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No sane, rational buyer can bid on this. This is who can bid on this. The children of people who made $90 billion
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in one day. Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Cara Swisser from Korea.
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Hello Scott. Uh how are So give me your impressions of Soul. Tell me all about it.
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Well, I'm drinking bubble tea of course. Um I was in the Gangham region uh today
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with all the lights and all the young people and all the plastic surgery area. Um it's great actually. It's very clean.
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It's very vibrant. Um young people wandering everywhere. Um uh it feels good. I mean I think they feel very emboldened by pushing down the martial law thing cuz they're good at
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we're not. Um and uh and they it feels very vibrant. Feels like it's it's not a lot different from last time I was here. I'll be honest with you. But uh I like Kore quite a bit. I don't How many times have you been here?
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Well, you know, it's painful for me cuz I I had a Korean friend who died. He was so young. So young.
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Oh, no. I can't believe you told that joke. Oh, that's good. That's That's the only Korean joke I could find that was only mildly racist. Oh my god. That is
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Get it? So young. So young. Okay. Anyway, it's weird to think that I'm this close to like North Korea.
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Like, it must be so stressful to be near a country that wants to bomb you out of existence and stuff. So, that's a weird
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thing to feel. I don't know. Just go to a pro pali rally at Columbia. Oh, stop it. Don't even Don't even with
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like ripping the White House down. I'm not even going to like Oh, I agree. I I is Have you ever seen a
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visual metaphor that's more so much? We'll get We'll get to that. We'll get to that. Wing being torn down. I mean, seriously, I'm sorry. Everybody
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gets a pass except for Trump. Anyway, I think I mean like I release the Epstein files. That's all I have to say about
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this. Like it's another thing. Any we'll talk about in a minute because we've got a lot to get to today, including um
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Tesla and Netflix earnings, which are really interesting, and OpenAI taking aim at Google with its new browser. But
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first, uh Warner Brothers Discovery announced this week it's officially exploring a sale uh after getting
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takeover interest uh for summer part of the company. Earlier this year, uh, Warner Brothers announced a plan to
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split in two, separating its studio and streaming from its legacy cable networks. CNN is the most famous of
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those, but there's they have several. Now, it's, uh, it's open to an alternative separation structure. I
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mean, David Zazzle's saying the obvious cuz it's rejected three takeover offers from Paramounts, uh, David Ellison. Other rumored suitors include Comcast, Amazon, Apple, and Netflix. Uh Scott,
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we've been talking about this, but you predict in 2023 that Warner Brothers could face an activist event investor.
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Let's listen. I think you're going to see an activist at Warner Brothers Discovery. The stock is now down to a point where I think
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there's a lot of upside as Zazob to his credit is reducing debt and the assets here are trading at about even including the debt about half of what
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uh they paid um uh they paid AT&T for the asset. So uh I think I think that there's blood in the water. People see these assets uh have declined to a level where there's a decent amount of upside
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with not too much downside. So it's not an activist investor but it is you know other companies
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the ultimate activist isn't an acquisition. True. True. But it's these are companies that want to what what we've also talked
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about which is taking them cutting costs and consolidating which is a theme you and I have talked about quite a lot. um
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the idea of sort of taking taking you know moving and why should there be ABC, NBC, CBS, CNN, etc. But that's not
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really the focus here. It's um it's the studios and streaming I think probably. So talk a little bit about this because
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one of the things I've talked to a lot of people about this and they feel like if the Ellison's um get to $26 a share,
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I think they're in the 24 area, it's a done deal. Um, essentially, um, Zazloff is trying to make an auction happen, I guess. And, uh, he's already in the money. He's going to do really well
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himself. But, um, he's trying to argue that split apart, it's $30 or whatever once you split the two together. So, why should they take a cheap offer from the Ellison's? And the Ellison's are trying
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to get the studio and the streaming cheap because once you split them up, there are a lot of suitors, right? Um
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the only issue is that uh the others have one money problems comparatively to the Ellison's and two not a friend in Trump like Comcast Brian Roberts uh is
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not a fa a favorite of Trump. Um Amazon probably is more so Apple probably is more so Netflix probably not. Um and so there'll be difficulties in in picking up any of these things except for the
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Ellison's which is of course because we live in an autocracy. So friends of Trump get what they want. Um talk a
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little bit antirust concerns of course would be there but not in this not in this uh administration. Um and it does
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in a weird way make a lot of sense to consolidate some of these assets with other assets.
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It just depends if the the gimmies are spread around. But what are your thoughts on this? Well, uh, so there's
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suitors that do it for economic reasons and that is they see an opportunity to create scale or consolidate the back end
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or for growth. So they're buying it for financial reasons. There isn't a financial buyer here because this thing
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the majority of its assets are in decline and not streaming or or CNN part but if you look at but I think if you look at topline revenue here
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this isn't a company this is not a growth company and also the stuff I mean the problem is
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you have a mismatch of assets and that is the the streaming company the marketplace values growth and but that growth is expensive and then the other stuff the market does value IBIDA but
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that stuff's declining. So what you have is the marketplace wants a clean story and if it was just if it was just HBO and say Warner the movie studio that created a vertical integration of
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content to the streaming platform and HBO is still has an amazing culture and still manages to punch above its weight
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class. it would trade at a much larger multiple but at the same time and then it has these other assets that would
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trade at a lower multiple but a strong IBIDA and when you have a mi a mix mismatch of assets in terms of growth
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complexion and where they are in the business life cycle the marketplace finds the shittiest part of the business
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and assigns that multiple to the entire thing right so the merger never made any sense
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except for David Zazoff and David Zazlov so what Mark Zuckerberg and Charles Samberg, there's few people who have made more money while causing more harm to young people, right? But they have added
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tremendous shareholder value from a shareholder standpoint. They deserve their their billions. Um, the most
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overpaid CEOs relative to shareholder destruction were probably Marissa Mayor who managed to [ __ ] up everything at
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Yahoo and walk away with a quarter of a billion dollars. But she's about to lose the crown to David Zazz because David
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has taken out about I think a third of a billion dollars so far for taking the stock from 24 bucks where it was when
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they he talked people into merging it and it still managed to take that much money out of the company. And my guess
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is I mean this is what's going on. I've been on these boards before. He's pretending there's other biders. No sane
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rational buyer can bid on this. This is who can bid on this. the children of people who made 90 billion dollars in one day, which is Larry Ellis, who want to go to the Academy Awards and have a big vision for AI and
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and will overpay for this thing. And it's it look what media has become. Media has become basically
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just a spa retreat for the for the Nepo billionaires. Who are the who are the players here? The Bronman's, Sherry
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Redstone, David Ellison. What do they all have in common? Daddies. They're children of billionaires.
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Because any rational buyer, Comcast, any rational buyer looks at this thing and says it doesn't pencil out our
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shareholders. The thing is, and we don't, let me let me just interject. Uh, Bill Cohen, who's been very smart on this, I
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think, um, has noted that maybe daddy won't do this. Daddy's a little Larry is a little too smart. Like, at the same
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time, why not? It's like a good get while the getting's good. And it would help Paramount to have the assets of of
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Warner and HBO and then they'll just spin off. They don't care about news. I'm sorry. They just don't. All their
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choices tell me they don't care about news. But, you know, merge them together, cut costs, and then spin it
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off to some PE company. And I mean, the the cable networks and then bleed them dry. Um, cable and news essentially. Is
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that how you see it? Or will they keep it just cuz why not? I I don't know. I don't I don't know what is in Ellison. I mean, at the end
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of the day, um, Larry Ellison is to David Ellison what Peter Thiel is to JD Vance. And
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that is when Larry Ellison calls his son David. David can never say no. It's like, look, boss,
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you have one credit card and it has my name on it and you're allowed to use it, but at any moment I can tell you no.
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And what I think is going to happen, I I think the Ellison are going to get this.
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And Zazoff is pretending there's another suitor, which there isn't at this price. And he's also, I'll bet, spending more
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time trying to figure out his exit package, his golden stay in here. How to stay in here and
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have a fake roll or or pretend. All I know is he's going to figure out a way to get another1 to $300
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million for selling the company at the price he talked other people into buying it for several years ago.
