00:00:00
He brought 17 CEOs with him and three
00:00:02
diplomats.
00:00:03
>> Flying billionaires on a plane to China
00:00:05
to get [ __ ] seems problematic.
00:00:14
Hi everyone, this is Pivot from New York
00:00:16
Magazine and the Vox Media Podcast
00:00:17
Network. I'm Cara Swisser
00:00:19
>> and I'm Scott Galloway. President Trump
00:00:21
and uh Chinese President Xi uh have met
00:00:24
for a little over two hours right now
00:00:26
and attended a state banquet to start
00:00:29
off their two-day summit in China. In
00:00:31
G's opening toast at the banquet, G said
00:00:33
achieving the great rejuvenation of the
00:00:35
Chinese nation and making America great
00:00:37
again can go hand in hand. He's
00:00:39
snickering at Trump behind his back
00:00:40
though. The White House said both sides
00:00:43
agreed that the straight of her moves
00:00:45
must remain open. Xi warned that Trump
00:00:48
that mishandling Taiwan would cause
00:00:49
clashes and put the entire relationship
00:00:51
in great jeopardy. Trump is joined in
00:00:53
China by 17 American business leaders
00:00:55
including Elon Musk, Tim Cook, and
00:00:57
Jensen Huang. Uh a surprising lack of
00:01:00
women on this trip everywhere. Uh we and
00:01:02
also China experts. We asked Alice Han,
00:01:05
director of Green Mantle and co-host of
00:01:07
Prof's own China decode podcast uh for
00:01:10
her thoughts on the summit. Let's listen
00:01:12
to what she has to say. So, US President
00:01:15
Donald Trump is heading to China. This
00:01:17
is the first visit by sitting US
00:01:19
president since 2017 when Trump was last
00:01:22
president. I'm carrying a threepoint
00:01:25
scorecard going into the summit in terms
00:01:26
of rating it. Number one, will there be
00:01:29
any indication as to tariffs and trade?
00:01:32
Number two, will both sides agree to
00:01:34
freeze or maybe even loosen certain
00:01:37
export restrictions on chips and rare
00:01:39
earths? And number three is a thornier
00:01:41
geopolitical question. And I think both
00:01:43
sides will have two very different
00:01:44
readouts on Iran, but certainly both
00:01:47
leaders will be talking about it and I
00:01:50
believe that Trump will apply some
00:01:51
personal pressure on Xi Jinping to help
00:01:54
resolve it. Although I suspect the
00:01:56
Chinese will be reluctant and push back
00:01:58
on any kind of collaboration over Iran.
00:02:00
I think this will be largely summitry
00:02:03
without substance and it does pave the
00:02:05
way for more summits to come with
00:02:07
potential for two or three other
00:02:09
meetings and a she visit to the US later
00:02:12
this year. One concrete prediction I
00:02:15
have for this summit is that China will
00:02:17
increase Boeing purchases of aviation
00:02:20
equipment. I think the fact that the CEO
00:02:22
of Boeing is going there with Trump is
00:02:24
an indication of that direction.
00:02:27
Interesting. Um obviously so she does
00:02:29
summitry is a really good word. Um it's
00:02:32
uh you know it's interesting because a
00:02:33
lot of the coverage out of it is that
00:02:36
China thinks we're a declining empire
00:02:38
and uh of course who he brought was
00:02:40
interesting. You typically bring
00:02:41
business people on these things. It's
00:02:43
absolutely true and he brought all
00:02:44
mostly tech people or tech adjacent
00:02:47
people. Um, I think most people feel
00:02:49
that as as she says nothing's going to
00:02:51
come out of this and it'll be
00:02:52
interesting to see what signals uh she
00:02:55
sends uh versus Trump. I think I think
00:02:58
he's the more important person to pay
00:03:00
attention to. Your thoughts?
00:03:02
>> It's not who he brought, it's the ratio.
00:03:04
He brought 17 CEOs with him and three
00:03:06
diplomats. So, it feels as if America is
00:03:09
just becoming an operating system for
00:03:11
the wealth of the top 1% and they
00:03:14
>> billionaires on a plane like snakes on a
00:03:16
plane.
00:03:16
>> Yeah. And what's the minimum amount of
00:03:17
cheap calories and and entertainment,
00:03:21
you know, bread and circuses we can
00:03:22
throw at the bottom 99 such that they
00:03:24
don't, you know, revolt? And there's no
00:03:26
there's no policy. There's no prep. He
00:03:29
sounds like an eighth grader with
00:03:30
terrible, you know, who's had to take
00:03:33
he's failed English so many times he's
00:03:34
going to have to take it as English as a
00:03:36
second language. It's like Jesus Christ,
00:03:38
can can someone buy the guy Elements of
00:03:40
Style before he gives a talk? I mean, he
00:03:42
just
00:03:42
>> I know the speech was in Chinese
00:03:44
restaurants. I I didn't even understand
00:03:46
what he was talking about. They're
00:03:48
laughing at us. You can feel it.
00:03:50
>> And they I thought the most important
00:03:52
statement because you can be clear.
00:03:54
Well, he's sort of he's sort of
00:03:56
improvisation with a mic. You can bet
00:03:59
she calibrates every word. And the words
00:04:02
that she said that I think should send a
00:04:04
chill down everyone's spine is he said
00:04:06
that he hopes that America's current
00:04:09
approach, some of the effect of
00:04:10
America's current approach towards
00:04:11
Taiwan could result in a clash.
00:04:13
>> Clash. Yeah. And Trump hasn't really
00:04:15
said a lot about Taiwan. He's not flying
00:04:17
to Taiwan with Speaker Pelosi and and
00:04:19
and publicly cementing our relationship
00:04:22
with the ally there.
00:04:25
>> It was a warning.
00:04:25
>> Yeah. Or or not even a warning. It was
00:04:28
more I saw it more as like a preview
00:04:29
that we are going to start we are
00:04:31
seriously considering some sort of
00:04:33
>> soft or not so soft repatriation,
00:04:37
acquisition, invasion, whatever, use
00:04:40
whatever word you want of Taiwan. And I
00:04:43
think had Trump had more elegant
00:04:46
diplomats with them, they would have
00:04:47
immediately responded and put out a
00:04:49
statement along the lines of, you know,
00:04:52
we are all both nations are committed to
00:04:55
peace. And just as I'm sure we've
00:04:57
witnessed the incredible fighting force
00:04:58
of Ukraine when armed with technology,
00:05:00
they can repel a much larger aggressor,
00:05:03
which in my opinion would be an elegant
00:05:04
way of saying stand the [ __ ] down when
00:05:06
it comes to Taiwan.
00:05:07
>> Right. He doesn't sound like he was. and
00:05:09
he would never he doesn't think he
00:05:11
doesn't he doesn't have the diplomats or
00:05:13
the IQ to respond to what was really the
00:05:16
only substantive statement made at this
00:05:18
summit and sending she or sending Huang
00:05:21
over Jensen used to have 90% share of
00:05:24
trips over there it's gone to zero
00:05:26
>> right
00:05:27
>> because China's figured out that if I
00:05:28
provide my local entrepreneurs with the
00:05:30
incentives to catch up they just might
00:05:33
and uh our trade has gone from 23% of
00:05:36
their exports used to come with us now
00:05:38
it's 17% % they have bigger trade with
00:05:41
the with ASAN the Asian the Association
00:05:44
of Southeast Asian Nations and also they
00:05:47
do more trade now with Europe.
