00:00:00
America, you need to appreciate government before you start [ __ ] yourself. >> Hi everyone, this is Pivot from New York
00:00:11
Magazine and the Vox Media Podcast Network. I'm Cara Swisser >> and I'm Scott Galloway.
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>> We've got a lot to get to today, so let's dig in. First, Scott, I'm going to start testing my co-hosts testosterone
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levels. >> It's very low. [clears throat] >> They don't make metrics that high, baby.
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>> That low is what you're saying is what you meant. I feel like I need to do that
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now. Defense Secretary Pete Heges says the military will begin annual testosterone screenings for service
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members aged 30 or older with voluntary testing for younger troops. Service members found to have low testosterone
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will be offered voluntary hormone replacement therapy as part of a new program. I didn't know they did gender
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affirming care. I thought they were against that. Um let's listen to a clip from this bizarre announcement.
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>> This initiative, it's not about artificial enhancement. It's about restoring and optimizing your natural
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capabilities, protecting your longevity, and ensuring you have the biological foundation required to sustain the
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fight. >> Well, now we know he's on tea. Uh, you know, let let me let you run with this.
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You have taken you take testosterone. You've talked about it. Why is he doing this? Explain explain make the good case
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for it, I guess, or not. Well, I mean it if part of if part of health care coverage is like I'm on testosterone
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because I think it's good for my brain and my heart health and it makes quite frankly it just makes me feel younger.
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Weird things like I don't have to pee as often. Um and my doctor said we're not going to take you you know you don't
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want to I'm not using it to be a monster more aggressive. I'm using it cuz I want
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to quite frankly feel 45 again. And hormone replacement therapy is something that I think, you know, under a doctor's
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supervision for men and women in their 50s. >> Yeah, I take I take hormone replacement
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therapy. >> Yeah, I I think it's I think it's a can be a real value ad under the supervision
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of a doctor. But this is just performative in my opinion stupidity. I young men don't have or are military and men don't
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have a testosterone problem. It we have a loneliness problem. Young men are falling behind because they aren't low
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on testosterone. They're falling behind because they're low on purpose, education, work, and relationships. And
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we're having trouble finding, although actually recruitment is up this year. We're having trouble finding 70% of
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people. Remember how joining the army used to be the the option of last resort. >> Yeah.
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>> 70% of men that walk into a recruiting office right now for the armed services
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don't qualify because of obesity or mental health problems. >> Right. So if if you want to if you want
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a more lethal fighting force, we need to make more investments in young men. And
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it's not about pumping them full of testosterone. >> I know it's >> so this is just performative stupidity.
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He conflates this weird notion of masculinity and fitness and optics with or doing bad pull-ups. Our military
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is headed towards asymmetric war. You know who's going to have the best? You're you're going to have the most
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lethal fighting forces will be the ones that master AI, asymmetric drone capabilities, really good management,
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ability to attract the best and brightest and have special forces of just out of [ __ ] control, brave and
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smart and strong people, >> right? >> But those people are in their 20s and they are soaked in testosterone.
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>> That's correct. I that's the whole thing. I was like literally Ukraine and and the most recent conflicts have all
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shown and with Iran against the United States has shown that might is not the actual winner here or largeness or
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muscularness. It's something very different. And you know testosterone can also if it's taken wrong [ __ ] you up
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like beyond belief. Correct. I mean, you have a doctor's care, but I know a lot of people who do this is off the shelf
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and problematic and cancer causing and everything else if you don't do it properly.
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>> The average young person needs the following. Nothing. They need relationships. They need a gym,
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>> good food. >> They need the money to have decent nutrition, you know, but they don't some of the
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craze around peptides and enhancements. And I realize this is somewhat hypocritical, but as a 61-year-old male
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desperately clinging to just try and feel 45 again, I do think there's a difference.
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>> Yeah. >> But I it worries me this notion that young men this peptide stacks and I I
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think that stuff is >> is borderline a little bit scary. And your your 25 or 35year-old self is
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pretty [ __ ] awesome on its own as long as you do some very b good sleep, good nutrition.
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>> Yeah. >> Gym three, four times a week, >> some some practice to push your limits,
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>> you know, be strong, be fast. >> I agree. I can't tell you the amount of like people tell me they're buying
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offtheshelf peptides. I'm like, "Oh my god." >> Yeah. I don't do any of that [ __ ]
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>> Are you I'm like, "It comes from China. It's not It's not tested. I hope you like sepsis. Like I just am like, oh my
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god. And it's not to say there shouldn't be they shouldn't be doing all this research on peptides. By the way, GLP1s
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are a peptide. Um but the way people are doing and this just sort of brings it out this idea. Let's jack up our let's
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steroid up our um our troops and make them insane. Like I don't know, just so unhealthy. Anyway, typical of Pete
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Hagath because he's as dumb as a box of hammers. Anyway, uh next one. Elon Musk likely broke Wisconsin law when he
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promised to hand out those million-dollar checks to voters in 2025 state supreme court election which he
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lost according to the Wisconsin election commission. The bipartisan panel found probable cause that Elon violated a
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state law that makes it a crime to offer a person anything of value to get them to vote. Uh now it's in the hands of
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Wisconsin DA to decide whether to pursue charges. I'm I'm doubting they will. Um
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but honestly when he did that that was kind of so grotesque is he did it several different places across the
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country. I suspect he'll do it again if he's not stopped. So, I don't mind this moving forward in some fashion. Um, but
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he, you know, he's unchecked. I mean, this the money he's been he's put 90 I think $90 million into um elections
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right now at this point, just him um in the for the midterms and you know, Ken Griffin, a whole bunch of people are
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just shoveling the money in in the Supreme Court. The most recent decision just allowed them to shovel it even
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more. Thoughts? >> Yeah, I think Ken Griffin is probably running for president by the way. Um,
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>> oh really. So say more as you like to say. >> Well, he's taken a lot of public stance
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on politics. And if you're a billionaire, the key to happiness is to be anonymous. And he's decided not to be
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anonymous, which says to me he has political ambitions. >> Oh, interesting. >> Um, also a smart guy, a lot of money.
