00:00:00
This isn't military action. This is a war. There's one >> excursion. The word he's using now. It's
00:00:04
an excursion. >> Like a field trip. >> Hi everyone. This is Pivot from New York
00:00:14
Magazine and the Vox Media Podcast Network. I'm Carara Swisser >> and I'm Scott Galloway.
00:00:19
>> Scott, did we have a good time in Minneapolis? >> Oh, that was wonderful. And thank you to
00:00:23
the the wonderful people of Minneapolis. I thought it was great. I I've never you
00:00:28
know what was really the the community or you know maybe we got a not a representative sample I'd like to think
00:00:34
we got a representative the community seems very unified right now. Yeah, absolutely. People drove from North
00:00:40
Dakota. There was >> wherever that is or Iowa. We had a lawyer from Iowa come.
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>> Yeah. Judge, >> by the way, shout out. We know who you are. There's this wonderful woman who's
00:00:49
a lawyer in family court and she commutes seven hours a week and she said that uh excuse me. She said judge. Yeah.
00:00:56
And she said we're her we're her best friends. >> Yeah. Yeah. It was great. And people
00:01:00
were great. Anyway, we've got a lot to get to today. I'm going to dig in.
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First, the war in Iran is sending oil prices on a wild ride this week and creating what the International Energy
00:01:09
Agency says is quote the largest supply disruption in the history of the global oil market. Okay, that's kind of
00:01:16
something. As of this recording, oil is still very high, slowly coming down from
00:01:20
over $100 a barrel after ships were attacked in the Persian B Gulf. There's also the tax still going on. Gulf uh gas
00:01:27
prices continue to climb as well. And just remember, it's not just gas prices.
00:01:30
Every price goes up when gas goes up. The IEA's 32 member countries are releasing a record 400 million barrels
00:01:37
of oil from strategic reserves to counter the chaos, which means we aren't going to feel this yet. Uh I interviewed
00:01:44
uh Senator Warner yesterday and he was noting that um Trump has tried to calm markets. He keeps trying to to do this
00:01:51
to bring these oil prices down by words saying the war is quote very complete only to later announce we haven't won
00:01:58
enough. Oil prices also plunged after energy secretary Chris Wright incorrectly posted that US Navy had
00:02:03
escorted a tanker through the straight of Hormuz. So that was a problem. The post was deleted within minutes was
00:02:08
enough to move markets and wipe out uh million billion million dollar trades. Um this is such a taco. This is the
00:02:15
greatest taco of all I think. And even if the war in Iran ends soon, returning the straight of Hermuz to typical
00:02:20
traffic could take one to three months. We're going to see reverberations of
00:02:24
this ridiculous situation. um the way he's handling it and the way he's not it
00:02:29
seems all over the place. Um and also to to add to the kind of mess there, the initial findings of a military
00:02:36
investigation say that US was responsible for that deadly tomahawk missile strike on the Iranian elementary
00:02:41
school. It's actually causing a lot of strife within MAGA. By the way, the report notes officers like and
00:02:46
everywhere else, normal people and MAGA. Um the report notes officers likely used
00:02:51
outdated information to label the school as a military target. Trump has tried to
00:02:55
put the blame on Iran earlier this week, claiming they also have the tomahawks, which everyone thought was ridiculous.
00:03:00
And when asked about the military report on Wednesday, Trump said he knew nothing
00:03:04
about it. Um, we'll get to the the photography scandal at the Pentagon, but talk a little bit about what's going on
00:03:10
with oil prices and this the school, which is just I feel like we should take responsibility when we make an error,
00:03:16
such a terrible error. But go ahead, start. >> I'll go I'll go in reverse order. When
00:03:21
you're handling a crisis, and this is a crisis, the death of civilians, especially children, is obviously pretty
00:03:27
ugly. You acknowledge the issue, you take responsibility, and you try and overcorrect. And they've done nothing of
00:03:33
the sort. And there's in a war, and this is a war. This isn't military action.
00:03:37
This is a war. There's >> an excursion, the word he's using now, it's an excursion,
00:03:42
>> whatever that means. Excursion. >> I went on a bike, >> like a field trip, like
00:03:47
>> Exactly. My daughter went on an excursion. except he didn't get Congress's approval the day before that
00:03:51
he could go on the excursion. Um, you know, it's a tragedy. Uh, they just made
00:03:55
a bad situation worse. First off, they look incompetent by saying that it might have been a tomahawk from Iran. Iran
00:04:02
doesn't have tomahawks. So, it it looks like, okay, I'm not willing to own up to
00:04:06
this. I mean, there's not a good answer, but there's a reasonable answer here,
00:04:10
and that is >> Yeah, this we decided to go, you know, with military action. This is a This is
00:04:17
a group of people who killed 30,000 of its own people. War is going to have collateral damage. We screwed up. We
00:04:23
take responsibility. These are the following steps we're putting in place to make sure it doesn't happen again.
00:04:29
And take responsibility for it and it would have been not over, but it would have been acceptable. Instead, it's
00:04:35
like, no, it was Iran's fault. It just doesn't >> or I didn't know.
00:04:40
>> Yeah. Oh, >> Pegasus was the same way. It was it was and was angry when people asked about
00:04:45
it, which is the everything wrong in the response and everything wrong in the mistake. But you're right. Absolutely.
00:04:52
>> Yeah. And the the real I mean, we're just we're just starting to see.
00:04:59
So, I was speaking to a kid and um and I said, "What what you know, where do you
00:05:03
want to be in 5 years?" I always ask young men that. Where do you want to be
00:05:07
in 5 years? And this kid said, "Uh, I'd really love to have my own auto repair
00:05:12
shop focusing on EVs." >> Mhm. >> I said, "Okay, well then let's reverse
00:05:15
engineer from those things." Like, what kind of skills do you need to acquire?
00:05:20
What kind of job certification? What kind of capital or money would you need to um uh start something like this?
00:05:28
>> Uh have a business plan. Would what kind of real estate would you need? What
00:05:32
would be your you know, let's reverse engineer everything you need basics, right? Let's reverse everything,
00:05:37
engineer everything to today around what you would need to be an owner of an EV repair shop in uh he lives in the
00:05:44
outskirts of Los Angeles. Just the loveliest young kid. Anyways, we can't even reverse engineer the
00:05:51
tactics because I don't think anyone is really clear yet on what the endgame is,
00:05:55
what the end goal is. >> Mhm. >> And that is if they had said, "All
00:05:59
right, we're going to diminish their launch capability from missiles." Makes
00:06:02
all the sense in the world. It's more about the launchers and the missiles because you can bury the missiles under
00:06:06
under >> these are ballistic missiles for people who don't know. >> We can we are going to make sure that
00:06:10
the straits of Hormuz are more secure than they were uh previous to this and we're going to work with our Gulf allies
00:06:15
to create a series of mind sweepers and and enforce the border. I mean, and we're going to take out the navy and
00:06:22
we're going to take out the munitions infrastructure that builds this stuff.
00:06:25
These are the three boxes we need to check. >> Can I interject since I just interviewed
00:06:30
Warner about this? One of the things that they've talked about is going in and getting the enriched uranium, but
00:06:34
that would actually be would take, as they say, boots on the ground and it would be
00:06:39
>> not viable. Not feasible. >> Not feasible unless we want a lot of
00:06:43
Americans to die. >> Yeah. As is quite frankly, as is regime change. I mean,
00:06:48
>> this regime is sticking pretty strongly. >> Oh, they're not collapsing.