00:05:49
>> Yes, they do.
00:05:50
>> So we showed up you know it it looked
00:05:53
less like diplomacy than sort of two
00:05:55
casino owners trying to refinance each
00:05:57
other's debt. The but she but she is the
00:06:00
house right now. Trump came in as a guy
00:06:02
asking for an extension on his mark or
00:06:05
his credit.
00:06:07
We are mutually
00:06:09
each of us has a foot should we decide
00:06:12
on the other's corateed artery. They own
00:06:16
70% of rare earth minerals and 90% of
00:06:18
the processing. We own or control with
00:06:21
Taiwan 80 to 90% of sophisticated chips
00:06:24
which is why Jensen was there to be able
00:06:26
to sell. This is something Trump barred
00:06:28
by the way and then now he wants to sell
00:06:31
the chips into China. Can I make a
00:06:33
comment about all the business people as
00:06:34
you said? I mean it really was there's
00:06:37
so many important issues like there
00:06:39
should have been a discussion about
00:06:40
global AI standards in warnings just the
00:06:43
way with this group cooperating on scary
00:06:46
[ __ ] and this group is all in on
00:06:50
whatever it's there's nobody who is a
00:06:52
everything they do nobody is a critic of
00:06:54
it this is like you know flying
00:06:56
billionaires on a plane to China to get
00:06:58
[ __ ] seems problematic from a visual
00:07:02
point of view
00:07:02
>> you're exactly right this should have
00:07:03
been an opportunity to develop the
00:07:05
modern day equivalent of Interpol. We
00:07:07
have cooperation even amongst Russia and
00:07:10
China around nuclear weapons. We
00:07:12
cooperate and we go kill people if we
00:07:14
think they're trying to mix up a
00:07:15
biological, you know, a b, you know, a
00:07:19
boweapon. We cooperate and we go find
00:07:21
those people and we arrest them or kill
00:07:22
them. We should be doing the same thing
00:07:24
of cooperating around AI
00:07:25
>> publicly. Publicly. I I suspect there's
00:07:27
behind the-scenes stuff happening, but
00:07:29
of course there is. But at the same time
00:07:31
with this gang, just like with the
00:07:33
advisory council on AI, it has nothing
00:07:35
to do with safe safety and AI or
00:07:38
anything else. It has to do with let's
00:07:40
do some business here and as long as
00:07:42
it's good for us and my rich friends,
00:07:44
I'll do it. But it was so it was he
00:07:46
looked tired, he looked old, he looked
00:07:49
adultled, he's all those
00:07:51
>> and then he was tweeting his were truth
00:07:54
in his little heart out like with his
00:07:55
apparently the piece in the Wall Street
00:07:57
Journal. I don't know if you saw that
00:07:58
piece of him
00:07:59
>> was a truth 200 truths in a 4-hour
00:08:02
period
00:08:02
>> whatever it's this lady who helps him
00:08:04
this young lady who has a startling uh
00:08:07
resemblance to Ivanka uh who stays up
00:08:10
with him late at night and does this and
00:08:12
even the White House people don't know
00:08:13
what to make of the situation and the
00:08:15
journal was implying some stuff like
00:08:18
they were trying not to but she
00:08:20
facilitates him posting this crazy
00:08:22
stream of lunacy
00:08:24
>> when I'm old I just hope I have someone
00:08:25
facilitating
00:08:27
Anyway, um you know, his name is Manny.
00:08:31
>> Okay. I know. I know. Manny is the soft
00:08:34
hands. Manny with the soft hands. I'm
00:08:35
going to I'm looking for me. Anyone
00:08:37
named Manny with soft hands, call me and
00:08:39
I'm going to get you ready for Scott,
00:08:40
which should be in about 10 years. Okay.
00:08:42
Well, you should know that.
00:08:43
>> 10 years. Don't you think?
00:08:44
>> I'm I'm I'm difficult, but I'm very
00:08:47
generous in terms of
00:08:47
>> competition. I know you. When do you
00:08:49
think you'll be going down? Like going
00:08:50
down to
00:08:51
>> I think I think the correct term is went
00:08:53
>> went. No, no, but really going down like
00:08:55
hard. Going down.
00:08:56
>> When you say going down, you mean
00:08:57
needing help?
00:08:58
>> I mean like in the need for a manny. In
00:09:00
the need for a manny. I'd say 82 for
00:09:02
you.
00:09:03
>> Jesus. That early? I
00:09:05
>> think so.
00:09:05
>> My dad My I'm assuming I'll follow the
00:09:08
pattern of my dad at about 93. My dad
00:09:10
needed help.
00:09:10
>> 93. Okay. Yeah. All right. Okay. Manny,
00:09:13
get ready. So Manny might not be born.
00:09:15
>> Yeah.
00:09:16
>> Yeah.
00:09:16
>> But just back to for a moment back to
00:09:18
the summit.
00:09:19
>> Okay. where
00:09:20
>> Trump doesn't recognize the evolution of
00:09:22
China since the last time he was there.
00:09:24
China's no longer trying to copy Silicon
00:09:26
Valley. They're trying to replace it.
00:09:28
>> That's correct.
00:09:29
>> Alibaba alone is going to spend $53
00:09:32
billion on AI. We're so focused on the
00:09:34
hyperscaling and the capex here. You
00:09:37
know, US hyperscalers are spending 650
00:09:39
billion, but 53 billion from one
00:09:41
company, China usually typically has the
00:09:43
ability to make their dollars go much
00:09:45
further. And what they offer is
00:09:49
the fastest zero to a billion dollar
00:09:52
companies in history have one general
00:09:56
business strategy and we like to think
00:09:57
it's the innovator. No, it's not. The
00:09:59
second mouse gets the cheese or
00:10:01
specifically the shareholder value. And
00:10:03
the most dramatic or the most accreative
00:10:08
business strategy in history is to
00:10:10
provide the following. 80% of the leader
00:10:13
for 50% of the price. My first strategy
00:10:15
engagement of profit was the basically
00:10:18
this idea and that was a lot of people
00:10:20
couldn't afford the gap in the 90s. A
00:10:22
lot of people think of it as being a
00:10:23
kind of a middle-ass retailer. The gap
00:10:25
is expensive for a lot of people. Most
00:10:27
people can't afford
00:10:28
>> $22 pocket tees. And the idea was let's
00:10:32
tap into this huge population of single
00:10:33
mothers who are very conscious about
00:10:35
their children's confidence at school
00:10:37
and offer 50% or I'm sorry 80% of the
00:10:40
gap for 50% of the price. Old Navy,
00:10:42
fastest billion dollar retailer in
00:10:44
history. Southwest is essentially when
00:10:47
it started 80% of the majors for 50% of
00:10:50
the price. China's entire strategy is
00:10:53
we'll give you 80% of a seaman cell
00:10:56
tower for 40% of the price.
00:10:58
>> Yep. Yep. They're very innovative, too.
00:11:00
Let's let's say, you know, this idea of
00:11:02
what they're they are a very dynamic
00:11:05
autocracy. Let's just they are a very
00:11:07
like dynamic and nimble autocracy.