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The above. Yeah. And this guy's going to walk away with Marissa Mayor like compensation for adding no value here. But what I think
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they would do is I quite frankly I don't think I don't buy into these hair on fire that they're trying to control the
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media. I don't think Larry Ellison is that Mcavelian. I I don't think they're going to try and take CNN and turn it
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rightwing. I think they will probably sell it. I don't think they want. Yeah. Like a PE firm.
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So I agree with you. What I do think they'll do is say, "Okay, David, you get to go to the Academy Awards because we'll own Warner
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and HBO." And I think they're going to take AI and Oracle's newfound kind of like Oracle is kind of a distant Oracle is sort of a distant number two now to Nvidia and try and figure out a way to
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substantially reduce the cost of the production the means of production and create kind of a new a true Quibby Meg
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Whitman and Quibby said we're bringing together the best of of Silicon Valley and Southern California which I always
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thought that's in and out on a sourdough bun But but these guys are going to try
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and take content and say, "All right, they have amazing franchises, amazing IP." The biggest problem here is we need
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to reduce costs across the board by 30%. And we can do that with AI and we understand AI
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and you're just going to see millions of Tik Toks of creators in the Hollywood community crying into their camera about
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how, you know, they no longer need costume designers. Especially as I I that's the example
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I've used many times is they don't need costume designers. They can do story boards. They can do all manner of
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things, you know, in much cheaper. And it takes a cost from, you know, someone was telling me you could take a cost
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from like 3 million to 330,000, right? Versus something else. And I think one of the one of the things that's hard
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here is um people are very in love with the idea of a CNN or CBS and but these are declining audiences. So where do they I think it's smart to grab this before cuz I if there would be an
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auction for the studio and for Warner Warner and HBO there would be I think I think there'd be a lot of interested buyers for that asset right um so if it gets away from the CNN part of it that's
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that's a problem for the Ellison's so they want to get it on the cheap right presumably or without a lot of trouble
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without a lot of bidding that that's my assumption none not none of these things are cheap.
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I mean, it's ch Warner Brothers Discovery now is in October of 25. Right now, it's trading at a PE of 67. I think they want Warner and they want HBO. They
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want growth assets. The other stuff they can sell to a PE player for cash flow that's consolidating the back end. I don't I don't think their desire is to control the world of news. I don't think they want to step into that thunderdome.
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But you have I mean you could see them right away doing a second auction to pay down some of the debt if they're going to take out debt against this and then
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try and as I said again bring together the peanut butter and chocolate of of AI. You you are I think what you've said I think these new I think all these news rooms just for fun I watch CBS ABC and
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NBC evening news and they're what 24 minutes and 6 minutes commercials 22 minutes is the same [ __ ] thing and then they all then they all pick a different feel-good
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story you know again about a moose that keeps showing up because this old lady fed it
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once and they're literally why on earth is the difference. Their newsrooms are no different. They're just no goddamn different. Listen, every now and then, as as does
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any news organization, they come up with a good one, right? Like, so CBS 60 Minutes still is quite good, for
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example. I bet they sell that off. I I I bet they sell that off. That's my prediction here. Um, some CBS Sunday
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Morning is good. I can't, you know what? I don't know what I would do if I wasn't able to watch Andrew Rosorin explain the stock
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market to an 83year-old Leslie Stall. I just don't. No, but watch it more. When there's more demand than sellers, the stock price goes up. No, no. Here's the It's a good brand.
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There are pieces of it that you could do. You could presume I could do something with it. Scott Face the Nation
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is an important I had a couple of those assets. I would do I would have lots of ideas of how to
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digitize it and make it more. Yeah. And you you'd take something they spent a billion dollars on and and make it worth$ 120 million. these things
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don't unfortunately journalism is a shitty business $20 billion so one of the things you
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know it's really interesting here is that um yeah and what the media gets all you know like oh no CBS and I was like
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you know they're declining businesses like really by an audience point of view and that's that's the problem and when
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you talked about ABC CBS they are all the same many years ago I'll tell a very brief story I was with um I'm not going
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to say who it was it was a was a I was on this network thing and they showed a package you know when they do those packages
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um where like the the the the anchor sits there and interviews people on a like a like a a a gradiated stage where
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people are sitting. It was it was a big news event that happened 10 years before and they interviewed people from the
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day, right? And I was sitting next to Ken Burns who had just done this really wonderful documentary on um the
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Gettysburg Address which just happens to be one of my favorite pieces of writing right in our American history. And so I
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was talking to him during the package and the host turned to me and he said, "Why aren't you watching my package?"
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And I don't know why I said this and I said it without thinking because I was very interested in talking to Ken about this documentary cuz it was so good. I
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said, "Well, if it was interesting, I'd watch it." And he looked at me, he goes, "Well, that's harsh." I go, "It's not
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interesting." Like, it's the same [ __ ] You're always doing the same exact setup. And this was 5 10 years ago. And
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I just was like, "You have to make stuff people want to watch, right?" like and I just couldn't look at it and it and
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that's what that they all are the same in some ways and there's little points of difference sometimes that are really
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promising. I still think 60 Minutes is amazing brand. I think it I think you could do a lot with that brand and it
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does it does rather well online once they get it up there. Does it? I Yeah. But but look, these
00:16:14
things are being picked apart limb by limb because you have something like The Atlantic which does an amazing job and brings
00:16:20
together I think some of the most talented writers in the world. But I think a guy like Derek Thompson who's prolific and has tapped into like
00:16:27
you know he's he's under the age of 40 so he feels like their grandchildren walking around these places. He goes to Substack and
00:16:35
he's making more money on Substack now. Yeah. I think a lot of the truly great individual contributors
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are going to use the platform for prestige and then veer off and do their own thing.
00:16:47
Nice to meet you. What do you What do you think I've been doing all this time at the New York and everything? But
00:16:53
there is more. Let me just say the Atlantic under Jeff Goldberg like and also Wired under Katie Drummond, they
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found invigoration in terms of higher subscriptions. They're doing pretty good with those. Only the editors that are
00:17:05
invigorating are doing okay like comparatively to to the individual players. But go ahead.
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Yeah, but you're you're the perfect example and and that is you were the Washington Post. You could be the
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premier tech p tech reporter. You were the premier tech reporter at the Washington Post, New York Times,
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the Wall Street Journal. You make a half a million. Okay. Sorry. And the Wall Street Journal, excuse me.
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Off with his head. Um, anyways, let's be generous and assume with comp and everything and you make a half a million
00:17:34
bucks a year. Not a salary. No, that's cuz I created the conference. I made more than that.
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But, well, okay. 1502 200. My point is, it's crazy. You make 10 or 20 times more than that
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finding finding a guy who tells dick jokes and doing your own thing. And now racist.
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Go ahead. So young so young is racist. I'm making fun of you. I understand. I'm gonna I'll all allow
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it. I love Korean baseball players. They often hit it out of the park. Oh my god. Oh Jesus.
00:18:04
Is that racist? Anyway, finish up with this. So So what happened? So I the the news to PE the
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the the studio stuff, the cable the cable the ads supported cable stuff gets sold off, you know, to
00:18:16
to just get them just get rid of that [ __ ] It's more trouble than it's worth for them. And nobody they're getting this. I think
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the deal is probably done, Cara, because no rational buyer. They're going on record and they're creating I doubt
00:18:30
Comcast is anywhere. Comcast is like, well, call us if you take 11 bucks a share because that's what we would need to pay for this thing to be able to explain to our shareholders in an
00:18:41
earnings call why we paid, you know, we can't justify anything above that. David Ellison's criteria are different because
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he he is the son of a guy making $90 billion in a day when he announces a contract with open AI. So,
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and that's what media has become. It's become a series of irrational buyers whose parents
00:19:00
are, you know, worth hundreds of billions of dollars. This thing goes to the Ellison's. They will spin off the
00:19:06
news. It's not a Mavlian attempt to control the to enter control. They'll get as much as they can. And then I
00:19:12
think they're going to use Warner and HBO and some of the content or some of the studios as their playground
00:19:19
on to do really interesting [ __ ] with AI and on Tik Tok. I mean they also I brought this up
00:19:26
over that's a really you know what I had thought of that is the most important thing here. That
00:19:32
is really an interesting taking that content and slicing it up and putting it on TikTok. But that it all comes back
00:19:39
the occasionally have one of those mind-blown moments. When I was in the Fantastic 4,
00:19:44
the credits took seven minutes. I know. I just did that the other day. As many as many people worked on the
00:19:49
Fantastic 4 is work at Palunteer or Reddit. And it's a risk. They don't know how
00:19:55
this thing's going to do that. that business other than health care. I think big budget content production is the most vulnerable thing to AI right
00:20:07
now. Very much they're just going to go line by line and go do we really need 22 costume
00:20:12
designers for our shoot in Sweden. Do we really need Sweden? Do we really need every single thing will be uh you
00:20:20
know every single thing will be and all all the existing guys I zazzlov they are still very empathetic and also
00:20:26
because they're all 100 years old they don't want to rattle the unions and saga after cages like this
00:20:32
but Ellison Honey Bear don't give a [ __ ] he's going to be like put out 10 block
00:20:37
but put out the new superman yeah but Ellison is very talent friendly he was involved uh very deeply in the
00:20:44
Mission Impossible movies the Stark Star Trek movies and of course in Top Gun Maverick.