00:06:53
>> Yeah. Yeah. No, I think Khi had the likelihood of regime change at like 10%
00:06:58
by the end of March or something like that right now. Anyways, it's like, well, okay, in war
00:07:03
you always have to have plans A prime and plan B because the enemy gets a say in this. But the problem is no one can
00:07:10
identify plan A. >> No, they ate it. They ate it. They the the dog ate my homework. Can I ask you
00:07:15
about the oil prices because I think that's something that's going to people
00:07:18
don't recognize. And um you the idea of trying to calm the market by releasing
00:07:24
incorrect information, letting it go, you know, whipssaw all over the place. And this release of these 400 million
00:07:30
barrels is going to have repercussions later because that's when the prices will go up, these strategic reserves.
00:07:36
And what they're they're trying to do everything possible to pretend we're not
00:07:40
going to have a real crisis between the straight of Hormuz and this release. Um and so it they it has second order
00:07:48
problems. Now Wall Street's sort of sloughing it off a little bit. Um but these are prices that are going to
00:07:53
reverberate through the system as you have noted. So look, the biggest loser here is obviously
00:07:59
um the people of of Iran who are in the wrong place at the wrong time, right? The the there is no bigger loser than
00:08:06
the families who lo lose loved ones. I also think the reputation of the US and what was an opportunity to create much
00:08:13
stronger alliances with moderate nations in the Gulf. So big losers. What people
00:08:19
aren't talking about, the countries that import more than 50% of their oil, Japan, South Korea, India, and most of
00:08:26
Europe have seen their markets hammered, absolutely hammered. Uh poor countries with no foreign exchange reserves uh and
00:08:35
dollar denominated debt can't, you know, are could be thrust into the IMF or
00:08:41
effectively what is bankruptcy. Airlines and hospitality companies all over the world, shipping, the bunker fuel cost
00:08:47
Warner said he's been meeting with airline executives and they said they're
00:08:51
fine for now but it's going to be $25 million a day extra which is crazy. >> I mean nations who import their oil
00:08:58
especially who get most of it through the straits of Hormone their economy basically their economies are like [ __ ]
00:09:03
for the year at a minimum. So there this is having you know we have obviously the
00:09:10
biggest losers by body count are Iran but by by economic collapse Middle Eastern oil importers Jordan, Lebanon,
00:09:17
Egypt and fragile emerging markets Pakistan. >> Guess who's doing great? Russia.
00:09:23
>> Yeah. gives him the need he need he was really on the on the ropes around the
00:09:28
million the million people who have died and also the price of oil and now he has
00:09:32
more money to spend while we ignored uh help from the Ukrainians on drones and one of the things Warner was pointing
00:09:39
out was that fine we could take out their battleships but their real problem is all those small fast boats and their
00:09:46
drones they can just do all manner of damage to us in that with these small $50,000 drones and we use a million
00:09:53
dollar rocket to take it out. I mean, this is the problem is they have an ability to do this and they've been
00:09:59
they're, you know, the way Warner described it, these this country is hard is is hard enforced like hard like
00:10:06
hardwired. This this is not Venezuela. This is Trump lives like he's in some
00:10:11
movie where you just do three bombs and that's the end of it. But this is a hardwired
00:10:16
150,000 people in this in this ruling uh group in Iran. And they're not giving up
00:10:22
all this money and all this power for I don't know. It's it's a really difficult
00:10:27
situation which they didn't. >> They're just thinking about the market,
00:10:29
the winners and losers. The hardest stock markets >> are Middle Eastern markets. Jordan,
00:10:35
Egypt, Lebanon, their stock market's greater. There's a capital flight to
00:10:39
safety. I mean, the ironic thing here is that over the long term, our reputation
00:10:42
is in tatters. We're probably the least damaged because we're energy independent. We produce more energy than
00:10:49
we consume. We have two oceans protecting us. Friendly Canada to the north, harmless harmless Mexico to the
00:10:56
south. We still have capital inflows. In a weird I mean, it's just terrible to
00:10:59
say, but in a weird way. Our markets are probably least damaged by this. Europe cost. There'll be costs for airlines.
00:11:06
There'll be costs for uh truckers. There's going to be costs for home heating. Thank goodness it's not winter,
00:11:12
right? >> The dollar's already strengthened. I mean, >> it's it's ironic, but when you diminish
00:11:17
the entire world, there's a flight to safety, and flights to safety usually benefit the US. Emerging markets are
00:11:22
going to get the [ __ ] kicked out of them. India, Brazil, South Africa, Mexico, capital flowing out to the US
00:11:29
dollar for safe havens. The US will likely be down 8 to 10% on a tariff ruling or was down but it could be down
00:11:36
another 10 to 15% and that'll be I'll talk more about that in our prediction
00:11:41
but you're going to have a pretty big big peak to trough but that some of that
00:11:45
might just be the air coming out of the bubble but to your point the least damaged in the Middle East or Saudi
00:11:52
Arabia and the UAE but the big winner here as you said is Russia oil the oil price spikes the oil price spike
00:11:58
benefits them the US is distracted by Iran. So more Ukraine leverage and oddly the the ruble strengthens. So
00:12:07
>> yep, >> this is >> war is literally the agent of unintended
00:12:11
consequences. >> Y >> and this is so frustrating because if this had been more like fore and less
00:12:17
like a rock and they'd set out a series of achievable objectives >> that this could have been a win. It
00:12:23
could have been the Gulf States coming together >> and if they had said, "Look, to a couple
00:12:27
European nations and to the Gulf States, a stable Middle East benefits all of us.
00:12:33
Let's all have a series of objectives and we're going to pay for and execute
00:12:37
against most of this. We could have strengthened our alliances." >> We've been dragged around by Israel
00:12:42
here. In a lot of ways, it looks like it. Let me let me move on. >> See, I disagree. I think we're very
00:12:46
tightly coordinated with Israel right now. >> I talked to Warner who's in the gang of
00:12:49
eight. I'm going to go with him over you. I'm sorry to say that, but you
00:12:51
know, I think it was that they were >> You went with the senator over Scott.
00:12:54
>> Yes. Yes, I damn. Um I think they were going to attack and we decided to be the
00:12:58
senior partner like that's rather than create something else because >> Well, you mean Iran was going to attack
00:13:02
Israel? Israel's attack. >> No, no, no. Israel was going to attack Iran. That I mean that's the implication
00:13:08
he had. And >> and Senator Warner feels like we did not have the power to say stop.
00:13:12
>> Well, he doesn't know why we didn't. That was one of his questions. He he's
00:13:16
he's surprised. He He seemed wor more worried. He's usually not a worry wart,
00:13:20
but he seems worried about two things. How this was conducted, obviously, >> and what the real implications are,
00:13:26
especially around drones and small boats that could do enormous damage to our battleships and everything else, and
00:13:32
also election security. Um, but one of the the weirder parts is how the the administration has behaved. Um, Donald
00:13:38
Trump was dancing last night or golfing and stuff like this, so the visuals aren't very good. And the DoD has now
00:13:44
barred press photographers from Iran briefings after publishing photos of HEGs staff found unflattering according
00:13:50
to the Washington Post. Hex says vanity aside, um it just they just look like like he looks like a fatuous popping and
00:13:58
jay at all times. But in this case, the lack of seriousness about something that's very serious seems problematic.
00:14:05
And it's also causing problems within their own group of mega. There's a real
00:14:09
shift. There's a real like sort of Tucker Carlson and Megan Kelly u MTG on one side um and then you know Mark
00:14:19
Levin, Ben Shapiro, all this there's a real ugliness. I I went over I wandered
00:14:23
over to Twitter which I shouldn't have done and the the nastiness between them
00:14:28
is really quite something. It's really quite something to watch. >> Like imagery is so incredibly powerful.
