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00:00In a recent edition of the CFO Briefing Newsletter, Mozilla, known for its Firefox web browser and
00:05Mozilla VPN, has set itself no lesser goal than to further the health of the internet.
00:11And we're going to talk about that and more AI, of course, with our next guest.
00:15Here to talk about that and more is Anna Cech of the CFO Suite. We've got Eric Molheim,
00:20Mozilla CFO, came to the company and the job at Mozilla back in November of 2021. Also with us,
00:25the leader of our CFO coverage, Nina Tretman. She's Bloomberg News Senior Editor, editor of the
00:29CFO Briefing Newsletter. Subscribe to it if you haven't already at bloomberg.com slash CFO dash
00:35briefing. Eric, I do want to start with you and just get your view on the health of the internet
00:40right now. If we were to do some sort of like grade of the health of the internet right now,
00:47including everything with AI, what grade would you give it? What grade would you give us?
00:53Well, I think I'd give it still a pretty strong grade. AI is really changing the way people find
00:59information and take action online, and that is going to change the economics of the web. But the
01:04web has always adapted over time. And what's important for companies, both software companies
01:09and companies that create content, is to figure out sustainable business models as the web changes.
01:15And at Firefox, we're thinking about sustainability in a number of ways. One is that we are creating a
01:21Firefox Enterprise browser for businesses. You'll be hearing a lot more about that in the future.
01:25Second, for us, we're steadily growing our display advertising business. But we're doing that
01:29according to Mozilla principles, which is really about maintaining consumer privacy and not engaging
01:34in surveillance capitalism. And when it gets to search, search is going to change. But actually,
01:40we're still bullish on search economics. If anything, what we've seen so far is that people who engage in
01:46AI are actually using the additional context and information they get on that and engaging in more
01:51search behavior and powered by that additional context. So if we zoom out, the way we think about
01:57this is that the browser ends up continuing to be the key technology that people use to access the
02:03internet. If you think about the browser, it's a very broad use of technologies that renders the web
02:08for people across a lot of different use cases, whether that's watching a soccer game, perhaps Wrexum,
02:12or checking your bank account. AI, and particularly agendic AI, is going to be an increasingly important
02:18use case. And we're enabling Firefox to use that technology. But if anything, this is additive to
02:24everything else the browser enables. Those other use cases aren't going to go away. So choreographing
02:30all of that is really hard. It's what the browser is particularly good at. And the flexibility of the
02:33browser, particularly Firefox, remains its durable advantage going forward.
02:39Can I, you know, I'm curious when you talk about principles, and companies often talk about
02:44principles, but then I always think about how do they balance it with the business story.
02:48And you guys have an interesting business structure between Mozilla Corporate and Mozilla
02:52Foundation. Can you just give us kind of the big picture of how that works?
02:57Yeah, well, really, our secret superpower is that we are a for-profit company, but we're actually
03:02owned by a nonprofit. And that's Mozilla.org. And Mozilla.org is a company, a nonprofit that's been
03:07focused on maintaining the health of the internet for over 25 years. And so as the for-profit software
03:14arm underneath Mozilla.org, we have a really very interesting tension of balancing delivering against
03:20that mission and maintaining profit. And there's really a sense in which doing this way is a lot
03:24harder. You know, for instance, as I've talked about, growing our advertising business is something
03:28that we have to do according to our privacy preserving principles. So we can't grow it as
03:33fast or in exactly the same way as everybody else does. But this really ends up being our point of
03:38difference at Firefox. Because we're not focused on maximizing quarterly financial results, and we
03:43don't have to answer specifically to the market or to an exit by a private equity firm or a venture
03:48capitalist, we can make decisions that are in the interest of our users. And this is how we build that
03:53trust that sustains us in the long run. So this is building a browser that gives people
03:57privacy, transparency. It gives them control, particularly in the type of AI they choose to
04:02use in the model or the choosing to use it not at all. And investing in AI use cases that
04:08provide
04:08people utility and user control. And this trust is what we believe is our long-term financial asset
04:13that's going to build lasting loyalty and differentiation. Eric, one thing that we've been
04:18talking to CFOs lots about in recent days and weeks is this question, how do you balance the
04:23investment that is required for AI with the need to keep the lights on at your company, basically to
04:29pay for headcount, to pay for other investments? I'm wondering how you're balancing those two
04:34goals at the same time.
04:37Yeah, Nina, thanks. This has been really challenging this year. When I put together the budget with the
04:43company back at this time last year, we didn't anticipate that we'd be spending nearly as much
04:48on AI as we're doing right now. And we're obviously not alone in that problem. However,
04:55we've got a core principle that we think about as we implement AI inside the company. And that's AI
04:59is there to create more capability and ability to deliver by our people. And it's not really to
05:07make our people more expensive. So when we think about that, the way we think about this is really
05:12the standard type of budget problem that you have for any line item in the budget. We need to sort
05:17of
05:17keep our overall budget in place. And so what we focus on is putting control in the hands of our
05:23managers who are responsible for delivering. With AI specifically, we're providing them visibility on
05:28their usage of AI, the expense of that usage, and empowering them to make the right decisions within
05:35their own budget on how they want to allocate capital between AI, between labor, between any other
05:41package that they have in order to deliver upon the results that they have to deliver. And we found that
05:47AI
05:47has really increased the capability of our company in a number of ways. Famously, earlier this year,
05:52we partnered with Anthropic and Mythos and uncovered hundreds of security holes in Firefox.