00:20:49
Yeah, he's a rich kid. I just had I just had dinner with a friend of mine who's an amazing producer and does these
00:20:56
incredible films. Cara, whenever I meet someone at an event and they say, "Oh, I'm like, "What do you do?" Like, "I produce documentaries." I'm like, "Oh, how did
00:21:07
your husband get rich?" I mean, the people in this business, it's like meeting a kid who's working in an okay job, not a great job in New York, and living in Soho. It's like, oh,
00:21:19
your parents are rich. No young person can live in Manhattan now, unless they're working for JP
00:21:24
Morgan or got transferred by Meta or their parents are rich. And every player now in film production in Hollywood effectively is someone who is so [ __ ]
00:21:36
frighteningly talented, they managed to break through. They're literally the the and and they're there, but they're
00:21:42
in the 0.1%. They're the Michael Jordans of content or their parents are putting them
00:21:48
through Hollywood. They're in the system. They're in the system. So, you don't think Netflix is trying to wait in any way? Netflix.
00:21:55
That's the wire that you had. Netflix. I don't I think I think Netflix is becoming like Apple in the sense that we'll just do what I think Ted Sarandos realized our culture is so strong and so powerful.
00:22:07
That's what the CEO buy [ __ ] and then try and integrate it and deal with whoever is running [ __ ]
00:22:12
Warner Brother. We don't we don't we have a way of doing things. We're outstanding at it. And if he was
00:22:19
going to buy anything, if Strandos was going to buy anything, he should buy Disney because he would just he would that would be they have a succession
00:22:25
problem. The content, they could have Disney as the f Netflix family, they would just own streaming. They
00:22:31
would it would just sort of be game over. But I don't even think if I'm Ted Sandos, it's like we're so good at doing
00:22:38
what we do. The the the the existential threat, the only reason Netflix would potentially weigh in here is that they
00:22:45
want to get a ton of content. So to compete with YouTube, so for example, 20% of television viewing time last
00:22:51
month is 12.6 of YouTube, 8.3% of Netflix. Netflix is squarely figured out YouTube is their competitor. That's why they're doing if if you look at what Netflix does need
00:23:03
though, and the only reason they might weigh in here and buy some of this content or buy pieces of it postacquisition by the big price they
00:23:09
can't compete with with the Ellison's is Netflix's content library is roughly 36,000 hours long, right? That's their entire library. 36,000 hours.
00:23:20
That's the same amount of content that YouTube users upload to the site every 70 minutes. So every hour YouTube is uploaded content equal to the entire
00:23:31
Netflix library. And what you have is the two are going to come together. YouTube content
00:23:37
has is going to get much better. The only thing the only the thing moving podcasts in and out of the top 100 is
00:23:44
the quality of their video game. And then you're going to see Netflix start to look more like YouTube and that is
00:23:49
they will figure out ways to have quote unquote a deal with a podcast. The deal with podcast they just did is
00:23:55
essentially them dipping their toe not into podcast but into a form of usergenerated content that costs much less.
00:24:02
So you've got to see the means of production and the content come down on the one end and it the quality is going
00:24:07
to go up on the bottom. things on the news cuz I I agree with you that they like this week it's all like the ter the
00:24:13
ter we'll talk about the ter on the west because it's really kind of grotesque but um but it's what you said about why
00:24:19
don't they take my two interviews a week on on and make them into a show I was like I had Bernie Sanders and Kla Harris
00:24:26
you could have done a great like by the way it was great I I I don't like to watch your stuff the but I did break
00:24:31
down the interview with Bernie was great he's great he was great I could take a billion I don't them All
00:24:39
good millionaire. It's fine. Some of them believe him. Did you like his little Democratic
00:24:44
voice? That was my favorite thing. Oh, I think we'll he had a tiny little voice for the Democratic establishment that
00:24:50
made me laugh hysterically. If like literally if that guy was 70 years younger, I'd vote for him for
00:24:55
president. Yeah, a lot of people were. That's why he was all the Trump voters. Uh let's move on. Let me ask you one
00:25:01
more quick question here. One more very quick and answer quickly. So if you had uh would something like Versent want to
00:25:07
buy a CNN and then merge their newsrooms and then have two good brand two decent brands to try to work with or not at
00:25:13
all? Like why bother? They get the cuz they lost all the news stuff. They lost all their news stuff to
00:25:20
NBC. So they're building their own news organization. So why want to take a shortcut and get because CNN has a very
00:25:26
good news organization around the world? Just a thought. Your thought? I think I think it's just I think it's all about I
00:25:32
think it's all about price. I don't you know there's a bunch of these upstarts and and who's backing them.
00:25:38
Yeah, it CNN would probably it would go for above market because it's such a powerful brand. But CNN it has really stumbled the last 12
00:25:50
months. I think its viewership is down something like 30%. I mean it is really hurting right now. And it's not even the content. I I think I think Anderson
00:26:01
Cooper, Caitlyn Collins, Dana Bash, Jake Tapper, they consistently Michael Smircon, they consistently for Reed
00:26:07
Zakaria, they have some of the finest journalists in the world, right? And across the world, by the way,
00:26:12
which people don't pay attention to. Yeah. And backed by what a 1,200 or 2,000 person newsroom.
00:26:18
These guys, they're great at what they do. It's the distribution and the business model that's [ __ ] and that
00:26:24
is nobody's turning even turning on their the screen that is their primary distribution channel
00:26:30
and they haven't figured out a way to monetize it on a very small screen. Yeah, it's tough. So that's all I'm saying. Someone could
00:26:36
consolidate these two and be be the news organization and and invigorate Comcast could buy it.
00:26:41
Comcast could buy it, but so could Versent anyway. We'll see. We'll see if that happens. I think it's going to be a PE company and then you know AA leego
00:26:48
for Caris Swisser. Anyway, um in any case for Caris Swisser, that's it. You're going to North Korea
00:26:54
and you're not coming back. So young. He died so young. Oh my god. I'm not going to let you do this anymore. Okay. Uh so uh I'll start
00:27:02
making Scottish jokes in a second. So uh let's go move on. Oh yeah. Oatmeal Savage.
00:27:07
Oh, you did it. You did it. I knew you would. You're not even drinking. What do the brightest people in Scotland have in common? What?
00:27:13
They left, Carol. Okay. All right. Very good. Okay. That's actually true. Open AI. Some of the finest minds in the history
00:27:19
of science and economics. They all left. I'm getting like exclamation points from the producers. Open a has launched a web browser Atlas. Sam Alman
00:27:26
called it a once in a decade opportunity to rethink what a browser can be. The launch comes a few months after the
00:27:32
company said it would be interested in buying Google's Chrome had it been uh forced uh into a sale that uh Chrome has
00:27:40
3 billion users worldwide. um talk a little bit about this and um also Reddit has sued Perplexity AI alleging the company scraped the comments of millions of Reddit users on an industrial scale.
00:27:51
Again, these I'm going to comment on last. These wars are going to break out all over the place until the numbers get
00:27:57
right when they start paying. Perplexity has been the one that usually gets into the most trouble here. But talk a little
00:28:03
bit about this browser because this browser knows will remember everything you read, not just where your search
00:28:08
was. They're going to be like super browsers essentially. I love this. I I love competition. Um I
00:28:16
think it's good. I think the biggest the biggest tax cut in the history in modern economic history would be if the Chinese and and American leadership decided to kiss and make up and stop
00:28:27
cyber attacking each other and take their tariffs to zero. The second biggest tax cut in history would be the
00:28:33
breakup or more competition in big tech. I mean people don't realize you are paying a huge toll. You don't realize it
00:28:41
because it's it's paid visa v advertisers trying to reach you but probably the biggest corporate tax in
00:28:46
America other than federal income tax is the tax of alphabet to reach consumers online in terms of advertising right in terms of advertising.