00:14:34
Basically, I think one photograph brought didn't bring an end to the Vietnam War, but expedited it. And it's
00:14:40
that that's it's that incredibly dramatic photo of the the young girl running from a napal bombing. And with
00:14:47
the Iraq war, George Bush and the Pentagon, they banned photos of service member coffins because he realized war
00:14:54
is so ugly that that it'll lose support. And there's just and the notion that
00:15:00
these guys can't handle the images of Pete Hegathth in an unflattering I mean
00:15:05
it's just uh it shows you're spending you're allocating your capital in the
00:15:11
wrong places that's not that's not what you should be thinking about or worried
00:15:16
about. And if you think you can control the imagery of Pete Hacksath, well, okay, just wait till you see the images
00:15:23
that are going to come out of Iran. And you can already sell see that the IRGC is quite frankly organizing again and
00:15:30
going on an information campaign. >> They are and they've been very good.
00:15:34
Iran in general has been one of the stronger players uh in th in those spaces in terms of propaganda and
00:15:40
everything else. And so that's why >> when you say good, you mean effective.
00:15:45
They they lie like there's no tomorrow, >> of course. But hello, lots of people do.
00:15:49
Lots of governments do. Um, >> oh, I don't know. I think I think Iran takes it to a new level.
00:15:53
>> They do, but but they are, when I say good is they're good at it. Um, they're
00:15:58
very um they're all throughout all the various social networks. They're very um
00:16:03
they did one the other day which I was sort of fascinated by where they put up your president as a pedophile. Um which
00:16:09
was interesting. um they just they've been at it for a long long time and they
00:16:14
have used often when there's stuff that pops up online it's either Russia or
00:16:19
Iran. um China to an extent too, but really Iran has used social media as one of the smaller I mean it is a smaller
00:16:27
country than Russia or less powerful and it has used social media to its advantage in ways that are really of
00:16:35
course heinous because it's conspiracy theories and you you always find them
00:16:39
somewhere in they're at the top everyone I ever interview in cyber security are
00:16:43
the top in cyber security issues in uh propaganda in conspiracy theories and they have a very welloiled machine
00:16:51
throughout the world doing this kind of stuff. So, >> well, when the actual audit of social
00:16:56
media is done, I think we're going to find that somewhere between 10 and 40%
00:17:01
of comments and posts >> Yeah. >> on geopolitical accounts or accounts of
00:17:06
influencers is going to have originated from either the CCP, the GRU, or the RGC.
00:17:12
>> Yep. Absolutely. >> And this is what you do. You see a piece of content and then you look at the
00:17:16
comments to evaluate and shape your own view of that content. >> Mhm. >> And when
00:17:23
>> it's all gamed >> Yeah. And it it has a huge impact. You don't even recognize how much impact it
00:17:29
has on your views of stuff because if someone says, >> "Oh, the US the US will be able to
00:17:35
escort ships through the straits of Hormuz." I'm just using an example.
00:17:38
>> And then there's just a ton of stuff saying that'll never happen. Oil prices
00:17:42
are going to be at $200. >> Mhm. All right. Where's that comment coming from?
00:17:45
>> Right. >> And and unfortunately, although they could put in places to verify accounts
00:17:51
and get rid of fake accounts and fake comments, you know, I mean, just go on these really sensitive pages or
00:17:58
sensitive opinions and click on who made the comment and it's someone with three
00:18:03
followers. Okay, that's not a person, >> right? And the question is why would
00:18:08
someone be making this comment or what entity would have an interest in these comments?
00:18:13
>> Yep. >> Anyway, I >> we're going to talk about that later
00:18:16
because there's a major report from the Center for Countering Digital Hate that's really interesting around chat
00:18:21
bots. Um but we're going to move on uh and we have lots to talk about, but there this story is going to continue in
00:18:27
our reberations obviously. Um, but when uh we're going to go on a quick break
00:18:31
and when we come back, Anthropics sues the Pentagon and Microsoft comes to Anthropic's defense.
00:18:37
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to qinc.com/pivot for free shipping and 365day returns. quint.com/pivot. Scott, we're back with more news. The
00:19:59
White House is reportedly preparing an executive order to formally ban anthropic across the federal government,
00:20:04
which is likely illegal. The Defense Department CTO Emil Michael, and let me just say I covered him and he's a a
00:20:10
toading bully, just said on CNBC that Anthropic would quote, "pollute the AY's
00:20:15
supply chain." We've only done this for foreign companies. Just so you know,
00:20:20
this kind of behavior. All this comes as Anthropic is officially suing the Pentagon for labeling it a supply chain
00:20:26
risk, effectively blacklisting the company from federal contracts. This has never been done to an American company.
00:20:31
Uh, Anthropic argues the government overstepped its authority and violated the company's First Amendment rights.
00:20:37
And now Microsoft is getting in the mix. The company threw its support behind Anthropic this week, urging the federal
00:20:42
court to temporarily block the Pentagon supply risk designation in an amicus brief. Uh, Microsoft warned uh that the
00:20:49
unprecedented move would have quote broad negative ramifications for the US tech industry. And they're damn right.
00:20:55
Scott, before we go further, I want to play a prediction you made last week. Let's listen. My prediction is no. And
00:21:02
that is Dario Amodi has given license and permission to CEOs to say no. And in the next 30 days, you are going to see a
00:21:11
raft of CEOs find their testicles and start saying no to this administration. >> So you were right, Scott. Uh so let's
00:21:18
talk about that them saying no. And it's not just Microsoft. 37 AI researchers at
00:21:22
OpenA and Google, not the companies themselves, also filed a brief supporting anthropic. Um, you know, I'm
00:21:28
going to just very quickly comment that the this what the government's doing
00:21:32
here is really unprecedented. It's a disagreement with a company and instead
00:21:36
of just disagreeing and moving on, they are attacking them in the most ridiculous ways, trying to make an
00:21:41
example of anthropic and really hurt their business. I need you all to understand Emil Michael's role here
00:21:47
because the the these people all have other interests and agendas that have to do with their previous life in Silicon
00:21:54
Valley and their future life in Silicon Valley. And Emil Michael's always, as I
00:21:58
said, been a toading bully to powerful men. And this is what he's doing here.
00:22:02
Um, and he's not a he is not a um a player that is in any way um you know, sort of neutral. He's not doing things
00:22:11
for you and I in in this government. He's doing things in his own self-interest if would be my guess. And
00:22:18
so the the attacks on anthropic right behind him is all manner of competitors of Anthropic that are using the federal
00:22:24
government to uh hurt a company that decided not to want to do something. And I'm glad Microsoft uh stood up for them.
00:22:32
Scott, >> I think this is the biggest story in tech. And so just a quick a quick recap.
00:22:37
Um, Anthropic had basically two ass um, and both pretty narrow. They didn't want uh, Claude to be used for fully
00:22:46
autonomous weapons, meaning AI, not humans making final lethal uh, targeting decisions, which seems reasonable. And
00:22:54
the second one was no use of cloud for mass domestic surveillance of Americans. And the Pentagon responded that it does
00:23:02
not intend to use COD for those purposes, but refused to contractually commit to that, arguing that it it can't
00:23:08
lead tactical operations by exception and that legality is the Pentagon's responsibility. And then on the U about
00:23:16
2 and 1/2 weeks ago, Trump posted on True Social directing every federal agency directing every federal agency to
00:23:23
immediately seize all use of anthropics technology. And then Hexath designated anthropic as
00:23:30
a supply chain risk. Okay, that is that's a label which was which has been reserved for foreign adversaries.
