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Anthony Scaramucci, founder and co-managing partner of SkyBridge Capital.

Jared Siskin/Patrick McMullan | Getty Images

You might not know this, but Goldilocks and the Three Bears is actually a story about the debate currently surrounding regulation of the blockchain and crypto industries.

Some people say there’s too little regulation. Some people say there’s too much. Some people think somewhere in the middle is just right.

But nobody can agree about where that “somewhere” is, we argue about it for years, and Goldilocks gets on Twitter to angrily threaten to move to another country where the soup is more to her taste.

Fortunately, “Too little, too much, or just right” is just one of the many ways we can have a civil conversation about how to regulate this industry. And it happens to be a terribly oversimplified one. A more nuanced framework that deserves much more attention than it receives: “Stop bad, support good.”

For a long time now, Gary Gensler’s SEC has been the (de facto, not de jure) most prominent and outspoken regulator of cryptocurrencies.

The agency nearly doubled the size of its crypto assets enforcement unit last May. It demanded over a million dollars from Kim Kardashian for her role in pumping crypto last October (big score for everyone who had the foresight to put “SEC publishes a press release with Kim K’s name in the headline” on their 2022 bingo card). It cracked down on Kraken’s staking program with a big fat (for Kraken) $30 million fine last month.

The fanbase cheering on these moves isn’t exactly huge.

Even from within, other commissioners—like Hester Peirce—have publicly criticized the agency’s approach. Its tug-of-war with other agencies, including but not limited to the CFTC, continues despite President Biden’s call for harmony in his executive order on crypto last March. And, of course, industry executives are happy to offer their two (non-interest bearing, of course) cents.

Many in the crypto industry want this “regulation by enforcement” to stop. But as Alison Frankel at Reuters and former SEC Office of Internet Enforcement Chief John Reed Stark both suggested earlier this year, there’s probably no end in sight.

Why? Because this is what the SEC does best. Enforcement is in its DNA.

The SEC is a weed killer. We can’t get mad at a weed killer for not growing fruit. At best, we can argue about what does or doesn’t constitute a weed, and whether or not the thing that just got sprayed should’ve been.

The approach the U.S. federal government has taken to regulating this industry is a bit like spray coating your entire garden with Weed B Gon (not an endorsement) and then, waiting for the harvest.

This is exactly why “Too little, too much, just right” isn’t sufficient. But “Stop bad, support good” helps us realize that we are missing half the puzzle.

Well-crafted government policy doesn’t just stop bad actors. It also promotes progress and prosperity. It’s as much of a trellis for good plants as it is a weed killer. That’s what we’ve lost sight of.

That’s why it can’t be just the SEC. We need a more holistic approach at the federal level.

That’s why we need to advocate for public-private partnerships like Abu Dhabi’s recently announced $2B initiative to back blockchain and Web3 startups or the older UNICEF Venture Fund launched in collaboration with Giga to make investments with crypto in early-stage tech startups.

That’s why we need to raise awareness about big grants supporting research and education at the university level like Ripple’s University Blockchain Research Initiative, the Wyoming Advanced Blockchain Lab made possible by a donation from IOHK at the University of Wyoming or the Algorand Foundation’s ACE program.

And that’s why we need government officials to balance the narrative, helping the American public to see that it’s about keeping the baby as much as it is about throwing out the bathwater—whether that’s making financial services inclusive and more frictionless, financing new and exciting applications of blockchain tech or simply supporting the spirit of American innovation.

Scaramucci is the founder and managing partner of SkyBridge Capital, an alternative asset manager and SEC-registered investment adviser. The author’s firm, Skybridge Capital, has multiple investments in cryptocurrencies, including the Algorand Foundation’s ALGO token, and crypto and blockchain-related companies, including Kraken.

Anthony Scaramucci says the U.S. needs stronger leadership and better direction

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Microsoft AI chief Suleyman sees advantage in building models ‘3 or 6 months behind’

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Microsoft AI chief Suleyman sees advantage in building models ‘3 or 6 months behind’

Microsoft owns lots of Nvidia graphics processing units, but it isn’t using them to develop state-of-the-art artificial intelligence models.