00:11:09
>> Just incredible.
00:11:10
>> Yeah. They have tons of problems. There
00:11:12
was just an interesting I mean similar
00:11:13
stories. Decline in marriages, decline
00:11:14
in kids. Um they certainly plan that for
00:11:17
part demograph I mean they have their
00:11:18
own issues. Youth unemployment
00:11:19
demographics real estate over real
00:11:22
estate morale stuff like that. Yeah.
00:11:25
Which is problem more problematic in an
00:11:26
autocracy but it's problematic here too.
00:11:28
Um all right Scott we'll see what
00:11:30
happens. Nothing. It's a nothing burger.
00:11:32
We'll see if they have do more but the I
00:11:33
agree with you. Taiwan is where we need
00:11:35
to f focus. Um, that will be a disaster
00:11:39
of that will be our greatest crisis of
00:11:42
this era, I think. Um, okay, Scott,
00:11:44
let's go on a quick break. When we come
00:11:45
back, Sam Alman takes the stand. Support
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00:13:07
Scott, we're back. It was Sam Alman's
00:13:09
turn in the hot seat this week. At the
00:13:11
Elon Musk OpenAI trial, Sam denied
00:13:13
Elon's claim that he tried to steal a
00:13:15
charity and said Elon supported Open AI
00:13:17
becoming a for-profit company as long as
00:13:19
Elon had total control. That sounds
00:13:21
pretty accurate as far as in my
00:13:24
experience. Let's go through some of the
00:13:25
other highlights from Sam's testimony.
00:13:27
Sam described quote a hairraising moment
00:13:29
when Elon suggested control of OpenA
00:13:31
should pass to his children after his
00:13:33
death. That is hairraising. Sam said
00:13:35
Elon's departure from OpenA in 2018 was
00:13:37
a morale boost for employees who did not
00:13:39
like his hardcore management style. I
00:13:42
was there during that time. That's
00:13:43
exactly what they described. I have to
00:13:45
say I heard from a lot of people he was
00:13:46
like a big giant [ __ ] baby. And he
00:13:49
does that with all his comes. He comes
00:13:50
and yells, kicks a can, and then leaves.
00:13:52
And they can't wait till he leaves. When
00:13:54
pressed on his open AI equity stake, Sam
00:13:56
acknowledged he holds a passive stake
00:13:58
through a company of in the company
00:14:00
through Y Combinator. I also want to
00:14:02
mention that Cara Swisser came up in the
00:14:03
trial this week. I was surprised not
00:14:05
more. While Microsoft CEO
00:14:07
>> was surprised not more
00:14:08
>> no because I was texting a lot with the
00:14:09
most Cara Swisser thing Cara Swisser
00:14:13
surprised I wasn't mentioned more.
00:14:15
>> I texted with them all during this time.
00:14:17
The Microsoft Satcha Nadella was
00:14:19
testifying. Elon's lawyers were
00:14:21
questioning Nadella about the nature of
00:14:23
Microsoft's relationship with open and
00:14:25
pointed to comments he made during an
00:14:26
interview with me after Sam's uh firing.
00:14:29
He was he he was all in for Sam during
00:14:31
that period. Uh closing arguments are
00:14:33
getting underway right now. So again,
00:14:35
your LA any I don't think there's any
00:14:37
more last minute surprises. Elon was not
00:14:39
supposed to leave the country by the way
00:14:40
according to the judge but he did
00:14:42
anyway. Um he was supposed to be you
00:14:44
know on call essentially but he doesn't
00:14:46
care. Um any last minute surprises?
00:14:49
anything. It seems like it's going the
00:14:51
way we talked about. Thoughts with this
00:14:54
jury?
00:14:54
>> I don't have any additional color here.
00:14:56
Again, I think this is grievance
00:14:58
cosplaying a legal argument. So, this is
00:15:00
a traditional jury trial and the jury
00:15:02
decides this.
00:15:02
>> It's a jury decision and then the judge
00:15:04
will decide remedies. So, it you know he
00:15:07
she if he lose if if Musk wins, they
00:15:09
might say, "Well, we're leaving it as it
00:15:11
is and going with the California thing
00:15:13
and they can pay him money or whatever.
00:15:14
We're not going to get rid of the CEO."
00:15:16
That's one of the things he's asked for.
00:15:18
Brockman and Alman to be I I think he
00:15:20
can't poss I think this jury can't
00:15:22
possibly side with him. I mean
00:15:24
ultimately I don't think they proved
00:15:25
anything and it's a sort of he said he
00:15:28
said kind of thing and Elon's the most
00:15:30
loathome of the pair right by far by the
00:15:33
country mile. So I think Elon's made a
00:15:35
spectacle of himself. If he wins it
00:15:37
would be something else like I'll tell
00:15:38
you that. Um but I can't imagine the
00:15:40
jury thinks this guy got the got a short
00:15:42
end of the stick or that he's stupid and
00:15:44
didn't know what was happening to him. I
00:15:46
think that's really he's sort of played
00:15:47
this I'm a genius. Well, if you're a
00:15:50
genius, how did this happen kind of
00:15:51
thing? You're not a dupe. And so, um, so
00:15:54
I think they probably think he's lying.
00:15:56
And there's enough there's enough
00:15:57
evidence that he is. Um, or or just as
00:16:00
you said, grievance theater, but we'll
00:16:02
see. We'll see. Um, I think it might be
00:16:04
it'll be very fast if that's the case.
00:16:06
Um, but I think and and also the
00:16:08
California has signed off on this and
00:16:10
everyone else agrees. It's just Elon
00:16:11
who's butt hurt. In any case, I have a
00:16:13
feeling it's going to be quick, but
00:16:14
we'll see. It would be a real shocker if
00:16:16
you won. Um, the latest inflation
00:16:18
numbers are out and the news is not
00:16:20
good. Consumer prices rose 3.8% last
00:16:23
month, the biggest increase in three
00:16:24
years. Energy costs obviously accounted
00:16:26
for more than 40% of the monthly
00:16:28
increase with gas prices up 28%. Grocery
00:16:31
prices, rent, and airfares also climbed
00:16:33
sharply. President Trump, however, does
00:16:35
not appear to be overly concerned. Let's
00:16:37
listen to how he answered a reporter's
00:16:38
question as he left the White House for
00:16:40
his China trip. When you're negotiating
00:16:43
with Iran, Mr. President, to what extent
00:16:45
are Americans financial situations
00:16:47
motivating you to make a deal?
00:16:50
>> Not even a little bit. The only thing
00:16:52
that matters when I'm talking about
00:16:53
Iran, they can't have a nuclear weapon.
00:16:56
I don't think about Americans financial
00:16:59
situation, I don't think about anybody.
00:17:01
I think about one thing. We cannot let
00:17:04
Iran have a nuclear weapon. That's all.
00:17:06
That's the only thing that
00:17:08
>> Oh, wow. That was that was some quote.
00:17:10
That was like an ad. Like they just he
00:17:12
cut an ad for them. It was that was
00:17:14
astonishing, I have to say. I mean, it's
00:17:16
what I it's what I think he thinks. And
00:17:18
this nuclear weapon thing, we're less
00:17:19
safe now than we were during the Obama
00:17:21
days when we had most of the enriched
00:17:23
uranium and a deal and the state of
00:17:25
Hermuz was open. So, any thoughts about
00:17:28
what he's doing here? Why? Or he's just
00:17:30
just an old adult man who just says
00:17:32
whatever's on his mind. I don't know.
