00:00:01
For people who don't know who he is, please give us an introduction to Joe Sat. He's the owner of the Nets and he's
00:00:07
now chairman of Alibaba. We like innovation from the bottom up. Alibaba just dropped their secret
00:00:13
weapon, Quinn 2.5 max. Alibaba surged 14 1.5% overnight, beat estimates on nearly
00:00:19
every metric. A massive rally alone this year, adding about 100 billion to the stock's value. You have to have a growth
00:00:26
mindset when you compete. Ladies and gentlemen, please welcome Joe Sai. Hey, my man. Good to see you.
00:00:44
Good to see you, brother. How are you? Good to see you. Good to see you, David. How are you?
00:00:49
The Brooklyn Nets. Brooklyn Nets. Nets and the New York Liberty. And the New York Liberty. Exactly. It's
00:00:56
not easy running a team, is it? It's uh not easy at all. Not easy at all because
00:01:04
uh a basketball any professional team is uh both a uh business and also it's an institution. You need to keep the fan
00:01:12
base happy. So there's sort of this church and state element. Yeah. It's almost like running a news
00:01:17
organization. Yeah, there it is. Can we uh maybe start with the WNBA and we can shift to
00:01:22
business and we can shift to basketball, but I think Caitlin Kark is out for the
00:01:25
season and there's just been a lot of controversy and attention that the WNBA is getting. What has it done right? What
00:01:31
has it done wrong? Did the has the league been doing enough to protect her as a as a star in the face of the
00:01:36
league? It's been a almost a microcosm for just a social discussion. Do you want to just talk about that as what you
00:01:43
see? Clayton Clark definitely had an effect on uh the WNBA. All the metrics went up.
00:01:48
So, this was last season, right, when she first came into the league from college. And uh uh we've seen all of our
00:01:56
metrics from viewership, ticket sales, sponsorship, everything went up like almost 4x 4x.
00:02:05
4x, right? I mean, that's incredible. That's incredible. So, so the so the economic impact that she's made to the
00:02:12
league is is extraordinary. Undeniable. Undeniable. But because of who she is, um, you know, she's a a little bit of a
00:02:19
different, uh, kind of player. You know, she is a she's a point guard. She's she's a smaller player. Uh, the knock on
00:02:27
her was was she going to be able to withstand all the physicality of the league, and she's proven that she's able
00:02:33
to do to do that. Um, unfortunately, there's been uh I think I think it's always good to have rivalries, right? uh
00:02:41
you know she she has this rivalry with Angel Ree that dated back to college. But some people would like to pit it as
00:02:48
uh a kind of a racial thing or is it uh you know this or that. I um I think we need to look past that uh and just look
00:02:57
at the skill set that's being brought into the league now. We have so many great college players. I mean uh the the
00:03:03
the rookie of the year potential candidate uh is Sonia Citron. Have you ever heard of her before she came into
00:03:11
the league? I mean, no, she I think she just uh broke the record for the highest
00:03:16
three-point uh shooting percentage in the league. Uh so, you know, you you see tremendous amount of talent and I think
00:03:24
uh you you ask what have what have they done, right? I I don't I think it's a matter of just uh a confluence of good
00:03:31
things coming into the league. And what about the NBA? So you guys did just an enormous
00:03:36
Yeah. Just let me let me just But but the one thing that's really changed that is prior to the Kaylin Clark uh season
00:03:45
uh your average fan base that watches ESPN basically you guys are not watching women's basketball. Maybe some some of
00:03:54
them follow college but certainly not the WNBA. But now your average ESPN fan base, they are watching the mainstream
00:04:03
sports fan base are watching the I think she's a I I have an observation about this and you and I are old school
00:04:08
basketball heads, you know, watching having watched the 80s and 90s and Patrick Euing and Charles Barkley. It's
00:04:14
more physical. They're tougher in the WNBA. And every time LeBron goes up and he gets fouled and he's just and he's
00:04:22
flopping all the time. How does he do it? You know, it's a foul. It's a foul. So maybe you could
00:04:27
comment on LeBron being like or just generally the NBA product actually. Yeah. The I mean the NBA and then
00:04:33
they're so tough and they're throwing each other around. It's a better game. The NBA product is great.
