00:00:00
I started doing it and I'm sitting there in the park and I'm like, do I really
00:00:03
need to be an [ __ ] >> Not today. Yeah, tomorrow. Tomorrow. >> Hi everyone. This is Pivot from New York
00:00:15
Magazine and the Vox Media Podcast Network. I'm Cara Swisser >> and I'm Scott Callaway.
00:00:20
>> We're going to do something a little different today and start with a
00:00:22
voicemail from a listener who's going to explain the situation. Let's play a
00:00:27
clip. >> Hi. After listening to Pivot today, I saw that James Murdoch is buying part of
00:00:35
Box Media and I was curious how that might change the freedom you guys have on your various podcasts. Anyway, love
00:00:43
your shows. Just finished burn book and listen to all your podcasts. Keep up the
00:00:48
good work. Jenny from Texas. >> Oh, that's a very good question. Jenny
00:00:52
from Texas. So, in case people don't know what she's talking about, James
00:00:55
Murdoch's company, Lupa Systems, is acquiring Vox Media Podcast Network, New
00:01:00
York Magazine, and the Vox site. Um, the other parts of Vox Media, including Eater, The Verge, SP Nation, are
00:01:05
becoming a a different company, a new independent company. The deal is expected to close in the coming weeks.
00:01:12
There's a few legal legalities and this and that. From what I understand, Lupa
00:01:16
Systems has not disclosed the purchase price, but it's reportedly around 300
00:01:19
million. the podcast network is the mo the more attractive asset that we love New York magazine and it does rather
00:01:25
well um and love docs uh and so explain Scott people want to know what we think about this because a lot of people have
00:01:33
bad information one first of all Jim Bankov is staying as CEO of this unit um it's a spin-off essentially uh of of
00:01:41
these assets and which have been fast growing so explain Mr. business. Explain the situation.
00:01:48
>> Well, about a decade ago, people thought, wouldn't it be great to aggregate kind of this alternative media
00:01:53
or build alternative media companies for a new world? And so, Buzzfeed, Food 52,
00:01:59
CNET, Vice, was it called Mike, Mashable, >> Mike? Yeah. >> And Vox. And back when they thought
00:02:08
probably six, seven years ago that if we bring together sort of these good little
00:02:12
media assets, some digital, some not, and group them together, we can spack it and it'll go public at 1 23 billion. And
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so Jim logically, the CEO of Vox thought this is a good idea. bought New York magazine, had a bunch of very, you know,
00:02:29
fast growing websites, Eater, Verge, you know, Vulture, and then started some naent podcasts, right? And then
00:02:40
essentially what happened was uh the market never said, okay, there was never the bloom came off the rose
00:02:48
>> of all these companies. But basically they're competing against monopolies who
00:02:52
extract rents and then their margin was you know the margin of all these companies is Google and Meta and
00:02:58
Amazon's opportunity and they've slowly but surely sucked the oxygen out of the
00:03:02
room and BuzzFeed from peak valuation to sales price was off 86% food 52 lost 96%
00:03:08
of its value CNET lost 94% of its value was I think uh basically went bankrupt but sold some assets was down at least
00:03:18
93% % uh Mashable off 80%. I mean just on and on and on and on. Tumblr, my favorite, 1.1 billion to 3 million. Uh
00:03:28
if you're an investor in Union Square Ventures, thank God that the guy with the Caesar's haircut, I forgot his name,
00:03:35
was able to convince probably one of the weaker CEOs in digital history to buy his bag of [ __ ]
00:03:42
for 1.1 billion tons. >> That was Marissa Mayer at Yahoo. >> Marissa Mayor, right? So effectively
00:03:47
this has just not worked out. Now what and what to be you know Jim our guy who we like has always said Scott be honest
00:03:55
and always told us to be honest so let me be honest. They spent a lot of money to create a company with negative
00:04:01
synergy. There's some real assets there. New York Magazine is a trophy iconic
00:04:05
asset. Um the the sites themselves, the digital assets are actually do pretty well, but again see above they're in
00:04:15
they're swimming upstream against giants. And then the smaller division that started out as an afterthought has
00:04:21
become the growth engine and the crown jewel. And Jim is a smart guy and realized that the whole was less than
00:04:27
the sum of its parts and basically decided to break them up into what was going to be three buckets. But my
00:04:32
understanding is, and I do not have inside information here, and I don't want it, is that Jim Murdoch or James
00:04:39
Murdoch, who wants to be in the media business, said, "I'll take New York
00:04:43
Magazine because I think he likes it and it's an iconic asset. And what I really
00:04:47
want is the podcast network, which is growing. I'll stop there. Where did I get that right?"
00:04:52
>> No, you got that all right. And I think Jim of all of them has cannilally moved
00:04:57
that into a space. Obviously, Buzzfeed uh just bought by Byron uh Allen. Um you know, they've all Vice has had a much
00:05:04
less happy situation. I don't know where that went. Like there were a lot of them and it was
00:05:09
very exciting. And one of the reasons I sold my tiny little site to Vox many years ago, Recode, was cuz they were
00:05:17
ridiculously priced and were sort of pricing me at I was even a smaller minnow. And so when I got to Vox, um, I
00:05:25
I I understood the ad market was really a problem here. Although we did great, let me just The only thing you're
00:05:30
leaving out is so much great journalism by so many of these sites and so much really interesting independent media.
00:05:36
Absolutely. Um, all the Verge, Eater, um, you know, all of them and New York Magazine just won a the national the
00:05:45
general excellence award and the national magazine awards. Wonderful. >> It was punches above its weight class.
