00:00:00
You know what, Mark? Just pay the money and fix it. Like, just stop. >> Hi everyone, this is Pivot from New York
00:00:13
Magazine and the Vox Media Podcast Network. I'm Carara Swisser >> and I'm Scott Galloway.
00:00:17
>> There's so much going on. >> That listen, President Trump plans to
00:00:21
install big tech names like Mark Zuckerberg, Larry Ellison, and Jensen Wong to a technology council to weigh in
00:00:26
on AI policies and other issues. We were not invited >> AI policy. Buy more of my [ __ ] US
00:00:32
government buy more. Give me what I need. You know, it's again >> no regulation and buy more of my [ __ ]
00:00:38
That's going to be their anybody who has a different alternative view that these
00:00:42
are the only experts. Our invit say I would say our invitation's lost them in
00:00:48
or the dog ate our invitation but he hates dogs. So Trump ate our invitation. I just don't this list is nobody who has
00:00:55
any doubt about it, nobody who has any good research. No one whose interests are not aligned with it. No regulation
00:01:02
with with any >> conflicts everywhere. >> Everywhere. I just >> Well, do you know Jensen Hong's a big
00:01:07
fan of selling being able to sell his chips into China despite the fact these are the chips that you do with and track
00:01:14
Ohio and and you know I just this god these people like you think if you were a real
00:01:22
president and I think this guy is losing it every single day and including the polls which are just like look out below
00:01:29
but um it's really amazing that he doesn't want other inputs like that may
00:01:35
vary from his rich friends. It's just I find it it's just not good policy not to
00:01:40
have people who doubt each other and debate it. I just I don't understand. We're waiting for an invite. Even just
00:01:46
you. Even you if he needs the white guys and >> even you. >> Well, you be good.
00:01:50
>> I love that. Well, I think you even you. I mean, >> you're the white guy. They're not going
00:01:54
to have me. I'm irritating to all of these people. And so, uh, you know, I'm
00:02:00
just saying. I'm just saying >> you uh speaking of which >> Oh, yeah. Someone was someone said I
00:02:06
don't know on one of these many many platforms which are just so good for your mental health
00:02:10
>> that car was a total shill for big tech >> and I I I wrote >> do you realize like I have been on when
00:02:22
you go on a board and they don't want you on the board they stick you on the
00:02:24
nominating and governance committee which has absolutely no power >> information okay
00:02:29
>> and your job your job is to find new directors and it's just it It's it's
00:02:34
literally like, you know, put them put them at the weird kids table. And so I've of course served on a lot of
00:02:40
nominating and governance committees >> and where you're supposed to recruit new
00:02:43
board members. >> If you weren't such a pain in the ass to these people,
00:02:47
>> you'd be [ __ ] chairman of SpaceX right now. I would be >> because over the last 20 years we have
00:02:54
correctly started saying all right let's try and broaden the aperture and bring
00:02:59
in candidates who potentially don't look smell and feel like us and aren't
00:03:02
members of the same country club. So, a a journalist, a a gay journalist who's
00:03:08
covered tech, you were built in a factory of lesser. >> I'm gonna go on a board next year. Well,
00:03:14
let's discuss that. You're >> I know, but the reason I I mean this
00:03:17
sincerely, Cara, you're not going to have me on. >> The reason you haven't been invited uh
00:03:20
to be on >> I was invited to one. I was invited to one. >> Okay. But the reason you haven't been
00:03:24
invited to half a dozen >> is because you get in their face. >> Yeah.
00:03:29
on boards. Nobody's going to put They don't mind someone who has alternative
00:03:33
opinions or whatever, >> but ever since, quite frankly, I'll be blunt, ever since I started becoming
00:03:38
more outspoken on podcasts, >> I used to get invited to go on three or four boards a year, it's gone way down.
00:03:44
>> Wow. Interesting. >> Because the public CEOs are like, >> the public CEOs are like, "Okay,
00:03:49
>> no, >> let's call him. Let's bring him in. Let's talk to him." But I don't want him
00:03:52
in my boardroom. >> Let me address something though. This week, I gave a thing at Syracuse
00:03:57
University. They asked me this amazing to >> the orange men and I was talking about
00:04:02
things that I've talked about a lot about CNN and the Ellison's owning it
00:04:05
and this and that and where AI is going. >> A little controversy this weekend. A
00:04:09
little controversy. By the way, by the way, I just want to say you want to talk about it.
00:04:14
>> I just I just want to say that I find David Ellison very attractive. >> I do too.
00:04:18
>> And Larry Ellison is a huge big brain thinker. >> He's a nice guy. He makes great movies.
00:04:23
>> I would absolutely love to work for them. >> Yes. Okay. All right. Listen. This is
00:04:26
what happened. I was telling things I've said 109 times before. I don't want to
00:04:32
work for a tech mogul. I don't. I just never have. Walt and I didn't take money
00:04:36
from >> as opposed to a media mogul. >> You worked for media? Absolutely. Yes.
00:04:39
Yes. >> I'm running challenge here. So, you'd rather work for Rupert Murdoch than
00:04:43
Larry Ellison? >> I We left Rupert Murdoch, my friend. I >> You did work there. You did work there.
00:04:47
You check as fast as I could get out. I got out. >> How long were you there? Hold on. Hold
00:04:51
on. Hold on. How long are you there? >> Just like two years before we could get
00:04:53
out. >> Was there two years? >> Yeah. No, I was there a long time, but
00:04:56
he didn't buy it for a while. In any case, Scott, we left. We left News Corp
00:05:02
because of Rupert Murdoch and that behavior around the the the the taping of that the dead girl was awful.
00:05:08
>> Was awful. We left like very soon after and we we on purpose. >> Was this the voicemail thing?
00:05:13
>> Yes. >> Oh god. >> I know. Exactly. So, we did that and we took money. We we were offered money
00:05:18
from Silicon Valley venture capitalist and we took money from Terry Seml who was had a media fund.
00:05:22
>> Oh, yeah. Yahoo. CBS. >> Yeah. Anyway, he's a lovely guy, amazing
00:05:26
guy, amazing person. He had a media fund and then we took money from NBC, but we
00:05:30
were offered venture capital money and we didn't take it because I was like,
00:05:32
"These [ __ ] they're going to [ __ ] me." >> There's a word for that, venture
00:05:36
capitalist. But anyways, go ahead. >> But anyway, I we didn't take the money
00:05:39
and then I just don't want to work for tech people. And I've said that to you
00:05:42
on this podcast a dozen [ __ ] times, right? Haven't I? >> A dozen. So, I I repeat that again. But
00:05:48
what what what I did was Scott McFarland who left CBS and is now with Midas um touch which is a very fast growing thing
00:05:56
and they're going into news now instead of just news aggregation which is a cool
00:05:59
thing and they Scott is an astonishing journalist he did an amazing job >> around the January 6th and the justice
00:06:06
department astonishing very handsome man by the way you would love his handsomeness very tall because he went
00:06:11
to Syracuse and so he was the MC and as a joke he was like you know he was talking about going independent oh no
00:06:17
cuz he looks like an ad for an anchor. He a typical TV anchor and he was, you know, he's like, "Oh goodness, I'm
00:06:24
taking a big leap." And and I was like, "Oh, it's going to be great." And I said
00:06:27
to him, I said, "You're you made the right decision." And I I was looking
00:06:30
directly at him and joking. I'm like, "You don't want to work for the I you
00:06:35
don't want to work for the Ellison's. I mean, he's a terrible person." I was
00:06:38
just like like laying it on as a joke. The whole crowd laughed. I was not I don't think Larry Ellison's a terrible
00:06:44
person. He's he's got he's a he's actually very funny. I don't agree with
00:06:48
him on a lot of things. He's an amazing entrepreneur. He has great aesthetic
00:06:52
taste, by the way, and his ship, his boats are fantastic. Like, I was joking to Scott McFarland directly, and somehow
00:06:59
these reporters were like, "Cara Swisser thinks Larry Ellison is a terrible
00:07:03
person." And it was crazy. And it's also all the things I've said before many
00:07:09
times. Like, it's it's kind of weird. And then it became a thing. Whatever. I
00:07:14
I like, by the way, let me just be clear. I like David Ellison. He's a nice guy. Larry Ellison is a tough dude. I'm
00:07:20
sorry. He really is. And people can dislike him because he's had a really He's been a tough C cowboy over the many
00:07:28
years. That said, I do think he's very innovative and has done astonishing things. And so, but I don't want to work
00:07:34
I I don't want to work for tech people. I don't. And I I think it's perfectly,
00:07:39
you know, legitimate. And frankly, the decisions they've made have been terrible around stuff that concerns me.