00:17:34
>> Yeah. So, look
00:17:37
with this administration. So the the
00:17:40
quote unquote objectives of regime
00:17:42
change. Oh wait, no nuclear weapons. Oh
00:17:45
wait, unconditional surrender. I mean
00:17:47
there there really isn't it's so back
00:17:50
and forth and you know erratic that it's
00:17:54
difficult for him to outline or be taken
00:17:57
seriously.
00:17:58
Having said that, I do believe that
00:18:02
loosely speaking, the way what he said
00:18:04
there is how presidents should approach
00:18:08
wars. Wars are more than gas prices.
00:18:10
Wars involve killing people and putting
00:18:12
our own men and women at risk.
00:18:14
>> Sure. And I think and he's not the guy
00:18:17
to do this, but I do think the president
00:18:19
should be willing to have an adult
00:18:21
conversation with the American people
00:18:22
and to say that the reason we have
00:18:25
decided to put our own men and women in
00:18:27
harm's way and commit this type of
00:18:29
treasure and talent and potentially kill
00:18:31
many of their citizens is because we
00:18:35
think it's worth it. And this is why we
00:18:37
think it's worth it. And quite frankly,
00:18:40
we don't go to war unless we as your
00:18:44
leaders have decided that the American
00:18:45
public are going to have to sacrifice.
00:18:48
George Bush told us we could go to war
00:18:50
and cut taxes and Americans believed
00:18:53
him.
00:18:54
>> So I think an adult conversation with
00:18:56
the American public around we have
00:18:58
consulted with Congress, we've consulted
00:19:00
with our allies and we believe whatever
00:19:02
the objectives are are worth some
00:19:04
sacrifice. I think that is the right
00:19:06
thing for a president to say,
00:19:08
>> right?
00:19:09
>> But this requires an adult conversation,
00:19:12
more leadership, more gravitas, and
00:19:14
clear objectives. And none of those
00:19:16
things are, you know, evident with this
00:19:19
president. But again, I think the
00:19:23
president should be the person to say to
00:19:25
the American public, I'm not going to
00:19:26
take you to war unless I think it's
00:19:28
worth it and also unless I am willing to
00:19:30
ask you to sacrifice.
00:19:32
>> That's not how he asked it. He's like, I
00:19:33
don't give a [ __ ] He doesn't have any
00:19:35
objectives. It's worse than before. He's
00:19:37
made it worse. And it's not a war. Like
00:19:40
it's not it's He's kind of right. It's
00:19:42
not It's something else where it's just
00:19:44
a disa. It's just a big [ __ ] mess.
00:19:46
The same his casinos and you know,
00:19:48
everything he touches turns to this in
00:19:50
some way. Just even the even the New
00:19:52
York Times story about the reflecting
00:19:54
pool. What a mess. He gave it to some
00:19:56
group of people who can't fix it.
00:19:57
There's already leaks already. It's
00:19:59
being painted a color that's not going
00:20:01
to let it reflect. It's going to the
00:20:02
non-reflecting pool. Everything he does
00:20:05
is shoddy and haphazard and unplanned
00:20:09
and with a huge whiff stink of
00:20:12
corruption attached to it and you know
00:20:14
and then telling them I don't really
00:20:16
care about you is really I think
00:20:18
disastrous. It's why his numbers are
00:20:19
going down is nobody believes him about
00:20:21
anything that he says except that he
00:20:24
doesn't care about you. And I think
00:20:25
that's a I I agree that president should
00:20:28
say things honestly but I don't think
00:20:30
this is honest. I think this is just he
00:20:32
could give a [ __ ] is what he's saying to
00:20:34
you and doesn't have any plan except for
00:20:37
disaster.
00:20:38
>> Well, there's the perception and there's
00:20:39
the reality and I think that I think the
00:20:41
perception after kind of eight or 10
00:20:43
very bad weeks for the president, I
00:20:45
think he's actually had a good couple
00:20:46
weeks. I do think he looks presidential
00:20:48
with Shei,
00:20:49
although nothing got accomplished other
00:20:51
than some saber rattling from Shei. Um
00:20:54
the Virginia
00:20:57
I think Virginia is a big deal. the
00:20:59
Supreme Court rejecting the attempt to
00:21:00
redistrict. I think he's had actually a
00:21:02
a decent couple.
00:21:03
>> I actually don't. I think the Supreme
00:21:04
Court is going to give it to Virginia
00:21:06
because he gave it to everybody else and
00:21:08
I think it's gonna I'm sorry. Can they
00:21:09
give it to
00:21:10
>> It's going to the Supreme Court. That
00:21:12
decision is going the Supreme Court has
00:21:13
to
00:21:13
>> Oh, you think you think the
00:21:14
redistricting will be allowed?
00:21:16
>> Yes, I think it'll be allowed and
00:21:18
because he's they've allowed it
00:21:19
everywhere else. It's very hard not to
00:21:20
allow it if they've allowed it
00:21:21
everywhere else and they Texas. As we
00:21:25
said last week,
00:21:26
>> he can do whatever he wants cheating,
00:21:28
but polling doesn't lie. And polling is
00:21:30
showing that you he can't outrun the
00:21:33
polling no matter how many times he
00:21:35
cheats. I think he has had a bad couple
00:21:36
of weeks actually and he looks older and
00:21:39
more adult than ever. I just I think
00:21:41
that this was a typical He's just saying
00:21:43
whatever is on his brain. He wasn't
00:21:45
doing it to be, you know, tough with the
00:21:47
American. He didn't do it with care. I
00:21:49
don't care what anybody's like. I don't
00:21:50
think about anyone's financial Americans
00:21:52
financial situation. I don't think about
00:21:54
anybody. That's ridiculous. And he, you
00:21:57
know, we were safer before and we're
00:22:00
less safe now. Anyway, um it was
00:22:02
interesting.
00:22:03
>> When's the last time you think he had a
00:22:04
good two weeks here?
00:22:06
>> Uh when he won.
00:22:08
>> Okay.
00:22:08
>> When he won. I don't think it's this is
00:22:10
I think this has been I that part of his
00:22:12
first term some of the stuff was okay.
00:22:14
Um
00:22:14
>> so it's been 78 weeks of constant. No, I
00:22:17
do think No, I think when he won I think
00:22:19
when he won and he had a real
00:22:21
opportunity
00:22:21
>> was a year and a half ago.
00:22:22
>> Yeah. I think it's been like a series of
00:22:25
like the one forgets the immigration
00:22:27
disasters, the shooting of US citizens,
00:22:29
the um all the stupid people he's hired,
00:22:32
the drunken Cash Patel, the lunacy of
00:22:35
RFK. I don't think there's any
00:22:38
>> Well, we shouldn't have dyes in our
00:22:40
food. Yes, sounds good. Like, I don't
00:22:42
know what to say. I think it's very
00:22:43
small little wins.
00:22:45
Um, and I think the stock market's done
00:22:46
well, but I don't think it's I think
00:22:48
it's detached from everyone else's uh
00:22:50
experience. Um, and you know,
00:22:52
billionaires have had a good time.