00:05:49
It's like the HBO of magazines is the way I would describe it. >> Right. Exactly. It's amazing. Um, and
00:05:55
so, uh, so anyway, so it it's it's really nice parts. They're really nice
00:05:59
parts, but what happened was exactly what Scott said and what I thought, which is one of the reasons I went to
00:06:04
Jim 12 years ago and said, I'm going to start this little podcast called um, uh,
00:06:09
was Recode Decode at the time or might have been something else. I don't remember what it was. and cuz I really
00:06:14
did have an interest in this area and felt it was shifting and then they added on the Ezra was on there. Um there's a
00:06:21
whole bunch uh today explained a bunch of things and what essentially happened after that after that I met Scott
00:06:27
Galloway and the rest is history like we've done really well >> bald man with the erectile dysfunction
00:06:32
Murdoch it just all makes sense >> in Germany in the Murdoch >> in the Murdoch and I worked for Murd so
00:06:38
rich isn't it how did this happen I know right I know people are thinking it's
00:06:42
very funny for me especially because I knew James from a million years ago when he was actually around for digital stuff
00:06:49
um very early when I was covering the early digital industry and he tried very hard to move his family's company
00:06:54
digitally. But Rupert always did something idiotic like whether it was the way they handled MySpace or there
00:07:01
was so many I can't even tell you. I just like Disney, they had 19 of these things and especially the iPad news
00:07:08
thing that I thought was ridiculous. Um and so I w I we left we left the Murdoch
00:07:13
Empire largely over um Rupert over problems. He was he was doing all sorts of nefarious things and we wanted to
00:07:20
come out on our own. Um and then ended up selling to Vox and so everything comes around essentially. I met Scott,
00:07:27
we built Pivot and we built each of our other stuff on and all the prof stuff which is wonderful. Um and over time in
00:07:34
our recent renegotiation we became partners with Vox and they sell our advertising. They help us mount the
00:07:41
events which they're excellent at and Scott has his has his has his own way of
00:07:46
doing things. he just started a great Substack and so it's a really actually
00:07:49
fertile time and but there's all these different configurations and I would say
00:07:53
for people to understand they are we we I have met with uh James Murdoch and uh his uh wife um Katherine who is also
00:08:03
very involved in this uh I have nothing but good feelings for them I don't have
00:08:07
good feelings for his father neither does he um which has been well documented um and so we have complete
00:08:13
freedom to do what we want we own these podcasts s that we have. Scott owns his,
00:08:17
I own mine, and we own pivot together in a in a um in a death grip to the end for
00:08:22
whoever which one of us survives. Um and uh and so we'll be keep doing what we
00:08:27
want and we really like working with Jim. We and now this other gym and uh and the rest of it and we hope there'll
00:08:33
be more, you know, synergies between them. We're we're not like a total believer in all synergy, but they've got
00:08:38
some cool uh things like Art Basle and um a number of number film festival, which I'll be at uh interviewing Mark
00:08:47
Maron on stage. And so there's lots of opportunities here, but most of the mostly it's not going to change from,
00:08:53
you know, not going to change our deal. We like the deal we got. Um we again own
00:08:57
our things and so uh we're happy to take suggestions from, you know, the same
00:09:02
thing like Jim will suggest something. will either ignore him or will not like he might have a he just had a great idea
00:09:07
to this morning for me. Um and I'll take it. Uh so and I really do think of James
00:09:13
Murdock has always been very smart digitally. I think um uh I think I we I like him. He's not you can't just put
00:09:20
Murdoch on it and say they suck. I I would agree about Rupert Murdoch. I would not be owned by Rupert Murdoch and
00:09:27
uh and we're not owned by anyone. So I think that's it. Anything else? Well,
00:09:31
when Reuters called me, I said, "Look, we like the gyms and we have, you know,
00:09:35
we have a lot of power here and we didn't ask for anything. We just asked for everything to stay the same. I sell
00:09:40
>> Pivot is a joint venture between Swisser, Galloway, and Vox. You own on I
00:09:44
own PropG, but both on and PropG uses Vox for we do a revenue split where they sell our ads. And if we could have I
00:09:53
mean, this is going to sound self-absorbed. We could have killed this deal. And we didn't. And we just we
00:09:59
didn't ask for anything extra. We just said, "Yeah, we just want things to stay
00:10:03
the way they are." And Jim Bangoff has never once asked me to tone it down, to stop the
00:10:10
dick jokes, to reconsider. >> That doesn't work. >> No, you have. But you're you're trying
00:10:15
to save me from myself, and you're also posing for your woke friends. >> Oh, stop it. You're so much woker than
00:10:20
No. >> Anyways, I'm so much wer than you. I'm the woke. >> But let me go to just some of the the
00:10:26
learnings here. And Basically, the business model for tech has been find have great technology,
00:10:34
find a very compelling leadership team that's able to craft a narrative to raise more capital than anyone else,
00:10:40
deliver an unbelievable product at below price and then consolidate the market and then start sucking the oxygen out of
00:10:46
the entire ecosystem. So, let me give you an example. And then everybody else gets crushed. Google and Meta have been
00:10:53
increasingly pushing users away from external sites in in favor of their AI overviews which they can monetize. So
00:10:59
Huffpo between 2022 and 2025, so basically the last 3 years that we have data on this,
00:11:04
Huffpost's organic search traffic has been cut in half. The Washington Post down by nearly half. Business Insider
00:11:13
has seen their organic traffic cut in half. NT organic search as a as a share of their total traffic fell from roughly
00:11:21
44% to 36.5%. And the Wall Street Journal's organic search as a as a share of their total
00:11:27
traffic fell from 29% to 24%. And let me just go back in history and pat myself on the back in 2006 when I joined the
00:11:36
board of the New York Times and literally my first meeting I said they said okay you're the digital guy which
00:11:41
we do. I'm like shut off Google. Don't let them crawl your content because
00:11:45
eventually they're going to commoditize your content, >> right? >> Stop driving traffic to us and all
00:11:51
you're doing is building them into the ultimate toll booth. >> That's correct.
00:11:55
>> And Martin Nenholtz, who's a very smart guy, said, "Well, if we can't figure out
00:11:58
a way to compete against Google and we're making money from the traffic they
00:12:01
send us, then shame on us." I'm like, "Yeah, go to go to Murdoch, go to the New
00:12:07
Houses, go to the Financial Times and consolidate and turn off Google and then license your content to the highest
00:12:17
bidder." And at that point, Microsoft had Bing and we would have been able to
00:12:20
get a lot of money and say, "Look, if you if you want to crawl this gorgeous
00:12:24
content from Thomas Freiedman and from Vogue and from the FT, you got to pay us." But instead they said no, we like
00:12:32
the traffic. They were pursuing this eyeballs thing and now it's way too late
00:12:36
and these companies are the internet and very few people go directly to NY the New York Times.com. They get served
00:12:45
stuff on Meta. That's how they decide where they're going or the the Google is
00:12:49
now entirely they don't take you to the best place. They take you to a place
00:12:53
they can further monetize. And Jim, you know, Jim is managed to get on the last helicopter out of Saigon.
00:13:01
>> Oh, wait. Do you want to hear some of the threads I thought of? I thought I'll
00:13:04
be I'll test the limits of our new ownership. >> I was walking around Lisbon yesterday
00:13:08
and it was beautiful and I was bored. >> So, as soon as I saw the announcement, I
00:13:12
thought, I'm going to test the limits of my freedom. My first thread, my first
00:13:15
thread was alternative media is like a vegan restaurant. Virtue signaling loses money and a billionaire bails you out.
00:13:22
That was my first one. My second one was that that picture of Jim Brooff and James Murdoch where it looks like the
00:13:29
30-year reunion of Abbercrombie and Pitch. They're both very handsome. >> They're very handsome.
00:13:34
>> And I wrote Romeo and Michelle's high school reunion 2 post transition. That
00:13:38
one I'm especially proud of. And >> oh, okay, last one. And then we >> What was What was my What was my third
00:13:45
one? Oh god. I wrote something about Oh, no. It just, you know, late late stage capitalism. But anyways, and and then I
00:13:53
started doing it and I'm sitting there in the park and I'm like, >> do I really need to be an [ __ ]
00:13:57
>> Not today. Yeah, tomorrow. I'm like, give them their moment. >> Give them their moment.
00:14:02
>> Give them their moment. >> They'll be an [ __ ] later >> before we start making their lives
00:14:06
difficult. >> No, you know what? Let me let me just end this because we got to end this. So,
00:14:10
two things. Jim B, he said, we don't we can say whatever we want. I don't see
00:14:15
that problem from James Murdoch or Katherine Murdoch at all. They might be irritated by us, but there's no going to
00:14:20
be no change in that. And let me be I hate to say this, but Rubert Murdoch never asked me to change a thing. Like
00:14:26
that is one thing I never experienced when I worked at the walls. I just don't
00:14:29
I think he's a heinous piece of well I think he's heinous the way he he's done
00:14:34
Fox News and the other stuff, but and has degraded democracy quite a bit, but he's not James is not him. And so, but
00:14:42
but that said, and Murdoch never meddled in my stuff and and he certainly could have um for for my entire time there. I
00:14:49
just didn't like him. Um but um but one of the things we have to say, we we get
00:14:53
to do what we want. We will do what we want. And also just I know Scott was sort of putting a sort of an ugly
00:14:59
picture on it, but actually New York Magazine is uh profitable. So are the pod the podcast networks are doing great
00:15:04
and very profitable. Uh a lot of these websites are. So, it's not like it's
00:15:08
just not a like a it's not a crazy business, but it's not these are not suffering properties. And last of all, a
00:15:15
lot many of them most of them provide amazing journalism. Uh, and I I think David Haskell deserves all due credit
00:15:21
for New York Magazine winning that award. And awards are one thing, but they certainly they were up against some
00:15:26
amazing uh journalism this year from The Atlantic and from ProPublican Wired. Uh,
00:15:31
so uh they're very good property. He's bought some good properties here um in
00:15:35
that regard. It's not they're not falling knife properties. Um, but we'll
00:15:39
see what we can do. Let's see what he does. >> They make money, but the the crown
00:15:43
jewel, shockingly, of all this is the podcast. New York Magazine is a vanity asset.
