00:00:00
I think the UK just demonstrated more institutional courage in one morning than the entire US Department of Justice
00:00:06
has managed in five years. >> Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast
00:00:18
Network. I'm Cara Swisser >> and I'm Scott Galloway >> and I am a trad wife.
00:00:24
>> What does that mean? >> I made bread and butter this morning. butter from scratch and I made this
00:00:29
delicious bread. Let me unwrap my >> You're really proud of it. You sent me a
00:00:33
a photo of it. >> I know. Well, I am. I made it. I I I know it sounds really stupid, but I get
00:00:38
I I'm on in Here's the whole bread. You can see it. Everybody see it. It's a
00:00:42
It's a loaf of It's a baguette. This today is a baguette. And I also made
00:00:45
butter with a marble and a jar and some heavy cream uh last night at dinner. Fresh butter. I'm going to make cultured
00:00:52
butter next. Um, I I get on Instagram and I'm obsessed with watching uh food
00:00:57
videos and I save them and I'm starting to make all of >> What's the next thing you're going to
00:01:02
make? >> Uh, we're going to probably make another bread. Bread. We're going for bread and
00:01:05
butter. We like bread and butter cuz I'm a trad wife. So, anyway, there you go.
00:01:09
>> Yeah. No, I think I like that white supremacist baking company. And he said
00:01:14
that his family had a long history of being in bread. >> Oh, I can't believe you have a bread
00:01:20
joke. Um, I have to say it takes me out of um >> takes you out of your head.
00:01:24
>> Out of my head. Like I It was an It was advice, you know, from doing this series
00:01:28
that's coming out. I I spend too much time in my head. And so Zeke Emanuel suggested he makes honey. I was like,
00:01:34
I'm going to do things that isn't in my head. And I have to say, I'm baking is
00:01:38
really chem, you know, it's you have to pay attention and I'm learning. And so
00:01:42
it's and it's totally you cannot pick up I mean, I have the phone there with the
00:01:46
rest as they're talking to me, but it's a useful use of the phone, I guess. I
00:01:49
don't know what else to say. Anyway, I really like it. >> So, two muffins are in the oven when one
00:01:55
turns to the other and says, "Man, it's so hot in here today." And the other met
00:01:59
and the other muffin says, "Holy [ __ ] it's a [ __ ] talking muffin."
00:02:06
>> I can't believe you have bakery jokes, >> Cara. My wife has been sleeping around
00:02:10
with other men. Our church pastor is coming over tonight to offer advice, and my wife is baking cookies, but I'm
00:02:15
embarrassed because the cookies are homemade. I could do this all night. >> Why do you have them? Are you on the Did
00:02:23
you suddenly get on the internet and said baking jokes? Is that what happened there?
00:02:26
>> No, I have a I have an incredible memory um for 1970s Ram playoff losses and for
00:02:35
dad jokes. That part of my brain is alive and well. >> Any we've got a lot to get to today, so
00:02:40
let's dig in. Um this is an astonishing development. former Prince uh Prince
00:02:45
Andrew has been we call him former Prince Andrew right now uh used to be known as Prince has been arrested on
00:02:51
suspicion of misconduct in public office by British police. You know he should be
00:02:57
arrested for something else but this is what they could get him on. The full details of the arrest are not clear at
00:03:02
the time of the taping but former prince has been under increasing pressure after
00:03:05
the latest release of the Epstein files. Andrew Moundbotton Moundbatton Windsor which is his name was previously
00:03:11
stripped of his royal title due to his uh involvement with Epstein mean finally after many many years of this. Meanwhile
00:03:18
Casey Wasserman has decided to put his talent agency and marketing firm up for sale amidst criticism his past
00:03:23
relationship with Gilain Maxwell. Uh there's a ton of people Dean there's so
00:03:27
I sent you the list of people that are you know obviously um uh Larry what's
00:03:33
his name Larry oh Summers uh stepped down Dean Cayman is having trouble he's
00:03:39
the famous robotics guy um all all manner of people the former prime minister of Norway um everyone but the
00:03:46
guy who said they let you do it grab the [ __ ] guy is not being investigated but
00:03:51
uh this is really interesting so from you're not in England right now. But what explain to people what this is
00:03:57
like, what this this is akin to arresting a royal. >> I think the UK just demonstrated more
00:04:04
institutional courage in one morning than the entire US Department of Justice has managed in 5 years.
00:04:10
>> Yeah. >> And it's just ironic. You know, my attitude is, okay, now do Epstein's flight logs.
00:04:20
I mean, >> yep. This is I mean some of it's probably pretty political. The the crown
00:04:25
is probably looking to try and renew their brand in an era where monarchies are fading. This really is the last
00:04:33
monarchy >> and also the prime minister is feeling heat and potentially calls for his
00:04:40
resignation. But I think that I think the UK quite frankly is actually showing some fidelity to the notion that
00:04:49
no one is above the law. Yep. Absolutely. I I agree. One of the things that's really that's really important is
00:04:56
the investigation should have gone on. These investigations that should have happened when how badly prosecutors over
00:05:02
the entire period of time um from down in Florida to now have [ __ ] this up. And in terms of I think the moment with
00:05:09
Pam Bonnie and she had never talked to those people like all of them are liars like I don't know why don't you do an
00:05:16
investigation? And so she's obviously not going to because she's bought and
00:05:19
paid for. But um but the fact that they didn't do investigations here on as you
00:05:25
say the people who are criminally liable and the other people who are getting you
00:05:28
know Bill Gates had a pull out of something because of this look that'll play itself out because that's about I
00:05:34
don't think it's about shaming. It's about like gh bad judgment. People are
00:05:38
going to have to pay for their actions eventually. Um, but the criminal investigations that haven't gone on
00:05:45
here, the the ability and I have to say we owe a debt of gratitude to uh uh Roan
00:05:50
and Thomas Massie for pushing >> this through and we need and the the redactions that this Bondi Justice
00:05:57
Department is doing are you know there Ted Lou who is a a trained lawyer got up and said there is credible evidence that
00:06:05
Donald Trump um this is what he is saying. I have not seen these things that he he uh he
00:06:13
sexually uh attack sex what is the right way to do >> assaulted >> assaulted an underage girl and for him
00:06:20
to get up and say that at knowing that he's a lawyer is really something like
00:06:26
and of course Trump is saying he's exonerated he's not exonerated he hasn't
00:06:29
been investigated properly right and so you know when he said let me just read this again maybe just maybe um as this
00:06:38
fedded penny drops. Maybe it wasn't locker room talk, right? Do you remember
00:06:42
that? I mean, this is what he said. Let me read it. I don't even wait. And when
00:06:46
you're a star, they let you do it. You can do anything. Grab them by the [ __ ]
00:06:51
You can do anything. I don't know if he did anything, but I'd like to have
00:06:55
investigators really. I don't know if they need an independent investigator or
00:07:00
>> special counsel. >> Special to me. I never like those things, but in this case, everybody's
00:07:04
dirty, right? And certainly Pam Body has no business being in the job she's in.
00:07:10
They should they should have a special counsel release all the files and especially the criminal stuff keep it as
00:07:17
maybe not release those because they really need to and it might not lead to anything but to show that we have what
00:07:23
the UK is doing and it there may be a statute of limitations by the way Scott on this stuff. I don't know.