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Um, but you know, he's been very, very vocal, but >> Oh, so he's going for the Mark Cuban
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slot, except he's like half as nice, like that kind of thing. >> There's a huge lane on the Republican
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side. Everyone keeps talking about the Democratic. The Democratic primary is going to be a is going to be a
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>> a gladiator fight >> because there's a lot of good people. >> Handsome. >> Handsome ass off.
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>> I'm having Do you see him in the Senate here? He's amazing. He looks like he looks like Kennedy.
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>> I think he's hot. I can't believe it. I was like, >> "Oh, he is hot. >> The guy's got total Kennedy vibes. Total
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Camelot vibes. I'm having I'm name dropping. I'm having uh coffee with another potential presidential
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candidate, Senator Kelly from Arizona, who you meet with the guy, you want to talk about testosterone. Guy flew a a
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craft 30,000 miles an hour an hour while also flying combat missions. >> He's a solid man and he's a twin, you
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know, and he's like, talk about someone who's been an outstanding husband. He's Anyways, he's a great role model for
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young men. But look, I the problem isn't election interference in Wisconsin. The
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problem is we've essentially decided that money can run unfettered. And so what do we have in society? Most people
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would agree the 1% has disproportionately benefited. It's not even the 1%. It's the 0.01%.
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And the 0.01% right now is in a position because of Citizens United and the most
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recent Supreme Court decision. I I told you my conspiracy theory, which I think is just just self-evident. I believe
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that this phone call took place. President Trump, is there any way you can lean on the SEC chair or the NASDAQ
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to let to include SpaceX right out of the gates in the NASDAQ 100? And as a result, you'll get, you know, retail
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investors will have the opportunity to invest. I'll have more demand >> of a of a small group of stocks and not
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a lot is out there. And so it it it juices the stock. But go ahead. >> It's trillions of dollars. that have to
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all be allocated to one of 100 stocks based on the market cap which creates unbelievable demand that what that isn't
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that has never been there for that has never been there for a new issuance in history. So, President Trump, if I my
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net worth goes up 20 trillion uh 20 $120 billion because of a smart move on your
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part, I don't see any reason why I wouldn't put one to 10 billion dollars into the midterms. And these elections
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are win or lost by two or three percentage points. You're telling me a billion dollars can't get you another
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couple points in Maine? I mean, or wherever it is. >> Maybe. Maybe. He didn't win in
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Wisconsin. He spent $25 million there. And >> well, that's the silver lining here is
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that money seems to have >> some effect. >> Uh money the the ROI on money is going
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down. It used to be that 95% plus of the people who raised the most money won because it was largely based on
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incumbency >> and television buys and this and that. >> But Tom Styer spent a quarter of a
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billion dollars to come in fourth or something in California. So that's the good news, but still and it goes back to
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the same thing. The problem isn't people the problem isn't people with billions of dollars. The problem is if you can
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directly connect it to undermining our democracy, you have unelected people deciding who's going to be president. So
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anyways, I I think we need one case isn't going to move the needle. >> I like that they're doing it though
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because that was at the time I was like, can anyone stop this? This is insane. You're buying votes. I just it's it's so
00:10:12
buying votes. It was like, you know, it just seemed like ridiculous that that that it was so explicitly bad. I hope I
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hope he they pursue it. But um speaking of election interference, which they're going to be a lot, we're recording
00:10:26
ahead. President Trump's working his hardest to interfere with the election. Uh he's going to do a prime time address
00:10:32
to the nation where he will discuss quote free and fair elections and other topics of popareie as one adviser put
00:10:38
it. Should never use the word poperie. Uh allegations about China meddling in the US election will reportedly come up
00:10:44
and some reports suggest he'll once again push claims of election fraud in Georgia. Speaking of John Oaf. Let's
00:10:49
listen to what Osaf had to say during uh an appearance on MS Now. >> There's talk that he might try to
00:10:56
declare me and Raphael Waro illegitimate senators. Obviously, the president has no power to do that, but he does have
00:11:03
the power to try to intimidate people. He's demonstrated his will to abuse power. I expect him to use whatever he
00:11:12
puts out there on Thursday as a pretext either for some attempted unconstitutional use of federal power to
00:11:19
interfere in the election or to give his proxies and loyalists in state and local
00:11:24
jurisdictions some cover for whatever they might attempt or to lay the groundwork for challenging the result.
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So there it is, you know, and it's really interesting because, you know, especially because his like handmaidens
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to seditions like Senator Cynthia Lumis rhymes with hummus, dummus. Um, you know, I don't know if they they were
00:11:42
properly elected. Like they they are they go they follow along. Trump also removed all three sitting members of the
00:11:49
bipartisan US election assistance commission, a group that oversees the testing of voting systems. It's all over
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the place. This is something Bannon, Steve Bannon has talked about. There's all manner of attempts uh possibly using
00:12:00
ICE at etc etc etc. Uh thoughts on this besides the handsomeness of John OA. >> You can't have a democracy when one of
00:12:08
the two parties acceptance speech is always the following. We won or it was rigged and election interference. The
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good news is that essentially affordability which right now the Democrats are seen as better on is
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dominating in Gallup polls what people are concerned about. Only 2% of voters believe America's biggest problem is
00:12:27
election reform. So, but at the same time, I also read 60% of Republicans think the 2020 election was rigged. I
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mean, this is just so bad for America because when you repeat a lie, this is straight out of the GRU. When you repeat
00:12:44
a lie over and over, it becomes less outrageous. Then it becomes normalized. Then it becomes self-evident.
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>> Correct. Yeah, that is correct. and our media, they just have a responsibility.
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I I I was just so I met I forget his name, the guy interviewing to be the head of our intelligence service,
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>> Clayton. Jay Clayton. >> Yeah. I met him at a conference. I spent a little bit of time with him.