00:23:36
>> Yeah, I just said that. Yeah. >> And companies linked to the Chinese and
00:23:40
Russian government. Well, I'm saying it again, Carol. >> Right. Okay, fine.
00:23:43
>> The supply chain the supply chain risk status. First off, that's this isn't just the
00:23:50
government saying, "Okay, you don't want to work with us, we don't want to work
00:23:53
with you." Mhm. >> If they say if they label them as a supply chain risk, then already uh a 100
00:24:01
plus enterprise companies have reached out to Anthropic and said, "We may not
00:24:05
be able to use you." A financial services company posits negotiations regarding a $50 million contract.
00:24:12
A pharmaceutical firm, financial technology company. I mean, they can't. This really is an ex when you're labeled
00:24:18
sort of an enemy of state. This is equivalent of like you're a corporate enemy of state or threat. I say threat.
00:24:24
Anthropic has now filed a lawsuit against the Pentagon saying that Congress's procurement laws don't
00:24:30
authorize blacklisting a US company over protected speech. That's what this is.
00:24:35
They get they get to work with or not work with who they want. And the supply chain designation is is just not it's
00:24:42
just not legal. And it sets a dangerous precedent for any American company. >> Lose most people. The government will
00:24:48
lose. But it will have an effect. Yes. Yes. The government will lose, but it'll
00:24:52
still have the effect. This is a Trump thing. He creates a real problem whether it's anthropic
00:24:57
>> and companies won't work with them until they figure it out >> and then it causes damage just like they
00:25:00
done at you know when they fire all of Voice of America. Now they've lost in
00:25:05
court and Carrie Lake is an idiot but it's already caused damage and caused damage to it and that's the goal is
00:25:12
they're going to push it illegally as far as they can and then they'll be
00:25:16
stopped but by the time they're stopped Anthropic is badly affected. And if you
00:25:20
all don't think this is a Silicon Valley rumble happening here, it's all in the
00:25:25
self-interest of private companies who have an interest in slowing anthropic down. And if you look at the links
00:25:31
between Emil Michael and the rest of these these these clowns, >> they have financial interest and
00:25:36
competitors >> just this. Yes, they do. And so this is a way that Silicon Valley the penny
00:25:42
Silicon Valley used to ignore government for the most part and then the penny drop that they're easy to pay for and
00:25:48
that they can do their competition with each other in the federal government by pretending they're working for us as
00:25:54
people are getting spots putting their putting their people in the various spots right that will cause it. This is
00:26:00
a Silicon Valley corporate beef happening. It's that is what's occurring
00:26:04
here. The one that's been most outspoken, I'm trying to connect his financial interest, which I'm sure is
00:26:09
driving his rhetoric, is David Sachs. >> David Saxs, Mark Andre, please understand there are shadow people
00:26:16
behind these actions that you need to pay attention to. And Trump is, you know, sort of a useful idiot. I'm I'm
00:26:23
sure they make fun of Trump behind his back. Um, but, you know, it's all in their economic self-interest to hurt
00:26:29
this company. And they couldn't hurt them by being better. So, this is how they're doing it. this is what they're
00:26:35
doing. >> But it comes down this is the this is the fulcrum that determines if companies
00:26:41
continue to show some backbone and by the way good for Sachi Nadella um showing some backbone here at again
00:26:48
risk. So the calcia is saying that anthropics like the likelihood anthropic wins the case
00:26:56
is 72%. In the meantime, companies will say, "Hey, that site license we're about to
00:27:02
sign with anthropic, we're just going to wait. We're apologize. This is terrible.
00:27:06
>> We love you. We think you're techn >> We we we can't sign this contract right
00:27:12
now." To to your point, Microsoft and a group of 22 retired senior military
00:27:17
officers have filed amicuses amicus briefs in support of Anthropic and its lawsuit.
00:27:24
But what's interesting is that consumers are speaking. The enterprise is running,
00:27:29
but consumers are running towards Anthropic. Downloads of the cloud app spiked more than 75% after Trump
00:27:36
prompted federal agencies to stop using Anthropic. And on the flip side, uninstalls of Chat GPT
00:27:44
uh Chat GPT's mobile app spiked roughly 300% the day after Trump's proclamation. So
00:27:52
the the the question is who wins in the mind of anthropics board here the fear and the stasis that has been created in
00:28:02
the enterprise market or consumers running towards a company they think is finally showing some
00:28:08
>> I think it's damaging I think this is the this is such a Trump way to do this
00:28:12
is create >> philanthropics more enterprise unfortunately >> I I know create chaos
00:28:17
>> and damage and it's legal but do the punch Even if it's like I'm not a boxer,
00:28:22
but if you do like a kidney punch, you do a you hurt the person and then you're
00:28:26
like, "Oh, did I do that? I didn't know I did that." And you use your minions uh
00:28:31
and I cannot underscore again what a minion Emil Michael is. Um to do your dirty work and pretend you're working
00:28:39
for the government. It's the whole thing is such a This is such a fixed fight. I
00:28:44
can't even you need to and I think reporters should really spend a lot of people don't know these characters.
00:28:50
Again, this was an ex Uber executive. He's been involved in a lot of stuff in
00:28:53
Silicon Valley, but he had to leave Uber under please go watch look at our reporting on him many years ago. Um he
00:29:01
had to leave Uber under very difficult circumstances around the rape of a woman in India um in an Uber. Um, but just um
00:29:10
just go go Google them reporters who are covering this and stop acting like Emil
00:29:15
Michael has is this clean character. In any case, I'm sure he'll come after me,
00:29:19
but it's true. Um, so I I'll win on that regard. Um, anyway, um, we're going to
00:29:25
move on. Uh, another thing that again, Silicon Valley just can't stop stealing
00:29:30
essentially. Grammarly launched an expert review AI feature that gives editing suggestions supposedly inspired
00:29:35
by well-known writers and journalists. Casey Newton discovered the tool was attributing advice to him and others
00:29:42
even though they never agreed to participate. The feature even generated advice under the name of a certain tech
00:29:47
journalist, Cara Swisser. Um they've they've stopped that now. They've gotten
00:29:53
they they pulled back on it apparently. But what an incredible bunch of information and identity thieves. I
00:29:59
don't know what to say. Anytime these people can steal, they steal. They're
00:30:03
such shoplifterss. I don't your thoughts. Well, it goes back to this mindset and I thought one of the I think
00:30:10
there's looking glasses into people's souls, how they treat their pets, how
00:30:14
they treat service staff is sort of a you know when is their guard down when there are certain tells, right?
00:30:20
>> And one of the tells that was really frightening when Sam Alman was asked
00:30:25
about the energy consumption of AI. He said, "What people don't take into
00:30:30
account is the amount of energy it takes and the amount of investment and resources it takes to get a human to a
00:30:35
point where it can make logical decisions and engage in critical thinking."