There are good reasons for that position, Mustafa Suleyman, the company’s CEO of AI, told CNBC’s Steve Kovach in an interview on Friday. Waiting to build models that are “three or six months behind” offers several advantages, including lower costs and the ability to concentrate on specific use cases, Suleyman said.

It’s “cheaper to give a specific answer once you’ve waited for the first three or six months for the frontier to go first. We call that off-frontier,” he said. “That’s actually our strategy, is to really play a very tight second, given the capital-intensiveness of these models.”

Suleyman made a name for himself as a co-founder of DeepMind, the AI lab that Google bought in 2014, reportedly for $400 million to $650 million. Suleyman arrived at Microsoft last year alongside other employees of the startup Inflection, where he had been CEO.

More than ever, Microsoft counts on relationships with other companies to grow.

It gets AI models from San Francisco startup OpenAI and supplemental computing power from newly public CoreWeave in New Jersey. Microsoft has repeatedly enriched Bing, Windows and other products with OpenAI’s latest systems for writing human-like language and generating images.

Microsoft’s Copilot will gain “memory” to retain key facts about people who repeatedly use the assistant, Suleyman said Friday at an event in Microsoft’s Redmond, Washington, headquarters to commemorate the company’s 50th birthday. That feature came first to OpenAI’s ChatGPT, which has 500 million weekly users.

Through ChatGPT, people can access top-flight large language models such as the o1 reasoning model that takes time before spitting out an answer. OpenAI introduced that capability in September — only weeks later did Microsoft bring a similar capability called Think Deeper to Copilot.

Microsoft occasionally releases open-source small-language models that can run on PCs. They don’t require powerful server GPUs, making them different from OpenAI’s o1.

OpenAI and Microsoft have held a tight relationship shortly after the startup launched its ChatGPT chatbot in late 2022, effectively kicking off the generative AI race. In total, Microsoft has invested $13.75 billion in the startup, but more recently, fissures in the relationship between the two companies have begun to show.

Microsoft added OpenAI to its list of competitors in July 2024, and OpenAI in January announced that it was working with rival cloud provider Oracle on the $500 billion Stargate project. That came after years of OpenAI exclusively relying on Microsoft’s Azure cloud. Despite OpenAI partnering with Oracle, Microsoft in a blog post announced that the startup had “recently made a new, large Azure commitment.”

“Look, it’s absolutely mission-critical that long-term, we are able to do AI self-sufficiently at Microsoft,” Suleyman said. “At the same time, I think about these things over five and 10 year periods. You know, until 2030 at least, we are deeply partnered with OpenAI, who have [had an] enormously successful relationship for us.

Microsoft is focused on building its own AI internally, but the company is not pushing itself to build the most cutting-edge models, Suleyman said.

“We have an incredibly strong AI team, huge amounts of compute, and it’s very important to us that, you know, maybe we don’t develop the absolute frontier, the best model in the world first,” he said. “That’s very, very expensive to do and unnecessary to cause that duplication.”

WATCH: Microsoft Copilot beginning of a seismic shift in AI integration, says Microsoft AI CEO Suleyman

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Former Microsoft CEO Steve Ballmer says, as shareholder, tariffs are ‘not good’

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Former Microsoft CEO Steve Ballmer says, as shareholder, tariffs are 'not good'

President Trump’s new tariffs on goods that the U.S. imports from over 100 countries will have an effect on consumers, former Microsoft CEO Steve Ballmer told CNBC on Friday. Investors will feel the pain, too.

Microsoft’s stock dropped almost 6% in the past two days, as the Nasdaq wrapped up its worst week in five years.

“As a Microsoft shareholder, this kind of thing is not good,” Ballmer said, in an interview with Andrew Ross Sorkin that was tied to Microsoft’s 50th anniversary celebration. “It creates opportunity to be a serious, long-term player.”

Ballmer was sandwiched in between Microsoft co-founder Bill Gates and current CEO Satya Nadella for the interview.

“I took just enough economics in college — that tariffs are actually going to bring some turmoil,” said Ballmer, who was succeeded by Nadella in 2014. Gates, Microsoft’s first CEO, convinced Ballmer to join the company in 1980.

Gates, Ballmer and Nadella attended proceedings at Microsoft’s Redmond, Washington, campus on Friday to celebrate its first half-century.

