×

CNBC Exclusive: CNBC's Andrew Ross Sorkin Sits Down with Marc Andreessen, Co-founder, Andreessen Horowitz Today on CNBC's "Fast Money"

WHEN: TODAY, WEDNESDAY, OCTOBER 8 AT 5PM ET

WHERE: CNBC'S "FAST MONEY"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Marc Andreessen, Co-founder of Andreessen Horowitz, today on CNBC's "Fast Money." Following are links to the video of the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000317987 and http://video.cnbc.com/gallery/?video=3000318343.

All references must be sourced to CNBC.

ANDREW ROSS SORKIN: WE ARE IN SAN FRANCISCO AT VANITY FAIR'S NEW ESTABLISHMENT SUMMIT. YOU ARE ON THE NEW ESTABLISHMENT AND YOU ARE ALL ON THE CNBC NEXT LIST SO CONGRATULATIONS FOR THAT. WANT TO TALK TO YOU A LOT ABOUT WHAT IS GOING ON IN THE NEWS WE HAVEN'T GOTTEN A CHANCE TO SEE YOU RECENTLY BREAK-UPS YOU ARE ON THE BOARD OF TWO COMPANIES THAT ARE EFFECTIVELY BREAKING THEMSELVES UP ONE BEING EBAY THE OTHER BEING HEWLETT PACKARD. A TREND IN THE WORKS? WERE YOU BEHIND BOTH OF THESE WHAT CAN YOU TELL US?

MARC ANDREESSEN: SO THEY DIDN'T KNOW ABOUT EACH OTHER UNTILTHREE WEEKS AWAY AND SO THEY WERE LITERALLY PARALLEL PROCESSES AT THE SAME TIME. SO I AM SITTING IN EACH BOARD MEETING AND BEING COMPLETELY MUM ON THE OTHER ONE. I THINK IT'S A MAJOR TREND. I THINK YOU HAVE EBAY, HEWLETT PACKARD YOU'VE GOT EMC UNDER PRESSURE FROM ELLIOT, YOU HAVE SYMANTEC THAT HAS ANNOUNCED THEY WILL PROBABLY BREAK UP. MY GUESS AT THIS POINT IS EVERY LARGE TECH COMPANY MORE THAN 20 YEARS OLD BREAKS UP.

SORKIN: EVERY LARGE --

ANDREESSEN: YEP.

SORKIN: ORACLE?

ANDREESSEN: YEP. I THINK AT SOME POINT IN THE NEXT FIVE YEARS THEY ALL BREAK UP. THERE'S MULTIPLE REASONS FOR IT. ONE IS THEY'RE ALL REALLY CHEAP AND ONE THING GOING ON IS THEY ARE ALL SUPER CHEAP. VALUATIONS ARE VERY LOW. TECH FOR THE LAST FIVE YEARS HAS BEEN TRADING BELOW INDUSTRIALS. CASH LEVELS ARE VERY HIGH, DEBT LEVELS ARE VERY LOW. ALL OF THAT THEN ATTRACTS ACTIVISTS WHICH ARE AN AFFECT NOT A CAUSE BUT THEN PUT ADDITIONAL PRESSURE AND THEN YOU'VE GOT THE FACT THE INDUSTRY IS CHANGING SO FAST. AND THIS IS A BIG MOTIVATION AT BOTH HP AND EBAY. IS THE INDUSTRY IS CHANGING VERY FAST IN ALL THESE SECTORS AND YOU WANT TO GET TO A SMALLER SIZE SO YOU CAN GO FASTER.

SORKIN: YOU MENTIONED ACTIVISTS. LET ME ASK YOU QUICKLY ABOUT EBAY. WE WENT THROUGH A WHOLE COMMOTION NINE MONTHS AGO WITH CARL ICAHN AND HE WENT AFTER YOU AND YOU WENT AFTER HIM THERE WAS A LOT GOING ON BACK THEN. AND AT THE TIME, YOU AND JOHN DONOHOE WERE VERY VEHEMENT THAT THE COMPANY SHOULD BE ONE NOT TWO. WHAT HAPPENED BETWEEN NOW AND THEN?