00:07:29
>> That's what's kind of interesting about this specific case with Prince Andrew is
00:07:33
that or the person formerly known as Prince Yeah, the >> I know it is kind of funny, but he's not
00:07:39
funny. He's gross. >> But when when the feds come for you and say you've clearly committed engage in
00:07:44
criminal activity here, they usually don't get you for what you know they didn't. They got Al Capone for
00:07:50
moneyaundering or for for >> No, no. For taxation. >> Yeah. For tax evasion.
00:07:53
>> And Prince Andrew isn't being accused of sexual assault. He's being accused of
00:07:58
passing state secrets to a convicted uh felon. But that's the point. The point
00:08:04
is if you commit crimes our you know our reach is far and our memory uh is long and now I have a different to
00:08:14
me this is how you handle the Epstein files and that is I don't think the Epstein files should have been released
00:08:21
>> uh I think that the Department of Justice >> gets sullied I I know what you're
00:08:25
thinking right >> I think the Department of Justice and a team of lawyers including outside
00:08:30
lawyers contracted for this very important case should have gone through these things with a fine tooth hair and
00:08:35
comb and said, "Okay, we're going to communicate to the public what is in these files visav grand jury
00:08:42
indictments and prosecutions." Because I think what has happened is I think we have been so played here.
00:08:49
Cara, if I was advising the Trump administration on how to dilute the depravity here and to get him out of
00:08:57
this, I would be doing exactly what they're doing. And that is by dripping it out sclerotically
00:09:05
uh uh incorrectly. Some stuff's redacted, some stuff isn't. And then we all chase. We're like a Tyrannosaurus
00:09:13
Rex. Wherever we see movement and violence and ringlight algorithm shaming, we start talking about [ __ ]
00:09:20
Deepo Chopra. >> And what the >> We should talk about him too, but go
00:09:24
ahead. >> I I disagree. I I think it's it's the Department of Justice is a there for
00:09:29
criminal indictments and to create incentives such that if you have a daughter and you're a single mother and
00:09:34
your daughter gets invited to some [ __ ] island that there's incentives that people who feel entitled to rape
00:09:40
your daughter won't. Yes. >> Whether or not someone is a creep or not is a distant distant second. And all of
00:09:47
this [ __ ] has diluted the criminal activity. >> I don't think it's [ __ ] I think
00:09:50
it's part of the same thing. And this is like, let me just say, who's the person
00:09:53
that said Epstein had legs? This whole thing had legs a long time ago when everyone thought it was going to go
00:09:58
away. This is one at the heart of the MAGA infrastructure. As I noted, it is also at the heart of a lot of it's true,
00:10:05
right? Some of it's true, some of it's not, but it is part of a whole movement around corruption of the
00:10:12
elites. And this is the worst version of it. And I think we do need to talk about
00:10:17
people. Andrew did this because he >> I'm on board. And Andrew is being
00:10:21
criminally prosecuted. >> But I'm saying he did it because he thought he didn't, as you say, he's not
00:10:26
bound by the law. Right. Right. Now, breaking. New Mexico investigators open a probe into whether Epste ordered the
00:10:32
burial of bodies on his Zoro Ranch property. We need to investigate this fully and wherever it takes us for for
00:10:38
it to have to just get out and get everyone's attention, the normal people, not the QAnon people. I think it's I
00:10:44
think this has so many drip drip drip legs that it's going to is absolutely going to reach Trump.
00:10:50
>> This should have been dozens if not hundreds of indictments and prosecutions
00:10:55
from an institution we trust. >> That's right. We don't trust the appointment of a special counsel.
00:11:02
>> Saying a cabinet member didn't look to commit a crime, but when he went under
00:11:07
oath in front of Congress and bragged that he had nothing to do with this person.
00:11:11
>> No, he did that on a podcast, but go ahead. >> Well, he he Oh, really? He hasn't done
00:11:16
it under oath? >> No. No, under oath he told the truth. Um, so I feel that all of the liar I feel all
00:11:26
of the shaming feels really good and it does say something about these individuals. I think it is deliluding
00:11:31
and weakening the case against the actual criminals here. >> Well, I don't know. I think you can do
00:11:36
both. I can can just walk and chew gum at the same time. And well, I think, as I saying, let me move to the next thing
00:11:41
because it's part of this everyone's tired of these [ __ ] rich people taking everything. Like so right now
00:11:47
Mark Zuckerberg took the stand this week that in this landmark social media addiction trial defending Meta against
00:11:53
claims Instagram was designed to hook young users and damage mental health. Zuckerberg said in his testimony that
00:11:58
Instagram was not a harmful product. It's a valuable service. Of course he'd
00:12:01
say that. He said that all along. He believes he's navigated the safety of young users in a reasonable way. He has
00:12:06
not. He also defended the company's decision to allow beauty filters even after experts warned they could harm
00:12:12
teen girls, including people internally. Um, when pressed about old emails and growth targets, Zuckerberg repeatedly
00:12:17
pushed back saying the same answer more than a dozen times. You're mischaracterizing this. This is an old
00:12:22
Mark Zuckerberg trick. We don't understand him. Uh, neither of us are lawyers and it's a really complex case.
00:12:27
And what what what two things it's not just Facebook, it is also YouTube is involved in this one. Others settled
00:12:34
other social media sites seem to have settled here. Um, so and it's not clear
00:12:38
if YouTube is going to settle before this, but this idea of of whether they're entertainment or they're
00:12:44
actually addictive. The lawyers for the the tech company sides are going to try to portray this young woman who got on
00:12:51
Instagram when she was nine as troubled had nothing to do with social media. She's alleging that social media dragged
00:12:57
her down a hole of shame and self-esteem. Um, it's a jury trial. Um, I'm putting Mark in front of a jury
00:13:07
helps a herds. He's he's not great at that. And he also, the judge wasn't
00:13:11
happy to see Meta's Rayban AI glasses worn by several members of Zuckerberg's
00:13:15
team, which I thought was super [ __ ] obnoxious to do for Zuckerberg to use it as a marketing event. Um, she warned
00:13:21
anyone wearing smart glasses to be held in contempt, noting the concern about facial recognition of the of it. Um, so
00:13:28
just thoughts on this case because I think it's really f there's there's
00:13:31
thousands of more behind it. By the way, >> I think John Oaf who's running for
00:13:35
Senate has come up with a brilliant term and that is a lot of Democrat how we lose is this stereotyping and and
00:13:44
keyboard virtue signaling that if you like all white people are racist, all billionaires are evil, and all young men
00:13:51
are sexist, fine, they're going to leave the party and we're going to and you're
00:13:54
going to have Vance as president. What Osaf has done is really smart. He has started describing this group of people
00:14:00
as he doesn't say the billionaire class, he says the Epstein class. Because the
00:14:06
majority of Americans like the idea of being rich someday and believe that if they get richer, it doesn't necessarily
00:14:12
mean they're going to become depraved weirdos. So I think that is a really powerful
00:14:17
distinction that there is a class of people most rich people I do not believe are
00:14:23
like this but there is a class of people who believe they are again as we talk about
00:14:29
>> um protected by the law but not bound by it. There's smoking guns everywhere but
00:14:32
the the real smoking gun I would focus on if I were advising the prosecution >> is their own internal research.