00:15:49
>> It is, but it does. Okay. It doesn't It's not It does fine. >> You become one of the sexiest men in
00:15:54
Soho when your rap is I own New York Magazine. >> We're going to stop there. It's a very
00:15:57
It does journalism, too. Anyway, >> that's So is NPR. It doesn't make any money.
00:16:04
it. Yeah, but this one does. So, anyway, speaking of things not making money, we
00:16:08
have some IPO news to get to. First up, SpaceX has filed an IPO prospectus, and it is revealing the company brought in
00:16:16
$791 million in profit in 2024. It swung back to $4.9 billion in losses in 2025. For
00:16:24
context, 200 companies in the S&P 500 had more revenue than SpaceX last year,
00:16:29
including Tesla. also revealed in the file, by the way, they buy a lot of stuff from Tesla. There's a lot of
00:16:34
roundt tripping happen at the these companies. It also reve all all controlled by Elon Musk. It also
00:16:40
revealed in the filing, Anthropic is paying SpaceX and thank God for it, $1.25 billion per month through uh May
00:16:46
2029 as part of the compute deal that two signed, meaning Grock will not be using that space in Colossus 1 and two.
00:16:53
SpaceX is reportedly targeting targeting a $1.7 trillion valuation. I mean it goes on and on and on. on a lot of these
00:17:00
a lot of words like um human I don't know like connection there's AI mentioned a lot just it's this business
00:17:10
is not economically and mass speaking it's not worth 1.7 I mean it's just the Elon that that guy
00:17:17
gets a lot of uh credit for for for using this number um because even the stuff they're promising seems
00:17:24
problematic but he's not he hasn't done it before he just moves from one lily
00:17:29
pad to the other in terms of from Tesla to this. But the big the big winner in this in that I read is Starlink does
00:17:36
great. The others Grock and um the rocket company is not so much. Go for it. >> I got a lot.
00:17:44
>> Okay, good. I can't wait. I'm excited. >> Yeah. What was >> Spit it out, Scott.
00:17:49
>> At 3:00 a.m. I was reading the S1. What were you doing? >> I know you were.
00:17:53
>> First off, I have some notes here. The first 14 pages of the S1 >> are pictures of rockets.
00:18:00
>> AI is mentioned 1,200 times in the S1. There are 277 pages of the perspectives.
00:18:05
For context, it's longer than The Great Gatsby and The Catch in the Rye. And
00:18:09
some direct quotes from the filing. These are direct quotes. We do not want humans to have the same fate as
00:18:15
dinosaurs. Well, thank God you're here, Elon. For decades, a reality where humanity travels between the planets and
00:18:23
the stars has felt tentalizingly close. But still, >> would you mind if I ate my protein bar
00:18:27
where you do this because I'm hungry and I also am fascinated. Keep going. >> For for decades, a reality where
00:18:32
humanity travels between the planets and the stars has felt tantalizingly close,
00:18:36
but still locked in the pages and screens of science fiction. The sun contains approximately 99.8% 8% of the
00:18:44
solar systems energy. And as a result, we believe it is the only truly scalable solution to terrestrial energy
00:18:50
constraints in the age of AI. Oh, Jesus [ __ ] Christ. All right, hold on. >> Woke.
00:18:56
>> We believe the next paradigm shift for humanity is the creation of a resilient,
00:19:00
perpetually expanding, space fairing civilization. Ultimately, >> sexy voice, please. I mean, I need a
00:19:06
more sexy. ultimately preparing us to Kardashev type 2 status defined as defined in the filing itself as a
00:19:13
civilization that harnesses the full energy output of the sun. Remember we work its mission was to elevate the
00:19:20
world's consciousness. >> Yes. No, this seems like he sounds like a Mayan. He sounds like a Mayan but go
00:19:24
ahead. >> So let's talk about the numbers here. Headline valuation 1.8 trillion. He
00:19:29
they're whispering they can go out at two. That's roughly the GDP of Canada.
00:19:35
So let that marinate. that the core business is genuinely an excellent business,
00:19:40
>> right? >> Starlink generated 3.26 billion in revenue in a single quarter with 1.2
00:19:45
billion in operating income. That's 36% operating margin on a monopoly satellite
00:19:49
inner business, internet business with no serious competitors in sight. It's a
00:19:53
great business. If this were the whole company, it would be one of the great businesses of our era. And then, but the
00:20:01
problem is it's not. Stapled to this rocket ship is XAI, a business that is clinically speaking a money furnace. In
00:20:11
2024, XAI lost 1.6 billion on 2.6 billion in revenues. By 2025, losses ballooned to 6.5 billion on 3.2 billion
00:20:20
in revenue. So revenue revenue went up 20% but losses went up 310%. That's >> Can I ask you quickly, these revenues
00:20:29
don't seem like killer? It's 30%. It's not like wow. It's they're not wow
00:20:34
growth, right? Is it's sort of good solid. Am I wrong there? >> No, it's Well, let's just let's just
00:20:42
talk about SpaceX, the best business. It's growing 20% a year and it's trying
00:20:47
to go out at 100 times revenue. When Google went public, it was growing 240% a year and went out at 10 times
00:20:52
revenues. So, just back to back to XAI. XI is losing money on the way to losing more money in in Q12 2026 alone the net
00:21:05
loss of 4.3 billion on 4.7 billion in revenue total capex 10.1 billion in 90 days 7.8 8 billion of that uh for AI.
00:21:14
Cash on the balance sheet um cratered from 25 billion to 16 billion in just 3 months. They burn 9 billion in cash in a
00:21:23
single quarter. That's a hund00 million a day. That's not investing in the
00:21:27
future. It's it's the future billing you in advance, >> right? Can this anthropic thing is
00:21:32
critical. Do you think he's moving into being the infrastructure player rather
00:21:36
than the AI player here? building and providing infrastruure. Tim him having spent too much capbacks thinking that
00:21:43
>> X AI his AI would need it and he woke up and realized he didn't. It's like this
00:21:47
has happened to me a million. Every time I start a company, I raise too much [ __ ] money. I go get a giant office
00:21:53
base in Soho and before I know it, I'm renting it out to a bunch of shitty startups to try and recoup some of the
00:21:58
capital. That's what h happened here, >> right? >> Total debt is for that, right?