00:28:57
You have to be on Google. I if you want to acquire customers online, which is where all customers are now, you have to
00:29:04
start increasingly buying search keywords and and boost your videos on YouTube. These are the biggest toll boosts in the history of mankind for corporations. And so I and they don't
00:29:16
have competition. So every year they raise their prices or the taxes they charge consumer and B2B brands greater
00:29:21
than inflation. So these companies need competition. There's some more existential things going on here. One,
00:29:29
Sam has to figure out a way to become kind of Google before Google becomes Open AI. So, him launching Well said. Him launching a browser makes a lot of
00:29:40
sense. I like that it tracks your searches. I don't I I I think all of the concern that was in your voice around
00:29:46
privacy, I understand, but anyone comp talking about privacy is usually over the age of 50 and lives in Brussels or
00:29:52
DC. Young people will tell Uber everything about where they a thin layer of AI on top of your Uber records, which by the way you cannot delete. You cannot delete your Uber record, your Uber
00:30:05
driver history. And that you people will be able to figure out if you just terminated a pregnancy.
00:30:10
Yep. If your sexual orientation, I mean, they'll be able to figure out everything based on where you're going
00:30:16
and when. Uber, they don't need AI to do it. They could do it now. So, as long as there's a coupon and utility and I can
00:30:22
see that my QX60 is parked around the corner, violate my privacy. That is what America has said, it's listening to our
00:30:29
phone conversations so it can and and by the way, I'm down with that as long as we have judges who are going to say,
00:30:36
"No, ICE can't use this information to start rounding up people." I I'm, you know, I'm I'm all about vi
00:30:42
violating my privacy in exchange for utility as long as we have thoughtful judges who heir on the side of civil liberties. Anyways, uh
00:30:47
oh, Scott, but go ahead. Yeah. Yeah, that's the the operative term there is if. Right. So,
00:30:56
what I think is the more interesting thing here is first off, keep in mind consumers are pretty lazy in terms of
00:31:03
getting used to a certain UI. And even with all the existential threat that Open AI supposedly poses to Google
00:31:10
search, they get, I think, roughly 96 times the traffic of Chat GPT still. And Google search impressions were up 49% year-over-year. Alphabet was my stock pick of 2025 because I think people
00:31:24
overestimate the threat, if you will. Chrome has a roughly a market share of 70% making it the most dominant web
00:31:30
browser. Apple's web browser, Safari, even without unbelievable access. It's not Microsoft.
00:31:36
It's Safari is at at 14%. Not Safari, that's Apple. Chrome. Yeah, Chrome. No, no, no. Chrome is uh you're thinking of Internet Explorer. Chrome is uh Alphabet. 70%
00:31:49
70% share. And what is what is Explorers? Well, remember Microsoft attempted to get into the game with Internet Explorer, remember? And put Netscape out of business. No, I know. But what is their what is
00:32:00
their market share? I don't think it registers. Okay. Um, I mean, basically between
00:32:05
Chrome and Safari, I mean, and then you have the weird ones like Duck.Go and [ __ ] like that, but basically
00:32:12
what Sam has said is I want to bring AI into search or uh into browsing and I mean, so let's look at some of the facts. Google has uh Google has an extremely
00:32:26
strong competitor to chat GPT and Gemini. Gemini has actually gained more share than any other company in in um in
00:32:35
AI. They have 400 million monthly users. It's now the fourth most popular free app on the on the Apple App Store. Just
00:32:42
two months ago in August, it didn't even crack the top crack the top 50. And according to multiple benchmarks and betterers on both Cali and Poly Market,
00:32:49
Google currently has the best performing AI model. Either way, I think in my opinion, yeah, you're right. Alphabet still at 29 times earnings is a steal for the for roughly the multiple of S&P. You're
00:33:01
getting a search business with 90 plus% market share, the largest ever streaming service in the world, a dominant AI
00:33:06
effort, a digital ad network, Google Chrome. Love you some Google. You love you some Google.
00:33:11
Two two other businesses that do over 30 billion in annual revenue and four other products have two billion users. The most interesting thing about all of this
00:33:19
in my view is that and that preages what might happen geopolitically and it'll be
00:33:24
my prediction at the end of the show is that it technically the new browser is open weight or open source and it's
00:33:31
actually built on the same technology that Chrome is built on which Google spends or alphabet spends like a hund00 million upkeeping and essentially I
00:33:40
think this is I think this says a lot about the future of AI and I'll come back to this but Sam has to justify a
00:33:46
half a trillion dollar market cap. So what he says is, okay, I'm going to be the next browser
00:33:52
and I'm going to be Alphabet and Alphabet's trading at a trillion and a half or$2 trillion dollars. I don't know what it's at right now, but why can't I
00:33:59
be a better version of Alphabet? And by the way, okay, go ahead. When you look at Google searches, what
00:34:05
do you the first thing you see? You see that AI summary at the top? They do. Let me let me introduce you because I've covered these companies for
00:34:10
so long, but you know, Chrome really came in and lapped, you know, Explorer and Safari and and all of them very
00:34:17
quickly, you know, in terms of how they in terms of market share, but it is moving away from the browser. So, the
00:34:24
more Chrome moves into an AI a chat GBT like environment, the better for it, right? Um, and so I it doesn't what there has there's I remember
00:34:36
interviewing Ben Horowitz once and he goes there's never going to be a funding of a search engine. There's never going
00:34:44
to be a funding of a social network and there's never going to be a funding of a big commerce platform because of Amazon,
00:34:50
uh, Google and Facebook at the time. He goes, why should we? And so why should we? Because you haven't seen a lot of
00:34:56
innovation in Chrome. You haven't seen a lot. And it took Open AI to get Chrome to innovate, right? It wasn't It didn't
00:35:03
happen. And they came in through a side door. Yep. Exactly. And so Sam Alman's vision wasn't wasn't to have a browser or a search,
00:35:09
right? But you know, it always changes things. So it's nice to have it. Um, honestly, I feel
00:35:16
I don't use browsers. I browse I'm trying to think of where I search. I guess I search within maps, within
00:35:21
Amazon, within like the search search has dissipated all over the place, but it's still owned by the same groups of
00:35:26
people, which is interesting. Any thoughts on We'll get to your prediction at the end, but any thoughts on the
00:35:32
Reddit suing perplexity? Some people don't like this lawsuit, others thinks it's
00:35:37
Why is that? You know more about this? I you know, Mike Masnik was like, "This is a stupid lawsuit." But, you know, that some of this stuff is um is
00:35:46
available and so they can do it. other people, you know, I think it's what what it is is another indication of who gets
00:35:51
to own the information and who gets to scrape it and what people do with it. But it's open season on everybody's
00:35:58
content. That's just the that's my feeling. And so everyone's going to try to defend the content they have, no
00:36:04
matter what it is. You know, Reddit certainly has created a really valuable property full of information that they
00:36:09
should take advantage of by themselves that others will take advantage of. Um, okay, Scott, let's go on a quick break.
00:36:15
When we come back, Trump's White House demolition. Support for this show comes from Upway.
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00:38:25
Scott, we're back with more news. The White House is demolishing the entire East Wing to make way for President Trump's 90,000t ballroom. The tearown
00:38:32
should be finished by the weekend. Trump initially claimed his privately funded ballroom wouldn't interfere with the existing White House structure, which
00:38:39
was a lie. He's also now saying the ballroom will cost $300 million, $und00 million more than originally estimated.
00:38:45
The White House is dismissing the shock and criticism around the depolution as manufactured outrage. No, mostly he's a
00:38:51
liar. Um, and uh release the Epstein files. That's what I have to say about this. What do you think? The pictures are still very upsetting in some weird way. Although the White House has been
00:39:02
renovated before, there is a need for a bigger room for some of the functions there. It is, if you've been to the
00:39:08
White House, they're quite small, actually. They're they're shockingly small. Um, and they do should have a lot
00:39:14
of functions, but there's plenty of other land around the White House they could have built these things on. Instead, he just did this cuz he felt
00:39:20
like it. Um, probably it is safer. I'm going to try to try to understand, but they he did it without asking anybody
00:39:27
essentially. And it's of course it's the people's house, not his house. But it's his house as it turns out. Thoughts?