00:04:40
Um I I I don't think it's fair to compare whether uh the men's league is more less physical than the women's
00:04:45
league or more one the other the I mean they're both very physical. I mean if you are sitting there on the floor you
00:04:52
are watching physicality. Sure. uh and and also athleticism, right? But the game has, you know, the
00:04:59
NBA has this uh uh committee called the competition committee. So I I got put on
00:05:03
the competition committee. They call me and they say, "Joe Joe, we want, you know, want to be on the competition
00:05:09
committee, you know, it's about rules about, you know, like what is this transition, take foul?" So the committee
00:05:15
is every season they're they make these tweak changes. They make changes to refing to make the product better. I
00:05:22
mean, when I got the call, I'm like, you want me to sit on the committee with Jason Kidd, Chris Paul, and uh Coach K?
00:05:30
Like, what do I know about basketball that can, you know, really be smarter than them? But, uh, but what
00:05:37
I've seen is uh I've said to ads so the competition committee should be called the product committee because that is
00:05:44
the product the fans see on the floor. If you change, let's say if you change the three-point line,
00:05:49
that is a product decision. sound competition. Should they? Is it too? I I don't think so. I don't think so.
00:05:56
When you watch the the Boston Celtics throw up 43 threes in a game, you think it's a good product?
00:06:01
I think it's a great product because there are 18 different ways you can throw up 43 threes in a game.
00:06:06
Okay, let's uh transition to Alibaba for a second. It's an incredible journey you
00:06:12
and Jack Ma and the whole story has it's I mean it's written in books and there's
00:06:17
just tremendous lore but can you take us back to your mindset? I mean I think we've heard it's well documented Jack's
00:06:23
mindset but how you got involved what you were thinking in that moment the risk you were taking. I was just
00:06:29
mesmerized by Jack's personality. uh every people see the public side of Jack which is very charismatic but what I saw
00:06:38
was he was able to instill faith in people. I mean, he had a when I walked into his apartment, there were like 12
00:06:45
to 15 sort of very young people roughly, you know, uh, students that were just coming out of college and Jack was kind
00:06:54
of the teacher that's 10 years older and he's able to communicate. He's able to paint a a very strong vision. Uh, that
00:07:03
was the part that I really signed on to. His ability to lead is an amazing ability and you know he's a teacher uh
00:07:11
by training he taught at Zojang University he taught English actually you know teachers in a way make natural
00:07:19
leaders uh because a you have to communicate well and b you can identify talent I think a lot of teachers love to
00:07:28
see their students and say oh this kid is gonna do really well so they write a recommendation they do whatever And also
00:07:36
teachers are have enough humility that they're willing, they're very happy if their students go off and then they come
00:07:44
back and become more successful than they are. And in a comp in building a company, you need to be able to
00:07:49
accommodate all sorts of people that are smarter than you are. And that's that's
00:07:52
really important. There was a phase I guess in the maybe the early 2010s where it was a lot of it felt like tremendous
00:08:00
freewheeling capitalism in China where there was just a just a Cambrian explosion of incredible entrepreneurs
00:08:06
yourself and Jack and all these others pony and then I think almost starting with the antipo it things changed a
00:08:14
little bit. Can you walk us through the dynamics of how that changed and then I think it all kind of leads to you know
00:08:20
the lot of foreign direct investment into the Chinese ecosystem has changed pretty dramatically. Just give us a
00:08:25
sense of what has happened over that arc that you've been in it working in it observing it.
00:08:30
Alibaba has been around for 26 years. I would say the first 15 years were it was
00:08:37
a complete free market kind of you know way of growth and uh uh we built a lot of business organically and then you we
00:08:48
went into a phase where there was extreme competition uh everybody wanted to do e-commerce why it's because if you
00:08:55
have traffic online e-commerce was the best way to monetize your traffic and and today in today's market we have five
00:09:02
or very very strong competitors including the parent company of Tik Tok bite dance they are doing e-commerce
00:09:09
they're not known as an e-commerce company but they are one of our fiercest competitors so there's a you go through
00:09:15
a a a period of extreme competition and then the government felt that this sector has gotten out of line a little
00:09:24
bit first there's too much competition and then there are some uh platforms that have exhibited monopolistic
00:09:32
behavior So then there was a uh you know people may call it a crackdown whatever more
00:09:38
regulations came in regulations some of the regulations are very good actually they protected privacy uh uh anti-
00:09:45
monopoly type uh regulation and uh uh now we kind of are in a new normal where uh we are we believe that the regulatory
00:09:57
environment is more predictable. We know what the red lines are uh and we we know
00:10:02
where to go and where not to go and it's actually made uh a a a better operating
00:10:08
environment because of the predict predictability of it. On a geopolitical level, it seems to be the rhetoric in
00:10:14
the United States. What they keep drilling into Americans is to look at China as an existential threat to
00:10:22
America that we're rivals that we cannot operate and lead the world to prosperity.