05:59But what we were able to do with that information with our engineers is create a very disciplined
06:05pipeline to very quickly fill in all those security holes, harden the browser, and do that at a rate that
06:11was much faster than we would have been able to do without using AI. So this sort of human-in
06:16-the-loop
06:16use of AI is what we focus on. And we focus on really delivering our results in a way that
06:24is
06:24more efficient using AI. You've got a new chief executive earlier this year. I'm wondering
06:29what is changing at the company? You've also made changes to diversify your revenue streams. Can you
06:34talk a little bit about what's changing now? Yeah, well, what's not changing is the mission.
06:40The mission that we've always had over the past 25 years is to keep the internet healthy
06:44and to keep it in shape for people. That means that it remains accessible, open, and shaped by
06:48consumer choice. What I really like about our new executive team is that the pace of change has
06:55really increased. Over the course of the past year, we've really built up our product development
07:01muscle, and we've been able to iterate much faster and bring new features to market, such as Smart
07:06Window, which is our implementation of AI in the browser. The Firefox that you see today is really far
07:11different than it was a year ago. It's got more capabilities, but also it remains not tied to the
07:17business model of a larger ecosystem. And that's really what our users expect of us. They expect
07:23independence, and this core advantage is the trust that they have in us. And as a result, we are also
07:29committed to maintaining that trust in the long run. Simply spoken, we want Firefox to be the best
07:34browser for the people who want to use AI and the best browser for those people who don't.
07:39It doesn't, Eric, it doesn't seem like you're super concerned. I don't want to bring the
07:45conversation outside of Firefox and Mozilla just a little bit. It doesn't seem like you're
07:49super concerned about an AI apocalypse. I'm not really concerned about an AI apocalypse because
07:56AI is simply, it's another software. It's a highly capable software. I think the real risk that we have
08:03with AI is the concentration of power in a very small handful of companies. What that would lead
08:09to is the loss of consumer choice. It would lead to the loss of multiple viewpoints.
08:14Has that ship sailed?
08:17I don't think it's entirely sailed. We're focused, particularly at the Mozilla.org level,
08:22we're focused on there being a multiplicity of models out there. What we're finding is that the
08:26non-frontier models are gaining a lot more capability much quicker than anybody thought they were going to.
08:32And frankly, a lot of the budget pressures that we're seeing on people like me are the types of
08:37pressures that are going to turn us to looking at alternatives that are highly capable. And in a
08:42lot of ways, it's the harness that you put on top of that model, which really defines how well it
08:46operates, not the model itself.
08:48Yeah, I was actually wondering if you could talk a little about the government's frameworks that you
08:53have at the company. Deloitte, in a recent report, found that many companies, even though they're
08:58implementing AI, don't necessarily have adjusted their governance frameworks to accommodate for the
09:03fast changes that this technology brings. How is that working at Mozilla?
09:09Well, for us, as I talked about previously, it's really about providing visibility at the level of the
09:16people who have the context to deliver on their objectives in the organization. To be honest, we all have the
09:22same
09:23objectives. Our objectives are to be able to sustainably deliver the mission of Mozilla over
09:29the long period. And that means that all of our managers have an incentive to meet their budgets.
09:36And with the visibility, they're capable of making the right choices for the organization.
09:40Hey, I just want to go one last question when you go back to AI. And I listened to you
09:44and your policy,
09:44and you guys are willing to slow things down to stay within the values that matter to you as a
09:49company. When you saw Sam Altman and Dario Amadei calling for things, oversight, global oversight,
09:55slowing things down, do you take them at face value?
09:59I think that there's a mixture of real concern that they have there. And I also think that there's
10:04a strong interest by the large, too-big-to-fail AI players to keep things a little bit more set
10:12so that they can maintain their advantage. What we'd like to see is a world in which there are
10:16hundreds of AIs. We think open AI is a very important partner for us. Anthropics is a very
10:22important partner. But people should also have the freedom to use open-source models. They should
10:27have the freedom to use local models. And that's what's going to keep the internet rich.
10:32This has certainly been so insightful. I hope you will come back and join Nina, Tim, and me again.
10:38We'd love to continue this conversation. Eric, thank you.
10:41Well, I really appreciate the opportunity to be on your show. And I encourage people to,
10:45if they're interested in an open, capable browser that gives them choice, check out Firefox.
10:51All right. Well said. Eric Mulheim, thank you so much. Mozilla CFO. And of course,
10:55our thanks always to our Nina Tretman, Bloomberg News Senior Editor. She's editor of the CFO Briefing
10:59Newsletter. You can subscribe to it at Bloomberg.com slash CFO dash briefing. It comes out a new one
11:05every weekend.