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Reasonable, smart, impressive man. Can't say that Biden won the 2020 election. >> Yeah, he can't. He actually can't do it.
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And because then his nomination will be pulled by Trump and it's like okay at some point
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>> at some point these men have to be men and [clears throat] says are going to think I'm a coward.
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>> I you don't think that video is going to be played back over and over and over in
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your kid's third grade civics class >> rest of his life. >> Rest of your life. It's like and by the
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way maybe the nomination gets pulled but don't you want to be that dude? Don't you want to be the guy that said of
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course he was elected. Yes. And then have Trump And then have Trump pull your nomination and be a [ __ ] hero.
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>> I know. You know, of all people, Thomas Massie was like, um, we have the House,
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the Senate, the Presidency, and pretty much the Supreme Court, and we're call saying the election
00:14:03
>> elections were rigged >> rigged. Like, wow. Keep rigging them. Like, it was it's ridiculous. I mean,
00:14:08
the fact I mean, one of the things it's just ridic it's it's an astonishing repetition of lies. Those two there was
00:14:16
two hearings. It wasn't just him. It was also the um attorney general. Can't say
00:14:21
it. They can't say it. Biden was certified president. That's all they'll say, which is not the same thing. I
00:14:28
mean, that the fact that they can't say it and it's happened several times with cabinet members is really something
00:14:32
else. It really is. And and as it's as if they live in Putin's Russia and they do for the Republican party where if
00:14:39
they say the wrong thing, they they get like thrown out a window essentially. And this is a not a not a real throw out
00:14:46
a window, but a sort of version of it, a political version of it. >> There has never been a testosterone
00:14:51
therapy like a Republican losing an election. >> We'll see. I don't know. You think Tom
00:14:56
Tillis and John Cornin are going to push back on Blanch. >> Look what truth tellers these guys are
00:15:02
once they lose their election and they have only six more months in the Senate or whatever.
00:15:06
>> I'm waiting to see if they vote against Todd Blanch. >> Mean his personal lawyer.
00:15:10
>> I'm his lawyer. I'm his lawyer. I mean, I was his lawyer. I mean, I don't know
00:15:14
what I mean. You know, I don't think they're going to I think they're going to vote for and they're not they're
00:15:17
going to let it out of committee. I just don't I I I don't think they they still
00:15:21
can't sack up. Too late, Tom. Sack up, Tom. Sack up, Tom. Take some testosterone if you need to. Take some
00:15:28
borrow from Hex. >> He We can't stand He can't stand Hex. The whole thing. You're right. When do
00:15:33
they When do they stand up on stuff like this? It's like what Adam Schiff said to
00:15:37
Todd Blanch, "What happened to you? You used to be a person of quality and it's really interesting. Anyway, um we'll see
00:15:44
what happens. And I'm not Are you watching the speech tonight? I'm not. >> Oh, I I I could care less.
00:15:49
>> I could care less. He'll probably You know what? I will watch it. I'll just watch it on one of three social media
00:15:54
platforms that'll give me the two or three clips. >> He'll probably like 10. Can I Can I just
00:15:59
>> She is now saying there's a 45% chance that Democrats take both the Senate and
00:16:03
House at the midterms. >> Yeah. Both. Anyway, that's still 45. Um, let me just say I'm going to go back
00:16:09
because this is the same thing. This repeating of the lie that you just said the the link the the uh the um
00:16:14
reflecting pool. This is the kind of thing the lie the lie the lie the lie the lie and then everyone and by the way
00:16:20
the media repeated it. We should have like just now the reporting is in and I got to I got to commend CNN did a very
00:16:27
tough uh u report on it. Just like stop repeating his lies. tonight. If you if you all repeat his lies, you're as
00:16:36
complicit in this in what's happening here. You have to say this is not true, this is not true, and not even entertain
00:16:43
it. Um, in some level, you can report on it, but you don't have to entertain it the way they as if it's an equal thing.
00:16:49
I just that to me is really what really drives me crazy. Anyway, let's go on a quick break. We come back, things are
00:16:56
going to get explosive and not in a good way. Support for the show comes from Build. [music] Here's a question. Are
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00:18:00
sent you. Scott, we're back. And never has diarrhea been so political. Uh, now let me pronounce this right. A
00:18:07
cycllospora outbreak has now spread to 34 states. It's a parasite that contaminates fresh produce and causes
00:18:14
severe watery diarrhea with frequent and sometimes explosive bowel movements. According to the CDC, officials are
00:18:21
still investigating the source. Mission officials say the evidence points to lettuce or salad greens. Uh, federal and
00:18:26
state officials are also looking into whether Taco Bell restaurants played a role. This is this is so ridiculous
00:18:32
blaming Taco Bell for this. And making things more difficult. The CDC of course scaled back the country's comprehensive
00:18:38
system for tracking foodborne ills outbreaks last summer. Thank you uh RFK. That's your fault. They cut these these
00:18:44
things. States can report cases through other systems, but experts say the cuts created blind spots making outbreaks
00:18:50
harder to track. um just ridiculous. These people made the cuts and this is the result.
00:18:56
Everyone's having diarrhea. It's the fact that diarrhea is the is the brand for the Republican party like bringing
00:19:02
us diarrhea, measles, and possibly polio is and Ebola is really quite something.
00:19:08
I just I I don't know. I I I like lettuce and now I'm like nervous about eating it. It's crazy. Um the memes are
00:19:15
amazing. Let's go through a few of them. Someone on X posted, "I found an explosive diarrhea parasite." With a
00:19:20
picture of Steven Miller, also first Mitch McConnell and now cycllospora, a big week for evil vegetables. And maybe
00:19:27
explosive diarrhea will finally be the thing that brings both sides together. Uh thoughts on explosive diarrhea.