ANDREESSEN: OH MANY MANY THINGS. SO FIRST OF ALL I'M UNDER NDA WITH RESPECT TO CARL AND EBAY -- I CAN TALK ABOUT CARL EX-EBAY BUT I AM UNDER NDA ON THE EBAY FRONT. I GUESS I WOULD SAY WE DON'T WANT TO LET AN ACTIVIST GET IN THE WAY OF WHAT WE THINK IS ACTUALLY THE RIGHT THING TO DO AND SO WE THOUGHT IT --

SORKIN: SO WAS IT THE RIGHT THING TO DO BUT THERE WAS AN EGO?

ANDREESSEN: SO HERE'S THE THING IS IT'S NOT JUST LIKE YOU WAKE UP ONE MORNING AND YOU ARE LIKE OH JUST SPLIT COMPANIES AND IT IS JUST EASY. THESE ARE LIKE VERY LARGE BUSINESSES OPERATING GLOBALLY WITH TENS AND TENS OF THOUSANDS OF EMPLOYEES WITH INTEGRATED STRATEGIES AND INTEGRATED BUSINESS MODELS

WORKING A CERTAIN WAY. WE HAVE BEEN TALKING, EVERY YEAR FOR THE LAST SIX YEARS WE TALK ABOUT WHETHER WE SHOULD KEEP IT TOGETHER, SPLIT IT UP, WE TALK ABOUT WHETHER WE SHOULD BUY COMPANIES. IT'S A SAME THING ON ALL THESE BOARDS. YOU'RE CONSTANTLY HAVING A DISCUSSION AND BUT UT IS NOT LIKE YOU JUST WAVE A MAGIC WAND AND ALL OF A SUDDEN THEY'RE SEPARATED. THESE COMPANIES ARE ABOUT TO GO THROUGH A YEAR-LONG PROCESS OF SEPARATION WHICH IS GOING TO BE INCREDIBLY ARDUOUS AND IT IS GOING TO CHANGE THE STRATEGIES OF ALL THE BUSINESSES AND WE JUST TOOK THE POSITION OF YOU HAVE TO FOCUS ON THE SUBSTANCE. YOU HAVE TO THINK IT THROUGH AND HAVE A PLAN. SO IT TURNED OUT WE DEVELOPED A PLAN AND WE HAVE A PLAN AND WE'RE DOING IT.

SORKIN: ACTIVISM.

ANDREESSEN: SURE.

SORKIN: SO THE CARL ICAHNS OF THE WORLD YOU'VE DEALT WITH NOW. RALPH WHITWORTH WAS ON THE BOARD OF HP.

ANDREESSEN: YEP.

SORKIN: IS ACTIVISM GOOD FOR BUSINESS?

ANDREESSEN: WELL, SO ACTIVISM IS ONE OF THE TERMS LIKE HEDGE FUND, IT DEPENDS WHAT YOU MEAN. SO ACTIVISM IN THE FORM OF RALPH WHITWORTH I THINK IS FANTASTIC. I CAN'T SAY ENOUGH GOOD THINGS ABOUT RALPH WHITWORTH. HE'S ASTONISHING. HE'S A TEACHER, A MENTOR. HE COMES IN. HE SHOWED UP AT HP SAID I BOUGHT A BILLION DOLLARS WORTH OF STOCK AND I'M HERE TO HELP. AND HE JOINED THE BOARD AND BECAME THE CHAIRMAN AND SCRUBBED IN AND HE AND HIS TEAM DID AN ENORMOUS AMOUNT OF WORK. TAUGHT THE LEADERSHIP OF THE COMPANY A WHOLE SERIES OF THINGS. THEY'RE PHENOMENAL. I CANNOT SAY ENOUGH GOOD THINGS.

SORKIN: YOU HAVE A HARDER TIME WITH CARL ICAHN.

ANDREESSEN: MAKE THE OPPOSITE CASE ON ALL OF THAT WITH CARL. I MEAN CARL IS LITERALLY THE EXACT OPPOSITE. YOU REMEMBER THE "STAR TREK" EPISODE WHEN THEY HAVE THE GOOD AND EVIL CAPTAIN KIRK? IT IS ONE OF THOSE THINGS.

SORKIN: CARL IS THE EVIL CAPTAIN KIRK?

ANDREESSEN: HE'S GOT THE SASH AND THE GOATEE. SO LIKE CARL IS JUST THE EXACT OPPOSITE. HE STARTS OFF BOMB THROWING, HE LIES, HE JUST MAKES STUFF UP, SLANDERS LIKE IT'S THE FULL LIKE -- RECENT -- LIKE HIS INNER 6-YEAR-OLD COMES OUT AND HE JUST GOES NUTS.