00:14:40
>> So let's go through a body. >> It's not a prosecution. It's a it's a
00:14:43
law civil lawsuit. It's civil, but the pe but the people the plaintiff's
00:14:48
attorney or whatever you would call their own internal research regarding body image harm. We make body image
00:14:54
issues worse for one in three teen girls. This is according to a 2019 internal Meta presentation. 32% of teen
00:15:01
girls said that when they felt bad about their bodies, Instagram made them feel worse. That was a March 2020 internal
00:15:07
presentation. Meta's leaked internal research showed that 32% of teen girls,
00:15:12
one-third, said Instagram made them feel worse about their bodies and the company
00:15:16
knew it. Addiction by design. Meta employee internal message. I I worry that driving sess session incentivize us
00:15:24
to make our products more addictive without providing much more value. How to keep someone returning over and over
00:15:28
the same behavior each day. Intermittent rewards are most effective. Think slot machines. In focus groups, teens told us
00:15:36
they didn't like the amount of time they spent on the app and they felt like they
00:15:39
had to be present. They often felt addicted and know that what they're seeing is bad for their mental health,
00:15:44
but feels but they feel unable to stop themselves. On depression and anxiety, teens blame Instagram for increases in
00:15:52
the rate of anxiety and depression said another slide in a 2019 presentation. This reaction was unprompted and
00:15:59
consistent across all groups. This is their own research. >> They also their own research showed they
00:16:07
have 4 million kids between 10 and 12 on the platform when it's not supposed to.
00:16:12
13 is when they're not they didn't have age age verification which isn't very
00:16:17
good anyway on the platform until 2019. They This is what kills me with these people. It's like how did how did four
00:16:26
million It's like oh four million kids got into liquor stores somehow. Are you
00:16:30
[ __ ] kidding me? Four million kids. How did that happen without them knowing it? When they know everything that is
00:16:36
happening on that platform whenever they go into this I don't you know kids can
00:16:41
get into things. You know my kid just got into the refrigerator and took a you know took a cookie the other day. That's
00:16:47
what they act like and in their own Let me tell you I can't tell you how many
00:16:52
times I have heranged Mark Zuckerberg on safety and people inside the company heranged him on safety. He just didn't
00:17:02
agree. And because he it cannot be fired. If the board decides to fire him, he can fire the board and appoint a new
00:17:09
board that likes him. He he can make decisions on his own. And we are all subject to decisions of one person who
00:17:16
has no accountability on him because been making bad decisions whether it's about anti-semitism, whether it's about
00:17:23
uh anything. And he always and he did this again. And I I sighed I sighed for free speech or not, you know, the filter
00:17:29
thing like, well, I decided not to act paternalistic. Okay, Mark, don't act paternalistic to toward adult users. We
00:17:37
get it. But you absolutely have to act paternalistic towards young people. Like the the safety issues about young the
00:17:45
fact that they still stick to their idiotic guns when it comes to young people. Let me mention another big tech
00:17:50
suit that just broke. Apple just got sued by West Virginia for alleged failure to curb child sexual abuse
00:17:56
materials on iOS devices and cloud services. They should sue Grock. They should sue all of them for these things.
00:18:03
And this is the way these companies are going to go down like the cigarette companies. And they still to me and I'll
00:18:10
stop ranting. His testimony show me once again he is absolutely intractable in his decision that everything he decides
00:18:18
is correct. And he it is simply not. It is simply not. And let me be fair, YouTube is bigger, but I it's all the
00:18:26
same to me. They're all enormous and delotterious to the impact on our kids.
00:18:31
Period. >> Just one more piece of data. Between 2010 and 2015, the number of 8th grade
00:18:36
through 12th graders exhibiting high levels of depressive symptoms increased by 33%. In the same period, the suicide
00:18:44
rate for girls in that age group increased by 65%. By 2015, 92% of teens owned a
00:18:52
smartphone. And today, here and now, let's talk a little bit about young men.
00:18:56
Young men between the ages of 20 and 30 are spending less time outdoors than prison inmates.
00:19:03
The data here, there are hundreds, if not thousands of families whose kids have killed themselves. There are
00:19:11
millions of families struggling with anxiety and depression. And there's a lot of different factors here, but this
00:19:18
definitively has made things worse. The the good news is that I do think finally, and I've said this before and
00:19:26
I've been wrong, but I'm going to say it again. I think the worm has turned. And
00:19:30
that is typically it takes 20 to 30 years before the public moves in on a well-funded addictive substance that is
00:19:39
creating harm across our society. It took us 30 years with tobacco. It took us 20 years with opiates. It looks like
00:19:46
it's going to take us about 20 years here. But what you're seeing is it's
00:19:50
getting tied up in politics in sort of a good way. And that is I think the tariffs I think the ultimate reciprocal
00:19:56
tariff from different nations is going to be they're going to start banning uh
00:19:59
US tech companies and they're going to use this as a valid excuse. They're
00:20:04
going to say you're out. We're age gating. We're banning this or where
00:20:07
they're going to ban an entire platform. But it does feel like we're we are at a
00:20:11
turning point. >> Well, the only this is a jury trial. This is what's really interesting
00:20:15
because what I think is going to be the problem for them is and by the way sometimes like when some of the the FTC
00:20:20
stuff I see why Facebook or whatever company won in certain ones of them, right? But jury members either they have
00:20:28
kids and get it >> know it at in their bones or they themselves are addicted and call it
00:20:35
problematic usage when it's everybody who you I'm addicted to food videos on
00:20:41
your on threads, Mark. I can't stop watching them. And I am not an addictive. I don't drink. I don't take
00:20:47
drugs. I am >> absolutely addicted. There is no question in my mind. And same with you,
00:20:53
right? >> Some of it's good. >> Some of it's good. And I use most of the
00:20:58
time I use I was looking at the time spent. I use it for texting, like bothering you, for example. But um but a
00:21:03
lot of it is addiction. And this jury is going to hand you your head if you keep
00:21:08
insisting it's problematic usage. We don't think you're totally at fault. I'm
00:21:13
sure this this poor girl had problems in her family life, but this is a contributing factor. Just like people
00:21:20
can have bad families and smoke cigarettes, it is it is part of of of a thing that
00:21:27
is making us worse as as as a country. Um, and the same thing with Apple. They should get sued. They should all get
00:21:33
sued and then we can have it out in court. Same thing with the Epstein victims and and the people and the
00:21:38
perpetrators. Let's have it all out in court. Let's do it. Like if we lose, we
00:21:43
lose, but if we win, we win. And that to me is the fairest thing. >> I think we'll I think it'll start with
00:21:48
the kids. What I'm curious is if it starts to >> melt upwards, and that is
00:21:53
>> like cigarettes. >> Well, the kids are the biggest problem, right? And that's the one we're most
00:21:56
sensitive to. >> That's where cigarettes started. But go ahead. >> I also think there's a real issue around
00:22:02
the coarsening of our discourse. I think it's making us all more anxious and
00:22:06
making us all hate each other more. I think I if if you type into open AI how to ruin youth or how to undermine the
00:22:14
power of the United States both times it'll come back with something that resembles social media. There's just
00:22:21
people there's a reason and a lot of it's economic that young people feel
00:22:24
worse and worse about America. But social media is basically it's like when you're in the third grade and two kids
00:22:31
start having words and everyone surrounds them and shoves them and says fight encourages them to fight. That's
00:22:37
happening a trillion times a day on these platforms. It's turning even amongst I spending a lot I'm thinking a
00:22:42
lot about how ways the left might [ __ ] it up and lose in 26 and 28. And one of those one of those ways is
00:22:50
the algorithms do a really good job of convincing people who agree on 90% of things to find the 10% they don't agree
00:22:59
on and figure out a way to get them fighting and hating each other. You know, it's just it really is ripping at
00:23:06
the fabric of society. I I I think our adversaries are sitting back and watching this and just loving it.