00:07:44
And that worries me of them taking over salmon. So what big deal? >> I think you're being bigoted against
00:07:49
wealthy white men. And you know, >> Larry Elson is a very funny guy. That is
00:07:54
true. He's a very witty. Anyway, I don't think it's a big deal, but whatever.
00:07:58
Whatever. >> You know, you wouldn't have to worry about this if you weren't living
00:08:01
forever. >> See, this is the difference. The CNN people are like, huge premiering soon.
00:08:08
and she insults the new owners. I mean, >> I'm I'm being very serious. I get I'm
00:08:12
speaking at >> one of these events tonight. Um anyways, but um I get a huge amount of power from
00:08:19
my atheism because I find it very comforting to know at some point >> everyone I'm worried about is going to
00:08:25
be dead and so am I. >> Yeah. >> I find it actually quite liberating to
00:08:29
realize, >> okay, >> squeeze all the juice you can out of this lemon called life cuz we're going
00:08:34
to be dead soon and take risks. And if you [ __ ] up, it really doesn't matter.
00:08:38
>> We are on the same wavelength. >> No. In a 100 years, no one's going to
00:08:41
remember us or anybody we care about. So >> anyway, uh moving on. The Pentagon, this
00:08:47
is troubling to me, is sending roughly 2,000 troops uh from the 82nd Airborne Division to the Middle East. As of this
00:08:53
recording, there's been no decision to put, I hate this expression, boots on
00:08:57
the ground, but that's what it is. Um Trump is talking a lot of talk this week, saying the war has effectively
00:09:02
been won. Iran wants to make a deal and negotiations are happening right now even as Iran disputes that and I hate to
00:09:09
say it but I believe Iran and I don't like the people who are running Iran and
00:09:13
he said he got a gift from Iran calling it a very big present worth a tremendous
00:09:17
amount of money and tied to oil and gas no idea what that is the US is all I think he's just making [ __ ] up now the
00:09:23
US has also well he always does he's also sent Iran a 15-point plan to end the war demands including dismantling
00:09:29
nuclear sites ending enrichment and reopening the straight of Hormuz We certainly had some of those things in
00:09:35
place before. And as potential talks may or may not be taking shape, there are reports that Iran would prefer to deal
00:09:41
with Vice President J. D. Vance over Jared Kushner and Steve Witkoff. I Wow, that's a that's a choice, right? That's
00:09:49
a choice. But I would agree with the Iranians on that. Um, and Vance has been um the person who, you know, is going to
00:09:57
be running for president and could possibly be president and also has been opposed to the war quietly. Um, he that
00:10:04
he certainly ran on the idea of no more wars and he's he's also a a veteran. Um,
00:10:10
I don't know what do what do you think about that? What's going on there? It
00:10:13
seems insane. It's all um I mean I go to the markets you know so there was an
00:10:19
unusual amount of futures that changed hands at >> talk about this >> well I I believe that in a digital world
00:10:29
where forensics and AI and investigative journalists u one of the wonderful things about
00:10:35
America is that people see incentive in in finding out what actually went down and I think that's one of the wonderful
00:10:41
things about our our society I think you're going to see President Trump four or five years post his presidency
00:10:50
sitting in front of a camera and a jury pretending to be too old and that he just doesn't remember him telling his
00:10:57
buddies, his friends, his family members that oh I think I'm going to announce
00:11:04
that the talks are going really well even though according to the Islamic Republic there are no talks which will
00:11:10
send the markets it's skyrocketing and then when it comes out 24 48 hours later
00:11:16
that in fact there are no talks and then the markets oil surges again and the markets go down.
00:11:22
>> This is an insider traders. >> It's right from the White House. It's
00:11:27
right from the White House. >> Ivan Boowki >> could not have dreamt of this situation.
00:11:32
>> The ability to trade >> Yep. >> uh on these on near certainty. The
00:11:38
president knows that if he just a he can say any he believes he can say anything
00:11:43
he [ __ ] wants. It doesn't matter. I can lie. I can be full of [ __ ] Just put
00:11:46
out press releases. It doesn't matter. Kind of the you know funding secured over and over. And I know that the
00:11:54
markets will respond swiftly to my comments. There is now zero day options where you can buy options that expire by
00:12:04
the end of the day. And I'm going to go out on a limb here and think and say
00:12:08
that sometimes the president doesn't have that much fidelity to rule of law or conflicts of interest.
00:12:13
>> I find it like I this has happened over and over again. There is they must just
00:12:18
he must just say things while on the toilet and people then trade or whatever. And you know, interestingly,
00:12:23
let me note lawmakers are introducing bipartisan bills to ban prediction markets from listing there. There's a
00:12:28
lot of action on this now from listing sports bets and to prohibit members of Congress from trading in certain
00:12:34
markets. Facing the heat, Kowi plans to block athletes, coaches, and officials from betting on their sports and
00:12:39
political candidates from trading on their campaigns. And Poly Market announced finally enhanced market
00:12:44
integrity rules, including banning trading on stolen confidential information. I mean, this has happened
00:12:51
rather quickly and quite it's quite important that this happen. Um, you know, it's really uh it's it's just
00:12:59
grift. It's just out and out grift that these numbers and you know that Democrats are prepared. This is like so
00:13:06
deep in the heart of easy to prove, right? This kind of stuff and who's doing it. And so I think they better,
00:13:13
you know, they better hope uh they get those pardons from from uh from Trump and he pardons himself because this is
00:13:20
just really it's let let me break it down for regular people. They're making
00:13:25
money at your expense and cheating while doing it. Like what? I don't know what
00:13:31
else to say. >> Look, the Democrats engage in what I'll call small cap corruption. And that is
00:13:38
it's not illegal to trade stocks right now is if you're a US Congress person.
00:13:43
>> I think it should be. >> And and even though there are regulations and guidelines against it,
00:13:48
the fines is a slap on the wrist. So the incentives are if I'm sitting in a you
00:13:53
know the Senate if I'm on the in the defense uh committee or the intelligence
00:14:00
committee and we're talking about a $30 billion contract to Northre Grumman and
00:14:06
it looks like it's going to go through and my guess is Northre Grumman will put
00:14:10
out a press release in 72 hours. Hey honey. Hey Paul Pelosi. >> Mhm. I really like Northrup and I just
00:14:20
want to be even-handed here. I think Trump >> Scott, you do this every time. This is
00:14:24
like sh massive corruption in a different >> It's just corruption on a different
00:14:28
scale, but it's still corruption. >> It is, but you tend to go right to Nancy
00:14:31
Pelosi who's leaving Congress. We we we know we should have passed these >> because,
00:14:36
>> okay, >> because in order to be taken seriously, we have to be critical thinkers and
00:14:39
apply to both sides of the aisle. >> I understand this is >> so but let's look at the data. over the
00:14:46
last what is it 20 years the S&P has tripled and the Pelosi portfolio is up sevenfold
00:14:53
>> and nothing she has done is illegal. >> This is a certain type of corruption.
00:14:59
What Trump has done is said okay that's small ball. >> You're corrupt for millions. I'm going
00:15:05
to be corrupt for billions. Yeah, >> because what he's done, >> it's I'm not sure it's illegal, but
00:15:12
we've never we've been dependent upon and Barry Goldwater predicted this 50
00:15:16
years ago. >> We have been too dependent upon a series of norms >> as opposed to laws and slowly but surely
00:15:23
seated power. >> Absolutely right. >> So Trump says, "Oh, everyone's doing
00:15:27
it." Marjorie Taylor Green was doing everyone in not everyone a significant
00:15:33
number of people in Congress have been trading stocks and beating the market. >> Mark Wayne Mullen was one of them.