SORKIN: AND WAS HE RIGHT? WAS THE 6-YEAR-OLD RIGHT IF THAT'S WHAT YOU CALL HIM?

ANDREESSEN: IT DEPENDS ON WHAT THE STRATEGY OF THE COMPANY IS WHEN APPLIED TO THE ACTUAL BUSINESS. ONE OF THE PROBLEMS CARL HAS IS HE DOESN'T LIKE -- MICHAEL DELL SAID OF CARL, HE SAID HE DIDN'T KNOW IF WE MADE NUCLEAR REACTORS OR FRENCH FRIES. HE IS NOT IN THE DETAILS OF ANY OF THIS STUFF AND SO THESE ACTUALLY COMPANIES HAVE TO BE --

SORKIN: BUT HE WAS SMART ENOUGH TO FIGURE OUT SOMETHING.

ANDREESSEN: I DON'T KNOW THAT IT TAKES SOME SUPER HIGH IQ TO SAY IT'S A GOOD IDEA TO BREAK COMPANIES UP UNDER CERTAIN CIRCUMSTANCES. I THINK IT IS A QUESTION OF WHICH COMPANIES WHEN WITH WHICH STRATEGIES? BY THE WAY YOU ARE AFFECTING THE LIVES OF REAL PEOPLE, YOU ARE AFFECTING THE LIVES OF TENS OF THOUSANDS OF PEOPLE, YOU ARE AFFECTING THE DESTINY OF THE COMPANIES FOR YEARS TO COME. THE SUBSTANCE ON THIS REALLY, REALLY MATTERS AND ALL THE CRAZY BOMB THROWING AND ALL THE INFLAMATORY STATEMENTS AND ALL THAT STUFF IS A COMPLETE SIDESHOW AND IF THAT'S WHO HE WANTS TO DO BUSINESS HE CAN BUT IT ACTUALLY CONTRIBUTE TO BUILDING A COMPANY.

SORKIN: LET'S ASK ABOUT ANOTHER INFLAMATORY COMMENT AND IT IS NOT FROM CARL ICAHN BUT FROM A FRIEND OF YOURS ABOUT A COMPANY YOU HAVE INVESTED IN. PETER THIEL ON TWITTER. HE SAYS THE COMPANY IS HORRIBLY MISMANAGED AND YOU MIGHT RECALL THAT HE SAID THAT HE THOUGHT THAT THE MANAGEMENT WAS SMOKING SOMETHING.

ANDREESSEN: WELL, HE IDENTIFIED THE SOMETHING, I THINK, RIGHT?

SORKIN: HE DID.

ANDREESSEN: OBVIOUSLY TWITTER IS WHAT YOU ARE TALKING ABOUT.

SORKIN: YES.

ANDREESSEN: WELL DICK COSTOLO HAD OF COURSE THE RESPONSE WAS I'LL RESPOND TO PETER'S STATEMENT AFTER I FINISH THIS GIANT BAG OF DORITOS. I WILL JUST LET THAT SIT THERE

SORKIN: WHAT'S YOUR RESPONSE THOUGH?

ANDREESSEN: I THINK TWITTER'S PERFORMANCE SPEAKING FOR ITSELF. I THINK THEY HAVE BUILT AN ENORMOUS FRANCHISE. THEIR BUSINESS IS GROWING INCREDIBLY QUICKLY. THE TEAM IS DOING AMAZING THINGS.

SORKIN: YOU HAVE BEEN A BIG SUPPORTER OF BITCOIN AND YET SOMETHING IS HAPPENING IN TERMS OF THE PRICE OF BITCOIN AND IT HAS DROPPED PERCIPITOUSLY. CAN YOU EXPLAIN THAT?

ANDREESSEN: OH, SO THE PRICE IS GOING TO GO ALL OVER THE PLACE. THERE'S NOT -- THE PRICE IS GOING TO GO – WE ARE NOT REALLY FOCUSED ON THE PRICE BUT WE ARE FOCUSED ON THE TECHNOLOGY AND INFRASTRUCTURE BUILT. I MEAN, BITCOIN IS A GLOBAL PAYMENT NETWORK. BIGGER THAN IT HAS EVER BEEN. IT CONTINUES TO GROW VERY FAST.

SORKIN: THE PRICE OF BITCOIN DOESN'T MATTER TO YOU ONE IOTA?