00:23:12
>> Yeah. I'm going to read from a very famous author. Let me just read this.
00:23:16
All these companies began with a grozy credo to change the world. But they have done that in ways they did not imagine
00:23:22
by weaponizing pretty much everything that could be weaponized. They have mutated human connection so that
00:23:26
connecting people has often to become about pitting them against one another and turbocharged that discord into an
00:23:32
unprecedented and damaging volume. They have weaponized social media. They have weaponized the first amendment. They
00:23:37
have weaponized civil discourse and they have weaponized most of all politics. I
00:23:42
wrote that in 2018. I got screamed at by Facebook and the tech people for saying
00:23:46
that they were digital arms dealers. That's what they are. >> Have your time.
00:23:51
>> I'm just telling you it's just like enough. Enough. And it begins, the
00:23:55
cigarette companies began with Joel Camel, them using cartoons. They were that cynical that they use cartoons to
00:24:02
attract kids to smoke. It's the same thing and they need to stop. And same thing, and by the way, let me not just
00:24:09
pick on Mark Zuckerberg. Apple, you need to do something about CS Sam Gro, you should be taken to court. Google, you
00:24:18
YouTube needs to be fixed in ways that people kids don't become incredibly addicted to what you're doing. And to
00:24:25
pretend otherwise just because you have money, you can run over all these senators and congressmen, you're not
00:24:30
going to run over all of us. That's my feel. Anyway, that's enough. I'm going
00:24:33
to stop. All right, we're going to go on a quick break. When we get back, Cole
00:24:36
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00:27:01
Scott, we're back. Late night host Steven Cobear is calling out CBS and his parent company Paramount for not
00:27:07
standing up to the bullies. Colbear revealed this week that CBS lawyers told him he could not air an interview with
00:27:13
Texas Democratic Senate candidate James Telerico. Uh there were concerns about running a foul of FCC Chairman Brandon
00:27:19
Carr, the [ __ ] as I like to call him, and the FCC's equal time rule. Colobar
00:27:23
ended up posting the interview on YouTube where as of this recording it has nearly 7.5 million views. The
00:27:29
broadcast typically gets around 2.5 million viewers. This is just one single interview. Coar summed up the irony on
00:27:35
his Tuesday episode. Let's listen. So, we obeyed our network and put the interview on YouTube where it's gotten
00:27:44
millions of views. And and I I can see why. Taler Rico is an interesting guy. I don't know what if
00:27:54
he should be the senator, but it was a good discussion. I wish we could have put it on the show where no one would
00:28:00
have watched it. >> Uh CBS initially, they've been very quiet lately, has been pushing back on
00:28:05
Cobar's version of events, saying the show was not prohibited from airing the
00:28:08
Telerico and UNV, but was given legal guidance and options. I've been in that
00:28:13
sphere. Coar took issue with that statement, calling it crap, and it indeed is crap. All of this has been a
00:28:19
major boost for Telerico who raised more than $2.5 million uh dollars in the first 24 hours after the interview went
00:28:24
on YouTube. Uh Brandon Carr, the [ __ ] is calling it a hoax, by the way, saying
00:28:29
Telerico did this for the purpose of raising money and getting clicks. Except he then uh on this interview he did, I
00:28:35
think it was on Fox, uh said, "Oh, I would have enforced it." So, he said he
00:28:38
would have done what they what what Coar said he would have done. Um and then also noted that this fair this this the
00:28:45
way he's in trying to thinking about enforcing this equal time rule has not been done in forever. So he just
00:28:52
admitted every calling it a hoax and then admitted he was going to do exactly what they said he was going to do.
00:28:57
Again, a [ __ ] Um and he thought this is like some story like and I love Co Bear I think is handling it beautifully.
00:29:04
I don't think he's being too virtue signalally, but it is definitely a nail
00:29:07
in the coffin for broadcast television. >> Yeah. Just to step back and try and
00:29:12
understand the real dynamics and the the the shape of power here because we've
00:29:17
moved from a democracy and capitalism to an autocracy and kletocracy. This is what's going on. The president has made
00:29:23
it clear he will exercise his authority unilaterally and illegally in my view to
00:29:29
decide who gets to acquire which companies. And essentially he has decided that okay um if the Ellison's
00:29:40
who own Paramount and CBS fly their partisan proTrump flag, I will figure out a way to get them Time
00:29:50
Warner. And so they are very sensitive to trying to not offend him, plate him, do whatever he wants regardless of the
00:29:58
First Amendment. And the the excuse they're using is the following. The FCC's equal time rule is a federal law
00:30:06
that requires broadcast stations to provide equivalent air time to all legally qualified candidates for the
00:30:12
same political office. That theoretically makes sense, right? Historically though, the FCC has
00:30:21
exempted many entertainment talk shows and now they've decided to update this
00:30:26
and they're selectively enforcing it. And by the way, folks, curiously, FCC Chairman Carr has not yet attempted to
00:30:32
apply these rules to any conservative talk shows. >> He's he's sued the he's he's
00:30:38
investigating The View just on ABC for having >> The View and Coar, >> by the way, has had Jasmine Crockett on
00:30:46
and probably asked right-wing people. >> This is so ridiculous. But this is what
00:30:50
has happened. There's a decent chance that FCC Chair Carr has given uh Representative Taler Rico a decent shot
00:31:00
at being a senator in Texas. Now, >> this has done nothing but bolster Torico
00:31:06
raised $2.5 million in the subsequent 48 hours. The >> the big loser here is the FCC and Trump.
00:31:14
This has backfired. This is blown up in their face. The Ellison, the Ellison's
00:31:19
are now now sitting on top of a collapsing asset, >> right? >> And in addition, the other loser here,
00:31:26
just quite frankly, is Jasmine Crockett >> because she she came out, unfortunately,
00:31:33
this has elevated Terico and Colbear to hero status. And Crockett wishes she was
00:31:39
the one that got, you know, that got sort of blacklisted, right? Cuz they were running neck andneck. And the
00:31:45
likelihood according to the prediction markets that >> well it wasn't quite neck and neck. It
00:31:50
was like 60 40 and now pretty close I think. >> No no the prediction markets were he was
00:31:56
winning quite substantively but not as much. >> He went from 63 to 77. >> Yeah. Right. That's that's
00:32:03
>> 63 is a lot. Right. That's I mean that's basically when you're at
00:32:10
77 it's kind of said or it's getting to the point where it looks like the race
00:32:15
may be over. >> There's also early voting going on and Democratic voting is alltime high. It's
00:32:20
crazy high and it's surpassing Republicans. I'm going to link it speaking of the Ellison's one two
00:32:24
things. Warner Brothers Discovery this let me just tell you David maybe this media thing isn't your best look. Warner
00:32:31
Brothers Discovery is reopening negotiations with Paramount for the best and final offer, but the clock is
00:32:36
ticking. Netflix has granted Warner a seven-day waiver for these Paramount talks. The deadline is February 23rd. Uh
00:32:41
Zazov wrote to Paramount's board that David Zazov, who's the CEO, Warner, uh
00:32:46
welcomes the opportunity to see whether the company can expeditiously deliver a proposal that provides superior value,
00:32:51
meaning he's not calling it superior value. Paramount has indicated it will raise its bid to $31 a share and has
00:32:57
agreed to cover Warner's $2.5 billion breakup fee owed uh to Netflix, which it
00:33:01
should have done in the first [ __ ] place. A lot of these things they've just agreed to, they should have done
00:33:05
months ago. Uh Netflix CE co-CEO Ted Sandos explained why he agreed to this in an interview with CNBC. Let's listen.