Between the tariffs and weak quarterly revenue guidance announced in January, Microsoft’s stock is on track for its fifth straight month of declines, which would be the worst stretch since 2009. But the company remains a leader in the PC operating system and productivity software markets, and its partnership with startup OpenAI has led to gains in cloud computing.

“I think that disruption is very hard on people, and so the decision to do something for which disruption was inevitable, that needs a lot of popular support, and nobody could game theorize exactly who is going to do what in response,” Ballmer said, regarding the tariffs. “So, I think citizens really like stability a lot. And I hope people — individuals who will feel this, because people are feeling it, not just the stock market, people are going to feel it.”

Ballmer, who owns the Los Angeles Clippers, is among Microsoft’s biggest fans. He said he’s the company’s largest investor. In 2014, shortly after he bought the basketball team for $2 billion, he held over 333 million shares of the stock, according to a regulatory filing.

“I’m not going to probably have 50 more years on the planet,” he said. “But whatever minutes I have, I’m gonna be a large Microsoft shareholder.” He said there’s a bright future for computing, storage and intelligence. Microsoft launched the first Azure services while Ballmer was CEO.

Earlier this week Bloomberg reported that Microsoft, which pledged to spend $80 billion on AI-enabled data center infrastructure in the current fiscal year, has stopped discussions or pushed back the opening of facilities in the U.S. and abroad.

JPMorgan Chase’s chief economist, Bruce Kasman, said in a Thursday note that the chance of a global recession will be 60% if Trump’s tariffs kick in as described. His previous estimate was 40%.

“Fifty years from now, or 25 years from now, what is the one thing you can be guaranteed of, is the world needs more compute,” Nadella said. “So I want to keep those two thoughts and then take one step at a time, and then whatever are the geopolitical or economic shifts, we’ll adjust to it.”

Gates, who along with co-founder Paul Allen, sought to build a software company rather than sell both software and hardware, said he wasn’t sure what the economic effects of the tariffs will be. Today, most of Microsoft’s revenue comes from software. It also sells Surface PCs and Xbox consoles.

“So far, it’s just on goods, but you know, will it eventually be on services? Who knows?” said Gates, who reportedly donated around $50 million to a nonprofit that supported Democratic nominee Kamala Harris’ losing campaign.

— CNBC’s Alex Harring contributed to this report.

WATCH: There will be many LLM winners, says infrastructure investor Morrison

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AppLovin can offer TikTok ‘much stronger bid than others,’ CEO says

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AppLovin can offer TikTok 'much stronger bid than others,' CEO says

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AppLovin CEO Adam Foroughi provided more clarity on the ad-tech company’s late-stage effort to acquire TikTok, calling his offer a “much stronger bid than others” on CNBC’s The Exchange Friday afternoon.

Foroughi said the company is proposing a merger between AppLovin and the entire global business of TikTok, characterizing the deal as a “partnership” where the Chinese could participate in the upside while AppLovin would run the app.

“If you pair our algorithm with the TikTok audience, the expansion on that platform for dollars spent will be through the roof,” Foroughi said.

The news comes as President Trump announced he would extend the deadline a second time for TikTok’s Chinese-owned parent company ByteDance to sell the U.S. subsidiary of TikTok to an American buyer or face an effective ban on U.S. app stores. The new deadline is now in June, which, as Foroughi described, “buys more time to put the pieces together” on AppLovin’s bid. 

“The president’s a great dealmaker — we’re proposing, essentially an enhancement to the deal that they’ve been working on, but a bigger version of all the deals contemplated,” he added.

AppLovin faces a crowded field of other interested U.S. backers, including Amazon, Oracle, billionaire Frank McCourt and his Project Liberty consortium, and numerous private equity firms. Some proposals reportedly structure the deal to give a U.S. buyer 50% ownership of the company, rather than a complete acquisition. The Chinese government will still need to approve the deal, and AppLovin’s interest in purchasing TikTok in “all markets outside of China” is “preliminary,” according to an April 3 SEC filing.

Correction: A prior version of this story incorrectly characterized China’s ongoing role in TikTok should AppLovin acquire the app.

WATCH: AppLovin CEO Adam Foroughi on its bid to buy TikTok

AppLovin CEO Adam Foroughi on its bid to buy TikTok

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