ANDREESSEN: NOT AT THIS STAGE. THIS IS VERY EARLY. THIS IS LIKE JUDGING THE INTERNET IN 1994 ON THE PRICE OF DOMAIN NAMES. IT'S STILL EXTREMELY EARLY THE WORLD JHAS NOT YET ADOPTED BITCOIN. IT IS STILL EXTREMELY EARLY. SO I DON'T THINK YOU CAN READ A LOT INTO PRICE AND BY THE WAY I DON'T THINK YOU CAN READ A LOT INTO THE PRICE GOING WAY UP OR WAY DOWN.

SORKIN: BEFORE WE SAT DOWN I NOTICED YOU WERE WEARING A VERY NICE WATCH, A FANCY WATCH, AN OMEGA SPEED MASTER I THINK IT'S CALLED, RIGHT? BUT THEN I READ RECENTLY YOU WANT AN APPLE WATCH. WILL YOU DUMP THIS WATCH FOR THAT?

ANDREESSEN: NO WAY MAN. THAT GOES ON THIS WRIST.

SORKIN: YOU ARE GOING TO WEAR TWO WATCHES?

ANDREESSEN: YES. ABSOLUTELY.

SORKIN: AND YOU THINK THAT'S THE FUTURE?

ANDREESSEN: OLD WORLD, NEW WORLD.

SORKIN: NO, NO. LET'S TALK ABOUT THE FUTURE. MOST PEOPLE OF A DIFFERENT GENERATION ARE NOT WEARING WATCHES AT ALL.

ANDREESSEN: THAT'S THE THING. PEOPLE WHO WEAR WATCHES ARE LARGELY DOING IT BECAUSE IT'S WITH STYLE OR HAS TO DO WITH THE RESPECT FOR THE ENGINEERING OR FASHION. OR HAS TO DO WITH OTHER THINGS. YEAH. MOST PEOPLE CHECK THEIR CELL PHONES FOR THE TIME.

SORKIN: DO YOU THINK IT'S HUGE HIT OUT OF THE BOX?

ANDREESSEN: I THINK IT'S UNCLEAR. I THINK IT HAS VERY GOOD PROSPECTS. WITH THESE THINGS I THINK IT'S REALLY HARD TO CALL IT UNTIL YOU ACTUALLY SEE IT IN ACTION.

SORKIN: RIGHT.

ANDREESSEN: AND SO PEOPLE IN APPLE HAVE BEEN ABLE TO TRY IT BUT THE REST OF US HAVE NOT BEEN ABLE TO TRY IT. I THINK IT HAS REALLY GOOD PROSPECTS AND I THINK IT IS VERY EXCITING. BY THE WAY, THIS IS THE OTHER THING. YOU NEVER KNOW WHEN THESE THINGS ARE GOING TO WORK. IF IT DOESN'T WORK THIS TIME, IT MAY WELL WORK THIS TIME AND IT MAY BE GREAT BUT IF IT DOESN'T WORK THIS TIME EVERYBODY WILL WRITE OFF THE CATEGORY AND THEN IT WILL TURN OUT IT WILL WORK IN FIVE YEARS. I DO THINK THE IDEA IS RIGHT AND WILL HAPPEN EITHER NOW OR SOME POINT LATER.

SORKIN: RIGHT. REAL QUICK, THIS MORNING YOU ANNOUNCED A DONATION OF $500,000 TO INCREASE DIVERSITY IN THE WORLD OF TECH, A HUGE ISSUE OUT HERE IN THE VALLEY AND ACROSS THE COUNTRY MORE BROADLY.

ANDREESSEN: YEP.

SORKIN: HOW DO YOU EXPECT THIS PROBLEM TO GET SOLVED? IN TERMS OF FINDING ENGINEERS FROM A TRULY DIVERSE BACKGROUND AND REALLY DIVERSIFYING, I MEAN, WHAT'S GOING ON AROUND YOU? YOU LOOK EVEN AT YOUR OWN FIRM I WOULD IMAGINE. PROBABLY NOT AS DIVERSE AS YOU WANT IT TO BE.