00:33:12
>> We gave them the opportunity to get those shareholders exactly what they
00:33:16
deserve, which is complete clarity and certainty about what the value of these deals are. What we're certain is is that
00:33:22
the Netflix deal to acquire these assets is the best deal creates generates the best value for their shareholders and
00:33:28
they think so too. That's why they recommended the deal and why they reiterated recommending that deal post
00:33:33
this. So give them seven days to put their money where their mouth is. >> He's so smart. I got to say the other
00:33:38
part before you go in um uh they have to they have to basically they have to give
00:33:43
more money. Really that's if they give more money they'll probably get it. That
00:33:46
said, there's been a really, you know, even though most of the narrative has
00:33:49
been anti-Netflix with Paramount has done quite a bit of the making that happen. Uh, this idea that they will
00:33:55
have to cut uh Paramount will be disastrous because they're going to have to cut because of the finances here.
00:34:01
They will they will decimate um employment in Hollywood and Netflix will not there both of them face different
00:34:08
challenges uh both regulatory and what's going to happen. Warner Brothers has
00:34:12
scheduled the shareholder vote on the Netflix deal from March 20th. Um, we'll
00:34:16
see what happens. Uh, David Ellison was at the White House last week, by the way. This after Trump said in an
00:34:21
interview he wasn't involved in the deal. Who knows? Um, and let me link this to Anderson Cooper. He's leaving 60
00:34:27
Minutes, which is a CBS property after 20 years. Uh, he's still at CNN, of course. He signed a big deal with an $18
00:34:33
million deal with them recently. So if this deal works out for parent, they could take Warner's cable properties and
00:34:39
right find himself back. The reason he did so was he said he was to spend time with his family. He didn't want to work
00:34:45
with Barry Weiss. That I know this to be true. Um he didn't like where 60 Minutes
00:34:50
was going and he he also didn't like what was happening to his colleagues. He's a he's a great journalist and he
00:34:56
just didn't want to work with these people. So because he thinks I I would assume he thinks they're lesser than and
00:35:01
and they are compared to him. So, uh, another high-profile exit, not just Anderson, Taylor Sheridan left, uh, who
00:35:09
does Yellowstone. Um, a lot of messes there, both in the news division and obviously with Coar. He's he'll be
00:35:15
leaving in May. Uh, your thoughts on on these two things with the Ellisons. They
00:35:20
seem to be really, they may still win it, but boy, they >> First off, the way this is supposed to
00:35:25
work in a capitalist society is the person who shows up with the biggest bag of money gets preliminary approval by
00:35:32
the shareholders and then it goes under regulatory review to make sure that there's not too great a concentration of
00:35:36
power. >> In my view, neither of these companies should be able to acquire Warner
00:35:41
Brothers because it's too much concentration of power. Having said that, >> this is the world we live in. One of
00:35:46
them is going to get it. What's interesting is that it's clearly now such a kleptocracy
00:35:52
that on Khi the likelihood that Paramount takes over WBB WBD because it has become obvious that the president's
00:35:59
is doing the Ellison's bidding is now 53% and Netflix's odds have fallen to
00:36:05
just 36%. So >> neck to neck on poly market just so you know but >> Paramount has sweetened the deal. They
00:36:14
agreed to pay $2.8 8 billion fee the WB WBD would owe Netflix if the merger agreement falls apart. They also added a
00:36:23
uh ticking fee of 25 cents per share paid to Warner shareholders for every quarter that the deal isn't closed
00:36:28
starting next year and the total cash bid was raised to 78 billion back in December. Here's what I don't
00:36:35
understand. the union SAG After and the Writers Guild decide to strike at exactly the
00:36:44
wrong moment a couple couple years ago and basically took everyone had everyone not work for seven months in order to
00:36:52
get nothing in exchange when they they decided to strike at a weak point and yet now
00:36:59
you just referenced this if the Ellison's own they've already overpaid for Paramount which looks to be through
00:37:06
a serious I call it a leaky yacht, >> which looks to be just one after the
00:37:11
other creating self-inflicted wounds that they just unforced errors, ungoals, whatever you want to call it, that are
00:37:17
substantially reducing the equity value and showing how much they did in fact overpay.
00:37:23
Whether it's CBS News going from 5 million viewers to 4 million in one week after the anchor transition,
00:37:30
60 Minutes might go away. I mean, these things literally >> Why would you stick Why would you poke
00:37:35
that in the eye? that actually was successful. Oh, >> so they've overpaid for Paramount.
00:37:41
They're probably going to have to overpay, and I understand why the rationale for Warner such they can get
00:37:46
something resembling consolidation. But hey, hey, writer's guild. Hey, Saga.
00:37:51
What the [ __ ] do you think Ellison, one of the largest providers of inference and compute for AI, what do you think
00:38:00
their idea is going to be to rationalize costs and somehow get a return on investment here? What do you think is
00:38:08
going to h say what you want about Ted Sarandos? He's a disciplined operator.
00:38:12
He likes the old Hollywood model. >> He likes >> Well, some of it some of it he likes,
00:38:16
some of it he doesn't. Yeah, but he's not. Oh my god, >> he's they've got the theater owners in
00:38:21
there. >> Compared compared to Larry Ellison. >> Agreed. >> He is in love with those makeup artists
00:38:28
and those >> Larry Ellison is going to leave you Hollywood people naked without
00:38:33
>> He's going to say, "I have an idea. >> Going to I know them. You know,
00:38:36
>> let's take let's take the 40 movie release with an average budget of $140
00:38:41
million >> and let's do 60 million. Let's do 60 movies at 14 million each using AI.
00:38:48
>> That's right. >> And where do those where do those cost efficiencies come from?
00:38:52
>> That's correct. >> Instead of having 18 costume designers on the Fantastic 5, they're going to
00:38:57
have one in an enic layer. >> And by the way, it'll probably be AI slop. I don't think it'll work.
00:39:07
Warner Brothers film unit production cost by 40% and it's all going to come out of and where the [ __ ]
00:39:18
are I can't believe the unions aren't like >> it's Netflix or we are not
00:39:23
>> I think you're finally right about these unions. I mean I I think it's not great.
00:39:27
Listen listen the theater issue is a big one but you know what consumers don't
00:39:30
like the theaters as much. Listen to consumers. It's not because that tech did something. They did. They gave them
00:39:37
an alternative that consumer. We all have our own theater now. It's at home.
