin Supreme Court struck down a state abortion law that was adopted in 1849 in a 4-3 landmark decision. CBS News' Shanelle Kaul reports.

Madison

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Paris

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Everglades

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Moscow

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Thailand's Constitutional Court on Tuesday suspended Prime Minister Paetongtarn Shinawatra from duty pending a case seeking her dismissal, adding to mounting pressure on a government fighting for survival on multiple fronts.

Bangkok

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Israeli strikes killed at least 60 people across Gaza on June 30 in some of the heaviest attacks in weeks as Israeli officials were due in Washington for a new ceasefire push by U.S. President Donald Trump.

There will be many losers across the AI space, says TCV's Jay Hoag

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Rise of AI