00:30:40
>> Mhm. >> He said, "If you look at how much energy and input and resources it takes to
00:30:44
raise a child such that it can get to a point where it can make decisions, >> AI is better." I found that so
00:30:50
nihilistic and so inhuman because what Silicon Valley >> or at least some of the individuals we
00:30:57
talk a lot about don't realize is that >> we try and get ROI economically such
00:31:03
that we can make low ROI investments in relationships and people we love. I'm
00:31:08
not getting I am not getting an ROI back for my children on any sort of economic
00:31:12
level. >> Well, you use a lot of energy. I'm wondering if we should use as much
00:31:15
energy for you as we do. But go ahead. Well, but the the whole point the whole shooting match
00:31:22
>> of an economy and relationships and satisfaction and purpose and some sort
00:31:25
of spiritual sense of calm and and like your life mattered is that you do engage
00:31:31
in productive, you know, productive economic or domestic labor such that you can invest
00:31:38
that in other people and you may or may not get a return. But the point is the return you get is
00:31:45
you're so invested in something that you you your life has meaning. The the whole
00:31:50
point is that you create value such that you can you can you can invest that value in relationships. And for most
00:31:58
people the most rewarding place of investment where quite frankly they don't get anything resembling an
00:32:02
economic ROI is in children. And to look at it on that level is like, okay, you don't understand
00:32:10
what it is to be a mammal or a human. And and also the notion that you can spend 50 years of your life
00:32:20
professionally working your ass off, staying late, starting in the mail room at the Washington Post as you did, such
00:32:24
that you have a voice, a reputation, a twist of phrase, an ability to string words together that compels people to
00:32:30
action or provides insight. And then they can come in and just adopt that 50 years or piggyback on it.
00:32:37
>> That piggyback steal it really >> is like I if I type in give me five
00:32:43
jokes on this or or give me a view on the oil price and I put in my voice it does a really good job because what it's
00:32:51
doing is stealing from everything I have ever written, said or done. >> That is correct.
00:32:56
>> And so the music industry did this correctly. It said, "Okay, if we're
00:33:00
Kroq, which is awesome, the best radio station >> uh of the '9s in Los Angeles, and they
00:33:07
play a bunch of English Beat or Tom Petty >> or Lloyd Cole in the Commotions or Ramm,
00:33:13
they track how much they're playing and then they send them a royalty."
00:33:16
>> Mhm. And what these guys want to do is they want to leverage your years,
00:33:20
decades of of of discipline, schooling, certification, risk-taking, time away from your family, but they don't want to
00:33:28
pay for it. And they see everything. I mean, that's I think a a a felony. But
00:33:35
what is double homicide from a mentality standpoint is that these people really look at relationships and humans on an
00:33:43
economic basis. I just when I saw that I thought >> Yeah. Yeah. He just had a kid.
00:33:48
>> This guy is not >> he just had a kid. >> Well, I'm I'm not going to I'm not going
00:33:54
to speak to his children, but what he's going to find out and this is a what I
00:33:58
tell other dads >> comment. It was a dark comment. >> I'm like, don't make the mistake I made
00:34:02
and think that right away your kid's going to be super into the [ __ ] you're
00:34:06
into and you're going to get all these Hallmark moments despite what insurance
00:34:09
commercials would tell you. you're going to have to invest more in this child in
00:34:14
every way. >> And that's the point because at some point what you realize is that that
00:34:18
overinvestment in other people gives you purpose and value. >> Well, I I I do think we're going to move
00:34:24
on from this, but let me just say they think everything is for the taking and for them. I just this is just another
00:34:29
example. This what was happening at the defense department. Oh, we have an uponthropic. Oh, anything they can take
00:34:36
they take. and they just continue to prove, you know, they they keep not meeting my low expectations for them
00:34:43
already. Um, and this is kind of an interesting thing. Researchers from the Center for Countering Digital Hate,
00:34:48
which has been attacked in all the and it's its founder been attacked legally
00:34:52
by Elon Musk and the federal government now in his at his behest, um, tested 10 major they they're keeping going though,
00:35:00
they don't care. tested 10 major AI chatbots and found out eight out of 10 were willing to help plan a violent
00:35:06
attacks like school shootings, bombings, or assassinations. Researchers posed as
00:35:10
a 13-year-old boys as 13 boys showing how easily minors could get guidance on weapons, locations, and strategies. Only
00:35:17
anthropics claude and Snapchat's my AI consistently refused to assist in planning attacks and only Claude
00:35:23
attempted to dissuade the users. Deepseek wished the user happy and safe shooting. And on that note, a lot of you
00:35:30
have been writing in about a story in Canada earlier this year. An 18-year-old gunman opened fire at a school in in
00:35:36
Tumblr Ridge, British Columbia, killing eight people. Let's listen to a clip
00:35:39
from a listener. I am calling because it seems to be that there is a connection now between the shooter and chat GPT.
00:35:50
The shooter was flagged by Chat GBT several months ago regarding some of uh their behavior online. Chat GBT didn't
00:36:00
report it, which is one of the reasons why I am leaving this message to see what your thoughts are on that. Open A
00:36:09
is now being sued by the parent of the child who was injured in the shooting. I, as you know, I've been at this for
00:36:15
years, especially around kids, but it's jumped into people. Um the most recent
00:36:20
uh one of the more recent shootings it was was this suicide was an adult was was changed by these chatbots. I cannot
00:36:28
let's stop calling them chatbots. What an adorable word for synthetic beings.
00:36:32
Um which who don't who don't are not bound by legal like if you're a lawyer
00:36:37
and you did this you'd go to jail. If you're an anal if you're a you know a
00:36:40
psychologist and you did this you'd go to jail. If you were a person and you
00:36:44
did this you would go to jail. like all of the people go to jail. They're willing to assist in violent attacks and
00:36:52
they're not doing anything to rein it in. And it's not just kids, it's it's
00:36:56
everything. And again, the only one that is doing the right thing is Claude. And
00:37:03
so, and this is anthrop. And this is the company. I'm not doing an ad for Claude
00:37:07
here, but they have at least some. And I think they should be regulated, too. But
00:37:11
I can't tell you how incandescent I am about the way these people try to take
00:37:16
every p bit for themselves and they do not care the damage they are creating. And I I I am going to keep talking about
00:37:24
this until Congress steps in and does something about it. You don't work for
00:37:30
those rich people. You do not work for them. You and and I I'm with Dell Rico.
00:37:35
Enough with these people. So go ahead. I just ranted. Well, I I think it's important to draw a distinction between
00:37:42
potentially creating some sort of psychosis that leads to self harm or harm against others through overuse of
00:37:48
of AI or any other digital platform. I think that's a separate study that needs
00:37:53
to be done and without the interference of the massive money and lies and and owned
00:38:02
bought research that these these firms will do. I think this is different. I think this is whether the federal
00:38:08
government needs to put in place laws and incentives such that if a private organization or corporation
00:38:15
receives information that this person might be on the verge of committing an act of violence, if they have a
00:38:21
responsibility to report it to the authorities immediately, and I think they do. I'm not a privacy
00:38:28
person. I'm not suggesting we go to Minority Report where we arrest them before they've committed the crime. But
00:38:34
at at my school or or so uh my school in Florida where my kids went at another school uh and we we all
00:38:46
shared information when I was involved with the school about these very difficult situations. A kid was drawing
00:38:51
very um disturbing images of gun violence. And so the school felt like it had an obligation to report it. And then
00:38:59
the FBI went to the house and the FBI said, "Are there any guns in the house?"
00:39:03
Mhm. >> And I think that was the right thing to do. >> You're right. That seems
00:39:07
>> If you notice, there was a video that went viral on Snap. A teacher put out a
00:39:12
snap saying that she wanted to kill these kids. And it immediately the cops showed up and said, "Did you put did you
00:39:21
say this? Are you having any sort of mental issue right now? You need to go home and we need to understand what is
00:39:28
going on with you and if you have access to guns before we let you back into a school." Mhm.