ANDREESSEN: YOU WOULD BE SURPRISED. BUT SO LOOK. THE GOOD NEWS IS THERE'S DIVERSITY IN CERTAIN AREAS SO SILLICON VALLEY IS LIKE THE UNITED NATIONS WHEN IT COMES TO INTERNATIONAL DIVERSITY. WE HAVE TREMENDOUS NUMBERS OF CHINESE AND INDIAN AND VIETNAMESE AND PEOPLE FROM ALL OVER THE PLANET WHO COME TO SILICON VALLEY AND THESE COMPANIES YOU WALK AROUND AND IT'S LIKE THE U.N. YOU WILL HAVE PEOPLE FROM A 100 COUNTRIES IN THESE COMPANIES. AND SO CLEARLY TECHNOLOGY IS WANTS TO BE INCLUSIVE, WANTS PEOPLE TO BE ABLE TO PARTICIPATE. WE DO HAVE THIS CHALLENGE OF WE HAVE UNDERREPRESENTED GROUPS AND PARTICULARLY WOMEN AND UNDER REPRESENTED MINORITIES. ESPECIALLY AFRICAN-AMERICANS AND LATINOS UNDERREPRESENTED. WE THINK, I THINK THE TWO THINGS TO MOVE THE NEEDLE ON ARE PIPELINE WHICH HAS TO DO WITH THE EDUCATION PROCESS, RIGHT? FOR EXAMPLE, RIGHT NOW ONLY 15% OF COMPUTER SCIENCE GRADUATES ARE WOMEN AND I THINK IT IS POSSIBLE TO INCREASE THAT A LOT SO THAT'S THE PIPELINE SIDE AND THEN THE OTHER IS ACCESS WHICH IS HOW TO DO PEOPLE PLUG INTO THE NETWORK, GET TO KNOW, HOW DO THEY GET THE JOBS, THE INTERNSHIPS, THE OPPORTUNITIES, HOW DO THEY ULTIMATELY RAISE VENTURE CAPITAL AND HOW DO THEY GET INTO THE NETWORK? THREE NONPROFITS THAT WE ANNOUNCED GRANTS FOR THIS MORNING WORK ON THOSE TWO PROBLEMS.

SORKIN: REAL BRIEFLY BEFORE WE SEND IT BACK TO MELISSA, WILL YOU HAVE A CAMEO IN THE NEXT HBO SILICON VALLEY? YOU JUST CAME FROM A PANEL WITH THE CREATOR OF THAT PROGRAM.

ANDREESSEN: I THINK I'LL LEAVE IT TO PEOPLE LIKE ERIC SCHMIDTAND KARA SWISHER MUCH MORE TELEGENIC THAN I AM.

SORKIN: OKAY. WE'LL LEAVE IT THERE. MELISSA, DO YOU HAVE A QUESTION FOR MARC?

MELISSA LEE: MARC, I WAS WONDERING ABOUT THE BITCOIN COMMENT, ACTUALLY, IF YOU'RE STILL THERE AND DOESN'T MATTER ONE IOTA. ISN'T THIS A BITCOIN BLACK EYE THAT WE ARE WITNESSING? IF YOU HAVE AN ASSET THAT HAS ESSENTIALLY GONE THROUGH A MAJOR CORRECTION, DOESN'T THAT DETER PEOPLE FROM WANTING TO INVEST IN OR USE BITCOIN?

ANDREESSEN: IT'S REALLY EARLY. SO BITCOIN S A GLOBAL PAYMENT SYSTEM. NOT JUST A CURRENCY. THAT PAYMENT SYSTEM IS RUNNING AT HIGHER SCALE THAN EVER BEFORE. PEOPLE ARE DEVELOPING APPLICATIONS FOR IT ALL OVER THE WORLD AND PEOPLE ARE USING IT TO TRANSFER MONEY ALL OVER THE WORLD AND IT IS ACTUALLY BOOMING IN CHINA NOW IT'S A HUGE THING AND HUGE EXPANSION GOING ON AND SO THE CORE TECHNOLOGY PHENOMENON WHICH IS WHAT WE ARE INTERESTED IN IS DOING EXTREMELY WELL. I THINK THE PRICE WILL BOUNCE AROUND. PRICES OF LOTS OF ASSETS BOUNCE AROUND AND LOTS OF BANKS BOUNCE AROUND AND YET THEY'RE STILL STANDING. SO I'M NOT WORRIED ABOUT IT.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD , CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms. These include CNBC.com, the online destination for global business; CNBC PRO, the premium, integrated desktop/mobile service that provides real-time global market data and live access to CNBC global programming; and a suite of CNBC Mobile products including the CNBC Real-Time iPhone and iPad Apps.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/programming/cnbc.