00:22:54
That's for sure. Tech billionaires. Um,
00:22:56
but this rise in inflation to me is the
00:22:59
only thing that matters at this moment
00:23:00
for most people.
00:23:01
>> What people miss, we're very focused on
00:23:04
unemployment. We think that unemployment
00:23:06
causes unrest. It's actually not
00:23:09
unemployment that causes the greatest
00:23:11
levels of unrest. It's um what really
00:23:14
upsets people and moves them to
00:23:16
political action and sometimes even some
00:23:18
form of revolution which I think we're
00:23:19
already in is not people who aren't
00:23:22
working. It's people who are working and
00:23:24
yet still hungry. And that's what's
00:23:26
going on here. The unemployment rate is
00:23:28
4 and a.5%.
00:23:29
That's not what ails America. What ails
00:23:31
America is that people have two jobs and
00:23:34
can't afford healthare.
00:23:36
So when and when now we have inflation
00:23:40
or prices outpacing wages that just
00:23:43
translates to the following the quality
00:23:44
of your life goes down.
00:23:46
>> Yeah.
00:23:46
>> And the problem is America and I lay a
00:23:49
lot of this Trump doesn't have the IQ or
00:23:51
the integrity or the honesty to do this
00:23:54
or the the confidence around him. But I
00:23:58
would also argue that America isn't
00:23:59
ready for an adult conversation because
00:24:01
if you're going to be serious about
00:24:02
inflation, it's very long-term difficult
00:24:04
things. It's there's a relationship
00:24:07
between essentially the economy breaks
00:24:09
into three buckets. There's labor that
00:24:12
is the earners, there's shareholders,
00:24:14
the owners, and then there's consumers.
00:24:16
And because of a lack of antitrust,
00:24:18
because of tax policy, we have decided
00:24:20
to massively transfer power and economic
00:24:23
well-being from consumers and earners or
00:24:26
laborers to shareholders.
00:24:29
And everything we do, every tax policy,
00:24:31
keeping minimum wage low, uh riding off
00:24:34
all capex, subsidizing certain uh
00:24:37
certain industries, everything is about
00:24:39
how do we consistently take money from
00:24:42
earners who minimum wage was 725 years
00:24:45
ago. it's still 725 the NA despite the
00:24:47
fact that the NASDAQ has quadrupled and
00:24:50
push more and more money into
00:24:52
shareholders and also the most boring
00:24:54
thing that no one wants to talk about is
00:24:57
that when you go from 12 chicken
00:24:59
companies to three when you go when you
00:25:01
let pharmaceuticals consolidate when you
00:25:03
let health systems consolidate when you
00:25:05
let healthcare verticalize when you let
00:25:08
one company control 90% of search 50% of
00:25:11
e-commerce 78% of social media they will
00:25:14
extract greater and greater rents from
00:25:18
consumers and earners and transfer it to
00:25:20
owners. It requires antitrust. It
00:25:23
requires uh really interesting uh or
00:25:26
more severe quite frankly entitlement
00:25:28
policy where we reduce our entitlements.
00:25:31
You're going to have to reduce the
00:25:32
military budget. You're going to have to
00:25:34
increase taxes, 40% AMT across
00:25:36
corporations and millionaires, and then
00:25:39
slowly but surely create more
00:25:41
competition, lower rents on consumers,
00:25:43
and a transfer of capital back from the
00:25:45
owners to the earners. But the American
00:25:48
public doesn't have a political election
00:25:49
cycle that that creates a serious
00:25:51
conversation around these things.
00:25:53
>> No, I get that. I get that. I'm talking
00:25:54
about people feeling it like at all
00:25:56
levels. And you do you do when you when
00:25:58
you go out. I mean, I I was I know it
00:26:00
sounds dumb, but I do I do do Amanda and
00:26:03
I split the grocery shopping, but I went
00:26:05
to get a quart of milk and I was like,
00:26:08
"What?" It was like $6 or $7 and I was
00:26:10
like, "Are you [ __ ] kidding me?" And
00:26:13
it's not just looking at the gas pumps
00:26:14
or there was something I was in a
00:26:16
airport and there was a sandwich and
00:26:18
they were like,
00:26:19
>> " $14." I'm like, "What?" Like, it was
00:26:22
it was, you know, I I I didn't get it. I
00:26:26
was like, "Well, that's a lot of money
00:26:27
for a sandwich." like kind of thing. And
00:26:29
so I don't begrudge them having to raise
00:26:31
prices. It's that it was it's just I
00:26:33
think people who are price resist like
00:26:36
price insensitive are noticing it. Like
00:26:39
that kind of thing.
00:26:40
>> You can't help if unless you're just
00:26:42
holed up in your house, you can't help
00:26:43
but notice things have gotten a lot more
00:26:45
expensive.
00:26:46
>> Yeah.
00:26:46
>> But there's there's shock and there's a
00:26:48
reduction in the quality of life and
00:26:49
then there are threats to your own
00:26:51
personal safety. Correct. And those
00:26:53
>> when you see um affordable care act
00:26:56
subsidies go away, you have someone
00:26:58
who's literally dependent upon diabetes
00:27:00
medication for their life see their
00:27:03
insurance bill go from $178 a month to
00:27:06
1700.
00:27:07
>> Yeah.
00:27:07
>> And it's as if the government has said
00:27:09
to them, "We don't care that you're
00:27:10
working hard. We've decided that you're
00:27:12
going to die."
00:27:12
>> Yeah.
00:27:13
>> And those are the I think those are the
00:27:16
kind of what I would call You're going
00:27:19
to have I I think we have bad economic
00:27:21
policy. that results in inflation and a
00:27:23
decline in prosperity. What is
00:27:25
unacceptable is that someone is worried
00:27:28
when someone starts rationing their
00:27:30
prescription medication. That just that
00:27:33
just that should not happen in
00:27:35
>> or cuts off. You know, there was a
00:27:37
really upsetting story in the New York
00:27:38
Times, a woman writing about her kid who
00:27:40
died of cancer, but like they've cut
00:27:42
cancer, pediatric cancer things, and so
00:27:45
these you can't get in these studies
00:27:47
because they don't ex they suddenly
00:27:48
disappear these advanced studies and
00:27:50
everything cuz you know he doesn't say
00:27:52
we're not going to help pediatric cancer
00:27:55
anymore. What he says is we're cutting
00:27:56
all over the place. So in essence,
00:27:58
that's what we're doing. Anyway, the
00:28:00
rise of inflation comes as Kevin Walsh
00:28:01
takes the reigns as Fed chair. Worsh was
00:28:04
narrowly confirmed by the Senate this
00:28:06
week in a 54 to 45 vote. It's usually
00:28:09
unanimous, which is where we are. Um
00:28:12
he's certainly qualified. The question
00:28:13
is most people don't think the rates are
00:28:15
going to be cut. And so juggling this
00:28:17
inflation with Trump's demands to lower
00:28:19
interest rates. Most people think he
00:28:21
will not be lowering interest rates um
00:28:23
at this moment given the inflation
00:28:25
numbers are so high and there's no signs
00:28:27
that they're going down. Just thought
00:28:29
very quick thoughts on that. We like to
00:28:30
simplify things in the media that this
00:28:32
guy's going to come in and cover rates,
00:28:33
but people don't want to actually pay
00:28:35
attention to the mechanics of the
00:28:36
Federal Reserve and that is the Federal
00:28:41
Open Market Committee is the one that
00:28:42
decides whether to cut rates or not. So
00:28:45
while the Fed chairman has the bully
00:28:47
pulpit and sets the agenda, he's one of
00:28:49
12. He's one of 11 or 12 votes
00:28:51
>> and Powell is still there as you say.