00:15:38
>> Uh they can't and also in my solution I think they should make I think people in
00:15:44
Congress I think representatives should make a million dollars a year and senators should make $2 million a year.
00:15:49
>> I agree. >> Every they make I think 168 or $178,000 a year. >> Small
00:15:54
>> if you have two homes and you're living in DC >> Yeah. And you you weren't rich before
00:15:58
running for Congress. >> We should pay for their apartments. I mean, I just
00:16:01
>> You can't afford you can't afford >> You should have these nice apartments
00:16:04
for them that are actually secure. So, put make them more secure. >> The Singapore model, the probably the
00:16:10
best run nation in the world, the Singapore model. They pay their elected officials a lot of money and they have
00:16:16
zero tolerance. >> You cannot go to work for a lobbying firm or a pack company. There has to be
00:16:21
a sunlight period or whatever they call it, sunshine period. You cannot in any way have any insight domain benefit in
00:16:29
any way. We find out you've called your cousin in the Philippines and here or
00:16:33
she is trading stocks. You're probably going to get lashed. That's literally
00:16:37
what it's like in Singapore. And what do you know? There's no corruption.
00:16:40
Anyways, my he has taken it to an absolutely new level. But just circling back where I started, we're going to
00:16:45
find out that the greatest levels volume of insider trading in history are happening and originating out of
00:16:54
Pennsylvania Avenue. >> Absolutely. 100%. One of the things that's uh problem I think there there's
00:17:00
there were people talking about whether it's treasonous or not to release the
00:17:03
things because these are these are these are boots on the ground that could get hurt and everything else. There's a
00:17:07
whole level of complexity here because they're betting on possible deaths of
00:17:11
Americans and others. Um sending JD van, where do you imagine this Iran thing because it is going back
00:17:18
and forth and back and forth and the market is trying to grock it and it it feels very whipssaw. Um so far they've
00:17:24
given it hasn't suffered that badly. You had talked about a real decline in the
00:17:28
market. Um, is this the thing that will pull it off or just very briefly because
00:17:33
we have to get to some other >> the thing that pull you mean sending JD Vance
00:17:37
>> but but sending Vice President Vance is a signal. There's a few signals here.
00:17:41
One, the scariest signal is we have amphibious ships and combat marine marines being deployed to the region.
00:17:48
This is either you could argue he's just playing poker or in fact he's planning
00:17:51
to put in the terminal like boots on the ground in Carg and maybe do a swap where
00:17:56
I'll let the oil flow through CarG if you ensure the Straits of Hormos are of
00:18:01
safe passage. There's all sorts of game theory going on here. He has a tendency
00:18:05
to lie and then before before a quote unquote surprise attack, which I think is bad for our brand long term. America
00:18:11
has to be seen as doing what they say and meaning what they say and saying what they mean. Right.
00:18:15
>> But anyways, sending Vance is a signal because >> Well, no, they're not sending Vance. The
00:18:20
Iranians want Vance. >> Well, but the Iranians want Vance. And this is quite frankly, this is a signal
00:18:28
that for the people who want this to end because Vance is on the record of saying
00:18:34
>> for a long time that these types of misadventures overseas were a bad idea.
00:18:38
>> He's been really quiet. >> Well, he hasn't. He's like, I think I
00:18:42
won't let send let let Scott Bent do that. He the last thing he wants to do is get on himself
00:18:49
>> with Kirsten Welker and have her bring up about 5 million >> times
00:18:55
>> tapes and where he said under no s World War II under Biden. We could should
00:19:00
never get into these quagmires overseas. >> There's just >> he's trying his best to justify it.
00:19:05
>> He is literally just doing everything he can to stay. He's literally hiding behind the
00:19:10
curtain. He's like, "Don't ask me." Um, he's he's done a few like real pretzel
00:19:15
moves that are really problematic. Um, but it's >> but the RGC probably believes correctly
00:19:20
he's more likely to to be empathetic to want to deescalate. So, this is a good
00:19:27
side. The fact that the Trump administration is entertaining this, he he both sides, I think he is probably
00:19:34
the guy >> that can find common ground here. >> Not Rubio. Well, we'll see. Um I
00:19:40
>> Rubia is perceived as a bit of a hawk. A lot of people think he's the shadow
00:19:43
president right now. What has been the most militarily adventurous administration in a long time
00:19:48
>> incredible and they're planning Cuba next which is like oh god >> that I mean
00:19:52
>> leave let them die themselves. They're already on their last legs. Just let
00:19:56
them fall and then we'll move in the hotels. >> I'm sorry. Under the oposis of having an
00:20:00
opinion about [ __ ] I have no domain expertise in. Let me just say that the smartest thing we could do
00:20:04
geopolitically as it as it relates to Cuba >> would be to be sending humanitarian aid
00:20:09
to them right now. >> If you want the people to rise up and think, you know, the Americans aren't
00:20:13
that bad. Maybe we should normalize relations. At some point, the Castro family will die out.
00:20:19
>> It would be starching our hat white and sending >> sending power, fuel, and food to Cuba
00:20:25
right now. Yeah. and instead were anyway >> it worked out so well for the Kennedy
00:20:31
administration. But what's really interesting is this is all having an effect. Democrats pulled off a
00:20:35
surprising win in Florida. Actually, a pair of them, but one that was particularly sort of surprising,
00:20:39
flipping two legislative seats, including the district that covers Mara Lago. Like in he now has a Democratic
00:20:45
representative. Emily Gregory, a firsttime candidate with a background in public health, won by a little over two
00:20:51
points. Astonishing. This was a big Trump uh district. Trump has taken to social media to support her opponent
00:20:57
obviously and President Trump who's called voting by mail cheating voted by mail in the election. I mean these the
00:21:03
dem the list of things Democrats have won recently is really something else. Um to see them winning in all sorts of
00:21:10
districts and from people I know down there they're just furious at him. They're they really are these are all
00:21:16
his fans like or people who voted for him. Um, and it's really it's I'm not
00:21:22
sure it's a I think people I think they they're going to try to steal the
00:21:25
election. I don't think it's going to be possible givingven the overwhelming
00:21:28
numbers that are going to happen. And and another thing that's affecting him
00:21:31
and these are two topic as we record negotiations to end the fivewe DHS shutdown or standstill with Congress
00:21:37
scheduled to go into recess any minute. The Republicans have brought a number of
00:21:41
possibilities to Trump but he's turned them all down and the Democrats are sticking. The sticking points are still
00:21:47
ICE funding and enforcement reforms. Very simple things. Don't wear masks. Uh
00:21:51
bring in judicial warrants and um and uh and cameras. It's nothing is that hard.
00:21:59
No one was happy again from the latest rose from the Republicans. TSA officers will miss in their paycheck this Friday
00:22:04
if the deal hasn't reached. They've lost hundreds of employees. On Tuesday
00:22:08
morning, Delta Airlines suspended specialty services for members of Congress. Yay. They're going to have to
00:22:14
wait in line like everybody else, which I think is great, all of them. Um, you said in your la our last show that
00:22:20
grounding private planes might move the needle. Um, and I love that Delta and others are pushing back. The TSA is
00:22:27
pushing back against >> Delta. Great great brandenhancing. Brilliant [ __ ] move by Delta.
00:22:34
>> And no one likes ICE there. Like they're you TSA has said it's useless. The
00:22:38
airlines think it's useless. It's there was a pilot that got on social media
00:22:43
where he's like this [ __ ] sucks people. And I I have to say this is all at Donald Trump's door because he's
00:22:48
refusing to deal because of the Save Act and letting people wait in line. I love
00:22:53
that Congress people have to wait in line. I love it. And so talk about this win in Mara Lago and and what's
00:22:59
happening with TSA because besides Iran, this is yet another series of things that are indicators, leading indicators.