00:39:40
What they should be caring about is the economic livelihood of the people actually producing the content.
00:39:44
>> Correct. But the issue is the expenses. Like I was just as I said I did this
00:39:48
heated rivalry interview. I mean they made that show which is an enormous hit for which is by the way on HBO Max uh
00:39:55
for two two million to3.5 million an episode. Stranger Things 50 to60 million dollars an episode. I mean, and the
00:40:04
government helped pay for it. There's no way our government's gonna help pay for
00:40:07
a gay hockey love story. But that said, it's the economics are changing so drastically, you don't even have to use
00:40:13
AI to understand you need to change the economics. And let me tell you in no uncertain terms, having covered Larry
00:40:20
Ellison for 30 years, he is going to do what it takes. He is has no sentimentality toward anything except
00:40:28
making more money and so he will do whatever it takes and that includes squeezing all of you and for his for his
00:40:36
benefit and I know David loves movies etc etc but at some point uh this is not a romantic fantasy of saving Hollywood
00:40:44
it's not that's what kills me and here's the here's the thing I don't think the I
00:40:49
think the elins have misplayed this so badly they've taken too long they should
00:40:52
have done all those things they just agreed to months ago uh to make it better. They should have increased the
00:40:58
price if they really wanted it. They're they're being very cute here and all
00:41:02
they do is attack Netflix. They are very prime for attack. And then meanwhile over at CBS we're getting a preview of
00:41:10
their shitty management and their shitty decisions whether it's Taylor Sher Taylor Sheridan which I thought was in
00:41:16
massive miss Anderson Anderson Cooper who you may end up buying the Ellison's
00:41:22
man buying and being his boss he cares so little for them he's willing to quit
00:41:27
60 minutes and he's going to whatever happens if they get if they become his
00:41:33
boss that's how much he doesn't like them. He know he they could they could
00:41:37
end up being his boss in 15 minutes. That that should tell you everything about it is quality people don't want to
00:41:44
be affiliated with it. So I listen I agree probably this consolidation is a problem and and there probably was a
00:41:51
better I don't know what the better deal here. I thought the spin-off was the best idea
00:41:56
for now and then later they could sell the film studio. That's was my feeling.
00:42:00
That was my feeling on the whole thing. Um, but this is where it's headed and
00:42:04
the Ellison's are showing you exactly how they manage a property and you should pay attention to it.
00:42:10
>> I for the life of me, I can't figure out why the unions haven't come out and
00:42:13
said, "If Paramount gets this, we're out." >> Yep. >> We're out.
00:42:17
>> We're good luck. Good luck managing this thing. Day one, day one after this
00:42:22
closes, we're shutting the whole [ __ ] thing down. >> Well, >> no TV production, no attention to
00:42:27
people. You know, they offered Anderson Cooper a fortune to run to be the head of the to be the face of 60 Minutes and
00:42:33
he even he couldn't do business with them. So, I'm just saying a lot of money, you know, and by the way, he
00:42:40
should spend more time with his kids, but that's not what happened here. Anyway, although I think it's partial.
00:42:44
I'm sure that's partial. So, anyway, uh let's go on a quick break. When we come
00:42:48
back, we'll talk about the Pentagon's fight with anthropic. This is something
00:42:51
else. >> Support for the show comes from Vanta. If you're a business owner, you're not
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00:45:15
Scott, we're back with more news. There's so much news, it's all different. The Pentagon is considering
00:45:19
cutting ties with Anthropic amid a dispute over how Claude can be used by the military. Anthropic wants limits on
00:45:25
uses like for weaponry that fires without human input and mass uh this domestic surveillance seems reasonable,
00:45:31
but the Pentagon wants access for all lawful purposes. Open a Google and XA have agreed to have models deployed in
00:45:37
unlawful use cases. In principle, Pete Hexath is reportedly also considering labeling anthropic supply chain risk
00:45:43
which could force contractors seeking to work with the US military to stop using
00:45:47
claws. Senior Pentagon official said the change will be a pain in the ass and the
00:45:51
Pentagon would make sure Anthropic pays a price. Pete is a [ __ ] idiot. He just actually let go of someone who has
00:45:57
an incredible um he forced out this colonel who had this incredible record cuz just cuz he's competent. Um really
00:46:06
interesting. There was just a picture from I think it was India where the anthropic CEO and Sam Alman wouldn't
00:46:11
hold hands for a second together which was funny. They're in a big beef but that's a separate beef. Um, this is
00:46:17
really interesting. I'd love to know what you think about this because they're not they're standing firm. It
00:46:22
looks like anthropic is like we're not going to be used, you know, to attack
00:46:25
humans without a human intervention or domestic surveillance, etc. >> Yeah. So, the the Pentagon, they're
00:46:32
threatening to they're threatening to sever its $200 million relationship with
00:46:36
Anthropic. >> Not big. Not too big >> because the AI firm insists on
00:46:40
maintaining limitations on how the military uses their LLM. uh anthropics red lines are no mass surveillance of
00:46:48
Americans and no fully autonomous weaponry. Right? So, but this is yet another example
00:46:57
of a a loss of capitalism. This is technically a very severe form of socialism and that is the state has
00:47:06
decided they control the means of production. private companies are allowed to have their own guidelines and
00:47:12
if those guidelines mean they can't work with a military contractor they they get
00:47:16
to make that decision. So this is and them trying to shame them and threaten them economically
00:47:22
is the worst type of socialism. So all of these quoteunquote free market people claiming this is private companies
00:47:34
Vox gets to decide if it doesn't want to work with the Pentagon. And so if they sign a contract, fine, they have
00:47:43
to live up to their contract. But the fact that Anthropic has these guidelines, I again think this is a bit
00:47:49
of a cold bear moment for Anthropic. And that is Anthropic has starts their hat white in an environment where the
00:47:56
majority of Americans feel really uneasy about AI. So, Anthropic has sort of positioned itself as the clean, well-lit
00:48:04
corner of the bookstore here, >> like Apple and privacy or Apple and not >> 100%. We're the good guys.
00:48:12
>> Mhm. >> And so, I I I as we sit here today, I actually think that Anthropic or in the
00:48:18
next 12 months, this one of our predictions is going to be worth more than open AI. But this is a win for
00:48:25
anthropic and another example of the government deciding they get to dictate. They're not breaking the law. The
00:48:33
government gets to dictate visav laws that okay, you can't discriminate based
00:48:36
on someone's sexual orientation, race, ethnicity, gender, whatever. They can
00:48:40
enforce that. There's no law saying that if you're a company that doesn't want to
00:48:45
engage in mass surveillance of citizens that you're you have to work with the
00:48:49
government. that there this is this is socialism gone arry. This is market intervention where there shouldn't be
00:48:57
any. And when it comes from on Pentagon stationary, I mean they might as well just have had Donald Trump sign this. I
00:49:03
think this is actually going to be >> it's a text will you do what I say.
00:49:08
>> It's a col bear moment. Daario Emodi is being like Colar and sticking up the
00:49:13
middle finger and a lot of enterprises and a lot of consumers are going to go, you know, I like a company that refuses
00:49:18
to engage in mass mass surveillance of its own citizens. >> Yeah, I think this is a good Anyway,
00:49:23
we'll see. Pete Hag says, you're also a [ __ ] Anyway, um one more quick break.