00:39:33
There's a clutch in your pearls. This is a desecration. It's not your What this means is the following is that
00:39:41
he is normalizing federal troops in cities. He's creating doubt around the election process and he
00:39:47
has no intention of leaving cuz I won't if I'm running a place, I won't put in a new refrigerator, much less tear down an
00:39:53
entire wing. So let's be honest, folks. You really think he'd go through this if he was
00:39:59
planning to leave in 36 months? Yeah. It's his new Mara Lago. He's building Mara Lago.
00:40:04
Yeah. And uh so to me, I immediately like, okay, when do we wake up and realize the guy's not planning to leave? He's making long-term renovations. I mean, how long is it going to take to even do this to build this thing? It
00:40:17
it's not. So, but he's planning to leave, but he's going to So, look, I I don't I I find the whole thing yet again, um everything's adding up to the
00:40:29
following. He wants to normalize sending troops into cities during the election process to make sure whether it's to discourage people from voting or to lie
00:40:41
or to um show up. Uh Bill Maher said it perfectly. It's like what happens when two people show up to inauguration?
00:40:48
And he's he's basically saying, okay, if the second person tries to show up, legitimately wins, I'm going to show up
00:40:55
with troops and masked agents that are basically my secret police. That's where I see this going. And this is just more
00:41:01
evidence that he's not planning to leave. You don't have you don't initiate an enormous construction project when
00:41:08
you know you you constitutionally have to leave in three years. Yeah, I would agree. I think, you know,
00:41:14
I think a lot of people think this, right? Or put whoever in place that he wants to cuz as you say, which my
00:41:19
favorite expression these days, biology is undefeated. He seems more adult than ever, missing words and everything else.
00:41:25
But only reason I'm not worried. Yeah. Right. Biology is going to take care of me, right? Except then then what? Right. And
00:41:31
would it be interesting? Let me just posit that that doesn't happen and a Democrat becomes president. What do you
00:41:36
do? He's going to gold this thing up, right? All over the place. It's going to be so ridiculous and grotesque. What do
00:41:43
you do the ne when you get walk in there and you have this ridiculous over badly sized ballroom next to a a
00:41:51
East Wing was quite it's not really lovely. I don't love the White House, I'll be honest with you, but um it it it
00:41:58
was a scale. It was to scale, right? And so this looks like a weird like mutated
00:42:03
tumor onto the White House. Um uh that's my architectural determination. It's a tumor. It's a tumor. Um, but what what do you do the next day with this weird
00:42:14
patio and then the and then the thing this behemoth this grotesque golden behemoth? What do you What do you do? Nothing. Right. I don't know. I just I I know what
00:42:26
happened here. He sat down with some crazy right-wing probably hot blonde decorator and and what
00:42:33
decorators do is they say, "All right, I want mood boards. like tell me what they you know they try and make you feel
00:42:38
special like you're involved in the process and they say like I'm I'm I redid my place in Manhattan and they said what do you want it to look like? I'm like I want it to look like what it is a a a professor who's who's done
00:42:53
fairly well. Yeah, that's what I want it to look like. That's what it looks like. And and what
00:42:58
he did was he said, "I want this place to look like you walked into the best Iraqi wh house."
00:43:04
And they have delivered against it. The decorator, this feels like you are in Baghdad at a brothel, but it's a
00:43:12
high-end brothel. But it's a high-end brothel. Really? I mean, it's it's absolutely perfect.
00:43:19
It's Anyways, not enough marble. We need more marble. And as Forest Gum said, and that's all I have to say about that. But what what do you do the next day if you're the Democrat who you're like, "Oh
00:43:30
my [ __ ] god. What do you do? Let everyone." By the way, the only I've only been to the White House once, you know, that was
00:43:36
me. Yes, that's right. Yes. You've been And I didn't want to go. I was intimidated. I had to bring a suit. I
00:43:42
met you in the lobby. I was wor I don't I don't The idea of seeing all those people and having them kiss your ass like I knew they were going to like the
00:43:49
vice president. Cass wish I want to hug you and kiss you. Secretary Blinken, Cara. Cara, and all the
00:43:57
And the only thing is people like me, oddly enough. So strange. So strange. Yeah. Key word. There are some.
00:44:03
Well, no. More than you'd think. More than you'd think. I don't know why. Well, you're exceptionally likable.
00:44:08
I guess I don't know. Um I literally say I dislike you and think you're a bunch of fascists. They're
00:44:13
like, "Yeah, come to our party." The the other thing that struck me about my one tour of the White House
00:44:19
was uh I could not relax living there. There were two things. One, this situation room where you're deciding whether to have nuclear war or not. You can hear the microwave in the
00:44:30
kitchen. And I'm like, can they smell popcorn when they're popping it out here? It's actually really small.
00:44:35
It's poorly designed in my view. Those off like the West Wing the offices are like weirdly a warren of very
00:44:42
uncomfort. It's a very He is right that it's kind of a mess. It It's in terms of as as a building like
00:44:48
as a as an office building. And and then I thought, how does anyone relax here? There are
00:44:56
140 people here hanging out who look like they're about to invade Fallujah. It is there. That place is armed to the teeth. I'm like, you get up at night to grab
00:45:06
some milk. I guess the residence is different and you're going to run into someone with an AR-15 and people
00:45:12
military like there's no taking the dog for a walk. Anyway, we'll see. It's just grotesque.
00:45:17
And release the Epstein files. Thank you. Just release the Epstein. I don't know what they're going to do tomorrow. I'm like waiting to see what are they
00:45:23
going to like paint the paint the Washington Monument so it looks like the penis that it is. Anyway, um Trump is
00:45:29
demanding $230 million, by the way, from the Justice Department, saying he deserves compensation for federal
00:45:35
investigations into him, according to the New York Times. The compensation is tied to two claims Trump filed against the DOJ before his second term. One is
00:45:42
tied to the investigation of Russ Russian interference in his 2016 campaign. The other the FBI's 2022 Mara
00:45:48
Lago search. I'm sorry, sir. We have the pictures. Payment would likely come from taxpayer money would have to be approved
00:45:53
by the DJ potentially by Deputy Agent Todd Blanch. Todd Trump's former attorney uh personal attorney Trump
00:45:59
commented on the unprecedented nature of all this to put it mildly when asked about his claims. Let's listen.
00:46:04
It's interesting because I'm the one that makes a decision, right? And uh you know that decision would have to go
00:46:10
across my desk and it's awfully strange to make a decision where I'm paying myself. In other words, did you ever
00:46:16
have one of those cases where you have to decide how much you're paying yourself in damages? But I was damaged
00:46:22
very greatly and any money that I would get I would give to charity. Oh my Oh my god. Lie. Huge lie at the
00:46:29
end. Enormous lie. And by the way, yes, he has made decisions where he pays himself. It's the presidency and evidence in action is cryptocurrency and
00:46:41
his his children, but his children, his adult sons. And uh anyway, I don't know.
00:46:47
We're not paying him, are we? Good God. Uh I I I I think we probably are. And keep in mind if the federal government comes for you and the case ends up let's assume that
00:46:58
that this was politically motivated and there was no legitimacy or veracity and and these things were politically
00:47:04
motivated and unjust and unethical. Uh let's assume that happens quite a few times when the federal government comes for people. I I if you're found guilty, which he was
00:47:16
in one case and not in others, when that happens to average American citizens, they the government doesn't
00:47:22
pay them back for their legal fees. Now, we're going to have to pay. But we've become we've become no sometimes
00:47:28
in I believe in certain legal cases if you win u I think if you win a civil case sometimes the other side has to pay your legal fees and but if the government comes for you and
00:47:39
you're found innocent you they don't pay you back your legal fees. Too bad, Donald. So, anyways, but we've become this has
00:47:45
become normalized and to think that this not going to happen. He gets to a point
00:47:50
he got to appoint the head of the the DOJ. Now, it to think that they're going to
00:47:56
stand up to him. Keep in mind, there are whatever 53 Republican senators. These people were
00:48:03
freely elected. You'd think they'd have balls, right? They don't. They're watching. This guy sent pe This guy sent people
00:48:08
after them to kill them on January 6. I just think it's hilarious that they try to they try to position the protest last weekend as violent and weirdo. I'm like, no, that was January 6. If if you're
00:48:20
looking for violence and people who hate America, right, just go back to the protest of January 6, if you can call it that. It was an
00:48:26
insurrection. But the notion that these people are going to stand up when they can't get duly elected senators who he sent a mob
00:48:33
after to kill and they won't stand up against the guy to think that Pam Bondi is going to say
00:48:39
this is a bridge too far. No. No. So, I I think the sad part is Go ahead. Here's the thing. Trump's not going to pay for this, but if they do this, they will at some point. All his minions are
00:48:50
going to get God at every that's who I'd go for if I was I'd get all of them. Like Trump will get away with it. It's
00:48:57
just everybody knows he's going to get away with it. Um but the minions, not so much. I think that's my feeling.