00:22:02
Presumably from the anthropic, >> total debt on the balance sheet is 29 billion. Um, so just for context, that's
00:22:10
more debt than it's on the Delta Airlines, United Airlines, and American Airlines combined with all their planes
00:22:15
and and those they carry passengers. SpaceX has Starship, which has cost over 15 billion in development and is still
00:22:22
on its 12th test mission. The bottom line, you're being asked to pay 1.75 trillion for a great satellite internet
00:22:31
company, a rocket business that loses money, an AI product losing 6 billion a year and falling further behind its
00:22:38
competitors that has 29 billion in debt, and a CEO who, and this is my favorite part of the filing, purchased $131
00:22:46
million of his own recalled cyber trucks with company cash. >> Right. He's propping up Tesla. Propping
00:22:55
up Tesla. Right. >> So, in some Starlink is the golden goose, an amazing company. Everything
00:23:00
else is Elon's hobbies. And at this valuation, you're paying full price for
00:23:06
all of them. So, you know, Snow White is [ __ ] hot, but you gota if you marry her, you're taking on these little
00:23:15
nonvalue ad weirdos. Uh this is so this company you have an amazing company buried in all of these other money
00:23:26
furnaces, >> right? I like money. >> He's asking you to pay essentially 100
00:23:31
times revenue. >> People will so talk about that because look it is not I I read it. I'm like,
00:23:37
"Wow, this is not a there's one good business in there, right? Really good
00:23:41
business." And and by the way, easy to disrupt that business by the people will
00:23:46
come into this business and there'll be more competitors. Um and uh and so that
00:23:51
that's my worry about Starlink is like sure he has the win for today. It doesn't mean he will have the win
00:23:56
forever just like Tesla. Um, the second thing is it will it doesn't matter because people will just buy into this
00:24:03
and run it up because it's him and these promises which you left out a little bit
00:24:07
here is there's going to be all these robots in your home. There's going to be
00:24:10
he he made a lot of promises in this in this perspectus too about the future like you have to assume he's going to
00:24:18
kill it in robots and by the way I have heard from many people his robot technology is really advanced but it has
00:24:24
to get to people right it's got to it's got to get to people it's got to become
00:24:28
a product um and so just hand it feels very hand wavy this entire thing but I don't think it's going to matter I mean
00:24:35
be be a Wall Street person and say you know what would you do as an investor faster here.
00:24:40
>> Uh you might want to play it for the pop, but I actually think that there's
00:24:43
going to be a ton of bill people and analysts that will look at this thing. The more scrutiny on this thing, the
00:24:49
worse it's going to be for the IPO and does it go out at 1.8 trillion? I wouldn't be surprised if the bankers try
00:24:55
and manufacture scarcity and it gets a small pop, but I think by the end of the year it's well below a trillion dollars.
00:25:02
There's just no there's no way to justify this thing is a cash incinerator.
00:25:08
And also certain components of the business feel very weiworky in the fact that as they grow they burn more cash.
00:25:13
There's no operating leverage. >> Yeah. Yeah. Even with even with this
00:25:16
entropic deal because that's all he can sell. That's right. It's like he's
00:25:19
selling the chairs or something. Right. I mean >> he built out infrastructure for that he
00:25:25
doesn't need because his his AI is not growing the way. >> Right. Exactly. And he's got it. He's
00:25:29
got this colossus and of course he's facing lawsuits all over the place because he's going to buy more of these
00:25:34
methane engines. That's going to and trust me that they're going to put a
00:25:37
stop to that eventually. Um, so so what would you how would you do it here? People are listening. What would you do
00:25:44
here? >> I won't tell you what to do because I have been wrong about Tesla. I thought
00:25:49
Tesla was a sell in 2017 and it's gone up 8x. >> No, you were right. But you were wrong
00:25:53
about what people would do. >> I think we have to squarely say I was wrong.
00:25:56
>> Okay. >> So what I'm going to do is if someone called me and no one's going to call me,
00:26:01
but if Elon Musk called me and said, "Do you want allocation in the IPO?"
00:26:04
I would probably say sure and I'd sell it on the first trade. They will manufacture scarcity. Goldman and
00:26:11
everybody will tell him, "Okay, this is what it looks like." Put out press
00:26:13
releases saying you're 30 times over subscribed. It'll get a pop and then get
00:26:18
out again. An amazing business can be a shitty investment even at some valuation. And a shitty business can be
00:26:25
an amazing investment at a certain valuation. This is an amazing business surrounded by businesses that are not
00:26:33
scaling where he's trying to play catchup and at a valuation that makes just abso fuckingutolutely no sense.
00:26:40
>> Yeah. >> So what I would do X AI in here was a way to save his ass, his own ass.
00:26:46
Correct. >> It's a it's it's the cheapest form of capital he could find by attaching it to
00:26:52
an amazing business such that he could try and catch up. And even the business, even the amazing business on its own
00:27:00
which is doing 16 billion in topline revenue and 8 billion in IBIDA >> this is Starlink.
00:27:05
>> Yeah. I don't know give it 25 you know give it a 100 times IDA it's worth 800
00:27:13
billion. 100 times I zeba is no you know no one trades at that. But you not only
00:27:19
are trying to to get it out at 1 and a 1.7 to 2 trillion, you've attached onto
00:27:25
it all of these businesses that look to have negative leverage. >> Andy's using the business to help Tesla
00:27:32
out by buying shitty Cyber Trucks and everything else. >> Well, that was the most that was the
00:27:36
most eye popping thing. >> I know. I agree. >> Was that it reminded me of and this is
00:27:41
the argument against when corporate or when governments decide to get start cosplaying business. the the Irish
00:27:47
government or the UK government said Delorean is the future and they give them a bunch of loans and then these
00:27:52
pictures came out of a ton of Deloreans sitting in a warehouse in Ireland unsold.
00:27:58
>> So the the worst product arguably the worst tech product maybe than the Oculus or
00:28:06
Siri, the worst tech product of the last decade is hands down the Cybert truck. >> Cyber Truck. So he went out, a bunch of
00:28:12
them recalled, and he used money from this organization to buy to buy back Cybert trucks. You're not supposed to do
00:28:18
that. You're supposed to say, "Okay, Tesla Tesla has a a a turd of a product
00:28:24
and we're going to take a right down." And you just take your, you know, you
00:28:27
take your pain. This is Elon brings a level of awareness, magic. People have done investing with him. He is an
00:28:36
unbelievable visionary. But uh you know this goes to something broader and that is this is all part of
00:28:45
an entity that will cement where I believe we are now and that is I finally believe we are squarely in 1999.
00:28:51
>> Yeah I would agree with you. That's what I felt after looking at I didn't look at
00:28:55
over as carefully but I thought oh no no no this is not good. This is you know all I don't really care about the
00:29:01
luminous humanity [ __ ] and flying to the stars and the sun is going to power our world. Like that's all his I I I've
00:29:08
had to listen that nonsense from him for many years and great. I'm glad you think
00:29:13
that. I mean, I don't really care if everyone if that's what turns him on.