00:19:34
>> Yeah, I don't know. I [sighs and gasps] I'm I was feeling really good. I'm I had
00:19:39
the best You know what's coming. Uh, I had the best bowel movement I've had in years the other night and then I
00:19:46
realized I was still in bed. Um, look, I don't >> Okay, that was good. >> Uh, you know, all of these things,
00:19:54
whether it's testosterone, yeah, look, the CDC, we need we need thoughtful people. It this goes back to
00:20:03
the same thing. This is true of Democrats and Republicans. We've taken for granted how many competent people
00:20:09
>> work for the government. work for the government >> and that you need a diplomatic core that
00:20:13
can say this memo of understanding doesn't mean [ __ ] anything and we need to do hard work of diplomacy here.
00:20:20
We need we need talented medical professionals in the CDC to go this is a risk these are the preventive
00:20:27
steps we need to take who have the support of the White House and are aren't you know trying to figure out
00:20:33
ways to undermine you know vaccines. So for every look, for every $1 invested in
00:20:40
public health preparedness, you get multiple dollars in avoidance of health care costs and productivity losses.
00:20:45
>> Food born illnesses already cost the US tens of billions annually. >> You don't notice these things when the
00:20:52
CDC is working. You only notice it when someone is [ __ ] themselves. >> Outbreaks. there's small outbreaks as
00:20:58
opposed to these enormous >> well okay but America you know and this is true of Democrats and Republicans
00:21:05
you need to appreciate government before you start [ __ ] yourself >> yeah but in this case this was the
00:21:11
Republicans cutting these programs that have been in place >> agreed elected by an American populace
00:21:17
>> correct that's correct that's absolutely correct but I don't think we voted I
00:21:20
don't think even those people voted for diarrhea didn't vote for diarrhea >> right nobody voted for diarrhea and you
00:21:25
would assume that this is the kind stuff, you know? The fact that they go for this stuff is really interesting to
00:21:31
me. I'm like, that seems like a like a real like I don't know. It's just it's so it's not just shortsighted, it's just
00:21:37
dumb. Like, let's stop the tracking of foodborne illnesses. What what made that decision that like I want to be in that
00:21:45
room? Like, who said, "Yeah, that's what we're going to cut cuz that's something
00:21:48
that you know isn't important like salmonella or something like that." I don't know. It's it's a really I think
00:21:54
it is all knitted together. And again, back to the reflecting pool, it's like those were no no bid contracts. Back to
00:22:01
all the no bid contracts all over all over the place where you have shoddy work or shoddy this or shoddy that. And
00:22:07
then in this case, it's diarrhea. I just and of course it's now it's going to hit
00:22:12
lettuce makers, you know, people who sell lettuce, grocery stores, the all the implications. Everyone's eating
00:22:17
chocolate chip cookies, they get fatter, whatever. Um, let me ask you a question
00:22:21
as a marketing person. How would you sell this as a Democrat? If you're is it is it worthwhile to make
00:22:29
use this in in the election? >> Yeah, you know, bombs, diarrhea, and inflation. I I
00:22:40
that word is so powerful that I I would probably couch it in America's health being ignored, which drives up costs.
00:22:47
So, you you you can't afford the treatments to the diseases you shouldn't be getting. I mean,
00:22:53
yeah. I I think I don't know. I think they need to test it. I I still am all about accountability and affordability
00:23:01
or maybe affordability and accountability or renewal. Um, you know, I'm working on a bunch of messaging
00:23:07
around these issues. This is it needs to be more than a meme. It needs to be broadened to our health is
00:23:16
is been compromised by an an incompetent set of um officials where it comes back
00:23:24
to the same thing and that is opting for falty over competence will hurt the American public.
00:23:29
>> Yeah. and that Democrats, if you look at past administrations, sure, you know,
00:23:36
politics plays a role, but here are some of the, you know, I would hold up I I would say, okay, let's just look at
00:23:43
Surgeon General Morty. Let's look at let's just look at these people's backgrounds. Let's look at the former
00:23:50
Let's look at some of the people who ran our our intelligence and who's running it now. I just run ads around. All
00:23:56
right, let's look at past defense secretaries and Pete Hacksth. Let's just compare.
00:24:00
>> Compare and contrast. Yeah. >> Yeah. And contrast. And unfortunately, that doesn't fit on a bumper sticker.
00:24:06
There's probably something very clever around this they can come up with. >> There is a grift kind of thing that's
00:24:11
really I think is actually very strong. Like just just this week, the SEC under the [ __ ] Brandon Carr uh signal that
00:24:17
we'll vote to repeal the cap on ownership of TV stations, a limit that keeps owners from controlling the
00:24:21
stations over 39% of the markets. They're trying to merge companies and they've been blocked by um various
00:24:26
lawsuits. And you know, Americans confidence in technology companies has fallen like drastically. I just think
00:24:33
you put out an idea of the grifters are here and you're getting diarrhea. The gri the rich grifter they're getting
00:24:39
rich and you're getting diarrhea kind of thing. >> Well, like what can we do about it? I'm
00:24:43
always thinking other than just barking into a mic, I'm putting out a bunch of threads and a bunch of posts. I
00:24:50
initially thought this is this could be the Democrats making light of a bad situation and and placing blame where
00:24:55
they're where they shouldn't. And then I did just a touch of research. On July 1st, 2025, the CDC's foodborne
00:25:03
surveillance network called Foodnet, cool name, dropped a number of pathogens that require states to track from 8 to
00:25:10
two. Only Salmonella and E.coli remain mandatory. Cycllospora, Lististeria, Campilobacttor,
00:25:17
Shagella, Vibrio, andia all became optional. Cycllospora has been tracked continuously since 1997, meaning 28
00:25:24
years of monitoring, ended the summer before the biggest outbreak on record. Folks, connect the dots. Since early
00:25:32
2025, the administration has cut more than 3,000 positions from the CDC, roughly a quarter of the workforce, and
00:25:38
what do you know? We're having a cycllospora outbreak. I mean, it's this is math. This isn't politics.
00:25:45
>> Let's connect the dots. They they can't run. They can't govern is what you want
00:25:48
it really. They cannot go. They don't govern. And when they govern, they steal. I mean, I think that's
00:25:53
>> the administration dissolved the CDC's division of parasitic diseases and malaria.