00:49:28
We'll be back for predictions. >> Support for today's show comes from
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today to get started. That's selectquote.com/pivot. >> Okay, Scott, we're going to talk about
00:51:35
predictions, but first, um, I have one prediction I'm going to make, but I'm
00:51:39
going want to do this first. The US military is moving into place for a possible Iran strike. probably because
00:51:44
this Webpstein stuff is getting hot again for Trump as early as this weekend. Scott, let's hear what you said
00:51:50
in January. >> Bottom line is my prediction is that I think we're about to see the US conduct
00:51:56
a military strike on Iran. >> Now, you thought it was pretty quickly, but the state uh but but it's happening
00:52:03
possibly this weekend. There's they've they've amassed an enormous amount of
00:52:07
military might in the region, probably I think more than when they were doing the
00:52:11
last war, they were over there. So it's that this the things are in place, the
00:52:16
battleships are in place. You do you want to talk about that or do you have a different prediction?
00:52:19
>> Oh, no. I I think it's on and and let me be clear. I like this. I would like to
00:52:24
see I think the Islamic Republic is one of the most misogynistic, brutal regimes
00:52:30
in the world right now. And I think Iran has the cap the potential uh to be an outstanding ally. And I think if and
00:52:38
there's a lot of unknowns here. regime change, you know, brings its own risk
00:52:42
>> and why he's doing it at this moment. But go ahead. >> But he can be doing it for the wrong
00:52:46
reasons and can still have a good outcome. I'm I'm absolutely 100% in favor of this. And I think that Iran uh
00:52:52
being quote unquote just less oppressive, less brutal, will be really good for the region and really
00:52:59
especially good for the women of Iran >> if they can complete what they need to
00:53:04
complete. If they just don't and they just beat them up again and then leave,
00:53:08
it's a different issue. >> I think the regime the regime is hobbled and I think this could tip it over. I
00:53:14
not to get in too much in the Jesus, I think they need to coordinate with the MSAD and have agents on the ground and
00:53:18
do a series of of targeted executions quite frankly or assassinations. Execution is the wrong word.
00:53:24
Assassinations. But I'm a I'm a huge I'm a huge proponent of this. If you look at troop
00:53:32
movements, whether it's refueling planes, supply chain cargo, aircraft carriers, uh, specialized operations
00:53:38
troops, they are either playing serious poker or they are about to do this imminently.
00:53:44
>> They kind of have to, right? And Trump's probably in the mood. I think that I
00:53:47
think the other factor here is he has a State of the Union on Tuesday. I think he can't complete a state of the union.
00:53:53
I just >> He also he also wanted to distract from the Epstein files. >> Epstein files. loves he loves the macho
00:54:00
flex of what happened in Venezuela. This he thinks is going to be part two >> which didn't last too long.
00:54:07
>> And also Rubio positions himself for president with these types of actions.
00:54:11
And Rubio is probably whispering in his ear this would be a great move for us. Uh I I'll be very curious how our allies
00:54:18
in the region what they think of this. But I I think it's on and I have think I
00:54:23
have thought if you just look if you just track um uh troop movements, ship movements, supply chain movements. I
00:54:31
mean we are moving a lot of stuff to the region and we are sort of we are ready to go. We are at the starting line.
00:54:38
>> Yeah, he'll cancel the state of the union would be my guess. If this is
00:54:41
happening thought of that >> um and I don't think he can complete one. I don't I think he is quite losing
00:54:47
it as you know in some fashion. I'm not so sure he's he's I think I know he
00:54:52
seems vibrant, but I I suspect that it's there's problems around that. Um that's
00:54:56
just me. Uh one the only prediction I would say is today uh Wired published a story about uh the gay mafia in Silicon
00:55:04
Valley. They had written me about it and I was like there's no such thing. There
00:55:07
just isn't. Sorry. >> Gay mafia. >> Yeah, I know. It's the it's a story that
00:55:11
they wanted to work on. They had contacted me years ago about it and they're like let's talk about you and
00:55:15
the game. I'm like there is no I don't have friends with Kim Cook. There's no
00:55:18
gay mafia. There's I mean, sorry, but I thought it was a silly idea and I still
00:55:22
think it is. And I have to say I think they're going to get a lot of push back
00:55:25
for the illustration which shows uh two hands coming out of two crotches, one with a with a rainbow, you know, Apple
00:55:34
watch on uh but the penises are hands and they're shaking. So, I thought that
00:55:39
was so [ __ ] insulting to gay people. I'm sorry, guys. That was a terrible illustration. Like I don't usually I
00:55:45
usually laugh at most like jokes about gays, but oh my god, you don't have to
00:55:50
have, you know, penis. >> Well, there's definitely no gay mafia, but it's obvious that Jews run the
00:55:53
world. I mean, >> right? >> What the [ __ ] But why do you have penis
00:55:58
hands? We don't need penis hands. >> Yeah. Just speaking along those lines,
00:56:01
George Han pointed out something that really struck me as very insightful. >> I think they're going to get in trouble
00:56:05
for it. That's my prediction because it's stupid and it's really offensive
00:56:08
and I don't usually get offended. So that's my meter. But go ahead. We referenced Heated Rivalry before and he
00:56:12
said the thing he loved about Heated Rivalry and it just struck me as so true is that he felt it was the first time
00:56:18
>> that not one but both gay men were depicted as just incredibly high performance good-looking functional
00:56:26
>> like impressive men. One wasn't one wasn't neurotic or quote unquote very
00:56:30
flamboyant or one wasn't struggling with some they're just both really impressive
00:56:35
men and I I literally tick through every depiction of gay romance and he's right
00:56:42
there's usually one person that feels >> lesbians have gotten a better shake
00:56:45
recently >> kagy and lacy >> no lord and things like that um but yes
00:56:50
I agree with you I agree there's a great book that I recommended vto Russo the
00:56:53
celluloid closet is a history of how gays were depicted it uh and it it it continues to this day and for gay men
00:57:00
they do not get as much complexity as these two. I'd agree with you. Yep. Absolutely.
00:57:05
>> Well, a certain extent the Epstein the Epstein class has sort of diminished the
00:57:09
comfortable notion that gay people are more inclined to be pedophiles. No, it's
00:57:13
it's rich white dudes that seem to be more inclined. >> Rich straight white dudes.
00:57:18
>> Yeah. And let me tell you, go straight to hell for doing anyone who did that
00:57:21
should go straight to hell. Anyway, on that note, um, uh, and no more penis penis handshakes. Anyway, uh, we want
00:57:29
wired. I love you, Katie, but >> I don't get a prediction. You're just
00:57:32
rolling right. >> You just did that. No, no, go ahead. No, now you have another one. Go ahead.
00:57:35
>> What was my prediction? I >> military Iran. >> Well, I made that one a month ago.
00:57:40
>> All right. Okay. What's your new I want to say? You just I feel hurt. I feel
00:57:43
shamed. Okay, go ahead. >> Okay, fine. We're bombing Iran. Never mind.