00:29:16
That's great. But it was the the Tesla thing. There was a several things in here that were very speaking of
00:29:23
latestage capitalism. I felt it was late Elon, right? That's what that's what it
00:29:28
felt like to me. But just we'll see. >> Look, it his job is to get capital as
00:29:33
cheaply as possible. He's going to do that. Yeah. I think it's smart for him
00:29:37
to do this. >> That's good for him. Yeah. >> But I think investors in some if you
00:29:42
look at what happened. >> So there was a really interesting analysis done in the FT and that is at
00:29:47
the peak of the dotcom boom about 60% of GDP growth was coming from capex related
00:29:53
to telco infrastructure and the internet. It's now 93% is coming from AI including and I'm loosely and also these
00:30:01
companies will be grouped into that. In addition, the total capex inflation adjusted was about 850 billion
00:30:09
in 99 up until that point. Now we're at about 1 and a.5 trillion. >> And every time you have over 2 or 3% of
00:30:17
GDP going into the buildout or capex or something, whether it's railroads or
00:30:21
highways or the telco infrastructure of the late '9s, two years later, there's a
00:30:26
crash. Two to three years later, there's a crash. Railroads, all of it. >> We are there. and and one of these
00:30:32
companies or more of them is going to experience what every big tech company has experienced when they're get out
00:30:37
over their skis and that is you're going to see a 70 to 95% decline in the value
00:30:42
of one or more of these companies. Nvidia, I mean all these companies are there's the the expectation
00:30:50
of they're increasing their capbacks 20% a year while increasing their revenues
00:30:55
optimistically 15% a year. That's negative operating leverage. And eventually the music's going to stop
00:31:02
here. >> Yeah, I felt drunken sailors had a feel of this. I don't know. I just like
00:31:06
>> Well, the way I would describe it is I think Nvidia is a casino and we're all drunk people at the
00:31:11
blackjack pay table and >> it will affect very good businesses and then along with the tariffs and all the
00:31:17
other corruption around Trump. It just gets to be a real problem here. >> Nvidia is an amazing business. SpaceX is
00:31:23
an amazing business. They should, oh my god, they should be worth they should be
00:31:27
worth a trillion dollars and 300 billion respectively. So down about 50 to 80%. And the technology I think the
00:31:37
technology will live up to its expectations more on the optimistic side than the pessimistic side, but the
00:31:42
valuations won't. >> Yeah. All right. Well, speaking of which, OpenAI is preparing to
00:31:45
confidentially file a draft of its IPO perspective as soon as Friday. I expect you to read it over the weekend and tell
00:31:50
me about it next week. Um, as you're listening to this, the company is valued
00:31:54
at over $850 billion by private investors. The things I'm looking at there is all the cross investments with
00:32:00
Altman involved. I'm probably interested in that. Um, where the where their where
00:32:05
the trends are in terms of their subscriptions. Um, and where their spend is. I think those are the things I'm I'm
00:32:12
looking at. What are you looking at there very briefly? Well, just to distill it, to justify the $1 trillion
00:32:17
valuation that OpenAI is pursuing at its IPO, it needs to grow from 13 billion in
00:32:22
revenue to the to the size of today's Microsoft in four years. So, they're
00:32:27
saying they're going to be the size of Microsoft in four years. And I just don't think revenue did triple to 13
00:32:32
billion, but the company burned 9 billion. And right now, it has negative momentum relative to Anthropic. And what
00:32:39
they have said is get out right away. We need the perception that we're the leader. And also Sam Alman looks at
00:32:45
SpaceX and says there's not room for there's only so much retail money that's
00:32:51
going to come into the ecosystem. Get out because it's going to dry up because
00:32:56
if SpaceX goes out of pop and comes down, retail investors are going to start to get queasy and then when you
00:33:03
have these enormous IPOs, in other words, at some point retail investors are going to run out of money
00:33:08
to invest in these things. So he's like, "Get out." And the CFO, Sarah Frier, who
00:33:12
I'm shocked still has a job because she's not towing the company line. She
00:33:16
worked at Goldman and Mckenzie, has reported previously that colleagues uh to colleagues at OpenAI saying, "We're
00:33:23
not ready for an IPO because the risk from its spending commitments." >> Yeah, I know her. She's a very She's
00:33:29
like that. She's >> like a Ruth Barrett. She's an adult. Yeah. >> The the company is committed to spending
00:33:33
600 billion over the five years across vendors and their Oracle deal alone requires 60 billion a year starting in
00:33:39
2027. nearly five times OpenAI's entire 2025 revenue. >> So >> again, this is we are squarely a 99
00:33:47
>> 99. All right. Well, we'll go with that. All right, Scott, let's take a quick
00:33:50
break. When we come back, Jeff Bezos, so good God. Speaking of billionaires behaving badly, speaks out on all sorts
00:33:56
of things. Support for the show comes from Indeed. When you're looking for talent, Indeed
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indeed sponsored jobs. >> Scott, we're back. Jeff Bezos sat down for an interview with Andrew Ross
00:35:06
Sorcin, our favorite Canadian on Wednesday. Let's talk about some of the things he said. First up, Bezos said
00:35:10
that Trump was more mature and more disciplined in his second term. The Washington Post owner defended massive
00:35:15
cuts he made to the newsroom earlier this year, saying he doesn't want a post
00:35:18
to be a charity. I have some things to say about that because I think he's the
00:35:21
one that drove it into a wall. Bezos also backed the idea of eliminating income taxes for the bottom half of US
00:35:27
earners. Let's hear what he said to say about his own taxes. >> People sometimes say that uh that you
00:35:34
know I don't pay taxes. So true. I pay billions of dollars in taxes and it's a
00:35:39
per again if people want me to pay more billions, right? >> Then let's have that debate. But don't
00:35:45
pretend, you know, that this that that's going to solve the problem. You could
00:35:49
you could double the taxes I pay and it's not going to help that teacher in Queens. I promise you.
00:35:55
>> Let's try. >> Let's try. >> Let's try. Let's see what happens.
00:35:58
>> Let's see what happens. Jeff, >> if we take his effective tax rate from
00:36:01
16 or 17% to 32 or 34 like the rest of us, I don't know. Let's just give it a
00:36:06
whirl. >> Let's just give it a whirl. Let's see what happens. >> So disingenuous in this interview. Let
00:36:11
me let me start and then I'll let you go. First up, the more mature. Come on,
00:36:16
Jeff. Like seriously. Like, I get that there's a lot of face work going on and
00:36:21
a lot of other enhancements, but it's gone to your [ __ ] head. Like, I get what he means. It's good for me. Instead
00:36:27
of saying more mature, more disciplined is he's more focused on giving me the
00:36:31
[ __ ] I want. That's I I would just prefer that if he wouldn't mind like
00:36:35
saying that. Whatever. He can say what he wants. He's never been a particularly
00:36:40
liberal person, but now he's just he's just now being just as disingenuous. The
00:36:44
Washington Post thing drove me crazy because he's the one who kept the same management in place then hired an
00:36:51
incompetent like Will Lewis uh did nothing that the New York Times took moves after Trump left office to do
00:36:58
something. He he created all manner of situations where people just just left cut their subscriptions which were which
00:37:06
were slightly growing but they were definitely stabilizing. And then after he put his dirty little fingers in the
00:37:12
editorial process, he messed it up. A huge exodus of talent blaming the talent which then went to successful properties
00:37:19
like the Atlantic and many other and the Wall Street Journal and other places which are doing okay. They're doing
00:37:25
they're they're making businesses. New York Times, Wall Street Journal, The
00:37:28
Atlantic, everything else. So, every time he says this, I'm like, why don't
00:37:32
you look over at Lorraine Powell Jobs, who's managed to do a very nice job over
00:37:36
there at the Atlantic by not meddling and supporting and not losing money. Um, the income tax thing I'll let you take,
00:37:44
but it was so full of disingenuous stuff. And again, let's try Jeff. Even if you pay billions, you have billions
00:37:51
and you pay the fact that I pay more of a percentage of my taxes than you. And then the corpor Don't even get me
00:37:57
started with corporations. So anyway, uh the whole thing was and also he didn't
00:38:03
look well in my opinion and since he spent so much time on cosmetic stuff, I feel like I can comment upon this. Go
00:38:10
ahead. >> Jeff Bezos pays himself $82,000, just enough such that he can claim a child
00:38:15
tax credit, which by the way he takes, and then he puts all of his additional money and such that the value of his
00:38:21
shares go up. He borrows against those shares, not not triggering a taxable event. likely has a lot of those shares
00:38:27
in a trust. And then after leveraging the unbelievable infrastructure and culture of the great state of
00:38:33
Washington, he then >> post office everything >> takes his $120 billion in shares and
00:38:39
moves to Florida to spend more time with his father and then starts selling shares. Now granted, just as every
00:38:48
prisoner has an obligation to escape, I think every individual has an obligation
00:38:51
to avoid taxes. I don't blame him for tax evasion. I blame our government for
00:38:55
letting him engage in it. But quite frankly, Jeff, when you start trying to wallpaper over the tax avoidance of
00:39:02
billionaires by claiming you care about nurses, >> teachers, >> sit the [ __ ] down. Just sit down. This
00:39:09
is a misdirect. And it's like when Jensen talks about, "Yes, tax me more." Okay,
00:39:17
thanks guys. But I just don't think they're in a position when a guy has
00:39:21
when a guy has so optimized the dynamics of supply and demand of labor such that
00:39:28
his delivery drivers have to pee in bottles to make their correct >> quotas. You're just not the person to
00:39:34
pretend to have empathy for that nurse in Queens. So, I'm not even going to I'll talk about his idea, but give me
00:39:42
the mother of all eye rolls when Jeff Bezos claims to be concerned about the tax
00:39:48
rates of the nurse in Brooklyn. What I when I've advised or when I was talking
00:39:54
to Andrew Yang when he was running for president mayor, I said, "You [ __ ] up.