00:23:07
Thoughts? District 87, Palm Beach C County, as you noticed, includes, you know, White House, Florida. And a really
00:23:15
impressive young woman, I love this Gregory. >> Fantastic. >> 40-year-old small business owner and
00:23:21
military spouse running for office for the first time, defeated Republican John Maples, who had Trump's complete and
00:23:28
total endorsement. She won with 51.2% with turnout roughly at 29%. Trump carried the district by 11 points in
00:23:37
2024. That's a lot. >> The previous Republican incumbent, won by 20 points. I mean, this is And then
00:23:45
let's go up >> Let's go up the, you know, let's go up the coast of the great state of Florida.
00:23:50
Democrat Brian Nathan, a Navy veteran and Union organizer, upset Republican Josie Tomcow by just 408 votes, a margin
00:23:58
of.5%, which could trigger a machine recount. But Tomcow outspent Nathan more than 3
00:24:06
to one. And Nate, it looks like Nathan won and received over 400,000 in kind contributions from the Florida
00:24:12
Republican Senatorial Campaign Committee. The previous Republican incumbent, Jay Collins, won the seat by
00:24:18
10 points in 2022. And this all bubbles up to the most shocking, exciting, and somewhat it almost I'm almost worried
00:24:26
we're peing too early right now. >> No, >> the prediction markets.
00:24:30
>> Mhm. uh Cali is saying for the first time that it's more likely than not
00:24:37
>> that Democrats take the Senate. >> Yeah. Mhm. >> We When have we heard that? Everyone has
00:24:44
said it's >> everyone the narrative so far from quote unquote all the experts is it's likely
00:24:49
very likely Democrats will get control of the House. >> But the map is really difficult for
00:24:55
Senate. really difficult like looking at the people >> and now people more people are betting
00:25:01
their money on Democrats taking the Senate. This is >> it is I think the Democrats are fielding
00:25:08
much better candidate this woman and seems I I love her. I was like I love you. She was focusing in on maternal
00:25:14
health and affordability issues. You know you have Abby Spanberger in Virginia. You've got Mickey Cheryl.
00:25:20
You've got all even Mad people good candidates everywhere. Yeah, Telerico and not just centrist ones. Just really
00:25:28
good everywhere. >> People fresh ideas. >> Yeah. Fresh ideas, you know, tough
00:25:33
>> regulariz prostates, still childbearing, actually think about kids, actually have
00:25:38
kids at home. >> Yep. >> Yeah. >> I feel I feel really good about the
00:25:42
candidates. And the Trump ones look like a bunch of cult members or acolytes that
00:25:46
really hate him secretly. And by the way, let me stress to everybody, if you hang around Republicans, off the record,
00:25:54
they eviscerate Trump. On the record, they suck up to it makes them so awful. Like, like, at least the Democrats fight
00:26:02
in public, I guess, than they do. Um, but it's really um it's really something
00:26:07
to see what's happening here. That was I think there's the Mara Lago one is
00:26:11
particularly notable obviously but across the country in places where Democrats have never won. Georgia,
00:26:17
Kansas, all these places they're they're knocking up wins and and so that that
00:26:22
creates a real opportunity if Democrats walk into it. And I think so far on the local level like this, the candidates
00:26:29
have been speaking what they're listening to voters and they're they're
00:26:32
they're not I don't think they're just mouthing things like I think they
00:26:35
actually are concerned with what what do voters want? This is our customers and we're gonna give them what they want.
00:26:41
Anyway, Delta, let's give Delta a big old >> clap. I'm I'm uh I met the CEO there and
00:26:47
a good friend of mine's on the board. >> Mhm. >> The whoever whoever came up with this
00:26:52
idea. >> Mhm. >> Uh except that is one of the most brandancing, thoughtful, egalitarian
00:26:58
American thing. This was such a an amazing >> Yeah. um corporate move and it directly and
00:27:04
again it flies in the face of or not flies in the face. It supports what I believe is the greatest commercial
00:27:09
opportunity. I just had a phone call with I think one of the most thoughtful business leaders in America who runs an
00:27:15
iconic investment bank and I said to him the greatest commercial opportunity in a
00:27:19
long time has been presented and that is in a thoughtful nonad homminin non-personal attack discussing values of
00:27:28
America and how they have been so incredibly important to our capital markets to do with Dario and Modi and
00:27:35
now to a certain extent what Delta Airlines is saying and to say no this isn't direct affront on the Trump
00:27:40
administration. >> It's all Congress people. For people who don't know, Congress people can sail
00:27:44
through security. >> Yeah. But what this is saying is >> people don't know that
00:27:48
>> the people blame Trump and the Republicans mostly for this shutdown. So
00:27:52
by them saying this is unacceptable by Delta saying this is unacceptable and our leadership who has [ __ ] this up by
00:28:00
quite frankly demanding that the SEAB act be a part of this or ICE funding. >> We are no longer going to engage in
00:28:06
facilitating this. >> Wait in line. Wait. Get in the back back of the line. Back of the line, which is
00:28:11
great. All right. We we think it's great. Get back in the line. Lines suck, by the way. Um and it and it's terrible
00:28:16
for the TSA people who deserve to be paid and ICE people are being paid and they're doing nothing but buying coffee
00:28:22
and irritating people. They handed out water in the line through security. How stupid can you be? Okay, Scott, let's go
00:28:28
on a quick break. When we come back, Meta and YouTube are found liable in the first of the social media addiction
00:28:34
lawsuits. Support for this show comes from Vanguard. If you're a financial adviser, then you're probably thinking
00:28:40
about how to set up your clients for success. A fixed income strategy like bonds is a good place to start. However,
00:28:46
with tricky markets and rate shifts, there may be some unforeseen risks. That's why having a partner with scale
00:28:51
and expertise matters. Vanguard brings both. Vanguard bonds are institutional quality. Institutional quality isn't a
00:28:58
tagline. It's a commitment to your clients. It means top grade products across the board. The lineup includes
00:29:03
over 80 bond funds. They're actively managed by a 200 person global squad of
00:29:08
sector specialists, analysts, and traders. A lot of firms love to highlight their star portfolio managers
00:29:13
like it's all about one brilliant mind making the magic happen. Vanguard's
00:29:17
philosophy is a little different. They believe the best active strategies shouldn't be locked away with one
00:29:22
person. They should be shared across the team. So, if you're looking to give your
00:29:25
client consistent results year in and year out, go see the record for yourself at vanguard.com/audio.
00:29:31
That's vanguard.com/audio. All investing is subject to risk. Vanguard Marketing Corporation
00:29:38
distributor Scott, we're back with more news. Meta and YouTube have been found liable in of
00:29:45
harming a young user with features that were addictive to her mental health. A California jury found Meta must pay $4.2
00:29:52
million and YouTube 1.8 million. It's not very much money. She asked for a billion. The case focused on features
00:29:58
like infinite scroll and algorithmic recommendations. As a reminder, both Tik Tok and Snap settled before the trial
00:30:05
began. Uh Meta has also been found liable for failing to protect young people from online dangers in a New
00:30:11
Mexico case. There, Meta must pay 375 million, a little more, but still a parking ticket for this company. The
00:30:18
company made 160 times that in revenue last quarter. These verdicts are the first in social media addiction trials,
00:30:24
social media impact trials. as the New York uh Post cover said, metaculpa, which we love. We love. Scott, what do
00:30:32
you think? Here we go. We're that we're over the edge with juries involved.
00:30:37
Juries are tired of social media. >> I generally want to get your viewpoint
00:30:41
on it, but my initial instinct is that this is actually a big deal. It and it's
00:30:45
not about it's, as you said, it's not about the parking tickets that have been
00:30:48
issued. It's that there's now legal precedent for what that the activities these firms
00:30:54
engage in is is makes them civily at least liable. And the other piece of information I got that I found
00:31:01
fascinating is their insurance companies are trying to reject the claim saying that they intentionally they knew they
00:31:07
were intentionally doing this and so they're not covered by insurance. And my
00:31:12
sense is it's not about this case. It's that the other several hundred or
00:31:16
several thousand cases against these firms just got a lot stronger because of this decision.