00:28:53
>> Yeah. So, no interest rates. Kevin
00:28:56
Walsh, while you know, a really
00:28:59
disappointing testimony at a Senate
00:29:01
confirmation hearing, he's not stupid
00:29:04
and he doesn't want to go down in
00:29:05
history, is the guy that ignited an
00:29:07
upward spiral of inflation. So, there's
00:29:10
there's not going to be a rate cut. And
00:29:12
and as a matter of fact, Khi says
00:29:13
there's a 72% likelihood there's no rate
00:29:16
cuts for the rest of the year because
00:29:18
you still there these Fed governors
00:29:20
don't want to be known as the people
00:29:21
that that created bread lines.
00:29:23
>> Yep. Depression.
00:29:24
>> And when you have when you come off a
00:29:25
print of 3.8%.
00:29:28
There's no [ __ ] way. If War started
00:29:30
making noises that we should cut rates,
00:29:32
those guys would go on background to
00:29:34
journalists saying this guy's [ __ ]
00:29:35
insane in threatening a Weimar Republic
00:29:38
like inflationary economy here.
00:29:40
>> Yeah. I mean, I think it's it's the
00:29:42
deficit and everything else. Maybe they
00:29:43
should consult Zoran Mandami, who
00:29:45
balanced the New York budget.
00:29:46
Interesting.
00:29:47
>> What did he cut? I'm curious. I haven't
00:29:49
been following it.
00:29:50
>> Uh, some consultant stuff, a bunch of
00:29:52
things. He's doing a rather good job
00:29:54
with services. He opened the streets for
00:29:56
um the soccer the FIFA matches. He in
00:29:58
front of schools, he closed off streets
00:30:00
so kids could play soccer, like learn to
00:30:02
play soccer, and brought in all these
00:30:04
soccer players and stuff. He's very good
00:30:06
at services, this guy. I'm just saying.
00:30:07
I think Trump's got to focus in on
00:30:10
providing services to citizens. That's
00:30:12
what you're talking about. The idea of
00:30:13
that people get something out of
00:30:14
government and it's not to be kicked in
00:30:17
the [ __ ] teeth. And I think that's
00:30:18
really the the difference between lots
00:30:20
of cities and a lot of both Republican
00:30:23
and um Democratic Sen governors and
00:30:27
mayors who are providing people better
00:30:28
services uh in a smarter way. Anyway,
00:30:31
that to me is the goal for everybody.
00:30:34
Anyway, we're going to go on a quick
00:30:35
break. When we come back, we'll talk
00:30:37
about the biggest donors uh for the
00:30:39
midterms.
00:30:42
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00:32:50
Scott, we're back. The biggest donor for
00:32:51
the 2026 midterms may or may not
00:32:53
surprise you. It's Andre Horowitz. The
00:32:56
VC firm and its co-founders Mark Andre
00:32:58
and Ben Horwitz have already spent more
00:32:59
than $115 million this election cycle
00:33:02
outspending both George Soros and Elon
00:33:05
Musk. Uh much most of the money is spent
00:33:07
on the right. It's Musk, Jeff Yas, and
00:33:09
uh these two. Um Soros is is the is the
00:33:13
opposite but much smaller in comparison.
00:33:15
A major chunk of that money is going
00:33:16
towards pro crypto and pro-AI super
00:33:19
PACs. What a surprise. It's where their
00:33:20
investments are. Trump and the GOP are
00:33:22
also benefiting. Uh Andre Horowitz and
00:33:25
his founders have together donated
00:33:26
roughly $12 million to Trump's super
00:33:28
PAC, MAGA, Inc. and a trust linked to
00:33:30
Mark Andre gave nearly $900,000 to the
00:33:33
Republican National Committee and Mark
00:33:35
um you know, not a surprise. I mean, not
00:33:38
that this guy has moved, you know,
00:33:39
firmly. It's mostly Mark, but Ben is
00:33:42
right along with him as always because
00:33:43
he's this little follow little little
00:33:45
follow puppy. Um just typical. Just
00:33:49
typical. I mean, this is not a surprise.
00:33:51
And then he tells nonsensical stories
00:33:52
about how he went right, none of which
00:33:55
are true.
00:33:56
>> Um, uh, your thoughts.
00:33:58
>> It's smart.
00:33:59
>> Yeah.
00:34:00
>> Uh, it's wrong, but it's smart. It's the
00:34:03
greatest ROI any firm can get right now.
00:34:04
>> I think he's figured it out. Yeah.
00:34:06
>> This is pay for play. And by the way,
00:34:08
Horowitz used to give a lot of money to
00:34:09
when he thought Kamla was going to give
00:34:12
money to
00:34:12
>> Kla. He did. Mark used to be a big Gore
00:34:15
person as I recall a long time ago. He
00:34:18
wasn't ever. People are like, "Oh, you
00:34:19
used to be Democratic." I was like m not
00:34:21
if you were if you spent any time with
00:34:22
him he was certainly wasn't he certainly
00:34:24
was he was Mark is one thing which is
00:34:27
self-interested in the most extreme way
00:34:29
you're ever going to meet someone he's
00:34:30
very
00:34:31
>> called the corporation
00:34:32
>> I agree but I'm saying it's really quite
00:34:34
it's really quite he doesn't even
00:34:36
pretend he's really the most selfish
00:34:38
person ever Scott I get it but I mean
00:34:42
it's about incentives it's just
00:34:44
>> if the greatest ROI if you're the CEO of
00:34:46
a company or the head of a venture
00:34:48
capital firm and the greatest ROI on any
00:34:49
spending. It's not hiring more people.
00:34:51
It's not investing in planned property
00:34:54
and equipment. It's to give money to a
00:34:56
president who will who will pass
00:34:58
legislation or block legislation that
00:35:01
takes the value of your portfolio
00:35:02
companies up 10, 20, $30 billion. That
00:35:05
$115 million investment is the best
00:35:08
money you can invest.
00:35:09
>> Absolutely. So, I agree.
00:35:11
>> Again, it's the boring [ __ ]
00:35:14
Term limits on the Supreme Court. No
00:35:17
gerrymandering.
00:35:18
get rid of Citizens United. Until we do
00:35:21
those things, you're gonna have strong
00:35:24
men or women or or fascism from the far
00:35:26
left or the far right. It's you're
00:35:28
right. You're always going to have it.
00:35:30
And we're outraged at Andre Horowitz.
00:35:33
Soros. Okay. There'll be Democrats
00:35:36
that'll do it. I bet Jensen Hang is
00:35:37
about to write a $300 million check to
00:35:39
somebody.