00:39:33
>> And the same is true here that if you are going to monetize this type of
00:39:38
information and you understand it so you can interpret it so well >> that you can create a prompt that keeps
00:39:45
them on another second, another minute or serves them the exactly right auto insurance ad. Then in exchange for that
00:39:53
economic benefit and what is clearly demonstrated ability to know what's going on with that person, if you see
00:40:00
any evidence that that person might be capable of creating this type of crime, you have an obligation,
00:40:07
you bartenders, the bar, if a bartender continues to serve people alcohol, observing that that person is really
00:40:17
drunk >> and then that person gets in a bar and kills someone. Mhm. >> The bar is liable,
00:40:23
>> right? >> So if they have such incredible targeting, such unbelievable
00:40:27
information, they can clearly tell that okay, this individual is getting maps >> and and identification and information
00:40:36
is basically digital. >> We should investigate is what you're saying. This is
00:40:40
>> a school then immediately a message goes out to the local authorities saying here
00:40:45
is exactly what this person said. We have a judge involved. You get the order and boom, they're in the house
00:40:54
asking this person questions. I'm not saying they arrest them. They haven't
00:40:57
done anything yet. >> Right. Right. >> But >> they would argue this is surveillance.
00:41:02
But of course, they don't mind selling surveillance. >> They're surveilling. They're surveilling
00:41:05
us to serve as the thing is, you know, I'm just saying a human being in this
00:41:09
situation would be arrested or liable, right? >> These people are giving I agree you
00:41:15
should separate the two, but they're related, Scott. It's the same mentality
00:41:19
of let us extract all the good stuff. Let us not protect anybody and we are not liable for what we're doing there.
00:41:27
You know, Mark Benoff once called them cigarette companies. It's worse. It's
00:41:32
worse than a cigarette company. They were just selling cigarettes and using Joe Camel. That sucks. But this is
00:41:38
something demented. Like I think they they they're demented. I I don't that
00:41:44
they think this is okay and that they don't say to themselves, should we really is this the way we want to make
00:41:50
our money? We want to make our money by poisoning children's minds. We want to
00:41:54
make our money by letting people who are mentally disabled become more so and then giving that's a different issue.
00:42:02
>> I agree. But they're giving people plans and if you're going to give people plans
00:42:06
on how to shoot a school, you have a responsibility to say you might want to check this out. I I get, but for the
00:42:12
purposes of of remedies, >> I think you need to separate the two. Character AI may in fact be leading
00:42:19
people into a state of psychosis where they believe the right thing to do is to find their stepfather's gun and kill
00:42:25
themselves cuz they're going to get to hang out with Daenerys and the afterlife. That is shifting their
00:42:31
psychological state. My understanding of this the the shooter here was that she was already in an
00:42:38
awful psychological state and was using chat GPT as a tool to execute >> violence.
00:42:45
>> Both require some sort of regulation, responsibility, and action. >> Different. You're right.
00:42:50
>> Yeah. You've done a lot of good work interviewing parents around the rabbit
00:42:54
hole and psychosis that the character AIs can lead people to, which by the way has an average usage time of 75 minutes
00:43:01
versus AI at like 13 or 15. At the same time, if these organizations can very easily use the same technology
00:43:10
to not only alert them at the right moment to serve them an ad for a dating app or for a cryptocurrency trading
00:43:16
platform >> to say, "This person is clearly going through something and potentially a
00:43:21
threat to the community and others. They have a responsibility to immediately notify the authorities."
00:43:27
>> All right, we're going to finish up with they don't have a community
00:43:29
responsibility. One of the things that always struck me >> when you say they don't have a
00:43:32
community. >> They don't feel like they like >> No, I'm saying they should. I think
00:43:35
we're in agreement here. >> I think they never did is the point I was going to make when I when they were
00:43:40
building their their headquarters. I remember Twitter building its headquarter and they had the most
00:43:44
beautiful cafeteria. I don't know if you've ever been there, but it was gorgeous.
00:43:47
>> I've never been invited to Twitter's cafeteria. >> This was pre Elon and I was thinking
00:43:52
>> pre-lon. >> Pre-lon. Um I was thinking they don't care about all the businesses around
00:43:57
like you know what I mean? like they kept the people captive in this beautiful everything is here, don't go
00:44:03
anywhere. And that they don't give a [ __ ] about San Francisco. It's just like
00:44:07
they just want to be here. But they didn't care about the surrounding delies. They didn't care about people
00:44:12
going out in the street and creating a street life. They didn't back the the
00:44:17
you know, they don't have to back the opera, but they didn't back any civic
00:44:20
organizations ever. And I was always like, "Huh, what a group of people. They
00:44:24
don't really care about anything but themselves." Like I remember being
00:44:28
struck by that cafeteria and thinking they really could give a [ __ ] And it was the same it's the same idea. They
00:44:34
could give a [ __ ] about our government. They could give a [ __ ] about all these
00:44:37
things except for what's in their interests. And so I I could go I'm going
00:44:41
to I'm moving into I'm speaking of psychosis. I'm moving >> it comes down to one sort of basic
00:44:45
algorithm and that is all corporate. You could argue the big tech is worse than most. But generally speaking, it's safe
00:44:52
to assume that all corporations care about is shareholder value and earnings and getting to those earnings within the
00:44:59
confines of the law. What unfortunately is different nowadays, I don't think
00:45:04
that's changed. I think General Motors would still be pouring mercury into the
00:45:06
river if there wasn't >> I would agree >> wasn't an EPA. The the failure of the
00:45:12
glitch in the matrix is that we used to have checks and balance in the form of leadership.
00:45:16
>> Mhm. that prevented a tragedy of the commons. But because of Citizens United
00:45:20
now, >> the only thing that elected officials care about is getting reelected. And the
00:45:25
only thing you need to get reelected is more money than the next person. >> And Silicon Valley has connected the
00:45:31
dots here. >> Yeah. >> And it said we can compromise inch by inch their ability to regulate us and
00:45:36
prevent a tragedy of the commons by throwing money at them. >> Yep. And now billionaires, the 900
00:45:43
billionaires in the United States are responsible for 19% of the pack giving. >> Was that number? So I think you should
00:45:48
ask Taler Rico about this. I'm sorry. You should let him talk about this issue. I mean ultimately it's this is
00:45:55
not a good situation for all of us. And they someone came up to me the other day
00:45:59
and who had been critical of my book being too hard on Silicon Valley burnbook and they said, "I have to
00:46:05
apologize. You weren't hard enough." And I was like, "You're absolutely [ __ ]
00:46:09
right." All right, Scott. Let's go on a quick break. When we come back, what
00:46:12
Barry Diller is saying about CNN. >> Support for the show comes from Netswuite. Every business is asking the
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00:47:28
Scott, we're back with more news. Barry Diller is speaking out about wanting to
00:47:31
buy CNN and what he would do with it. In a new interview, Diller says it uh CNN hasn't been managed optimally and had
00:47:37
enormous in and it's has enormous potential to influence. He says he told Warner Brothers CEO David Zazoff all
00:47:43
this. Let's listen. >> I said to him, I don't think your programming I I don't think it's being
00:47:47
optimally programmed. I don't think it's competitive. Now, by the way, the facts
00:47:52
uh support that. Uh meaning that its ratings have declined, its revenue has declined.
00:48:00
Still is quite profitable. But how would you alter it? >> Oh, in every way.
00:48:07
Look, feel, and see. Every way. And I mean, I hope I get the chance. I don't think I will, but I hope I do.