00:25:57
>> Yeah. >> And they they keep saying with bloated bureaucracy. We talk about Okay. Bloated
00:26:02
is a key word here. And and wasteful. I mean, these these words are taking on new meaning right now. And the pattern
00:26:08
isn't limited to one parasite. A second one. A flesh-eating new world screworm showed up in the US showed up in US
00:26:15
livestock in June for the first time in nearly 60 years. And so these these talk about gross
00:26:21
these larae burrow into the flesh of living animals and the USDA is fighting it by releasing millions of sterile
00:26:26
flies in Texas. Mexico and Canada have both restricted US cattle imports over the spread. So this this neutering this
00:26:35
neutering of our government agencies and replacing them with loyalists and competence
00:26:42
is folks the chickens are coming home to roost except the chickens have diarrhea
00:26:46
or will give you salmonella or whatever. So >> I can't paint a pool >> but again I come back to the same place.
00:26:53
>> Our government is stacked with or was stacked with talented people >> talented people. I agree. I agree.
00:26:59
Anyway, on a much different note, OpenAI's uh much anticipated first device is going to be smart speaker.
00:27:04
According to Bloomberg, the device which is under development is meant to be humanlike AI companion that lives in the
00:27:10
home. It will help control smart home appliances, play media, answer questions, and tap into the capabilities
00:27:14
of chat GPT. It sounds like Alexa to me. Uh Oaya believes the device is different
00:27:19
from anything Apple has on the market, which might come into play with that Apple lawsuit we talked about. Um
00:27:23
obviously the delay there, Anthropic is allegedly going to go public in the fall
00:27:28
sometime. Um, open probably is not. Um, is this a product that's going to work, Scott? This seems like a product Scott
00:27:34
Galloway does not like, but perhaps he does. I don't know. I actually I like it more than I thought it would.
00:27:41
I thought I would because you keep talking about and at some point there needs to be a post smartphone era,
00:27:50
right? >> Yes, that's correct. And I I don't think the most valuable product of the next
00:27:56
decade or decades won't be the one with the best screen. It'll be the one that knows you really well.
00:28:01
>> Right. Absolutely. >> And it won't be who builds the biggest model or best model. It'll be who owns
00:28:06
your kitchen, your living room, your car, your earbuds. And Apple won because it owned the interface, not because it
00:28:12
had the best technology or model. And OpenAI is trying to own the relationships. Now granted, Meta tried
00:28:16
to do this with their I forget what it was called. >> Remember that? Yeah. So I I actually
00:28:22
think strategically going for a speaker and trying to go in home. I'd heard it was going to be some
00:28:29
weird [ __ ] pin or something. I I or an >> attemp pins have been tried that you
00:28:34
carry with you at some point. You will let me say you will have a pin on you at all times or it'll be your AirPods
00:28:39
that'll be extra smart, right? Presumably. >> I think that's right. So I I think that
00:28:43
the idea of a better Alexa, the idea I didn't I don't think smartphone.AI AI was going to work. But the idea of a a
00:28:52
really intelligent speaker conceptually I think this is strategically I think it's correct. The
00:28:59
thing that everyone learns and is just littered with dead armadillos is believing that because they're good at
00:29:05
software they'll be good at hardware. >> Right? >> There are so few companies who have made
00:29:09
the leap to hardware. I mean think about it. >> What hardware in the home do you trust
00:29:14
though? I mean my son literally took all the Alexexas out of our house. like he's
00:29:18
like they're not going to surveil us. That was one of the issues. The other they're always listening. Like people
00:29:23
are nervous about this kind, you know, even even the the um the alarms that people put on the cameras like they they
00:29:31
got manipulated [clears throat] from outside where people were looking inside people's homes. I mean I think
00:29:36
and then Amazon remember Amazon was going to have a drone that followed you around your house and did things like a
00:29:41
little floaty thing. I mean eventually people will have a version of that presumably. It's just who do you trust
00:29:47
to be in your home? Cuz I wouldn't put any of these things in my home at this point.
00:29:51
>> So my first thought when I read this was two things. My first [clears throat]
00:29:54
thought was, all right, I think this is actually smarter than I thought, at least
00:30:00
strategically. Obviously, this is all about execution because I thought they were going to try and put out some, you
00:30:04
know, the Amazon Firephone or whatever it is. Uh the second thought I had was I'm going to buy Sonos stock. I think
00:30:11
Sonos is going to be acquired. >> Oh. Cuz I think for Sonos has a market cap of 1.7 billion. That is literally
00:30:18
changing their couch for these companies and they immediately have an installed base of speakers where they can just
00:30:24
upgrade the technology >> which never work which never work. >> I think Sonus is amazing.
00:30:28
>> I love Sonus but you I have to tell you it's the most difficult to get coordinated. It is always glitching.
00:30:34
It's always glitching. I and I'm smart about these things. I love >> But there's so but you asked there's so
00:30:38
few trusted brands in the home. It's really interesting. Like, like Subzero is such an amazing brand. You can buy a
00:30:45
$4 million home and they will advertise that that it has an $8,000 refrigerator called Sub-Zero. That makes no sense to
00:30:51
me. You think about how many actual brands that the furniture market is totally fragmented.
00:30:57
>> It is. Yeah. >> Sonos is a decent brand. >> No, I agree. I have an installed base.