00:49:06
Oh, I but see this is where this is the opportunity and why I'm and one of the shortcomings of the Democratic party
00:49:12
right now. If this goes Okay, take the the ICE whatever sending people to Yeah. sending people to El Salvador. There are people all along the supply
00:49:24
chain that made the decision to send American citizens, incarcerate them, and send them out of the country. I would be drawing up all sorts of bills and publicizing them saying the statute of
00:49:35
limitations on these crimes, whether it's crypto crimes, whether it's fraud, whether it's lying in front of Congress,
00:49:41
just keep in mind these laws, the statute of limitations are longer than 37 months. And this is exactly what we're coming for you for. You may think
00:49:52
you feel safe now and you better hope you get a pardon, but I would be drawing up legislation that says or basically advertising a guy like Senator Murphy or Senator Bennett or Senators Clolobashar
00:50:05
and say these are the crimes we believe have been committed and he may be the head of the crime family but the
00:50:11
soldiers go to jail too and he might be safe because he'll probably be dead or he'll pardon himself but there are thousands of people and I'd start naming pardon himself and his
00:50:23
family. Can I tell you something? Several of the Trump people I've met said they're asking for pardons already.
00:50:29
Why wouldn't you? That's what I was. And I at first I was like, "What? What did you do?" He goes, "Nothing." And I said, "Well," he goes,
00:50:36
"Oh, they're coming for us." Like, and we probably kind of said, "We deserve it." Like it was really weird. I was, this is an or this is an orgy of
00:50:47
corruption. Yeah. They're coming for you. And where the Democrats again the Democrats should
00:50:53
be articulating exactly what crimes they believe have been committed putting out
00:50:58
Kazar has but go ahead Republic list of hundreds of people they believe they believe have potentially engaged in
00:51:04
these crimes and then next to their name what the statute of limitations is on that crime.
00:51:09
That's a great idea. let's make that list and start saying, "Okay, be clear, folks. Throughout for our 250 year
00:51:17
history, the White House and the DOJ flip back and forth. At some point, we're going to have the
00:51:23
gavvel. We're going to have the power of the purse. We're going to have the power of subpoena, and we're going to have our own DOJ. And unlike the unlike this
00:51:30
corrupt DOJ, we will be holding people to the letter of the law. And these are the letters that you have violated and this is their statute of limitations
00:51:43
because the world is shaped on incentives. What incentives right now are there not to engage in this
00:51:49
corruption? They're not getting enough money for what they're going to pay Trump is and the Trump families. He'll he'll he'll pardon himself and his family and a few
00:51:55
choice people, but everybody else, you're [ __ ] you're going to be [ __ ] out of luck. Anyway, we have to move on. Um
00:52:01
Scott, let's go on a quick break. When we get back, we'll talk Netflix and Tesla earnings, which are super interesting. Support
00:52:08
for the show comes from Apple. Before the show was even a podcast, all I had was an idea. And once I had that, all I
00:52:14
really needed to get started was a mic and a Mac. I have been starting businesses my whole life. One thing that
00:52:20
has been static, a constant in all of my business is Apple products. They just work. They send the right signal. Uh it sounds sort of strange, but they make me feel good about myself. They make me
00:52:31
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00:52:50
apple.com/mac. Scott, we're back and it's time to talk about some earnings. First up, Tesla. Tesla's third quarter revenue was up about 12% from a year earlier, but
00:53:01
profit fell short of expectations. That's because a lot of people rushed to buy cars, but then Tesla sold them for
00:53:07
cheaper prices and uh there was an ability to get loans, so people bought more. Vehicle delivers were up 70 7%
00:53:14
from a year earlier, but the company says it plans to hit volume production of cyber cabs and Tesla Semi in 2026. I
00:53:20
wouldn't believe that. Um, also, uh, uh, uh, Musk was saying he has to create an
00:53:26
army of robots, and if he doesn't have control over his army of robots, he he was he's trying to get his million his
00:53:32
his trillion dollar deal, which is going to be voted on in a week or two. Um, and next Netflix shares of the company are
00:53:38
down 5% in the last 5 days at the time of taping after a miss of third quarter earnings. Netflix cited ongoing dispute
00:53:44
with Brazilian tax authorities for weak results. However, revenue for the quarter rose 17% and the streamer said a
00:53:49
quarter ad sales uh in the quarter were the best ever powered largely by my favorite K-pop Demon Hunters, there's
00:53:56
also going to be some merch. Uh great news for Cara Swisser. Uh announcing Mattel and Hasbro will release K-pop
00:54:02
Demon Hunters toys, plushies, and games. Let me tell you, among the toddler set in the young below 10 set, they're all
00:54:08
dressing like Roomie uh for Halloween. not my daughter but um and son but uh but all the kids in school they're all
00:54:16
dressing like Roomie which is one of the car main characters in the uh in the in the show. Um so thoughts on these
00:54:22
earnings? Yeah, I think Netflix is one of the best run companies in you know in business.
00:54:28
Um their revenue increased 17%. That didn't meet expectations. Their stock fell 10%
00:54:35
but the stock's been on a tear. uh net income increased nearly 8% to 2 and a half billion missing estimates by about
00:54:42
15%. Their operating margin was 28% and that was also short of the 32% that it was expected. They highlighted a onetime tax expense in Brazil of 600 of $600
00:54:54
million for why their profitability mixed. Um that that by the way that that charge
00:55:01
had been previously disclosed to investors on past earnings reports. So, I I think at this point a lot of people
00:55:07
are just taking profits. K-pop Demon Hunters, which is a huge success. They keep hitting it out. Uh, the movie the movie was produced by
00:55:15
Sony Animation, but released directly to Netflix at the end of August. It's now the most watched movie in Netflix
00:55:20
history with approximately 325 million views. So, essentially the population of America has watched
00:55:27
K-pop. I haven't seen it. Will you please watch it so we can discuss it? I only watch things starring
00:55:32
my favorite actor, Hitler. Late at night, I take an edible. I have a makers and ginger and I watch World War II in
00:55:38
color. And then we can sing it together on the tour. Are you ready for the take down?
00:55:44
I'll keep singing it until you watch it. That's what we need to do. The soundtrack is also topped the Billboard
00:55:49
top charts. Uh cross promotion. Netflix, Mattel, and Hasbro have have joined together to produce K-pop Demon Hunter toys. Look, the company I still think I
00:56:00
think like I I wouldn't buy Netflix here. I think that their growth is going to be international. I think it's a great company. I think they'll probably
00:56:07
grow into their price. I'm of the mind now that I think just as we talk about cable cutters or people who cut the
00:56:14
cord. I think we're going to start hearing about an entirely new generation of people that just don't own TVs. And
00:56:21
also I think our desire for I don't know if you seen these trend I forget what they're called mini soap operas as one
00:56:27
minute content and these guys are smart they'll figure out ways to get into those fields but I worry I I think that
00:56:35
I just think everything's moving away have I ask you this I know you like the diplomat I've I've been struck in the
00:56:43
last 12 months all of a sudden I'm not turning on the TV are and I realize that's anecdotal
00:56:50
But I'm supposed to be in the age where I'm sitting around watching Murder She Wrote. Are you watching less TV? No, I'm watching specific TV. I I like
00:56:57
television appointment. So yeah, like I I watched the entire season of the diplom which is wonderful as I said. Um
00:57:03
and I noticed a lot of people said when I mentioned that said, "Oh yeah, I did the same thing." So I'll I I'll watch,
00:57:10
you know, spec hunt like I always talk about hunting wise, but I'll watch specific or the guilded age like but
00:57:15
it's all over the place by the way. And I'm I'm watching this Martin Scorsesei documentary. I think it's on I think
00:57:21
it's on Apple TV. Um but I watch specific things and I watch the hell out of them if that makes sense. And some shows I do watch week to week, right? Um
00:57:32
like the morning show. Well, that that goes out every week. I'm actually in this episode. This is my episode this
00:57:37
week. Yes, I'm on it. Yes, it's lovely. This week? This week? Yeah. Whatever this
00:57:42
Oh, we'll definitely tune in. Yeah. Yeah. Um, I got a bunch I can't watch it here in Korea, so I I'm not
00:57:47
able to watch my amazing Emmy Ward. Just use a VPN. I know. I didn't I guess I could. Um, so
00:57:53
I don't I'm too tired. I don't I don't care to watch myself on TV. You don't know where you are. You don't care. I don't care. You don't know what's going on.