00:48:16
>> Um, I'm not sure when this was, but I I I texted him. Um, he said this not
00:48:20
happening. He said, "Not that now that the Ellison's have it." Um, and they and
00:48:24
he quite correctly, and I happen to know this, they're going to combine CNN and
00:48:28
CBS. Um, he doesn't think he has a chance. I would love to work for Barry D. He's much more conservative than I
00:48:35
am, but um I would certainly love he's such a good programmer. He's such an
00:48:40
interest journalism even if he gets mad at it sometimes. He's someone I I appreciate
00:48:46
in that regard. Um and it would I wrote him. I said, "Can you please?" And he's
00:48:51
there's no way. So I can I can knock this one out of the water. He can't do
00:48:54
it unless Please, Ellison, sell it to Barry Diller. Please, that would be great. So, any thoughts?
00:49:02
>> I would love to see Barry Dillard partnered with Jeff Zucker and a private
00:49:05
equity firm. And I think there's more a greater likelihood than people believe
00:49:10
that the Ellison's might say this is too big a headache. >> We might just sell a combined CBS and
00:49:16
CNN to someone else because I think that I'm not sure and maybe I'm being naive
00:49:21
here. I'm not sure they're as Mavian as people think about trying to control the
00:49:25
world. Um, I don't know, but maybe they have some grand vision for how they integrated into Tik Tok, but I I can't
00:49:31
imagine Larry Ellison is as smart as he is. Isn't going to say this is going to
00:49:36
be more a headache than it's worth. >> No, they wanted the studios. I I I
00:49:39
agree. They're not quite as madilian. They they they're just opportunistic, I
00:49:44
would say. I I you know, Ellison was was democratic. >> You're the third richest man in the
00:49:49
world by focusing on on economics. And I think that >> anyways, I think he makes a lot of
00:49:55
money. Diller is correct. It makes >> the time margins. But I did some analysis here because I just wanted to
00:49:59
show you like one talk about some numbers of cable news. I spent a decent amount of time last night uh on AI
00:50:08
looking at ratings and viewership and essentially what I did was just to give you a sense for the ecosystem and also I
00:50:15
never miss a chance to make pivot look good. >> It is good. >> I looked at gross viewership. That is
00:50:21
the number or listenership. That's the number of people who watch a program and
00:50:25
then see it on YouTube or on social or download the audio and listen to it. And actually listens are more valuable than
00:50:32
views because it's a more intimate experience. And that's why >> that's why you get higher CPMs on
00:50:37
podcast right now than you get on cable TV. CPM is the cost per thousand viewers
00:50:42
an advertiser is willing to pay. So let's look at gross viewership. the number of times someone or the number of
00:50:48
people that watch the program, see it on YouTube or somewhere else or listen to the podcast version of it.
00:50:54
>> Fox News averages during prime time. >> Fox >> Fox Okay. >> Fox News during prime time averages 2.1
00:51:02
million in gross viewership. >> Mhm. >> This is staggering. CNN 660,000.
00:51:08
>> Mhm. >> Fox is kicking the [ __ ] out of CNN. >> Yes. Pivot's gross viewership is
00:51:15
375,000. >> CNBC is 252,000. Now, that's a bit of a a misnomer. It's
00:51:24
important, but what advertisers care about, they don't care about kids. They
00:51:29
don't care about seniors. They care about people aged 25 to 54 who are buying kids, houses, and cars and in
00:51:35
their mating years. >> This is a single pivot, not two together of the week, right?
00:51:39
>> This is one show. >> One show. single show. >> We do two a week, but go ahead.
00:51:43
>> This is one show. >> Mhm. >> So, in the core demo, that's adults 25
00:51:47
to 54. >> Mhm. >> Okay. Well, let me let me let me let me start here, which will explain that
00:51:53
number. Let's look at the median viewer age. >> Fox News, the median is 69,
00:52:00
>> CNN at 67, CNBC at 63. >> Pivot, the median age is 42. >> 42. So which leads you to believe as you
00:52:10
should that the number the percentage of viewers in the core demographic for these institutions or for the cable guys
00:52:18
and CNBC is somewhere between 20 and 30%. For pivot it's 70%. Meaning the number of people listening or watching
00:52:27
these program listening to or watching these programs in the core demo that advertisers care about CNBC gets 63,000
00:52:35
people on average watching programming who are in the core demo. >> CNN gets 135,000.
00:52:42
Fox gets 197,000 and Pivot gets 233,000. >> We beat them in the demo. >> So we're getting more people in the core
00:52:51
demo. And then which leads to the following. Our average CPM >> Mhm. >> according to Ray Chow, Ultimate Nice Guy
00:52:58
and New Father. >> Mhm. >> From Vox, we get a CPM of $45. The word I've heard from CNN is they get
00:53:08
between$ 13 and $17. I don't know what Fox gets. >> Mhm. >> So, just to give you a sense, Oh, and
00:53:15
let's talk about median household income >> and cost of doing business, but go
00:53:19
ahead. Yeah. You want to reach wealthy people. Wealthy people are now responsible for 50% of consumer
00:53:24
spending. They have more discretionary income, right? >> Fox News, the average household, the
00:53:29
median household income is $60,000. CNN 65, CNBC 85. >> That's not >> Pivot
00:53:39
150 because we get a very techheavy high paid audience. So, it's pretty obvious
00:53:46
why cable news, Fox is actually doing pretty well, >> but cable news as a whole
00:53:52
>> is dying. >> Yeah, >> it's literally dying. So, Barry Diller
00:53:57
saying he wants a new look and a new feel, what I would suggest is unless you can pick it up at distressed pricing and
00:54:04
consolidate it with a bunch of other stuff, I think Barry's falling into the
00:54:08
same trap that a lot of people fall into, and that is nostalgia is not a strategy. I don't think there's any I
00:54:14
don't think there's any coming back. That's not to say >> the these come
00:54:19
>> they're too expensive. I mean, you didn't even figure in costs. Our costs
00:54:23
are basement compared to all their cost. >> Oh, the gross margins. >> Yeah.
00:54:27
>> I mean, then then it gets it goes from ugly to worse. >> Yeah. What's interesting is there there
00:54:33
there's it's a it's still a great brand and I agree with you about the
00:54:37
romanticism and he happens to be even today at his he's much older is still the best programmer around. He's been
00:54:45
>> No, he's he's a legend in the world of media. >> But not just that. I don't I've never
00:54:49
seen him think like oh I >> Yeah, but so is John Malone and he hasn't been able to figure it out.
00:54:54
>> I agree. I agree. But I'm just saying I I I wouldn't like just say oh he's just
00:54:58
being romantic. I I've had discussions with him. He's got some great ideas and
00:55:01
I agree it's a real problem. It's a I would spin it off and see what Zucker
00:55:05
and Diller could do cuz I both of them very good. They have a lot of ideas and bring in people who have great ideas and
00:55:12
what would you do with it if if they said here is this. This is what you have Scott. What would you do with it? I know
00:55:18
you have just an anathema to television. I know that. But um I it's an interesting I think it's what he knows
00:55:25
best and it would be interesting. I think he would be an interesting owner. It's he says it's not happening. Um but
00:55:32
uh but it's nice that he's bringing it up. I think Well, sorry. And by the way,
00:55:35
speaking of our demo, of our young demo, 42 means there's a lot of people on the
00:55:40
very young side. A lovely young man named Evan, last night I was going into this party for Hank Pollson was like, "I
00:55:46
love Pivot. Say hi to Scott." And I was like, and and was like, >> "That is a very young person. I get
00:55:51
stopped by very young people, very old people. um middle most much in the middle and very different people and I
00:55:58
really Evan I really appreciate all the nice things you said about the show uh because we we like all our different
00:56:04
fans but you're right the age thing is important all kinds of stuff anyway we'll see anyway Barry good luck um all
00:56:12
right we're not going to be buying it and I won't go off on my craziness like
00:56:15
I did with the post um all right Scott one more quick break we'll be back for
00:56:19
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00:57:26
>> Okay, Scott, let's hear a prediction. You you sort of mentioned it. What is
00:57:30
it? What is it? Oh, one thing. I predict we're going to have a great time at
00:57:33
South by Southwest. All right. That's my prediction. >> That's what you're predicting always.