00:10:28
What do you think? I I I don't agree with that view of uh the world. I'd be interested in your view,
00:10:38
David. I mean, I don't believe in that either. I mean, I'm I don't know why this has to
00:10:42
be the only dialogue we have is that we are bitter rivals. Yeah. I mean, look at this. the I I
00:10:49
think I I I could understand why sitting here in America you look at the rise of
00:10:54
China over the last 20 years 25 years uh China has become strong in terms of um manufacturing that's why it's such an
00:11:01
export juggernaut it has become because of the economic development it's uh you know China has become a technology
00:11:10
juggernaut as well and the fear is well all that stuff economic strength and technology strength is going to flow
00:11:18
into military strength and that becomes kind of a national security issue. I I understand that. I I get it. Uh but I
00:11:26
think it's um uh it uh I these are the two largest economies in the world and I think you just need to take a step back
00:11:35
and say well yeah on the one hand we should compete with China right that's fine we our comp the hyperscalers
00:11:42
companies compete with the Chinese internet companies globally um but then on the other hand there there is just so
00:11:49
many trouble spots in the world uh that what did President Trump say that he stopped Seven wars, right?
00:11:56
Yeah. Okay. Well, China has didn't start any of them. China has not started a war in
00:12:02
the last how many years? You know, 30 years, 40 years. Um I think uh China was part of the uh Korean war. Uh maybe the
00:12:12
Vietnam war, but that was uh a long time ago in history. Uh so in a way China you
00:12:18
know if you observe the behavior of the the Chinese people and the Chinese state
00:12:23
it's a very peaceful nation. China cares about econ its own economic development.
00:12:29
They care about uh the well-being of its citizens and uh I think there's a lot of
00:12:35
friction in in the in the course of competition where China feels that the United States is trying to contain China
00:12:42
and and stop the rise of China economically. Just speaking about the the welfare of its citizens. Um you
00:12:48
mentioned bite dance. I think there was reported bite 10's revenue just passed meta's revenue. I mean it's a
00:12:53
juggernaut. It's a private company so I don't know. You were telling Yeah. Yeah. They actually released it but
00:12:59
um one of the core products Tik Tok it's a fundamentally different product here than in than in China. And because of
00:13:06
that regulation and a focus on the welfare of its citizens, there's like strict rules in terms of the content and
00:13:12
the curation and the algorithms. Whereas here, you know, it's like cat videos and
00:13:17
like, you know, all kinds of nonsense. Although now I noticed that Tik Tok put a STEM section inside of Tik Tok in the
00:13:24
American product for whatever reason. There's a wherewithal that China has to think about its citizenry like that. And
00:13:31
I'm just curious, how do we embrace more of that principle because that sort of gets lost in this?
00:13:38
Such a good question. Yeah. What can we learn from China? Yeah. Yeah. What should we be doing more of
00:13:42
that China does? Well, first education. I mean, you have a extremely highly educated population. And you know, you
00:13:52
talk to every Chinese parent, they want their kids to take the ent college entrance exam and get into the best
00:13:58
universities. you know, if they want to send their kids away to school, they want to go to
00:14:03
the Ivy League or Stanford or, you know, all of that. So, I I think I think the emphasis on education, I think there are
00:14:12
some structural issues here in the United States, like the teachers union that is getting in the way, but uh
00:14:21
uh but there are no teachers unions in China. So, David, what's your David? I'm curious looking at this um not in any
00:14:30
official capacity but kind of the same question Chimath and I are sort of um probing about here. What is your take on
00:14:39
America and China succeeding together? And are we destined to be in conflict with this country forever or is there a
00:14:46
path forward with our incredible amazing dynamic President Trump? Well, I think you know, Professor
00:14:55
Mirshimer explained it at all in some of the last year that the US and China are
00:14:59
in a high-tech competition. They're in a security competition, economic competition. And the the reason is
00:15:05
because China's become rich and powerful. And the United States does not tolerate pure competitors. We want to be
00:15:10
the number one country. We want to be the most powerful country. The balance of power is to some degree a zero- sum
00:15:16
game. Economics are not, but power is. And the the history of the United States is we want to be number one and we don't
00:15:23
we don't like having pure competitors. And I mean that's the bottom line. Now I mean there are good reasons for this. We
00:15:28
live in a an Arctic world meaning there's no higher authority. If you get in trouble in the global system you
00:15:34
can't call 911. And so countries privilege their survival over all their considerations. And the way to survive
00:15:42
in the international system is to be powerful. and you measure your power based on the gap between you and the
00:15:48
next most powerful country. And I think that 20 years ago, China wasn't seen as a threat because it wasn't rich and
00:15:54
powerful, but now it is. And I think that's what's led to a much more hawkish environment in Washington. And I, you
00:16:01
know, I can't disagree with all of it because I think it's very important that the United States win the AI race. We
00:16:07
don't want China, for example, to dominate in AI or or in chips. We want the as Americans, we want the United
00:16:14
States to be the most powerful country. Now, if I were Chinese, I would want China to be the most powerful country.