00:31:21
>> Yeah, there's a real there's a real backup. You know, this has been
00:31:23
something you and I have been talking about. I went back >> Oh, you think?
00:31:26
>> Yes. >> I thought I wrote I thought I wrote a book on this about 10 years ago.
00:31:30
>> I did. I was just saying you wrote a book on this and I wrote a book on this
00:31:33
and talking about these problems and how liable they were, how lack of accountability, lack of regulatory
00:31:39
scrutiny of anybody except some in other countries. uh in fact rolling over for them but both by Obama and Trump of
00:31:46
course because he takes money from them. Um you know I think their high water mark was standing in with Trump at the
00:31:53
inaugural. I think this was was in this was starting to be in place when people realized after January 6th I think that
00:32:00
social media has a real impact and it's been a slow burn. That's for sure. And
00:32:04
our our regulators have done nothing. Let me just say not in states in our federal regulators and I don't mean to
00:32:10
say Amy Clolobachar and others have not tried. I just think they have not been successful because of the push back and
00:32:17
in this case I think you're going to see furious push back by these companies
00:32:21
even for this small an amount right this tiny amount of money. They're they're
00:32:25
because they don't want any accountability for what they're doing. They want to skate out of responsibility
00:32:32
and they can't because now it's in front of juries and every person knows
00:32:36
addiction is an issue. Sloppy management is an issue and threats to kids are an issue.
00:32:43
>> I saw you on Anderson Cooper last night and and you had I thought was exactly
00:32:49
the right point and we've been talking about this and that is >> the nation is actually pretty good at
00:32:54
recognizing externalities and harm. It just doesn't act crisply. It took about
00:32:58
30 years with tobacco, >> 20 years with opiates. Social went on mobile in 2012,
00:33:04
>> it feels like that timing is about right that about at 2032. >> Unfortunately,
00:33:09
and I'm personally agrieved quite frankly, >> my kids got [ __ ] up on these things. I
00:33:17
>> you know, your kids, your your first generation, your older kids, Alex and
00:33:22
Louie, had to endure this. And my sense is they've come through it pretty pretty
00:33:26
>> unstable. And they had less of it. They had less of it. It wasn't quite, you
00:33:29
know, they were, your kids are the zero, ground zero. I think my kids were near a
00:33:34
blast zone, but not the same quite thing. I think they they like YouTube. They were a little bit on Snapchat, you
00:33:40
know what I mean? But it wasn't as intense and hateful as it as it became >> as as big tech always does. Mhm.
00:33:48
>> this praise on the poor >> because if I'd had these devices and a
00:33:53
mother who was gone before I got up in the morning and got home after sometimes after I was asleep because she was
00:33:59
working and I was totally unsupervised and I had YouTube and Snap and Uporn and Meta and and Facebook,
00:34:10
>> I think I just would have been on these things all damn day long. And as I was
00:34:16
going through puberty, my brain would have been wired for constant squeezing of a dopa bag, which I believe could
00:34:24
have very easily taken me away. I used to leave my house to go hang out with my friends cuz I was so bored. I'm not sure
00:34:32
I would have left my house. >> You wouldn't. Why would you? Why would you? I mean, one of the things that
00:34:36
they've done, and I think as as these cases come to f, the discovery is going
00:34:40
to be brutal. I mean, I think they know it. There's all kinds of evidence that
00:34:43
they know it in this case. A lot of stuff came out that they want to they want to attract tween cuz they're
00:34:48
lifelong customers, right? It's like cigarette. It's literally like Joe Camel
00:34:52
when you read this stuff. If you put cigarette in there um and what's incredible here is I actually believe
00:34:58
the cigarette manufacturers knew exactly the problem of nicotine. I think these guys think that they're not it's not
00:35:05
their fault. It's never their fault. And then they hide behind the first amendment. Hey, it's just people
00:35:10
talking. And there was a great story in the New York in the in the Washington Post today about uh Republicans worried
00:35:16
about young Republicans being so anti-semitic, Nazif focused, sort of hateful. And where do you think this
00:35:24
comes from? And again, I don't blame them fully. I don't I don't I don't
00:35:27
think it's fully, but they've created addictive and necessary features without
00:35:33
any kind of guard rails in place or any kind of what is it? It's It's not like
00:35:39
they're like, "Hey, let everything go." And I think that's it's sort of like
00:35:42
they're evil babysitters, right? In some fashion. And at some point, the babysitter has to get dinged in in some
00:35:50
way. That that's they consider themselves. It's not their fault if people eat their shitty food. I I you
00:35:54
know what I mean? Like our tainted meat, it's okay. Uh you know, and of course,
00:35:59
everyone else gets regulated but them. >> Yeah. I I think the argument would be we
00:36:03
don't get any credit for all the good we >> Yeah. all the good we >> why aren't there parades
00:36:08
>> right that we that people do learn people do it helps them with their homework they do make connections you
00:36:14
know parents of kids with childhood rare her childhood diseases social media does
00:36:19
add a lot of value it creates tremendous economic growth a lot of highpaying jobs
00:36:24
there's a lot they would argue >> they would argue we're a net good and I
00:36:29
would argue that's actually true the problem is with the word net >> and that is we're net beneficiary from
00:36:36
fossil fuels and pesticides. But we still have we still have a Clean Air Act. We still have an EPA. We still have
00:36:41
an FDA, >> right? >> And this is this is fossil fuels and pesticides
00:36:47
>> with absolutely no emission standards. >> No emissions. No. >> No. When when I lived in LA, I was
00:36:53
talking I I went on vacation with a buddy of mine. We grew up in LA together. There were days where by the
00:36:58
end of the school day, you couldn't breathe in, >> right? >> And they cleaned it up.
00:37:04
>> They cleaned it up. Unfortunately, what's happening here? >> Unfortunately, that I I thought of it
00:37:08
yesterday. I was trying to think I was asked to go on and talk about this >> and I instead I decided to go out and
00:37:14
drink uh cuz but the I was thinking okay is this the beginning of the end? It's
00:37:18
not you know what this is this is the end of the beginning. these fir this industry is not going anywhere. But the
00:37:24
era of we, you know, we need to do better from Cheryl Samberg or Mark Zuckerberg weaponizing thousands of
00:37:32
lawyers and lobbyists to delay and obuscate and gloss over the internal research. I do think that era is coming
00:37:40
to a close. >> Yeah. And um the the my favorite part of the case is that uh there was an
00:37:48
undercover operation I think from the attorney general in New Mexico where they posed they created accounts posing
00:37:56
as an 11-year-old girl which was almost immediately inundated with images and targeted solicitations from wait for it
00:38:05
>> child abusers. >> That's right. So, it took the attorney general about 48 hours to figure this
00:38:11
[ __ ] out and we're supposed to believe that Meta wasn't aware of it. >> Yeah, we don't believe them and neither
00:38:17
did the jury, by the way. Um, we're going to move on in a second, but I got to say one of I did quote you last night
00:38:22
uh on Anderson um where you say, you know, we're bound by the law but not protected by it. And they're protected
00:38:27
by the law, not bound by it. Now they're bound by it and they're going to fight
00:38:31
their asses off. You know what, Mark? Just pay the money and fix it. Like, just stop. like stop because the more
00:38:38
they resist the more a growing group of people bipartisan across the country recognizes the damage these companies
00:38:47
and then of course the same day Donald Trump names all of these people to a committee on AI with not ner a critic on
00:38:55
it right everybody with self-interest is on that that that advisory committee and
00:39:00
nobody who's going to talk about the possibilities of problem only up and to
00:39:04
the right and once again. They're going to try to do it. And let me tell you
00:39:08
folks, we need to stop them now because the damage they will do. They have shown
00:39:12
no no ability to control themselves. No. >> No one under the age of 18 needs to be
00:39:18
on any of these. >> And we hate to say that. I have to say I hate to say that, but this is where we
00:39:22
are. Um, okay, Scott, moving on. I want to start our next story by playing a prediction you made just last week.