00:57:36
All right. So, my prediction is essentially um I think the markets this year are going to go down. Uh dangerous.
00:57:48
I think I think we're >> I think we're on the precipice of like a10 trillion dollar wipeout.
00:57:54
>> Whoa. >> Um >> really. >> Oh yeah. >> Tell all.
00:57:58
>> Well, not and by the way, I get this wrong all the time. This is not financial advice, but I don't think it's
00:58:03
from Iran. It's from what comes after Iran. Um and this is this is the chain
00:58:10
reaction here. Uh, I don't think oil is going to I think oil is not going to be
00:58:16
at 150 bucks, but it's going to be it's it's going to be sustainably higher. It's going to be
00:58:23
elevated through the rest of the year. And inflation in some markets reignites. The Fed can't cut rates. They're trapped
00:58:31
um to inspire the economy because they're worried about inflation. I think corporate earnings are really impaired
00:58:37
as consumers stop spending because some of them will be paying five bucks a gallon for gas and their 401k
00:58:44
will start to decline and Q2 earning season becomes bad and then what CEOs do when things are sort of bad is they
00:58:51
throw in the kitchen sink and they'll make it look like a blood bath just to
00:58:54
get all the bad [ __ ] out. >> That's a good idea actually. >> But the real contagion
00:58:59
>> uh here is going to be from emerging markets. I think there's a decent chance
00:59:03
that Pakistan and Egypt default as well as Sri Lanka and Bangladesh >> dollar denominated debt very energy
00:59:11
dependent very fragile economies >> because they all they all there's this
00:59:16
domino effect in those markets because they can't afford oil imports and their
00:59:19
dollar denominated debt just becomes unpayable and then the real downward spiral starts
00:59:26
European banks holding that emerging market debt start announcing write downs um foreign banks, Deutsche Bank, BMP,
00:59:35
Pariba, all hugely exposed. Credit spreads blow out and we get sort of a not this to the same extent, but we get
00:59:42
an '08 style which bank is next moment except this time it's happening while
00:59:50
the US is fighting a war we started for no reason, >> right? >> Uh other than Scott, it's an excursion.
00:59:57
>> Well, >> I'm teasing you. It's war. And well, that's the mistake here is it should
01:00:00
have been a special it should have been a military combat operation. Instead, they've turned it into a war with no
01:00:06
objectives. But anyways, by August, the narrative shifts shifts from transitory war shock to holy [ __ ]
01:00:15
we may have broken the global financial system. The S&P is off 20 to 40% from
01:00:21
its peak. Bitcoin goes to like 30,000. Um, and you know, and quite frankly, the only thing that probably goes up is
01:00:29
canned goods and ammunition >> and Chevron. Um, >> well, that's a scenario.
01:00:36
>> Happy South by Southwest. >> But, but it's going to start, the
01:00:41
prediction is the following. It's going to start, the contagion is going to start in emerging markets that can't
01:00:45
afford >> oil and uh, their debt is dollar denominated. It's just a toxic cocktail.
01:00:52
It's a very accurate prediction, I have to say. >> So, and the problem is we've shot so
01:00:58
many bullets with our debt and printing money that um the ECB and the Federal Reserve doesn't have the same firepower
01:01:07
to try and lift us out of this. >> Mhm. >> So, in other words, it could be like a
01:01:12
an08 shock, but the problem is we we have less ammunition for a bailout. >> Yeah. Yep. With the tariffs, with the
01:01:19
debt, with everything. I mean, you know, one of the things that uh did you hear James Carville saying, "I don't have
01:01:24
enough Trump derangement syndrome. I want more. I should, you know, I'm so furious at this [ __ ] He was screaming
01:01:30
this what he has done here with this Iran." And it all, as you have noted many times, links back to Epstein again,
01:01:37
right? It links back to this guy. >> He's the guy in every room >> in every room. I think you're absolutely
01:01:42
right that this everything is motivated by either people want to get before while the getting's good or for
01:01:49
themselves or a an un unhealthy need to hold on to power in a demented way like I I remember when Elon said that one
01:01:59
time if Democrats it's an existential crisis for the world if Democrats win.
01:02:04
Actually, as I always say, every accusation is a confession. We're in an existential crisis because of
01:02:11
these greedy [ __ ] and because of the the need to hold on to power over everything and it's going to it has
01:02:17
reverberations around the world. >> There's some really interesting tax
01:02:20
proposals. Senator Booker proposed basically a tax holiday for young people which I which I love. Not that expensive
01:02:29
because young people don't make that much money. Mhm. >> We need to level up young people who are
01:02:34
24% less wealthy than they were 40 years ago versus old people who are 72% wealthier. And then
01:02:40
>> for the first time I saw a wealth tax >> that could potentially make sense. But instead of going after
01:02:47
billionaires >> Mhm. >> they should be going after anybody or everybody that say has a well, you know,
01:02:54
more than call it $und00 million, >> right? >> You get no happiness. your kids will get
01:02:59
no incremental happiness from inheriting that much money. >> Billionaires were helping you lift your
01:03:03
wallets. Um, >> and it should be it should be annual and it should be small enough
01:03:07
>> such that people don't have to liquidate assets >> or move to Florida like
01:03:12
>> Yeah, it has to be federal. >> Starbucks is just has to be federal.
01:03:15
You're absolutely right. That's great. Okay. All right. We're going to talk
01:03:18
about that. That's going to be one of our big topics at South by Southwest. We
01:03:21
Anyway, we want to hear from you. Send us your questions about business tech or whatever is on your mind. Go to
01:03:26
nymag.com/pivot to submit a question for the show or call 85551 pivot elsewhere in the Karen
01:03:32
Scott universe. I'm going to get serious for a second. Monday I published a story
01:03:35
that I think I'm the most proud of of anything I've done in a very long time.
01:03:39
I sat down with three Epstein survivors who've been pushing for more transparency with on on with career
01:03:44
survivor uh Liz Stein who's also a survivor of childhood uh sexual abuse said her desire to help her younger self
01:03:52
fuels her advocacy work. Let's listen to a clip. It would be irresponsible of me
01:03:58
to have this position and to not use it so that others did not feel alone in this. Because if I could go back and
01:04:07
tell myself anything, it would be to tell someone. And if they don't listen,
01:04:12
tell someone else. And just keep telling until people listen to you. And even if
01:04:17
you feel like they don't, be proud of yourself because you at least were able
01:04:22
to sit in your uncomfortable truth when other people weren't. And that's really
01:04:26
what fuels me doing this advocacy, being the person that I wish was there for me
01:04:31
when I needed them most. This was a great show. They actually got to talk a lot about it. Often you get these
01:04:36
shorter interviews. It was really very moving. I dare I just listen to it. I know everyone goes, "Oh, goodness."
01:04:43
>> Yeah. You can hear the emotion in her voice. >> Such dignity. such incredible strength,
01:04:48
such heroic behavior in in the face of adversity. And uh you know, it was a lot of I've gotten a lot of feedback that's
01:04:56
been I really appreciate, but it was all these women. They were astonishing. It has nothing to do with me, but I let
01:05:01
them talk and you should listen to what they have to say as she said. Anyway, that's the show. Uh thanks for listening
01:05:07
to Pivot. Be sure to like and subscribe to our YouTube channel. We'll be back
01:05:11
next week.