00:16:19
And I don't have any resentment towards Chinese people who want their country the most powerful country. So, um
00:16:24
there's no animosity in saying this, but I want the US to be the most powerful country. And you know, in my little part
00:16:32
of the world, that means winning the AI race. Can I respond to that? Yeah. Yeah. Uh I I think it's really important
00:16:40
that the uh as an you you know you as a patriotic American, you want America to win. Uh but I think when it comes to AI,
00:16:49
there's no such thing as winning the race. I think it's a long marathon. And you know, you could just see by these
00:16:56
model companies, uh every week there's a model that's leading, but then the next
00:17:01
week another model overtakes them, right? So uh and the other thing is it's um AI is one of those uh we haven't
00:17:09
figured out what is the business model is but in our business in e-commerce we have a marketplace model with network
00:17:16
dynamics but I'm not sure if the development of models has those uh network effects that means winner take
00:17:25
all right so I don't think AI is a winner take all uh field I think what My definition of winning,
00:17:36
you know, is not who comes up with the strongest AI model, but who can adopt it faster. And I think uh uh people here in
00:17:47
the United States uh a lot of resources should go into adoption and diffusion of
00:17:54
the technology as opposed to just plowing you know bill I mean literally each of the hyperscaler companies is in
00:18:02
each of them is investing something like $80 billion a year. But you know I I think if you look at China a couple
00:18:10
things are going on. Number one, China has espoused open- source. Um, and and second, uh, a lot of the companies
00:18:17
including ourselves have launched models that are smaller. You know, not the trillion parameter models, but you know,
00:18:25
we have a model that's 1.7 billion parameters, another that's four, another that's 8 billion for like mobile devices
00:18:32
and laptops. So, so with these types of uh uh development uh I think it's more conducive to faster adoption. Uh you
00:18:42
want AI to proliferate. So, so now you know you look at China ch you know I'm not saying China
00:18:49
technologically is winning in the model war. Uh but in terms of the actual application and also people benefiting
00:18:56
from AI, it is uh has made a lot of uh uh development. Uh I I've seen a survey uh of Chinese firms last year only 8%
00:19:07
have are using AI were were using AI in their business. Uh now that number is approaching half 50%. So so the adoption
00:19:18
rate has been fairly uh fast and I think that the two countries AI is such an important element of life. It's almost
00:19:28
like air. Right. Right. And uh why would any one country say we have a sole claim to to air? We
00:19:36
we we should uh there's so many things that AI can do that that that could you know in medicine in in biology uh that
00:19:43
you know we we I think there's a lot of room for cooperation. Joe, one of the key questions that everybody asks when
00:19:50
we talk about AI and whether you spin your own models, which you do, which you've done a good job, and some people
00:19:55
just take them off the shelf, is the actual net impact in the operations of the business. Does it change the number
00:20:02
of people you hire? At what level does it change it? Does it change the efficiency? Does it change the way you
00:20:06
think about certain jobs? What's the practical application that it's doing for you guys
00:20:12
on the ground inside of Alibaba? Yeah. Um the uh I I would definitely made our uh operations more more
00:20:20
efficient. So we we actually can don't have to hire as many people. Um I'm still I'm on on this sort of uh mission
00:20:28
to uh write our quarterly earnings release with AI uh and and maybe just have a model, right?
00:20:34
Yeah. Yeah. Put Yeah. And and also put uh AI on the on the analyst conference call. See if people can, you know, tell
00:20:41
the difference. Uh but anyway then then they'll get rid of everybody in the finance department. Um but uh the the
00:20:48
most the biggest impact AI has made is with our uh we incorporate AI into all of our uh consumerf facing apps. So
00:20:57
we're in e-commerce, we're in maps, uh we have a food food delivery business, uh and uh once once you infuse AI, uh
00:21:06
the consumer have a massively better experience and that generate more user base for us. So so we're seeing the
00:21:13
impact uh from the uh sort of the the uplift on the on the revenue side. Is is the workforce then naturally
00:21:20
attritting as more and more of the workload is done? Yeah, it we haven't you know announced any layoffs because
00:21:26
of AI but I think um uh you know I keep asking our our engineering leads about how uh how much of the code is written
00:21:36
by AI today. I think the answer I get is all over the map depending on which department you make you you ask but I
00:21:44
think it's maybe 30%. at this point already. Yeah, already I'm doing kind of a weighted average of
00:21:52
the different Yeah, Alibaba is an enormous business. Uh it's in so many countries around the world.