00:57:46
>> No, go ahead. No. What's your prediction? Well, I don't know if you've
00:57:50
noticed, but about $1 trillion in value has been destroyed amongst the biggest AI players since the beginning
00:57:57
of the year >> as you were noting they would >> and what's interesting about it is I
00:58:02
mean a few things need to happen needed to happen either revenues needed to like
00:58:05
even jump more to justify the the massive capex and that didn't happen. So their stocks have come down. What's
00:58:13
really interesting in my opinion is that what also happened though is that people
00:58:17
still think these technologies um I mean just an example Amazon's off 14%. Microsoft's off 17%. B Apple
00:58:26
>> Apple has dropped Amazon's had its worst couple weeks in a in several years.
00:58:31
>> Yeah, they've lost 500 billion. >> They've lost a lot. Um, so but what's
00:58:38
also interesting is there's been a trillion dollar wipeout at SAS companies and that was when Enthropic unveiled its
00:58:44
uh Claude Co-work uh legal automation tool. >> It triggered uh what traders at Jeffre
00:58:51
immediately christened the SAS apocalypse erasing approximately 285 billion in market cap in a single
00:58:57
trading day. >> Software companies. Yeah. The general notion is that people aren't going to
00:59:02
need that basically you're going to be able to write a prompt and you'll be
00:59:05
able to replace Adobe, Salesforce, Service Now. >> Yeah. >> And that these companies have been fat
00:59:10
and happy for 30 or 40 years. >> Yeah, they have. >> And these companies So
00:59:14
>> this one I agree with. >> Well, it's interesting because Salesforce is off 25%.
00:59:21
Uh Adobe is off 25 to 30% this year. Intuitit is now down 34%. It's lost a third of its value year to date. Now my
00:59:31
view and this is and this is my prediction is that these companies are much more deeply
00:59:40
integrated into their corporate customers than people believe. And even if you can write the code really
00:59:46
efficiently and quickly without their technical staff at these companies, their technical staff is only 10 to 20%
00:59:52
of their employees. So they have they have really powerful UI, they have client service, they have
00:59:58
client management, they have integrated billing, they they are so deep into these companies that I think rumors of
01:00:05
the death of these companies has been vastly exaggerated. And as a multiple of free cash flow, these companies have
01:00:11
never traded at a lower multiple. In addition, if you actually look at the >> opportunity is what you're saying
01:00:17
>> 100%. If you actually look at their revenues and their margins, there is
01:00:22
absolutely no evidence whatsoever that AI is hurting them. None whatsoever. >> Yeah.
01:00:28
>> So my prediction is that a basket >> a basket of stocks Adobe >> Figma Service Now Salesforce that
01:00:39
they're going to have um great returns from here on out. I think >> especially if they integrate the AI
01:00:44
features in in a way that's helpful to people, right? That's what it it I find
01:00:50
them like I what what's interesting is and I think we should talk about this
01:00:54
Monday, this fight between open and I just hired um a very significant person from from Instagram, Charles Porch,
01:01:01
who's really talented talent relations. Um Figma did a deal with Claude, you
01:01:06
know, uh Open AI got a hold of OpenClaw, right? It's really interesting what's
01:01:12
happening. It starts to become what's actually useful and who takes advantage
01:01:15
of the utility. Correct. And some of Adobe could do it, right? They could easily make their product 100 times
01:01:22
better. >> Well, just looking at it operationally, say they spend 10 or 20% on programming
01:01:29
and that's no longer a a moat because AI can come in and write the code just as
01:01:35
easily. These companies themselves could reduce their cost by 10 or 20%. Shed that technical staff quite frankly and
01:01:43
then pass on those savings to their end consumer while not giving up any ibita or margin. In other words, 80 80% of
01:01:50
their capex goes into things that or or their expenditures goes into things that
01:01:55
AI is not challenging. AI is challenging their technical mode, but AI is not challenging the fact that
01:02:03
my even my shitty small companies were all on Salesforce. The idea of someone coming in and saying, "We'll give you
01:02:10
50% we'll we'll charge you 50% less." I'm like, "Are you kidding? I just spent
01:02:13
the last [ __ ] year training everyone how to use Salesforce, right? We're all
01:02:17
on it." if they give me more for >> and I get invited to cool Salesforce
01:02:21
events and they give me research and the nice attractive dude who used to play football at Cornell shows up and he's
01:02:27
our Salesforce representative. These these companies are much more deeply integrated
01:02:32
>> into their client base even if if there's a widget on anthropic that helps
01:02:37
you build the code that they offer. It's just not that >> there has to be an alternative stack is
01:02:42
what you're talking about that match >> well did that it what it'll do though
01:02:46
these companies are smart what it'll do first off I think these companies are
01:02:49
really fat and happy and there's a lot of expense cutting that they they could
01:02:52
all endure my prediction is the following I think the sale or the decline on uh these these companies
01:02:59
Adobe Salesforce Service Now I I think it's been overdone and that a basket of
01:03:05
the companies that have endured this SAS apocalypse are going to are going to do
01:03:09
really Well, I think it's a great investment because if you look at their multiple on free cash flow, they've
01:03:13
never been lower. They've never been cheaper. And I see absolutely no evidence whatsoever that AI is reducing
01:03:19
their top line or their bottom line. >> Greatly exaggerated. >> That's exactly right.
01:03:23
>> All right. So, anyway, that's a great one. I love that one. Um, I think you're
01:03:26
right. I think you're 100% right. We want to hear from you. Send us your questions about business, tech, or
01:03:30
whatever's on your mind. That was useful for our listeners, Scott. Thank you. Go
01:03:34
to nymag.com/pivot to submit a question for the show or call 85551 pivot. Elsewhere in the Karen
01:03:40
Scott Universe this week on Profy Markets. Scott spoke with Professor Aswath Deotin, professor of finance at
01:03:46
NYU's Stern School of Business to discuss why he's concerned that the market is ignoring catastrophic risks.
01:03:52
After the second world war, we put together an economic order centered around the US and the US dollar and
01:03:58
that's coming apart and the market seems to essentially be blowing back saying it
01:04:03
doesn't matter. We're we're going to figure out a way and just like we did on
01:04:07
co and maybe that's part of what's going on here is people are saying markets are
01:04:11
resilient enough they're going to find a way even through this dramatic change in
01:04:16
how the global economy is run to find the other side. There seems to be too much of an acceptance that we'll figure
01:04:22
a way through this without serious pain. >> Well, that's what they're like whistling
01:04:26
past the grave. That's great. He's so smart. Otherwise, is so smart. Um, we
01:04:30
obviously didn't talk about RFK Jr. and Kid Rock's exercise video. >> I don't know how to feel about that.
01:04:36
>> We don't know how to feel about that. I feel like if I watch that and then watch
01:04:40
Heated Rivalry, I might just explode into an orgy of like >> They said the worst the worst season of
01:04:45
Heated Rivalry was those two. Oh my god. God. rage against. >> Every time I see Kid Rock, I immediately
01:04:51
think, "How much Sudafed can I buy at a CVS? >> There's so much good stuff on the
01:04:57
internet about it." But remember, it's your taxpayer dollars at work. Oh my
01:05:01
god, there's >> a milk in a hot tub. That's all I have. >> That's the workout video for single dads
01:05:06
who fight for child custody and then never see their kids. >> Thank you. Let's end on that. Okay,
01:05:11
that's the show. Thanks for listening to Pivot. Be sure to like and subscribe to
01:05:15
our YouTube channel. We'll be back next week.