00:57:58
I don't care. I don't I saw O speak. I saw a good movie. I saw a cute movie. Um, I'm trying to go to the movies tomorrow
00:58:04
with my boys. I saw Good Fortune with Seth Rogan is I'm sorry. Oh, it's supposed to be good. Yeah. And Karus. The movie's actually
00:58:10
not that well done. Uh, but it it's a wonderful message though. Oh, okay. It's really a nice
00:58:16
Yeah, I'll go see that. I think it's all about increment like I'm going to see Wicked. That's it. The new the the Wicked sequel. They're now
00:58:22
making Crazy Rich Asians Against. I'd see that in the theater. Like it just it's just specific. I'm a very specific
00:58:27
watcher. When I used to just watch whatever as you and I grew up, we just turned on the boob tube and just stared
00:58:33
essentially. So, I'm highly specific. Um, but and and I watch I watch threads. I know it sounds crazy, but I watch Instagram. It's scary, isn't it? I've noticed that, too. I get so much my
00:58:44
information now from But it's nice. It's easy. Threads and Tik Tok snackable. The algorithms are great. They figure
00:58:49
out what we want. Yeah, absolutely. So, but but anyway, so so Tesla, talk very quickly about Tesla.
00:58:54
What's your thoughts on that? Well, look at Tesla, it's a little bit hard to to extrapolate from these
00:59:01
earnings because there was a pull forward and that is that because the tax credits were expiring, a lot of people
00:59:06
they gave very went in and and bought probably more cars. Deliveries were up 7%.
00:59:13
So, this is this was the greatest revenue they've seen and registered in two years. But again, this is probably
00:59:18
due to pull forward demand due to the expiration of the EV tax credit and also other things. about some other
00:59:24
things they get to put in their earnings all that that Trump got rid of about around the environment and not carbon
00:59:30
but another one air quality or something. Well, that's right. Because of the expiration of regulatory credits and
00:59:36
also their increased spending on AI, their net income fell 36%. So last year they made about $2.8 billion from selling regulatory credits and about 40% from America. And this is
00:59:49
essentially just lost revenue. And this this quarter, Tesla reported the regulatory credit revenue was down 44%
00:59:55
year-on-year. And R&D expenses, including AI spend, rose 57%. They've got to enter the same spending war as
01:00:01
everybody else. Uh, and it rose to 1.6 billion. And Tesla also blamed tariffs for scratching profitability,
01:00:08
but provided no numbers. It's interesting because they're actually the most vertical automobile maker. The they have more quoteunquote made in America
01:00:15
parts still than anything. the the earnings call was really him trying to pivot to AI and robots, but so far it's off to a rocky start. They've delayed the production of the
01:00:26
Optimus bots, abandoning previous plans to make I think it was 10,000 robots by the summer.
01:00:31
He says it's nonsense. And the head of Optimus has left from for Meta. And not only that, this guy is
01:00:37
pissed off at Elon because he made a point of saying, "I left despite taking a cut in pay," which means you're angry.
01:00:44
They also launched their robo taxi service in Austin and since then they've also expanded to San Francisco and in
01:00:50
both cities safety monitors are in the car during the ride. In SF the monitor sits in the driver's seat so that's I don't know so far ahead it's crazy and this is going to be hard to make money.
01:01:00
There's so many players in this. Well, you know what I didn't you know what I you said something I
01:01:06
occasionally do listen to you and you said something that's always stuck to me and that is it is easy to it's it's difficult to have empathy for victims
01:01:12
when you've never been a victim and I've that has really registered with me because I've always said oh London is safe New York is safe you don't need to worry there's a different set of fears
01:01:26
for a guy who's 6'21 190 and quite frankly just like like this is a bad thing. You know, this is a dangerous thing to say. I have never been I don't think a victim of a crime.
01:01:39
Now you're going to get killed. I've never been assaulted. I've never been mugged. I've never been pickpocketed. I've never had my phone stolen.
01:01:45
So, it's just not I it's just not easy for me. And I have to realize I need to have, you know, I need to have uh you
01:01:53
know, more empathy for people who are victims. And the thing that really struck me is I
01:02:00
have heard several women say the following. They hate getting in Ubers because the
01:02:07
Uber driver starts chatting them up and they feel unsafe. You can ask for a woman Uber both Lift and Uber. You can and you can ask for a woman. But that's something Uber drivers have
01:02:19
no desire to talk to me. They have they don't. It's usually me and I'm not proud of
01:02:24
they know that you would put out. That's the thing. Well, that's the thing. There you go. Yeah, it's they sometimes I tip
01:02:30
them off when I get in the front seat. No, but and I thought I thought that's the last [ __ ] thing I would want to deal with is I'm coming home late from a dinner. And by the way, I want to be clear, some
01:02:42
of these guys, nor guys are probably just friendly, right? But they but they shouldn't have to deal with that [ __ ] Most most are. And I thought and that's why
01:02:52
that's why and then on the Whimo caller the guy who runs Whimo was saying I think it was the guy who runs Whimo says
01:02:58
this some of their biggest uptake has been the guy that runs it with her but go ahead
01:03:04
but have said some of their biggest uptake has been from women and I'm like that just makes sense
01:03:09
right you don't want to deal with it and quite frankly I don't I don't if I could
01:03:14
have a driverless car I was thinking about would I want to do it my experience so far in driverless I
01:03:20
haven't enjoyed other than the technical sophistication and the wonder because they go so [ __ ] slow. It's like having your 16-year-old overcautious
01:03:26
driver. I hate that. They've got they're now like an aunt who's a good driver but too slow. It used to be grandma who's not such a good
01:03:32
driver and but but the promise of the promise faster I've noticed they're faster in San Francisco. Oh, that that's great cuz I think the
01:03:39
promise of of autonomous is the following. In London, the most uh one of the most crazy frustrating experiences is the open road, no traffic, and on
01:03:52
certain places where there's cameras, the guy is no joke, has to go 25 miles an hour, and you're trying to get to
01:03:58
Heathro to make a flight and you're on a highway and he's going 25. And the real, in my opinion, the
01:04:03
promise of the promise of autonomous is that you'll be able to do away with speed limits and you'll let the supercomput decide if
01:04:10
the thing can go 90 miles hour. That would be a great thing. That would be great. Yeah. Why do we have those signs at all? Anyway, uh we'll see. You
01:04:16
know, we'll see. I think he'll probably get that pay package approved. Although the two big shareholder services who he keeps trashing said this is [ __ ]
01:04:22
ridiculous. Um and he said there'll be he has enough control that he'll be able to control his robot army, whatever that means, but not enough. What do you think Bernie Sanders thinks of that pay package?
01:04:33
Oh god. Doesn't like it. Doesn't like it. Um he has to hit certain numbers by the way, everybody. Like if he doesn't,
01:04:39
he'll find a way to get paid this guy. But um he said he doesn't have enough control if he's insane not to get fired.
01:04:46
And I'm like um sorry. I think we passed that station on the train of of Tesla at
01:04:53
this point. Let me take the other the other side of his pay package. He has to earn. I'm actually relatively unoffended by
01:04:59
the pay package and that is made a lot of money for it. Well, what he's saying is what he's saying is if I
01:05:06
make shareholders four or five trillion, will you give me a 10 or 20% commission on that?
