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A picture taken in London shows gold-plated souvenir cryptocurrency tether, bitcoin and ethereum coins arranged beside a screen displaying a trading chart, May 8, 2022.

Justin Tallis | Afp | Getty Images

Paolo Ardoino, the chief technology officer for Tether, has been promoted to CEO of the stablecoin company, in a surprise move. Ardoino will take the reins from Jean-Louis van der Velde, a secretive crypto executive and entrepreneur, who has for years been the company’s boss.

In a press release Friday, Tether said that Ardoino will lead Tether from December 2023, succeeding van der Velde. Van der Velde will take up a new advisory role at Tether while still holding the position of CEO at Bitfinex, a crypto exchange that is closely associated with Tether and operated by the same Hong Kong-based parent company, Ifinex.

Ardoino will still serve as Tether’s chief technology officer while taking on his additional duties as CEO, Tether said. He will also continue serving as the chief strategy officer of Holepunch, a peer-to-peer communications network launched by Tether, Bitfinex and infrastructure platform Hypercore.

Ardoino first became involved in crypto when he joined Bitfinex in 2014. He joined Tether as chief technology officer in 2017.

Tether is one of the largest stablecoin operations in the world. Its USDT token, which aims to maintain a one-to-one peg to the U.S. dollar, is the biggest stablecoin by market value with more than $80 billion worth of tokens currently in circulation. Stablecoins are a vital part of the crypto market that help traders move in and out of digital tokens, anywhere in the world, around the clock.

In a statement, Tether’s van der Velde said that Ardoino is “extremely well-suited to lead Tether,” adding: “I believe Tether is poised to continue its rapid growth, with a continued focus on emerging markets and transformative technology.”

The departure of van der Velde, an executive who has barely ever appeared in public, comes as Tether has faced scrutiny over transparency. Many market observers had pointed to the lack of the former CEO’s public facing attitude as a sign Tether is not transparent.

How stablecoins became the backbone of crypto

Ardoino has for years effectively been the face of Tether. He has held multiple interviews with the media and appeared on podcasts, often to defend his company and its associated USDT token from scrutiny.

In a CNBC interview at the Money 20/20 conference in Europe in Amsterdam earlier this year, Ardoino said the company would release a full audit “eventually.”

“We’re working on it,” he added.

Explaining why the company had not yet completed a full audit already, Ardoino said this is because none of the big four auditing firms were willing to work with an industry that lacks regulation. While regulations are coming into place around the world for crypto, there is still no all-encompassing framework for the industry in place.

That is soon set to change with the EU’s Markets in Crypto Assets (MiCA) regulation around the corner. This would require stablecoins to keep a certain level of assets including more quality assets in their reserves, as well as publicly disclose their reserves. However, MiCA won’t fully apply until December 2024.

Van der Velde, on the other hand, has largely operated in the shadows, helming Tether without appearing in public much or speaking to the press.

Tether ran into a major controversy last year following the collapse of a rival stablecoin called TerraUSD, or UST. UST’s price fell to zero after crypto investors flocked out of the coin en masse due to fears over its backing.

Tether CTO says stablecoins will move toward a full audit to prove reserves

Not long after then, Tether’s USDT also began to deviate from its U.S. dollar peg, stoking concern over whether it was truly fully backed by dollars. That led to calls for Tether to increase transparency and run a full audit of the reserves behind USDT.

For its part, Tether said that its coin is always backed by dollars and dollar-equivalent assets including government bonds. Tether is also backed by other assets, including crypto tokens like bitcoin, and even gold.

Tether’s reserves rose to more than $86 billion in the three-month period from April to June. During that quarter, the company also says it booked a profit of more than $1 billion, up 30% quarter-over-quarter.

The company is sitting on a stockpile of U.S. Treasury bills, which are currently yielding about 4.6%. Tether makes money from various fees, and issuing loans to other institutions, and investments in digital tokens and precious metals.

In 2021, Tether settled with the New York Attorney General’s office for $18 million over claims that it and sister company, Bitfinex, had moved hundreds of millions of dollars to cover up the apparent loss of $850 million of commingled client and corporate funds.

As part of the settlement, Tether agreed to offer frequent quarterly reports detailing its reserves.

Tether continues to face sharp regulatory scrutiny. The U.S. Department of Justice is reportedly investigating Tether executives over allegations that they committed bank fraud in the early days of running the company, according to Bloomberg.

– CNBC’s Arjun Kharpal contributed to this report

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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.

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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

Piotr Swat | Lightrocket | Getty Images

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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