00:39:57
It shouldn't be universal basic income. It should be basic income." And to get
00:40:01
Republicans on board, you need different frame it. Don't call it universal basic
00:40:04
income because it sounds like socialism. call it a negative income tax. Republicans love tax breaks. I do
00:40:11
believe there's something to the notion of saying anyone who makes below $50,000
00:40:17
should not only not get taxed, but maybe get a tax credit in the form of services
00:40:23
or maybe just cash quite frankly because most of the studies show that when you create a government infrastructure to
00:40:28
deploy social programs, they're inefficient and never go away. >> Just give them the money. Just give them
00:40:32
>> just give them the money. Just cut them a check. You're in a household, you have
00:40:36
kids, whatever. They did a bunch of studies in Africa, and quite frankly, I'm going to be a sexist here. When they
00:40:42
give money to the men, the prostitutes in the bars do well. When they give money to the women, the kids get taller
00:40:46
and fatter. You couldn't do that in America and just give money to single mothers, which is what I would like to
00:40:51
see happen. But if you gave just gave money, nationalized healthcare, there's
00:40:55
a lot of good taxation ideas. What he said was very accurate is that if you had a tax holiday for people under the
00:41:02
age of 30, he didn't say this, but if you gave a tax holiday, which is what he's saying, or cut the taxes of people
00:41:06
making less than $75,000, you don't lose that much tax revenue. Because it is
00:41:11
true that only 1%, the top 1% in New York pay 48% of the taxes and the bottom 25% really don't pay much. So, he's
00:41:19
right they wouldn't be giving up much. But he is just not. We need an alternative minimum tax on people like
00:41:25
Jeff Bezos. of I believe 60%. Because the earner that's making 2 million bucks working her ass off as a
00:41:34
baller partner at Scatterenarps in Manhattan is paying 54. And fine, maybe she pays maybe the person making 10
00:41:42
billion or 10 million a year pays makes 60%, because here's the whole objective
00:41:47
of taxation. You want the least taxing tax. If you start attacking education and food and
00:41:56
housing, you end up >> with homelessness. Yep. >> Less educated people, people who put off
00:42:01
their mammogram and die of metastatic breast cancer. Those are taxes that are too taxing. An alternative minimum tax
00:42:09
on corporations making above a billion dollars and people say making over 3 million a year. They don't lose any
00:42:15
happiness. The Baso and also do away with the estate tax exemption. If the Bezos children inherit 20 billion
00:42:22
instead of 30, no loss in happiness. But that 10 billion that could potentially be divided amongst the million the
00:42:31
$10,000 to the million poorest households, a lot of incremental happiness. >> You know what the the contrast was? His
00:42:37
ex-wife. Like she doesn't say a word. She doesn't do an interview. She gives
00:42:42
money. No ribbon cutings, no cosplaying, no whatever weirdness you're doing to your
00:42:48
body, Jeff. uh just and doesn't lecture us. That's the tone was what was crazy.
00:42:54
I I I know I got like Ben about the post stuff, but all of it had this tone. The
00:42:58
post stuff was disingenuous in the extreme. He's the worst media owner of any media owner and it's a low [ __ ]
00:43:04
bar. Let me tell you, I take Rupert Murdoch twice every day of the week and twice on Sunday to Jeff Bezos. At least
00:43:10
he understands media and likes it. Um, you know, this the tone was so obnoxious and this is why this general, you know,
00:43:20
he talked about people demonizing billionaires. Well, stop stop talking. stop appearing like I I honestly it it
00:43:28
the the the damage these people are doing to the brand of capitalism, brand capitalism and brand AI and brand tech
00:43:36
is so vast that you can see why these polls are showing up like this way. I know my own sons who both are incredibly
00:43:45
hard workers and it has nothing to do with me. They, you know, they often don't listen to me.
00:43:52
um they don't listen to anything I do at least and and I'm fine with that. But
00:43:56
they have these feelings, right? It's just it I don't know. It just and then
00:44:01
it gives rise to too much demonization, right? Because of the way these people behave. So I don't know.
00:44:08
>> So I have stories about McKenzie Scott and Melinda French Gates. I'm involved
00:44:13
in two nonprofits. I'm involved in something called the Jed Foundation that tries to train high schools around how
00:44:19
to identify what is kind of normal strange adolescent behavior and adolescent behavior that should raise
00:44:25
red flags around depression and suicide and they leverage the infrastructure of public schools and educate them and they
00:44:31
are they are amazing. It was started by a couple that lost their son Jed. It's
00:44:34
run by this wonderful management team. They do a great job. Right after I sort of got involved, they called me and said
00:44:40
they did a big thing event and they got they go we got great news. I'm like what's that? and he goes, "We got a $10
00:44:44
million wire yesterday and we're trying to figure out who it's from." Mackenzie
00:44:49
Scott didn't didn't want an RFP, didn't want to meet with them, didn't want her name
00:44:54
on anything. She just wired 10 million bucks. And then another association I love, the American Institute for Boys
00:45:01
and Men, which focuses on the struggles and mental health of young men and boys,
00:45:04
run by one of my role models, Richard Reeves. Melinda French Gates, $10 million. recognizing the majority of her
00:45:13
funds are focused on the struggles in gender equality and struggles of young women. But she she said without thriving
00:45:19
young men, women aren't going to continue to flourish. And she just sends 10 million bucks. And then someone who
00:45:25
shall remain nameless contacted the firm and I get it. He's trying to be or contacted one of these companies and
00:45:32
said, "Can I meet with so- and so and Scott? I want to hear about the strategy." And I'm like, typical [ __ ]
00:45:37
rich dude. We got to go sing for our supper. We got to like >> go talk to him as if it's a business and
00:45:44
return on investment. Whereas these these women are just like you're doing good work.
00:45:49
>> Yeah. Excellent. Here you go. >> Get back to work. >> You don't hear from him. They definitely
00:45:53
check you out. But it's not It is It's such a different way of giving. I
00:45:58
>> It really is. There's something >> I couldn't dislike Jeff Bezos more after
00:46:03
this interview. I thought I honestly thought could have pressed him harder. Honestly,
00:46:07
I didn't think Zoro pressed him hard enough on this stuff and let him get away with some stuff that I wish he had.
00:46:12
But I that said, we got to see him the way he is. And that is the way he is. Folks,
00:46:17
>> let me make the conservative or at least give some sunshine to conservative part
00:46:20
of this. I can't stand it when people on the far left say Jeff Bezos didn't earn
00:46:24
his money. >> Oh, he did >> because he was born to a single mother at the at the age when she was 17.
00:46:32
I believe he deserves to have earned $120 billion. I think we deserve to elect people who have the backbone to
00:46:38
tax him at 60 or 80%. But don't slow him down. He's not a bad person, >> right?
00:46:45
>> He's doing he's doing what we all do. He's optimizing for his own
00:46:48
self-interest. You may you may just you may say he's more self-interested than
00:46:52
some people. Fine. We're not doing our job. Elizabeth Warren and Bernie Sanders, you've been in Congress for
00:46:59
[ __ ] ever and the taxes keep going down under your watch. >> Yeah. Let's do something.