00:35:40
>> Who knows? Who know? I You know, it's
00:35:42
interesting because look, they they have
00:35:44
shifted, right? But I I my point is Mark
00:35:46
was never never liked anybody. Like
00:35:49
that's all I'm saying now. He likes
00:35:51
himself and his things and that's it. I
00:35:53
It's very I agree with you. It's the
00:35:55
right corporate thing to do. I've never
00:35:57
met someone who is so anti-
00:36:00
people in my life. Like just has such
00:36:03
disdain for humanity in a way that's
00:36:05
really remarkable actually. Just doesn't
00:36:07
like anybody like essentially. And he
00:36:09
would do it to the left or right
00:36:10
depending on what suited him. What what
00:36:12
someone was asking me, well, there are
00:36:14
left-wing people are going to give
00:36:16
money. I'm like, I don't want who knows
00:36:18
what they're going to be next week, and
00:36:19
I don't want any like individual rich
00:36:22
person, left or right, to be able to
00:36:24
take advantage of this way. It seems
00:36:26
unfair. Other people don't get an
00:36:28
audience with the president. And they
00:36:30
have an un unnecessary advantage based
00:36:32
on money. And that's kind of gross in
00:36:34
some ways.
00:36:35
>> Gross. Elon Musk after the SpaceX IPO
00:36:40
might be worth between 700 billion and a
00:36:42
trillion dollar.
00:36:43
>> Trillion dollar. Yeah.
00:36:44
>> If he takes 1% of his wealth or 10
00:36:46
billion
00:36:47
>> with his command of technology,
00:36:50
>> he can decide who the next president is.
00:36:51
>> He can. That's what I mean.
00:36:52
>> Is that what you want? Taxes are our
00:36:56
Kevlar and our vaccine
00:36:58
from power.
00:37:00
We need to stop thinking about taxes as
00:37:03
something that is inherently evil and
00:37:05
slows down the economy. That's bad
00:37:07
taxation. Taxation protects us from I
00:37:12
don't want to call them billionaires
00:37:13
because I don't want to demonize them.
00:37:14
Taxes protect us from an unhealthy
00:37:17
aggregation of power.
00:37:19
>> Mhm.
00:37:20
>> Due to money
00:37:21
>> 100%.
00:37:22
>> We shouldn't have any individual I don't
00:37:24
care if it's Soros. I don't care if it's
00:37:26
unions. I don't care if it's Lauren Pal
00:37:30
Jobs, although I think she's a wonderful
00:37:32
woman and I'm not, this isn't a
00:37:34
character assessment,
00:37:35
>> right?
00:37:36
>> You can't have an individual with this
00:37:39
much power and taxes are the only way,
00:37:42
our only protection, our Kevlar against
00:37:45
the aggregation of this type of power
00:37:47
and Citizens United.
00:37:49
>> Yeah, I got to get rid of it.
00:37:51
>> Speaking of which, all my friends have
00:37:52
decided you've become a lesbian because
00:37:54
of Per.
00:37:56
>> Really?
00:37:57
>> They were like, what? Like they were
00:37:58
like, "Huh?"
00:37:59
>> They weren't expecting that.
00:38:00
>> No, I was not.
00:38:01
>> Oh, by the way, a lot of my friends are
00:38:02
like getting sending me messages like,
00:38:04
"What the [ __ ] Shut up, buddy."
00:38:07
>> Pit Scott is a lesbian from San
00:38:10
Francisco. Now, speaking of virtue sign,
00:38:11
>> I go issue by issue.
00:38:13
>> I get it. I get it. Speaking of, I get
00:38:15
them getting more money. Besides Elon
00:38:16
becoming a trillionaire, Anthropic is in
00:38:18
talks to raise new funding that would
00:38:20
value it at up to $950 billion. uh if
00:38:23
completed, the company's valuation be
00:38:24
2.5 times what it was just 3 months ago
00:38:27
and higher than OpenAI's valuation of
00:38:29
852 billion. Of course, there's the
00:38:31
overhang of that trial with Open AI
00:38:32
right now. Um it's a huge thing,
00:38:36
overinflated. Uh I don't know. I don't
00:38:39
know.
00:38:40
>> Uh look, we've never seen a company
00:38:42
scale like that. Um so, and we've also
00:38:46
never seen Pepsi overtake Coke or or
00:38:49
Avis overtake Herz as quickly. We've
00:38:51
never seen this type of of transition or
00:38:54
pivot or reversal in fortunes. And and
00:38:57
also I still think OpenAI's valuation uh
00:39:01
IPO is probably going to be a hit. So
00:39:03
get this. In March of 2025, Anthropic's
00:39:06
valuation was 61 billion. So it's up
00:39:09
15fold. It's up 15fold in the last year.
00:39:12
>> A lot of parties in Silicon Valley.
00:39:15
>> Well, okay. It was 9 billion in annual
00:39:18
recurring revenue in December. Last
00:39:19
month it was 30 billion. and they think
00:39:21
this month it's on track to reach 50
00:39:23
billion. Um, for the first time more
00:39:26
businesses are using Anthropic than Open
00:39:28
AI, 35% versus 32. Anthropic's business
00:39:33
adoption quadrupled over the past year
00:39:35
while Open AAI has grew is basically
00:39:37
flat. And so a board decision on this
00:39:41
financing is expected later this month
00:39:43
with the and they think the IPO might
00:39:45
happen as early as October.
00:39:47
And Cali is saying it's a 70% chance it
00:39:49
goes public this year. Um and then
00:39:52
there's also
00:39:54
um a 60% chance that they have the best
00:39:56
AI model at the end of the year. I don't
00:39:57
know what that means. Look, I don't this
00:40:00
company is
00:40:02
>> it's just absolutely firing on all
00:40:03
cylinders. Having said that,
00:40:05
>> yes,
00:40:06
>> my thesis is that go long GLP1 and short
00:40:10
AI because I don't think I think it's
00:40:13
impossible to maintain a lead in AI with
00:40:16
AI and that is if you look at the
00:40:18
technical specifications
00:40:20
it's moving more towards par than
00:40:22
differentiation and I think it's going
00:40:24
to be difficult for any one company to
00:40:26
maintain a technical lead here and that
00:40:28
that will drive down margins and then
00:40:30
when these openweight AIs when she
00:40:32
starts engaging and AI dumping, which is
00:40:34
what I would do if I were him. I think
00:40:36
it's going to drive down their margins.
00:40:38
And the good news is, I think, similar
00:40:40
to vaccines or PCs or jet
00:40:43
transportation, the winners will be us,
00:40:45
uh, not these companies. But I'm
00:40:47
>> Yeah, there'll be one or two companies
00:40:49
that will dominate. Probably Anthropic
00:40:51
is one of them at this point.
00:40:52
Interestingly, probably Google is the
00:40:54
other.
00:40:54
>> We have become used to any innovation
00:40:57
resulting in a small number of companies
00:40:58
capturing trillions of dollars in
00:41:00
shareholder value. Again, my thesis is
00:41:02
that AI might be more like jet
00:41:06
transportation, vaccines, and PCs, and
00:41:07
that no one companies share.
00:41:10
>> So, it would be funny if Apple spent
00:41:11
nothing and ends up benefiting the most,
00:41:12
which is
00:41:14
>> Yeah, it'll be it'll be
00:41:16
>> 100%.