00:39:30
My prediction is OpenAI Sora social media app will be shut down soon. >> Oh, Sora, what do you know? You know
00:39:39
something? >> No, I don't. I I've done no original reporting, trust me.
00:39:43
>> Upon its release, Sora came out at number one in the app store. Um, and
00:39:49
actually got more downloads out of the gates than Chat GPT did. However, like the parties ended. Downloads fell 32%
00:39:57
month over month in December and another 45% in January. And some Sora is the little engine that didn't. And also
00:40:05
users continue to drop like flies. You were right. I still think you had inside information. Open a announced
00:40:11
this week that it's discontinuing the Sora app. This is the video app they're
00:40:15
doing just months after launching it. Uh this reportedly one of several steps the
00:40:19
company has taken to refocus the business ahead of its potential IPO. Sam Alman says, "The Sora team will now
00:40:23
shift to prioritizing longerterm bets like robotics." Uh, as for the Disney
00:40:28
deal they did at the time, if you remember, Scott and I talked about it, a $1 billion investment in OpenAI, which
00:40:32
we thought they weren't really going to give them that, and it was just a little
00:40:35
experiment that included licensing characters for Disney is out. Disney's out. Um, it was more of a press release
00:40:42
than anything yet. Um, so talk about this prediction. And I I um just so I'll
00:40:46
also note Open A is closing in on a deal to raise about $10 billion from investors, bringing its latest funding
00:40:51
round to more than $120 billion. Jeez of the [ __ ] we um so, uh talk about this. I mean, they've had to shift very
00:41:00
quickly. I don't know what they're doing in robotics, but they should just focus
00:41:04
on their core business, seems to me, but uh thoughts on this? What did you know?
00:41:09
Come on, tell me the truth. Cara, Cara, Cara. I don't I don't enjoy talking
00:41:13
about myself or taking credit for what is arguably one of the most precient >> predictions of the year in techn Oh my
00:41:20
god. >> It was so good. I got to say I was like he was right. Damn it. >> My nipples are hard.
00:41:26
>> Mhm. >> Touchdown Jesus. >> I I approve these. >> I am [ __ ] John Travolta when he was
00:41:31
thin and could dance. This is a ladies for the for the people tuning in on the YouTube channel. Watch his shoulders.
00:41:37
Watch his shoulders. Hello. to resist is feudal. Um, okay. The weirdest thing that was that was literally the easiest
00:41:45
prediction ever. By the way, it wasn't >> Why did that why did you like when you
00:41:48
said it, I was like, why is he talking about that? Like I get it, but >> to be honest, this goes on a on a deeper
00:41:55
level. This goes to the notion greatness is in the agency of others. I have a data and research team that feeds me
00:42:01
with every good idea I ever had. And this this young man named Dan Shalon, I said, I need a prediction for Biba
00:42:06
today. and he wrote sore is going to be closed down and he gave me a bunch of data. So I can't take credit for this as
00:42:12
usual. I take credit for it but it was my team that that came up with that prediction.
00:42:16
>> He just saw the download because a lot of apps go up and down right and many
00:42:20
like took forever for Meta to really kill off the metaverse. >> Okay. Open AI didn't shut down Sora
00:42:28
anthropic did. >> Yeah. that of all the new of all the incremental or new dollars being um
00:42:36
>> being won by AI companies in the enterprise market. It used to be 60% of
00:42:42
new dollars being spent on AI from the enterprise. We're going to we're going
00:42:46
to uh we're going to anthrop I'm sorry, open AI. It's dropped to 30 cents on the
00:42:51
dollar and Anthropic has screamed to 70 cents on the incremental dollar being spent by the enterprise on AI. Why?
00:42:58
Because see above, biggest commercial opportunity in history. Say no to the Trump administration. And also to be
00:43:04
fair, Anthropic's new products are just outstanding. They are I have to say >> they have more momentum right now than
00:43:11
any company in the world. >> They're better. They're better. It's
00:43:14
like when you were using browsers. I remember using Explorer and then Netscape and then Explorer was better,
00:43:19
but then you know it was it was like that. You're like, "Oh, that's like
00:43:22
Google. There was a lot of search engine and then it was like, oh, this is better. This is better." And to OpenAI's
00:43:28
credit and Sam's credit and the board's credit, they've said, "Okay, the best
00:43:33
business strategy when you're starting to wobble, quite frankly, is focus."
00:43:38
>> Moved fast. I would agree. >> Focus. We Okay, folks. It it And by the
00:43:42
way, my it doesn't end with Sora, folks, in terms of [ __ ] that's about to be closed
00:43:48
down. And that's going to be my prediction at the end of at the end of the show. But you knew they were going
00:43:52
to have to focus. You knew this product wasn't working. It was hemorrhaging money. The whole visual space around AI
00:43:59
just hasn't panned out the way people had hoped. >> Slop. It's slop.
00:44:02
>> Yeah. It's just not It's so interesting. The one >> couple of things
00:44:06
>> just was what's one of the most interesting things about Amazon is it
00:44:10
started in books and books has probably been the least disrupted industry it's
00:44:15
gone into. The book publishing industry although it's been consolidated is actually still pretty strong. Big
00:44:21
advances. >> Agents are still making money. independent book sellers are actually
00:44:25
making a bit of a comeback. Anyways, >> but what's so interesting I find about
00:44:30
if you'd said what's going to happen to designers 24 months ago, >> you would have said oh like customer
00:44:35
service and mediocre lawyers, they're just going to get cleared out by Sora and I forget Google's one. And what's
00:44:41
interesting is as a percentage of the employee base, the number of designers has actually gone up at tech companies
00:44:49
because it's the coding that is being commoditized. But the front-end humanfaced
00:44:56
UI design, >> yeah, >> really compelling is now the point of differentiation. But because these
00:45:03
things, this AI, I've played with this stuff. It's just not very good. >> It's not good. You know, the only thing
00:45:08
I like is when they show they like do all these like they have celebrities like they did a Game of Thrones in high
00:45:14
school. Some of it's fun, but it's like it's sort of like for a minute and then
00:45:18
you're like, "Okay, now I want to look at something real." I think the human
00:45:21
eye can see it. >> It exhausts you. >> It is. The human eye is like not so I
00:45:26
don't think you'll get used to it either. Everyone's like, "Oh, kids will
00:45:29
get used to it." I'm like, >> it's ruined animal videos. >> I don't think so. Yeah, animal videos.
00:45:32
>> Remember how amazing animal videos were? animal videos were amazing because
00:45:36
>> now they have them do >> when you saw a Norwal or a beluga whale retrieving a Nerf football from
00:45:44
adventurers or scientists in the Antarctic or wherever the [ __ ] that was. You're like, "This is an incredible
00:45:49
moment." And now I see it and go, "Is it [ __ ] AI?" >> Yeah, exactly.
00:45:53
>> Because if it is AI, I don't care. I don't It's not real. I don't
00:45:56
>> Yeah, I know. They make weird. I agree. I agree. And that's It just It's not
00:46:00
satisfying in a way that real is. I have to say. And I do think the human eye could. It's just years ago when I was at
00:46:06
the MIT Media Lab when they were having problems with robotics that talk to you,
00:46:10
you know, on a screen and it was always the eyes. There's something wrong with
00:46:14
the eyes and humans perceive it. >> Lips and the voice. I'm telling you
00:46:17
though, if AI starts producing cute, cute pictures of babies seeing or hearing for the first time, I'm out. I'm
00:46:25
logging off of every platform. >> I would agree. Anyway, >> it has to be real. Those things change
00:46:30
my day. Those things are >> amazing prediction. Once again, you have you have triumphed. Anyway, uh let's go
00:46:36
on a quick break. When we come back, we'll talk about the return of the Amazon iPhone.