00:47:03
>> You want to demonize them? No. Tax him. >> Tax him. That's the best way like to say
00:47:07
take look you whatever you want to do. Now let me switch to another billionaire because this was something that
00:47:13
happened. I we have not said a lot. Our listen some of our listeners are not going to like what I have to say here
00:47:17
and I don't really care but I do care but I don't care. Um unexpected sighting
00:47:22
in DC this week. Mark Cuban standing alongside President Trump. Cuban endorsed Kla Harris was a big supporter
00:47:27
in 2024. It's been one of Trump's most vocal critics, but the two appeared
00:47:31
together as the Trump announced a major expansion of Trump RX's administration's
00:47:37
online drugstore. The site is adding more than 600 lowcost generic medications through partnerships with
00:47:42
Cuban's Cost Plus Drugs, Amazon Pharmacy, and Good RX. At this event, Trump was asked about his new alliance
00:47:49
with Cuban. It's only on this issue, just for people to be clear. Let's listen. It's pretty remarkable seeing
00:47:55
you and Mark Cuban up there and the fact that obviously Mark endorsed Kla Harris
00:48:00
back in 2020. >> Well, he made a mistake. It was a big mistake. But >> what does this say about what you two
00:48:06
are building here? The important >> Well, it says we love people. We love our country. He wants to he's got a a
00:48:11
good company and he's going to do a lot of business with this and uh I'm going
00:48:15
to get drugs out through Amazon through the whole group and we're going to get
00:48:18
drugs out and uh Mark wanted to be a part of it and I think Mark was very gracious. He said this is something that
00:48:25
really works. >> Cuban later posted on X, if anyone thinks I'm going to put politics ahead
00:48:29
of helping Americans reduce their cost of healthcare and pharmaceuticals, they are a [ __ ] idiot. He took that down
00:48:34
because he thought swearing undercut his argument. He's probably right. Um, let
00:48:38
me just say a few things. The stuff out there about him making a bank or he's
00:48:44
mobbing up with Trump is it's just not true. You don't have to like that he
00:48:48
stood there. I get it. I get it. I get it. But he this this business is to get drug prices down. He does not make a ton
00:48:57
of money here. He This is more It's not a charity either. He's trying to build a
00:49:02
business. But this the the stuff that's out there about what he's doing is just
00:49:07
inaccurate and it's not if you don't like him standing there and you think he
00:49:11
betrayed you and I saw a lot of these I now can't like him. I thought he was a
00:49:15
good guy. He is a good guy. He is doing something that I'm sure makes him deeply
00:49:20
uncomfortable for a very good thing which is to bring lower prices. He's got
00:49:24
to get in this Trump RX. He essentially took control of Trump RX in a weird way because you've got to get these things.
00:49:31
If Trump is doing this site and I hate that Trump's name is on it, I hate it.
00:49:36
But look, he's an ego mana who puts his name on every [ __ ] thing and there's
00:49:39
nothing we can do about it. And if he he sat up there with Biden, you'd love him
00:49:43
for it or whoever a Democratic president, he would sit up with anyone. The only thing I would say was that I'm
00:49:51
not sure he got grretched. I sent him a note. I said, "You just got gretched."
00:49:55
When he when he first he started talking about this this $1.776 trillion slush fund for people who
00:50:02
criminals who attack the capital, I don't know. He got grretched. He was sitting there when Trump was going on
00:50:08
about something that's obviously illegal or and also a slush fund. I don't know what would he should he walk
00:50:15
out? Should he leave? I don't know. He did laugh at the you voted for Kla Harris. I'm not sure what you do in
00:50:20
situ. Should he have sat there and said I still would? I don't know. He would
00:50:24
have gotten lost out this deal. I don't know. And it's not great to have to
00:50:28
stand with Trump. We get it. We get it. I wouldn't do it. But if I had something
00:50:33
that mattered a lot, I might. And the only other thing I would say is Zoran Mandani went there and stood right next
00:50:40
to Trump and everyone praised that. And I the difference was is but he didn't
00:50:45
insult Trump and he didn't like slap him or do anything rude. He also didn't say
00:50:51
much and he didn't get gratched. And so he he needed something for New York and
00:50:56
he got it from Trump. And so I'm not quite sure what the difference here is because that's what I think was
00:51:01
happening here with Mark. And you can hate on me all you want saying I love the billionaires, but I think what he's
00:51:07
doing is an important thing for bringing drug prices online and you cannot wait for 3 years to do so. Your thoughts,
00:51:13
Scott? If your emotions and political partisanship trump the health of Americans, then the problem is you, not
00:51:20
Mark Cuban. The partnership between Trump RX and Cuban's cost plus drugs will unlock
00:51:29
millions of Americans in terms of cheaper prices or unlock cheaper prices for millions of
00:51:35
Americans. Uh, this week's expansion adds 600 generics, nearly seven times the previous catalog. They'll be
00:51:43
available to anyone regardless of insurance status and in many cases the cash price through cost plus is actually
00:51:48
lower than what insured pay uh insured people pay at the pharmacy counter after co-pays. Cost plus Drugs sells the
00:51:55
cancer drug I believe it's called a tanamibanib for $17. The same drug runs over $2,000
00:52:03
at conventionalies. three PBMs um uh Optim RX, CVS Caremark and Express Scripts control roughly 80%
00:52:11
of the US drug access and are untouched by this deal. It look something has to change. And I respect and the US
00:52:20
government has a scale and capital that no one can match. And if you have something that's good for America that
00:52:25
requires that scale and that capital, then you act like a [ __ ] adult. I shouldn't have said [ __ ] You act
00:52:32
like an adult and you go there. So, you know, you know, if if you think that Mark Cuban sold out, then all right, you
00:52:44
go buy people's cancer drugs, I this I can't imagine Mark enjoyed this, but
00:52:50
helping people get access to life-saving drugs at a reasonable value is more important than him getting dragged by a
00:52:57
bunch of bots and people virtue signaling and and applying purity tests from their keyboard.
00:53:04
>> Right. I would agree. You just didn't have the right information. The
00:53:07
inaccuracy is what I as always inaccuracy desires me. And to say that that he's going to make bank at this is
00:53:13
just not true. It's just absolutely not true. And and you again, I I wouldn't
00:53:18
want to have to do this. I don't know if I could stand next to him, but he's
00:53:23
there for the next three years. And if someone needs these drugs now, and if he has to take the reputational hit, that's
00:53:30
fine. I guess that's fine. The fact that you're dragging him is a pro I I
00:53:36
understand the the and I don't want to in this case for the first time I thought derangement. Don't be so [ __ ]
00:53:42
deranged that you don't understand what Mark just did which is he had to like
00:53:47
put his like ego in a in his pocket. He remains by the way Mark is not I would say he's liberal or conservative. He's
00:53:55
quite it can vary all over the place, but there is absolutely no way Mark Cuban would vote for Trump. I at this
00:54:04
moment in time or support Trump in politically. So, I don't know what you want from him, but to me, I thought it
00:54:11
was just a bad a bad um look for for the left. I thought I really did. I just was
00:54:16
sort of disappointed. Very disappointed. So, but they're going to drag us for it.
00:54:19
So, too bad. I don't care. All right, Scott. Let's go on a quick break. When
00:54:22
we come back, we'll talk about Nvidia's latest earnings. Support for this show
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something I hugely admire as a journalist. Scott, we're back with more news. Let's
00:56:42
talk about Nvidia's latest earnings. You just called them a casino. The company's
00:56:45
profit for the quarter was over 58 billion. They're benefiting from what's
00:56:50
happening now, which is up 211% from a year earlier. That is a number. It's not 30%. It's a lot. 3 years ago,
00:56:56
profit was 2 billion. Nvidia projected sales in the current quarter would reach 91 billion and it would uh as spending
00:57:05
on AI infrastructure would reach 2 to three trillion in 2030. This is an insane growing streak, but like you
00:57:11
said, they're benefiting from this huge spend by all these other companies. Uh
00:57:17
thoughts very quickly. >> Well, not a casino. They're the house. >> Okay.