00:31:01
>> You're right. I let Sonus know. >> And by the way, the stock is off 56% in the last 5 years. That company is
00:31:07
screaming. I have a lot of Sonuses in the home and I don't but I don't have Alexexas. I don't have. It's a really
00:31:13
interesting thing because but this when remember when Amazon bought Ero I guess I was like oh I was you know what I mean
00:31:20
like cuz I love the Eero guys they were really interesting. Um and this is to this is basically repeater for your
00:31:25
internet essentially and I and then when um Google bought Nest I was like oh damn, you know like oh they're here. And
00:31:35
now I do keep a nest in my home and I do keep a Sonos, but some I don't know if I
00:31:40
want Ch GBT around my house. I don't think I do. I think I do not. >> I think you're I I've always bought that
00:31:47
people talk a big game about privacy and if they can see their Uber QX60 is getting a little bit closer on the
00:31:52
screen, they'll give up all of their data. Yeah. >> I've just I think people opt for utility
00:31:57
over privacy and then they talk a big game about privacy. >> Kind of. Although you shovel a lot more
00:32:01
stuff into chat than I do. I won't. I still don't. And I don't I it's just cuz I don't want this particular company. It
00:32:07
doesn't mean I wouldn't allow I allow Apple in the home a lot more readily, but they never come up with
00:32:14
any. Their device was terrible. I have one of those I it's in a box somewhere. Um I still have yet to integrate these
00:32:21
into the home in a way that is useful in in what they're talking about here. So you're right. We'll see. Someone's going
00:32:27
to get it right. Anyway, let's go on a quick break. When we come back, we'll talk about a tumble for IBM shares and
00:32:32
what it means for the market at large. >> Support for the show comes from Framer.
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coverage varies. See mintmobile.com. Scott, we're back with more news. IBM stock is down 26% in the last 5 days
00:35:08
after issuing a rare profit warning, noting the shift in customer spending from software to AI hardware and chips
00:35:14
ahead of the quarterly earnings. The sell-off erased $69 billion in market cap and the initial tumble marked the
00:35:20
company's worst day since at least 1968. The S&P software industry index is down
00:35:25
over 13% for the year. You've talked a lot about the software companies by the way. SpaceX has really taken a digger.
00:35:31
Oracle is way down. Um, you know, and just related, I think New York has become the first state to ban the
00:35:38
construction of new data centers. The pause applies to new data centers requiring 50 megawatts or more power for
00:35:43
up to a year while state regulators develop new environmental and energy standards. Governor Kathy Hokll noted
00:35:48
the New Yorkers have seen their energy uh electric bill surge 68% since 2019 and a June poll reveal uh revealed that
00:35:56
46% of New York voters believe one-year moratorium on large data centers would be good with just 21% saying it was bad.
00:36:03
So this is all related to each other this idea of this growth. Talk a little bit about IBM and then you know the
00:36:09
links to Oracle, SpaceX, everything else. They're really trending downward in a really significant way and people
00:36:15
are nervous. There's so much more um discussion about a possible collapse um by lots of different people. Noble, the
00:36:22
the investor, George Noble, uh Bill Cohen did a great interview with him. He's nervous. Thoughts?
00:36:28
>> I was caught off guard by that. I mean, this was they came in at 17.2 billion
00:36:32
versus 17.9 and the stock had its worst day I I think maybe ever or in 50 years. And it
00:36:39
erased a quarter of IBM's value over a $660 million revenue miss. That's about $100 in market cap for every $1 of
00:36:46
missed revenue. The reason why is IBM's customers are rating their own IT budgets. In the in the in the last few
00:36:52
weeks, clients pulled spending from software and mainframe deals and use it to panic buy server, storage, and memory
00:36:58
before prices rose further. So, in the the sell-off infected entire enterprise software market, the fear is that
00:37:05
they're the Canary coal mine here, and that is the real loser is anyone who buys memory instead of selling it. So
00:37:13
data centers are forecast to consume 70% of all memory chips produced in 2026 up
00:37:18
from 20 to 30%. And three companies make up roughly 90% of the world's DRAM market and all three have shifted
00:37:26
production towards AI chips. So their costs are going up and meanwhile their revenues are flattered down. So you have
00:37:34
margin compression and meanwhile in topline going down. So the losers are everywhere else. uh PC makers who
00:37:42
consume a lot of memory or buy it that was 15 to 18% of PC materials cost is now heading towards 40%. So in a
00:37:50
competitive margin >> in a competitive commodity market your your costs are going up ways uh
00:37:56
>> and so prices have to go up. >> Think about it. Apple has already had to raise its prices but they have the
00:38:00
margin power to do it. >> Yeah. >> Xbox has raised prices by consoles as much as 150 bucks. Smartphone shipments
00:38:06
are projected to fall 13% on memory price surge and software and services corporate IT budgets are being
00:38:12
redirected to panic buying chips. So the ai trade has gone parabolic but the losers have
00:38:21
suffered tremendously. Accenture is down 47% year to date. I think as a lot of those back office jobs people think AI
00:38:28
will will will supplant. IBM's down 28%. Microsoft down 16. Service Now down 29.
00:38:34
Salesforce down 34. Actually spoke at Salesforce yesterday. Um so I this is the the market is reshaping around you
00:38:43
know big winners and big losers and IBM is perceived as being on the wrong side of the trade because now it's competing
00:38:50
it's competing with to buy the memory against companies that have a better business model or or better prospects.
00:38:58
>> Right. Right. But what what about the overall trend because there's so much noise now. I mean, I was really struck
00:39:03
by this George Noble interview that Bill Cohen did that, you know, there he's just like this is he essentially was
00:39:10
like this is bananas what's happening right now with with the spending and you do see you know SpaceX despite the index
00:39:16
thing is drifting down drifting down drifting down more and more. Ed Edison by the way is enjoying the entire drift.