00:21:59
How do you build a culture? How do you manage like just the insanity of having so many employees, so many needs, so
00:22:05
many issues? How do you deal with it? Uh focus. Uh so I came into the chair, you know, I was sort of kind of phasing
00:22:12
out. I was focused on the Brooklyn Nets. Then about a year and a half ago, I came
00:22:17
back into the chairmanship of the company. Uh the first thing I said is we we can't talk about our company as being
00:22:23
in six different businesses. It's just too confusing. Uh we're in two businesses, e-commerce and cloud
00:22:29
computing, you know, with an AI element in it. Those are our two businesses, core business and and so having that
00:22:36
focus was absolutely crucial to get our people, our teams to focus and uh and execute. Maybe end with just
00:22:46
forecast for the season, the whole league or just the Brooklyn Nets. Maybe just the Nets.
00:22:54
Well, I have to say we're in a we're in a we're in a rebuilding year. Um we You have a lot of picks.
00:23:00
We've spent all of our picks. We picked We have five for draft picks this past summer. Uh we have one pick uh in 2026
00:23:09
and we hope to get a good pick. So you can uh you can predict uh what kind of strategy we will use uh uh for the
00:23:16
season. But we have a we have a very young team. So we were talking to Dar on the last panel
00:23:22
on how China is a bit different in how it looks at autonomy, self-driving. There
00:23:28
are tests going on there, but they want to also make sure that there is tranquility and peace in the country and
00:23:34
people don't lose those jobs, those driver jobs. And so what's the climate in China? What do the Chinese working
00:23:42
class think when they see self-driving cars and they see tens of millions of people employed as drivers? There have
00:23:49
been protests already in Wuhan and protests in China are a very rare thing. Um based on what I know, I could be
00:23:56
wrong. I have a superficial knowledge. Obviously, you have a deep knowledge. What can you tell us a little bit about
00:24:02
how you know the the government and the people of China think of this incredible
00:24:07
revolution and the impact on jobs? I think the government is all in um embracing it and uh in fact the
00:24:16
government just a few weeks ago launched a kind of a AI plus policy uh and they say in 2030 which is 5 years from now
00:24:25
they want to see 90% penetration of AI agents and devices and things like that in in society. That's what the
00:24:33
government has publicly officially said. just an all-in just just just all in. Um there's really not
00:24:40
a lot of talk about uh uh people AI replacing human jobs. Uh maybe there's isolated
00:24:48
incidents. Uh but in general there is an anxiety about jobs. Uh uh China graduates about 10 million uh college
00:24:58
graduates every year. uh and today if you look at the youth unemployment rate uh which is age between 16 and 24
00:25:07
including graduates it's 18%. It's actually quite high. Uh so there's a lot of anxiety about about that. uh it
00:25:16
partly it's because the economy uh is even though the overall uh conditions of the uh of the Chinese economy is is
00:25:25
pretty good in terms of infrastructure access to energy and all those things but there is still a malaise right now
00:25:33
because China has gone through the last four or five years of a property slump uh everybody's uh average uh home prices
00:25:42
are down like 30% so there's a very negative neative wealth effect and that's uh still lingering.
00:25:49
Just quickly, is there any fear of AGI in China? You know what I mean by that? That out of control super intelligence.
00:25:55
Is that is that a fear or is that just an American thing? I um we people in government don't um talk about
00:26:04
it too much because they believe that uh they could control it uh better maybe better than in a you know society here
00:26:14
in in the US. Um but there's some some some lingering fears. Um but you know I was just listening to Denny's uh about
00:26:24
you know he's predicting 5 to 10 years but if he's saying 5 to 10 years I think AGI is probably 20 years from now and uh
00:26:36
uh and and it's because the the emphasis is on the word general. You have to be able to your AI has to be able to
00:26:43
generalize uh and apply uh principles to scenarios that you've never seen before.
00:26:50
Right, Joe? Thank you very very much. Great to see you. Thank you. Thank you. Thank you.
00:26:59
Pleasure. Thank you. Fantastic. Thank you, brother.