00:41:17
>> That's sweet. Uh, just last thing,
00:41:18
Google, speaking of Google, is in talks
00:41:20
with SpaceX for a rocket launch deal to
00:41:22
put orbital data centers in space. The
00:41:23
deal is based on currently unproven
00:41:25
technology that Elon said is the next
00:41:26
frontier for his rocket company. I I
00:41:28
kind of like this idea. It's totally
00:41:30
unproven. And Google has a history of
00:41:32
investing in wacky schemes. At one
00:41:34
point, they had um they were investing,
00:41:37
this sounds like a Sergey Bin thing
00:41:39
happening here. They used to beef over
00:41:41
some girl, but now they're getting
00:41:43
along, I suppose. Um uh there's uh
00:41:48
anyway, this is something Google has
00:41:49
done this. They had wind they had wind
00:41:52
up in wind kites at one point. They were
00:41:54
going to do a chairlift in San
00:41:55
Francisco. They had a a a ship, an
00:41:58
energy ship parked off the uh the city
00:42:01
in San Francisco. This is nothing. This
00:42:03
is feels smells like Sergey Brin to me.
00:42:07
And so he would try anything and this
00:42:08
would seem cool to him. So sure, why
00:42:10
not? Why not invest in it? What's the
00:42:12
difference? If it works, it works. If it
00:42:15
doesn't, it doesn't. Any thoughts?
00:42:16
>> I think these guys, they want to put
00:42:18
chips down and options on anything they
00:42:19
don't have insight into so they can get
00:42:21
investor updates, have a chance to work
00:42:23
with them.
00:42:24
>> It's smart. Everything is so
00:42:26
interconnected. Those graphs that look
00:42:27
like, you know, a god's eye. Remember
00:42:30
those in the 70s where everyone is
00:42:32
invested in everybody else and
00:42:33
everybody's suing everybody else.
00:42:35
>> Yeah. Just like Anthropic is doing a
00:42:36
deal with Musk. Not everyone was like,
00:42:38
"How dare you, Dario?" I'm like, "Are
00:42:40
you kidding?" Of course he did. Of
00:42:42
course they do. They don't. They like
00:42:44
beef and then they hug. It's like the
00:42:46
mob. Anyway, um one uh one more quick
00:42:49
break. We'll be back for predictions.
00:42:52
>> Support for Pivot comes from Mint
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00:43:52
>> Okay, Scott, let's hear a prediction. I
00:43:54
will note that people should something
00:43:56
we have talked about and have been in
00:43:57
our predictions. A New York Times
00:43:59
investigation, which you should all
00:44:00
read, found that over 80 poly market
00:44:02
users have placed bets with suspicious
00:44:04
characteristics and won money across
00:44:06
nearly 30 topics. There the insider
00:44:08
trading stuff of this stuff is just
00:44:10
getting started on all these predictions
00:44:12
markets. So, we we thought this might
00:44:15
happen, but that just just please go
00:44:17
read that because it's a really
00:44:18
interesting piece. Go ahead, Scott.
00:44:19
Prediction. Speaking of predictions.
00:44:21
>> So, my prediction, Chipmakers, Sarah
00:44:23
Bros, Cerebras, Sarah, I don't know.
00:44:26
Chipmaker Sarah Bros went public today
00:44:28
at a $40 billion valuation. And that's
00:44:30
up from its $23 billion valuation.
00:44:33
Um, uh, in February and 8 billion in
00:44:36
2025. And, uh, I believe it's over. I
00:44:41
believe it's playing into this massive
00:44:43
historic runup in chips. And after an
00:44:46
initial pop, I think it'll fall. Since
00:44:48
last year, its revenue has increased
00:44:51
less than 2x while its valuation has
00:44:53
increased uh sixfold. And the $40
00:44:56
billion valuation implies a 76 times
00:44:59
revenue multiple. In other words, it's
00:45:01
this shouldn't be a public company. It's
00:45:02
it's it's drafting off of what has been
00:45:04
an unprecedented increase in value in
00:45:06
the sector. So, as an example, Nvidia
00:45:09
trades at 26 times revenues and still
00:45:11
controls 85% of the AI chip market and
00:45:14
is growing faster. Cerebrush tried to go
00:45:16
public in 2024, but withdrew their uh
00:45:19
filing at the last minute over intense
00:45:21
scrutiny of its heavy reliance on a
00:45:22
single customer, the Emirati AI firm
00:45:25
G42. I don't if you remember these guys.
00:45:28
It's basically like actual giant big
00:45:30
chips, physical giant big chips. It
00:45:32
strikes me as quite frankly a shitty
00:45:34
company. And this is this is simply u
00:45:38
massively benefiting from an
00:45:40
unprecedented updraft in chip stocks.
00:45:43
And anyways, my prediction is that the
00:45:46
initial pop, this company, which I think
00:45:48
is actually a fairly mediocre chip
00:45:50
company trading at 78 times revenue is
00:45:53
not going to sustain. And
00:45:55
>> I like a highly specific stock. And then
00:45:58
that that same customer which makes up
00:46:01
the line share of the revenue, group 42,
00:46:04
accounted for 24% of revenue last year
00:46:06
and uh stateowned UAE University
00:46:09
accounted for 62% of revenue. Given
00:46:11
what's going on in the UAE, given their
00:46:13
dependence on one customer, given the 76
00:46:16
times revenue, this feels like one of
00:46:18
those bad Chinese firms that could just
00:46:21
go down 95%.
00:46:23
>> Yeah. Yeah. Well, it's a good warning
00:46:25
for people. Anyway, there's a lot of
00:46:26
froth happening for sure and and so
00:46:28
there it's hard to separate the good
00:46:30
from the bad. Anyway, we want to hear
00:46:32
from you. Send us your questions about
00:46:33
business, tech, or whatever is on your
00:46:34
mind. Go to nymag.com/pivot
00:46:37
to submit a question for the show or
00:46:38
call 85551 pivot. Elsewhere in the Karen
00:46:41
Scott universe this week on Profit
00:46:43
Markets, Scott spoke with Aswath
00:46:45
Deodorin, a professor of finance at
00:46:47
NYU's Stern School of Business, one of
00:46:49
Scott's favorites to break, and he's
00:46:51
terrific. I think so, too, to break down
00:46:53
what's standing out to him in the
00:46:55
markets so far this year. He shared his
00:46:57
thoughts on how the conflict with Iran
00:46:58
could ripple through the economy. Let's
00:47:00
listen to a clip. The catastrophic risk
00:47:02
here is not that oil gas prices stay
00:47:05
higher than they were before the
00:47:06
conflict is whether they'll go even
00:47:08
further up because there is that chance
00:47:10
of that happening. I think if uh you
00:47:13
know in many ways what the market seem
00:47:15
seems to be building in is the economy
00:47:18
can survive with gas prices being 450 or
00:47:21
five depending on what part of the
00:47:23
country you're in and that it might not
00:47:26
be as robust as you thought it was 3
00:47:29
months ago but it's okay but I think the
00:47:32
the the worry still remains that this
00:47:34
crisis while it's in a slow boil at any
00:47:37
point in time could become a fast boil
00:47:39
at which point you could say what what
00:47:41
happens to earnings now.
00:47:42
>> Yeah, that's interesting. Four 455. I've
00:47:45
seen 67 now. It's really across lots of
00:47:48
cities. Anyway, uh that's the show.
00:47:50
Thanks for listening to Pivot. Be sure
00:47:52
to like and subscribe to our YouTube
00:47:54
channel. We'll be back next week.