01:05:12
In my opinion, from a pure capitalist standpoint, sure, I sort of get it. What I am not
01:05:17
comfortable with is someone who aggregates that kind of capital and then pieces out to taxes and
01:05:22
engages in massive tax avoidance and that he makes he pays a smaller percentage of his earnings than a person
01:05:28
on the factory floor. That's what he does. So don't get in the way of upside of compensation, right?
01:05:34
But tax people, you know, it is linked, it is linked to his performance. And but that said, when
01:05:39
he said my robot army, it made me like frightened of humanity. Just he does this all the time. He's such a troll. Anyway, um he'll probably get it. It doesn't matter. And we'll all
01:05:50
be outraged and then they'll tear down the West Wing and we'll be outraged and except Anyway. All right, Scott. One
01:05:56
more quick break. We'll be back for predictions. Support for the show comes from Upwork. Hiring shouldn't be a hassle or a drain on your budget. Upwork says they're your one-stop shop to find,
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upwork.com. Okay, Scott, let's hear a prediction. What is your prediction? Just so you know, New York City Mayor Eric Adams
01:07:06
just endorsed on Andrew Cuomo, which I predict will make Zoran Mandami the Well, that that'll give him another 11
01:07:12
votes. Jesus, they want that Curtis to get out. Curtis ain't getting out. I think I
01:07:18
think Curtis is in with him and his cats are in it to win it. No, I think Curtis is the Ralph Nater of the Conservatives. He's like, "No, it's
01:07:25
democracy." I like Curtis a little bit. I like he's seems insane, but I like him. I like the hat.
01:07:30
I like the whole thing. I like the cats. I like I like I I actually have enjoyed him weighing in during these debates.
01:07:36
It's usually Mandani and Kuomo screaming. So was a guy like that. New York New York's such an amazing city. They always
01:07:41
bring out an interesting guy. Remember the guy, the rent is too damn high. The guy with the black gloves. Hey, he just
01:07:47
kept saying the rent is too damn high. You know what? He was right. I know. But I They're trying to get him to pull out
01:07:54
so that Cuomo is doing everything possible that nothing to do with the voters. It's like Trump's help get Adams
01:08:02
out, you know, everything except appeal to voters, which would seem to me to be the thing to do if you want to be mayor of New York, but whatever. Um, what is your other prediction?
01:08:14
Uh, that trying to get people to pull out often doesn't work. Haha. Okay, let me hear this prediction. Said my 15 and 18-year-old. Um, my
01:08:22
prediction is the following. So, America is run for profits. Uh, what dictates our society is shareholder value. The worth of someone's character,
01:08:34
their ability to have health care, their ability to have freedom, their ability to have a broader selection set of mates is based on their ability to acquire
01:08:41
[ __ ] or signal that they can acquire [ __ ] through monetary economic power. That's how America is run. The Chinese
01:08:48
government is essentially run and China is run for control and for power. And one of the ways they do that is they're much longer term thinkers about what positions them long-term geopolitically.
01:09:00
And I think essentially what's going to happen here is the following. I was sort of blown away by the fact
01:09:07
that this openweight browser that Sam Alman is basically shoplifted that anybody can use because it's sort of technically openweight is sort of like open source. I think if I'm the CCP I am
01:09:22
pissed off. They have their problems, but essentially Trump is really [ __ ] with them with these sclerotic 100%
01:09:29
tariffs, non-tariffs. And they are being very strategic and they said, "Okay, we're going to come for the heart and
01:09:35
lungs of Republican voters." And hey folks, I don't know if you heard, but we buy 50% of your soybean crops and from
01:09:43
these red states. We're stopping and we're starting to buy from Argentina. And your president is stupid enough to give Argentina money as we transfer
01:09:50
business. If that business is never coming back, farmers are out of business. They're now going after rare
01:09:55
earth minerals that are key play a real strategic role in everything from cars to missiles. And I think the next I think after going for our hearts and
01:10:06
lungs, they're going to go for our jugular the following way. I think they're going to release a series of
01:10:12
open-source or openweight AI tools that crush or put real pressure on our magnificent 10 and take down our market and put us into a western recession. If
01:10:24
I were in charge of CCP defense and strategy, I would be saying to Shei, if we really want to go for the jugular, America is now a giant bet on AI. Let's
01:10:35
make this a bad bet. And the way we're going to do that is we're going to release a series of
01:10:40
deepseek and deepseek like competitors that are free, open source and essentially do the following.
01:10:47
My biggest client, I started a strategy firm when I was 26. My biggest client was the gap. We did a bunch of demographic research and the group we
01:10:54
found that was most underserved and I could relate to this was single mothers who wanted their kids to feel good about
01:11:00
themselves because they were very self-conscious about their in lower income and the dad wasn't around. And so
01:11:05
we positioned what I thought was the most brilliant thing in the world at that time. And that as we said 80% of
01:11:10
the gap for 50% of the price and we targeted single mothers and it was called Old Navy. And Old Navy went from
01:11:17
zero to a billion faster than any retailer in history. I think China is about to go Old Navy with open AI or Old
01:11:24
Navy on AI going BYD on Exactly. But they're going to do it in AI and they're going to say here's an idea. We have a bunch of amazing AI tools that are all free that you can build on top
01:11:36
of. You don't have to pay a subscription fee. We're not going to pelt you with advertising. And guess what? We're going
01:11:42
to take the magnificent 10 down and we're going to take your whole [ __ ] economy down. Five and a half. The magnificent five
01:11:47
and a half. Oh, wow. That's really good. I like that. I like it. I like it a lot. And by the way, for people who aren't
01:11:52
paying attention, she has just consolidated power over the CCP. He's made it smaller. He's gotten rid of
01:11:58
people. He's really runs the show. Anyway, great one, Scott. Okay. Well, that's quite a I like that. I'm going to
01:12:04
watch that one carefully. Anyway, we want to hear from you. Send us your questions about business tech or whatever is on your mind. Go to
01:12:09
nymag.com/pivot to submit a question for the show or call 85551 pivot. Elsewhere in the Karen
01:12:15
Scott universe this week on ProfG Conversations, Scott spoke to one of my favorites, Heather Cox Richardson, a
01:12:21
historian at Boston College, author and the voice of the newsletter Letters from an American very popular um uh let's
01:12:28
listen to a clip. One of the things that frustrates me to no end is the idea that there was ever a United States of
01:12:34
America that was not multicultural is simply a fantasy. And you know, we talk in history about how whiteness is a constructed category. And you know that you know, you get all kinds of push back
01:12:46
on that, but it is worth remembering that Irish immigrants to the United States were not considered white. You
01:12:53
know, I just sit there and think, okay, we're just going to make it up, right? we're just going to construct our idea of what the past looked like because the
01:13:00
reality has always been that the United States was about working together as communities within a very very broad range of people. Uh she is amazing. Uh I she's an amazing
01:13:12
and everybody should read her and and listen to this. I love her. I I think she's an inspiration. I love a professor who's
01:13:19
just like so passionate about a very narrow niche of the world and is like after working her ass off for 30 years,
01:13:25
she's an overnight success. She's I just love that she's getting a ton of what I think is well- earned recognition and
01:13:30
attention. I love having her on for her. Yeah, she's very sharp historian. Um and reminder, we're going
01:13:36
on tour. We're going to be going to Toronto, Boston, New York, DC, Chicago, San Francisco, and LA. We're sold out in
01:13:41
Toronto and San Francisco already, but please visit pivotour.com for tickets. Especially you, Chicago. We want we got
01:13:47
an extra-L large venue for you guys cuz you have big shoulders. Come see us there. Okay, that's the show. Thanks for
01:13:53
listening to Pivot and be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us
01:13:58
out. Today's show is produced by Larara Neman, Zoe Marcus, and Taylor Griffin. Bernie Todd entry in this episode. Jim M
01:14:05
edit the video. Additional support from Kate Gallagher and Anakah Robbins. Thanks also to Jubos, Miss Ao, and Dan
01:14:10
Shalon. Michox Media's executive producer of podcast. Make sure to follow Pivot on your favorite podcast platform. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com/
01:14:23
pod. We'll be back next week for another breakdown of all things tech and business. Cara, safe travels.