00:46:42
>> Support for this show comes from Shipstation. When your company is growing fast, order fulfillment can make
00:46:48
or break your success. ShipStation's intelligence-driven platform brings order management, rate shopping,
00:46:53
inventory and returns, warehouse systems, and comprehensive analytics all in one place, saving customers 15 hours
00:47:00
per week on fulfillment. With ShipStation, everything you need to manage getting your product to customers
00:47:05
is in one place. You can connect to over 200 sales channels, and instead of five
00:47:10
to seven disconnected tools, you've got one. You can also set up time-saving
00:47:14
automations. ShipStation picks the best carrier, finds you the best rate, prints
00:47:18
labels in bulk, and sends tracking updates. Done. Share tracking details, can cut customer service inquiries by
00:47:24
12%. Returns management can give you data on what's coming back and why, and
00:47:29
analytics can show you where you're saving and where to optimize. Try Shipstation for free for 60 days with
00:47:36
full access to all features. No credit card needed. Go to shipstation.com and use the code pivot for 60 days for free.
00:47:44
60 days gives you plenty of time to see exactly how much time and money you're
00:47:47
saving on every shipment. That's shipstation.com code pivot. shipstation.com
00:47:53
code pivot. Scott, we're back with more news. Amazon is reportedly getting back into the
00:48:00
phone business, working on a new device internally known as, oh my good god, the
00:48:04
transformer. According to Reuters, what a bunch of idiots they are. This would potentially be an AIdriven phone that
00:48:11
syncs with Alexa and could eliminate the need for traditional apps. Oh, sure, why
00:48:15
not? Details are slim. There's no clear timeline or pricing. And sources say the
00:48:19
project could be scrapped, priorities or finances change. That's a lot of may.
00:48:23
Um, but let's not forget Amazon's last phone for I have not forgotten it since
00:48:27
I wrote about its creation and decline, the Fire Phone, which launched in 2014 and quickly flopped leading to $170
00:48:35
million right down. And I remember getting sented. I was like, it's like the home, the Facebook home. I I kept
00:48:40
getting sent these things. I'm like, what is this? And like I'm calling Steve
00:48:44
Jobs immediately because I need to talk to someone who knows how to make these things. Why would Amazon have a phone? I
00:48:49
want you to give me the argument why it's a good idea despite their and I I think people fail at things and they
00:48:54
come back, but I don't feel like Amazon is my device place. I I think they got
00:49:00
they got knocked over in the um in in the audible space. I think they got knocked over in the uh the reader space.
00:49:08
I mean, it's still a business, but it's not it's not on fire. It got knocked out
00:49:13
by the iPad in a lot of ways. Any thoughts on the phone from Amazon and why? Give me the argument. Well, the
00:49:19
argument could be that it becomes a new piece of the flywheel around Amazon Prime. And that is if you're an Amazon
00:49:26
Prime Plus member, you get a very competent phone that perhaps has even better bandwidth because Project Kyper
00:49:34
starts to pay off and they have satellitebased connectivity. So what this is is potentially I would imagine
00:49:42
in you know the conference rooms where Amazon strategy group who are some incredibly bright people are saying
00:49:48
>> yeah they need a thing >> well what if why don't we go after Android and that is we can offer people
00:49:53
>> oh okay >> we can offer people an unbelievable phone for free as part of their Amazon
00:49:58
Prime membership. Yeah. >> And then say and get off of AT&T and we'll we'll wrap it all into the
00:50:04
greatest loyalty program in history which is Amazon Prime. >> It is indeed.
00:50:08
>> So I think there's a really solid argument. The problem is this all works
00:50:14
uh on a whiteboard and then people hold these phones, the Facebook phone, the Amazon Fire and they go, I don't like
00:50:20
it. >> The Microsoft phones. >> Yeah. All the all the handhelds. And by
00:50:24
the way, just a shout out, a colleague of mine who teaches brand strategy at another university called me and said
00:50:30
saying that Apple shouldn't go into a lowerric computer is all wrong. And he
00:50:34
said he said my views on it were all [ __ ] up and I just want to give him his props. He said that look at all the
00:50:40
luxury car brands. They were all [ __ ] posted for going into lower-end models and it's expanded their share.
00:50:46
>> Yeah. >> And I thought that was a really good point. If they're going to give people a
00:50:49
really good version of >> of it and then you have to buy the shitty Dell version. Yeah. I
00:50:55
>> Well, all the Porsche purists said they should never launch an SUV. They did. It
00:50:58
sells more than any other car in the Porsche lineup. And also, Mercedes has an Aclass in Europe. They have they have
00:51:04
the what is it not the E, the C-Class. Anyway, well, they don't do it too much,
00:51:08
right? They you can't do it too much. You have to do it just the three, the two, the one. Anyways, I just want to
00:51:13
acknowledge the point cuz when when he called me and told me this, I'm like,
00:51:16
"Okay, you're smart. Good Android. Now I see. Thank you. >> They they this could be the in my
00:51:22
opinion the biggest increase in shareholder value that's >> is a function of the friction between
00:51:29
silos of different companies. Y >> the new co Disney should have something
00:51:33
called Disney Plus Plus and you get Disney Plus videos, you get free merchandise, you get the princess
00:51:41
experience and most importantly when you come to the parks it's on only Disney
00:51:45
Plus members days where there are no lines and it would be the ultimate loyalty program
00:51:50
>> and Amazon >> if they keep if they added telco and a device into Amazon Prime
00:51:56
>> Yeah. I think theoretically it's worth, you know, it's worth a couple billion
00:52:00
dollars to invest in. >> They don't do that. They don't do that often. You're right. They just like here
00:52:04
you go free. Here's it's like a it's like a a club. And you would do that
00:52:07
with Amazon because they do deliver really well. They're >> talking about autonomous like
00:52:13
>> the core stuff they do they do really well. So >> preloaded free Amazon music, free Amazon
00:52:19
Zuks or whatever their their autonomous is. >> Those are cool. Zuks is cool. and just
00:52:24
say, "Okay, folks, we're going to take care of you." Amazon is arguably the
00:52:28
most trusted brand in the world right now. >> Yeah, Kyper. They could offer that for
00:52:32
>> and they say, "All right, you don't need you don't need to trust us when you're
00:52:35
in front of the TV screen or the computer screen. You should trust us as much when you're in front of the phone
00:52:40
screen." >> The CEO, the the one person running at the vision, I'm supposed to meet with
00:52:44
him. Anyway, one more quick break. We'll be back for predictions. Okay, Scott,
00:52:49
let's hear a prediction. I'm going to say very quickly uh just so you know at
00:52:52
the time of this taping SpaceX is aiming to file its IPO within a week and I predict I will not be asked on the board
00:52:58
as you noted at the beginning. I predict >> I predict that >> people literally don't if I was your
00:53:03
financial c your wealth adviser and I kind of have been for the last few years. >> Yeah, you have.
00:53:07
>> But if I gotten a hold of you 10 or 15 years ago, I would have been like
00:53:11
>> tone down the anti anti- big tech thing >> and we're going to make hundreds of
00:53:16
millions of dollars on boards. >> I know. I know. I can't do What I just
00:53:19
said as a joke, Lar isn't a terrible person. I can't help myself. That was a
00:53:23
joke. >> You can't, you know, when you text me mean things at 2 in the morning, it's
00:53:26
not a good idea. And you can't help yourself. You literally can't mean some
00:53:30
of them are very >> You can't help yourself. I get it. >> I can't I can't I know I shouldn't drink
00:53:35
as much as I do. >> Speaking of I was right about these people. I was right. Anyway, your
00:53:41
prediction, please. >> Okay. So, what do we have here? Open AAI is in a fivecar alarm right
00:53:51
now. In the last six months, they have Oh, and by the way, this this Have you seen the deals of this financing to top
00:53:59
off the round with I think it's TPG? They are guaranteeing a 17.5% return. >> What?
00:54:07
>> Yeah, they're guaranteeing the to top up the round in private equity. The deal is
00:54:13
the deal is along the lines of the following. It kind of makes industrial sense, but it's a more of these circular
00:54:19
related party deals. They're saying to these private equity firms, if you invest and top up my round, I'll give
00:54:24
you se I'll guarantee you a 17.5% return. Now the idea is it makes kind of industrial logic because all of these
00:54:31
firms have massive uh a massive portfolio company of of firms which likely means they're going
00:54:40
to encourage these firms to adopt at an enterprise level >> open AI products. So open AI goes
00:54:45
immediately >> we get >> eat the dog food is what you're saying.