00:57:21
>> All of these companies spending just a crazy amount of money on 1.6 trillion on
00:57:25
capex are kind of drunk gamblers is the way I would describe it. And they're
00:57:29
benefiting from it. They're the house. They're the house when billionaires show
00:57:33
up, sharks with who are drunk and have unlimited credit at the casino. That's
00:57:37
the way I would describe it. But just in terms of the earnings, the revenue was 81 billion, up 85% year-on-year, which
00:57:44
was a beat. Earnings per share was a beat. Data center revenue 75 billion, up 92% as you said, year-on-year accounting
00:57:50
for 92% of total revenue. Again, a beat. Their Q2 guidance 91 billion above the 86 billion expectations. Another beat.
00:57:58
And their shareholder returns dividend was raised 25x from 1 cent to 25 cents per share. 80 billion in new buybacks
00:58:05
authorized. And I mean the reason he's on that plane to China is there's no
00:58:10
shipments right now and he he's like he looks at the stock price and thinks I
00:58:14
have got to continue to be >> continue. >> Yeah. And the only thing that's I found
00:58:18
really interesting here was despite beating on every every conceivable metric, the stock was flat, which says
00:58:26
to me that so the expectations of the stock price are so enormous now that they don't they people don't expect
00:58:34
Nvidia to beat, they expect them to massively beat, which says to me that the first time Nvidia even whispers
00:58:39
things might be slowing down, it it craters. So unbelievable company, 15th beat in a row, but I just think so the
00:58:49
expectations that are built into this valuation. I think it's the most valuable company in the world now.
00:58:54
>> Yeah. >> Um are pretty significant as evidenced by the fact that it beat on every
00:58:58
conceivable metric and the stock didn't move. >> Right. Right. That's interesting. That's
00:59:03
a really good point. Anyway, we'll see. We'll see what happens. There's a lot.
00:59:06
It's it's precarious is what I fragile. >> By the way, stocks off 2% today.
00:59:11
>> Yeah. But let me see a lot. Several different Wall Street people call me in.
00:59:14
They said, "Everything feels so fragile." So, we'll see. All right,
00:59:18
Scott. One more uh quick break. We'll be back for predictions. >> Today's show is brought to you by
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01:00:56
Okay, Scott, bring your predictions in a second. I just want to note we're going
01:00:58
to be off on Memorial Day uh for Tuesday. would not be we'll be taping a show on Memorial Day for Tuesday.
01:01:04
>> All right. Oh, I'm sorry. Um, so I have one we talked about late state or 99, but I
01:01:12
I'm I'm going to I just can't help it. I don't think SpaceX is going to price
01:01:17
near $2 trillion. >> Okay. >> The financial suggest >> I think you're going for it.
01:01:22
>> Well, you're going to have so many people pouring over this S1 and it's
01:01:28
just pretty ugly. You just read this thing and you start thinking, okay, this feels
01:01:34
this feels a little bit, you know, Iawasa. It just it it's a lot. And if and if you take each of the three
01:01:42
business lines, space, connectivity and AI, and apply a comparable price to sales multiple to each, Rocket Lab for
01:01:49
space, VSAT for connectivity, and anthropic for AI, which are very generous, you know, health healthy
01:01:57
valuations and you add them up, you end up with a valuation of 547 billion. My my hero on this stuff, Asat Motorin,
01:02:06
valued the thing at 1.1 trillion. And if you double each of those price to sales
01:02:10
multiples, um, you assume that each business will command a valuation that is two times
01:02:15
the typical market rate, you are still about $750 billion away from SpaceX's
01:02:20
projected valuation. >> Yeah. >> So >> that's being kind. You're saying that's
01:02:24
being >> if you just get very aggressive and value every piece of this as a leader in
01:02:28
its respective field >> and add the Elon plus, >> you add you get 600 billion and then you
01:02:33
go, okay, Elon effect, double it, 1.2 trillion. So, I've I've always been
01:02:38
wrong around Elon, but I'm saying I think it's going to I think two China is
01:02:41
a real stretch for here and it's going to price below that. >> All right.
01:02:44
>> And then the other one is just boring one. There's I think you can expect a
01:02:47
deal between the US and Cuba in the coming months. >> Cuba is currently in a fullblown crisis.
01:02:53
I absolutely think the smartest thing we could do is be providing humanitarian aid and let people decide that they want
01:02:58
to be the 51st state or at least get along with us. >> Yeah, I agree. >> The collapse is comparable. Well, it's
01:03:03
not getting any news because of everything else going on. But the collapse is literally comparable to the
01:03:06
1990s crash that followed the fall of the Soviet Union. >> Yep. >> Between December of 2025 and April of uh
01:03:12
26, Cube received just one of the eight monthly fuel shipments its economies required requires to function.
01:03:18
>> And blackouts are now, get this, 20 hours a day. >> I mean, it's crazy. No, we should just
01:03:24
help them >> 100%. >> part of the world again. And uh and but there's going to be a deal here because
01:03:31
Rubio is reportedly having secret talks with Ral Castro's grandson, bypassing
01:03:36
official Cuban channels. Trump told reporters in February, Cuba wants to make a deal. Just yesterday, Rubio sent
01:03:43
video message to the Cuban people, proposing 100 million in aid, and blaming Cuba's leaders for shortages of
01:03:47
electricity, food, and fuel. Uh Rubio was born to two Cuban immigrants, and this is a deal that he has personal
01:03:53
investment in. He sees this as his run, his next >> his president. >> All the people
01:03:59
>> sets him up well for a 2028 run. Cuba is in a deep dark corner. And also Trump,
01:04:05
he doesn't want another military excursion. There's just there's no [ __ ] way.
01:04:08
>> There's a way to do this. Just let it fall apart and we come in and help pick
01:04:11
up the pieces. >> It's already Well, it's falling apart, >> right? You know what I mean? It's like,
01:04:15
you know, interestingly, I agree with you here because I do think it should be welcomed back into the nations. It's
01:04:21
I've always wanted to go there. You know, my my actually everyone in my family has been there but me, which is
01:04:26
interesting. >> I've been there. It's great. >> Yeah. That's I just feel like it's it's
01:04:30
a wonderful people and it'll help Rubio immeasurably. This is at the heart of
01:04:34
his presidential camp. You understand that? Like it's very clear for at least
01:04:37
for Florida. Um and uh and one of the things that speaking of collapse, I've
01:04:42
heard from so many foreign affairs people who I really trust and think are smart that Russia is very in much
01:04:52
distress. Putin is under much stress right now because of the situation in that that in Ukraine, the economy,
01:04:59
everything else. And that they had thought this is the first time they see a light at the end of the tunnel,
01:05:04
Putin's rule. Just saying that. Just putting that out there which was interesting and
01:05:09
>> I gonna say it as a lie at the end of I think the end is nigh. >> The end is nigh. Yes. Whatever. Anyway,
01:05:14
so it's just interesting and we should do this you know there let me let me quote that more on Brendan Carr. We can
01:05:20
do this the easy the hard way or the easy way. Let's do it the easy way with
01:05:23
the Cubans, right? Let's show them the bigness of the United States and really
01:05:28
help them. And then Scott and I will open our hotel there and retire. Okay. Uh okay.
01:05:35
>> Great mojito. Great, >> great cigars, everything else. Uh, in any case, we want to hear from you. Send
01:05:40
us your questions about business tech or whatever's on your mind. Go to nymag.com/pivot
01:05:44
to submit a question for the show or call 85551 pivot. Okay, that's the show.
01:05:50
Thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We, as I said, will be back
01:05:55
next week.