00:39:23
There's he does a he does a thread every 5 seconds about it. um talk what is the
00:39:29
are you very worried because a lot of people I just have been hearing so much more noise around that and it seems very
00:39:35
interrelated to these data center slowdowns and that the business isn't quite there and open a is not going to
00:39:42
go public this year maybe anthropic will get through um are h you still remain worried or are
00:39:50
you paying attention to that because I think they're all related to each other >> I mean and granted I get this [ __ ] wrong
00:39:56
all the time. Um, I think we're I think we're literally late stage 99. [laughter] I mean, and I think I think
00:40:03
it's I think it's unfurling remarkably similar. First, it was B TOC, the Amazons, the e toys, the you know,
00:40:11
the the the pets.coms of the worlds imploded because they didn't create the demand to justify
00:40:18
their valuations. Okay. So, what's under what's under huge chart right now? the ultimate consumer AI play which is open
00:40:24
AI and then everyone but wait it's about B2B so everyone shuffled into anthropic
00:40:31
thinking it was the enterprise market I think that's the next one to come from a
00:40:35
trillion down to a hundred billion by the way $100 billion is what Starbucks is worth that's not that's still a lot
00:40:39
of money >> and then the next the next shoe to drop will be similar to what happened
00:40:44
everybody got out of B TOC got out of B2B and then they went into global crossing and Cisco because it's still in
00:40:49
the ground and then I think the next shoot to drop we're I think we're going to start to the weakness in the
00:40:53
infrastructure player specifically Nvidia in later half later part of this year beginning of next year this whole I
00:40:59
I feel as if we are literally in the the the beginning of the unwind >> yeah and these data center bans or
00:41:07
construction of them I I think it's a good idea voters want this of I think it's actually good government to say
00:41:12
like let's take it's not saying no data centers it says let's take a year let's figure it out let's do it so that
00:41:18
consumers don't have to pay it's a great political message and It's not anti-inovation. It's slow the [ __ ] slow
00:41:25
your roll, dudes. Like, this is ridiculous what you're doing to our to our environment and our costs. And you
00:41:32
know, they try to blame things like Hokll and others. I think it's actually good governance. That's my feeling.
00:41:37
>> Look, I it's become politicized. I think data centers have become the vessel for
00:41:41
outrage around income inequality. And I think some of the concerns around them are inflated. The notion that they're
00:41:47
going to soak up all the water. They're noisy. Well, they're not they're not many most of them aren't near. I I I
00:41:52
feel that essentially this has become the new the new kind of whatever it is squeeze toy or or anger mannequin for
00:42:02
income inequality. And then in what is the biggest brain deadad brand move of that century, they decided to make the
00:42:08
spokesperson for data centers, Kevin Olirri. >> Yeah. So, but if I were a civic official, first off, these people aren't
00:42:15
the people approving these data centers aren't stupid because these companies data centers don't call the fire
00:42:19
department or the police department and they pay property taxes. These people aren't stupid approving the data
00:42:25
centers. What I would do if I were a local civic official is the following. I would say we will cram through your
00:42:30
approval. We want 10 years guaranteed property taxes no matter what happens to your company because I think a third to
00:42:36
half of these things aren't going to get built. But I still want those revenues.
00:42:39
>> Yeah. And also maybe some you've got to talk to voters about the electric bills
00:42:43
and everything else, you know, and because it they I think the people who are opposing them have made very have
00:42:49
done a very good job of linking them with billionaires and like you're right Kevin Olirri looks like a [ __ ] idiot.
00:42:54
>> But that's math that a civic official should be able to say we have economists
00:42:58
empowered people estimating what the increase in electricity costs will be if those are in fact true. We need to at a
00:43:04
minimum compensate consumers with the property taxes or fees you're going to pay. And also I would say I a friend of
00:43:13
mine owns a shipping company and shipping container ships went to like from $30 a container to 150 because of
00:43:19
Hormuz. And I'm like is there any I'm like is there any way you can buy futures or sell futures and lock in that
00:43:23
price for the next 10 years? And he's like I'm trying. If I were a civic official I'd be trying to lock in the
00:43:29
revenues and the property taxes these things are going to pay for the supposed to pay for the next 10 years. Cuz Cara,
00:43:35
what I find generally in life and in business is the [ __ ] you are most worried about doesn't come to fruition.
00:43:41
>> Oh, interesting. >> Because you start planning against it subconsciously. The the [ __ ] we're
00:43:46
remember Y2K how worried we were. >> You do you know where I was? May I tell you a short story? I was sent by the
00:43:52
Wall Street Journal on the best night of the of of a New Year's for that 2000. I
00:43:58
had to be at Yahoo and Erade. That was my life right then as a young reporter. I had to hang there and nothing
00:44:04
happened. Go ahead. >> Well, or remember you you pro I used to go on Bloomberg when I was going on TV
00:44:10
there and for [ __ ] 12 months we talked about the collapse of Greece and how it was going to affect the EU. The
00:44:18
moment you start worrying about everything, it doesn't happen. No one was worrying about planes slamming into
00:44:23
the World Trade Center. We weren't that worried about a virus jumping the lab. In fact, I mean, Bill Gates was we are
00:44:31
so worried about data centers that my view is and my thesis is that all of a sudden we've had this incredible
00:44:37
flipping from a supply crisis to actually a demand crisis. Everyone everyone that was supposedly going to
00:44:43
create all the demand for data centers is now selling their data center capacity and storage to the to the two
00:44:48
companies creating demand, open AI and Anthropic. So, if I'm a civic official, I'm like, bank that money now. Get their
00:44:56
commitments because I And also all the innovation is going to go into chips and inference and compute
00:45:02
that requires less energy and oh my the most [ __ ] ridiculous thing. Have you ever been to one of these things? The
00:45:09
idea that we can put any semblance of one of these into space >> I know >> makes the Robovven look practical.
00:45:15
>> I know [laughter] Robovven you know my favorite person everyone should follow
00:45:18
him Yan Lun on the data space data space centers makes me laugh. I love that he says it though. There's part of me that
00:45:26
I gotta say, Elon, good one. Good one. Space centers, data centers in space. Like, I'm like, what a load of crap, but
00:45:35
I love you for trying it. It's like having the, you know, we were supposed to have 50,000 Optimus Primes in our
00:45:40
home this year. Do you have one yet? >> Oh, no. I mean, but hold on. Let me ask my robot.
00:45:46
>> Yeah. Yeah, exactly. I think we will, by the way, I think we will eventually.