00:54:49
>> Yeah. We get industrial scale here and because we're going public and Sam Sam's
00:54:54
bankers have probably said distinct of the problems you're going to get X valuation hundreds of billions or even
00:55:01
possibly trillion dollar plus valuation. So he said to the private equity guys I
00:55:07
guarantee you a 17.5% return on your money. The problem is a guarantee at the top of the kind of the capital stack
00:55:14
means that the people underneath them the investors might get squeezed out if they have the first you know if if a
00:55:20
decent amount of returns has to go to the top >> but it is more of this kind of what I'll
00:55:24
call shell game and as long as things keep increasing it's fine but this is the kind of thing that could absolutely
00:55:31
>> oh yeah >> brushed or trickle or if they don't make people like you Scott that's not that's
00:55:35
like a let me pay you to be my friend >> well this is >> don't like it
00:55:40
>> it's really that's the most interesting component of the deal is a you never
00:55:44
offer I have never seen it's a preferred return that aggregates and there's
00:55:48
typically >> would you invest that >> um I would I would want for open AI I
00:55:56
feel that what I would want to do is the following of just being purely capitalist I'd want allocation in the
00:56:01
IPO because Sam is smart and Sam and his bankers will say okay the first trade of
00:56:07
this is likely going to be 80 bucks so let's price it at 50. So we can say we're the best performing IPO of the
00:56:12
year. >> Yeah, they'll do those tricks. That's nothing new. >> It's a once in a-lifetime
00:56:17
branding event, the IPO. So the investment banks have an incentive because they get to buy shares at a
00:56:22
discount. They get to give shares to their buddies and institutions at a discount. And the firm for a modest
00:56:28
dilution, 3 to 5% dilution, gets a branding event that they're in the news for the rest of the year as the best
00:56:34
performing IPO of the year or great performing IPO of the year. So they leave quite frankly SpaceX is going to
00:56:39
leave >> they leave money on the table and it's yet another transfer of wealth from the
00:56:42
lower middle class who don't have access to preIPO or to the IPO. >> Don't you think SpaceX will leave them
00:56:49
in the dust? >> SpaceX in terms of an IPO. >> Yeah, that'll get all that stuff.
00:56:54
That'll be that'll all be about valuation cuz while SpaceX while SpaceX has the biggest moes in the history of
00:57:00
business as far as I can tell >> they're talking about a$1.5 trillion valuation on 13 billion or 14 billion in
00:57:08
I mean that's a h 100red times revenue so it's all about pricing but anyway so
00:57:12
this this where I was headed is the following it is a fivecar alarm and Sam and his board are smart they are
00:57:19
focusing first area of focus Sora We barely knew you. You're gone. The next area of focus, it won't be a headline
00:57:28
item. It'll be euthanized slowly. Um, it is IO and that is the $6.5 billion acquisition of Johnny Ives
00:57:40
company to build hardware. Uh, this is the metaverse on a smaller level. This is Mark Zuckerberg's
00:57:49
consensual hallucination cost meta shareholders uh 70 billion. This is going to cost 6.5 billion to open AI. It
00:57:57
was an all stock transaction but there is no way if I am on the board and I am Sam Alman and I'm like okay play time's
00:58:05
order I am losing my core business to Anthropic we need to focus that they're
00:58:11
not going to they're going to decide to not play in the traffic of hardware. So,
00:58:15
>> okay. All right. If you look at it, big deal. Okay. That's those are
00:58:19
>> there's been delays, technical difficulty, unclear product definition,
00:58:23
high cost. >> Uh, so >> I think I'd buy the Amazon phone first. So, that's a bad sign because I wouldn't
00:58:29
buy the Amazon. >> Brutal cate brutal category. And then if you look at what's going on here,
00:58:35
persistent technical problems. All right. >> Yeah, of course. >> Compute constraints, always on AI
00:58:40
reliability, privacy concerns, interaction without screens. Basically, this isn't right now IO or
00:58:47
the division of quote unquote open AI's hardware products. It's not just about
00:58:51
execution risk. It's unsolved product physics. >> I love it. >> And the timeline, the timeline keeps
00:58:58
slipping. I've been tracking this. Originally expected, >> let me give you a piece of advice that I
00:59:02
heard a long time ago. Hardware is hard. >> Thank you. >> Well, it was orig
00:59:07
It was originally expected around 2026 and now they're saying it's not shipping
00:59:11
before 2027. Guess what? It's never going to ship. >> Oh, all right. There's a prediction
00:59:15
right there. All right. We'll see what happens. Anyway, great job on your prediction. I like this new one. Um, and
00:59:21
by the way, next week, I just want people to know, speaking of predictions, Jeffrey Epste's lawyer and accountant
00:59:26
just told Congress they were never interviewed as part of a formal federal investigation. We're going to talk about
00:59:30
this next week because we're not going to let Epstein out of the news either.
00:59:33
Trump is making all sorts of handwaving to in order to pay it. But this to me was a malpractice on the part of federal
00:59:40
uh federal investigators. any in you know that they were not interviewed as part of a form I mean you you might talk
00:59:46
to the lawyer and accountant seems to me they might they might know a few things
00:59:51
in any case we'll see where that goes we're going to talk about it next week
00:59:54
so I want to get that back >> so can I just have one addendum the cloud and the silver lining of these
00:59:58
democratic wins >> what >> we need a Nancy a speaker Pelosi like figure who understands how to
01:00:07
>> um tell the children what okay the grown-up is here this is what you need
01:00:11
to do. >> Mhm. >> Uh, as good as things are for Democrats on a um on a Senate and and on a
01:00:18
congressional election level, we are about to snatch defeat from the jaws of victory. And while no one was looking,
01:00:25
we're about to elect a president of the fourth largest economy who's going to be
01:00:28
a Republican. >> Mhm. >> Because of the jungle voting construct in California,
01:00:33
>> we'll talk about that Monday. Let's >> We are probably going to elect a
01:00:36
Republican unless Democrats get their heads out of their asses. and dropping out. I'll do a little I've been
01:00:43
contacted by every one of those Democratic candidates and also Steve Hilton who I know well. Um I haven't
01:00:48
heard from the sheriff. >> Gavin Newsome and Chuck Schumer. You need to start promising these Democrats
01:00:53
something and getting them out of the race. >> I literally out of the race.
01:00:59
>> They they also had to cancel a thing. They're the whole thing is a [ __ ]
01:01:02
mess. And and it's suicidal. It's suicidal. It's really weird. And uh
01:01:06
>> and by the way, Governor Nuome, who I am a huge fan of, if you don't show some
01:01:11
backroom dealing here and make sure that the next that your era parent isn't a
01:01:15
Democrat, it's really going to hurt your chances of getting the nomination. >> They got to knock some heads. Um anyway,
01:01:20
uh we want to hear from you. Send us your questions about business tech or whatever's on your mind. Go to
01:01:24
nymag.com/pivot to submit a question for the show or call 8551 pivot. Before we go, I just
01:01:31
want to say my brother Jeff, who is a friend of our pivot, had emergency surgery this week, heart surgery. Um, he
01:01:37
had a blocked I don't know what I'm going to say it wrong, but he had to put
01:01:40
have a stent put in and it was because he he was on Kaiser or something like that and he went on Medicare and the
01:01:46
internist said to him, "You should check your calcium levels." Turned out he had
01:01:50
80 to 90% blockage. It's it's called the widow maker, the the the the issue. Um,
01:01:56
and he got it all cleaned out and he's doing great. But one of the things he
01:02:00
said for me to tell you is make sure you all check things like that and get a checkup. I just thank goodness that this
01:02:07
didn't happen because he would have died of this very suddenly. So I wanted to
01:02:11
give him a shout out. In any case, that's the show. But thanks for listening to Pivot. Be sure to like and
01:02:18
subscribe to our YouTube channel. We'll be back next week.