00:45:50
>> You think we're going to have You think it's going to be Jetson? You think we're
00:45:52
going to have a robot? >> Eventually, but we'll be dead. It doesn't really matter, but yes, I do. I
00:45:56
think >> my Filipino nurse, Manny, is cheaper than a robot and has softer, gentler
00:46:00
hands. >> All right. Okay. But someday, you may be taken care of by a robot. Anyway, uh but
00:46:05
I like the fact that they just lie through their teeth about something and the lie is very creative. Anyway, uh one
00:46:11
more quick break. We'll be back for predictions. Support for this show [music] comes from
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quint.com/pivot. >> Okay, Scott, let's hear a prediction. Let what what is your prediction?
00:47:26
Besides, I'm going to make a prediction. Odyssey is going to like blow. >> Yeah.
00:47:30
>> The >> That's a pretty safe >> I got to tell you. No, but I think like way more than people think it is really
00:47:35
that good. And I think people are again, just like they were with smaller movies
00:47:39
like Obsession and Back Rooms, they love getting in the theater when something's
00:47:43
worth it. This one is worth it. I think it's going to blow out well beyond what people think the blowout's going to be.
00:47:49
>> I like it. I'm going to see it. I'm excited that you liked it. Uh, so my prediction is that OpenAI is going to
00:47:56
buy Sierra and make install Brad Taylor as CEO. >> Oh, great idea. I I did I say this to
00:48:02
Who said this to me? Someone asked me who I thought was should be CEO of >> you. You said you you planted the seed.
00:48:08
You said Brett Taylor. >> Yeah. >> Okay. >> Um, look, the the the most successful
00:48:13
companies don't stop at the platform. They own the application layer. Like Apple didn't stop at iOS. It created the
00:48:18
app store. >> Explain what Sierra is for people who don't know. It's his new startup.
00:48:22
>> So, it it's essentially they're in the application layer for AI. Well, they're one of the best enterprise
00:48:28
AI products. Um and they're essentially they they are have a valuation of 4 to 5
00:48:36
billion. Open AAI is supposedly worth 800 to call it 500. So for 1% of the company they get a CEO. And right now
00:48:43
Brett Taylor is probably they need to bring in an adult that calms the markets. And OpenAI does you if OpenAI
00:48:50
doesn't in fact have the best model Sierra has one of the best enterprise AI products and B and Brett Taylor is
00:48:55
arguably the best enterprise software operator of his generation right now. And these as these foundation models get
00:49:01
cheaper, intelligence will commoditize. So the scare asset won't be IQ. It'll be
00:49:06
customer relationships, workflow integration, and enterprise trust. And that's essentially what Sierra's
00:49:11
offering. So >> can I also say he can go toe-to-toe with Elon. He's the one who got Elon.
00:49:16
Remember Elon tried to pull out of the deal. He was he was the chairman [clears throat] of Twitter. Forced him
00:49:21
to close. >> Forced him to close. >> He said this company's worth three. You want to pay 44? Sign here, here, here,
00:49:26
and here. And oh, remember me? Hey, you're the guy that signed these documents. You're closing,
00:49:30
>> right? He can go toe-to-toe with Elon and actually is very wellliked in Silicon. Very well, like unusually
00:49:37
well-liked >> essentially. Essentially, Sarah is the salesforce of AI and if open AI wants to
00:49:42
be more than the NVIDIA of AI, it needs to own the sales force of AI. So, >> do you think Sam Alman will give up the
00:49:48
CEOship? >> I'm not so sure. >> Well, this is what typically happens. The CEO is taking so much [ __ ] and and
00:49:57
has seen the valuation go down. That has got to be [ __ ] Vietnam minus the charm right now.
00:50:02
>> He likes being liked. I'll say that. >> I can't even imagine what it's like to
00:50:05
be Sam Alman. So, he probably has agreed. This is typically what happens when the CEO's tenure is like this and a
00:50:11
founder. They agree to bring in a president and then we all interview the president and the really the person we
00:50:16
really like goes says the following. I'm not going to be your [ __ ] president. Make me CEO. And then we all agreed to
00:50:23
make him or her CEO. Brett Taylor isn't going to take a president job, >> right? He did at Salesforce. Remember,
00:50:29
he was sort of >> Yeah, that was as a younger man joining joining Mark Beni off, one of the
00:50:33
greatest entrepreneurs in software, right? He's his own he's his own CEO now. >> And so th this this solves so many
00:50:41
problems. It gives the market a sense of calm and then an adult shows up. It's a
00:50:47
chance for them to turn over a different leaf. It's a chance to create cloud cover to dramatically decrease the
00:50:52
ridiculous capex. It's a chance for Sam to save face and be the chairman and the
00:50:56
visionary and prepare and pretend that it was his idea. And they also get a company on the in the application layer
00:51:04
for 1% dilution. This makes so much in some the two most the three most acquire no two most acquirable companies
00:51:13
right now Sonos and Sierra. But this just makes so much industrial logic. I'm I'm surprised it may it may even be we
00:51:21
we may even be in the midst of it right now, but Sonos should be picked up by one of these guys looking to get into
00:51:26
the home for scrap, but the real one here is Sierra. And it's not it's not it's an aqua hire. It makes Industrial
00:51:33
Logic, but what they really need if they announce Brett Taylor as CEO >> Yeah. big deal. I love it.
00:51:39
>> The valuation of the company goes up hundred billion dollars. I love it. >> They get 20x on the acquisition price.
00:51:44
Say they pay 10 billion for it. They get 10x just by with two words, Brett and Taylor, OpenAI is worth more than
00:51:52
hundred billion dollars. And they can say to >> Brett, I think I'm your muse. Do you
00:51:55
know that? I think I'm your muse. >> Well, you're my inspiration on a lot of levels, Cara.
00:51:58
>> I am. I say. >> Yeah. There you go. Anyways, uh >> Brett, call us. >> Sierra is going to be acquired and Brett
00:52:06
Taylor by Open AAI and Brett Taylor's going to be installed as CEO. >> I like it. I love it. Uh we want to hear
00:52:11
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00:52:16
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00:52:21
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