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No sane, rational buyer can bid on this. This is who can bid on this. The children of people who made $90 billion
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in one day.
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Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Cara Swisser from Korea.
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Hello Scott. Uh how are So give me your impressions of Soul. Tell me all about it.
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Well, I'm drinking bubble tea of course. Um I was in the Gangham region uh today
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with all the lights and all the young people and all the plastic surgery area. Um it's great actually. It's very clean.
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It's very vibrant. Um young people wandering everywhere. Um
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uh it feels good. I mean I think they feel very emboldened by pushing down the martial law thing cuz they're good at
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we're not. Um and uh and they it feels very vibrant. Feels like it's it's not a
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lot different from last time I was here. I'll be honest with you. But uh I like Kore quite a bit. I don't How many times have you been here?
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Well, you know, it's painful for me cuz I I had a Korean friend who died. He was so young. So young.
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Oh, no. I can't believe you told that joke. Oh,
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that's good. That's That's the only Korean joke I could find that was only mildly racist. Oh my god. That is
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Get it? So young. So young. Okay. Anyway, it's weird to think that I'm this close to like North Korea.
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Like, it must be so stressful to be near a country that wants to bomb you out of existence and stuff. So, that's a weird
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thing to feel. I don't know. Just go to a pro pali rally at Columbia. Oh, stop it. Don't even Don't even with
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like ripping the White House down. I'm not even going to like Oh, I agree. I I is Have you ever seen a
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visual metaphor that's more so much? We'll get We'll get to that. We'll get to that. Wing being torn down. I mean, seriously, I'm sorry. Everybody
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gets a pass except for Trump. Anyway, I think I mean like I release the Epstein files. That's all I have to say about
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this. Like it's another thing. Any we'll talk about in a minute because we've got a lot to get to today, including um
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Tesla and Netflix earnings, which are really interesting, and OpenAI taking aim at Google with its new browser. But
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first, uh Warner Brothers Discovery announced this week it's officially exploring a sale uh after getting
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takeover interest uh for summer part of the company. Earlier this year, uh, Warner Brothers announced a plan to
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split in two, separating its studio and streaming from its legacy cable networks. CNN is the most famous of
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those, but there's they have several. Now, it's, uh, it's open to an alternative separation structure. I
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mean, David Zazzle's saying the obvious cuz it's rejected three takeover offers
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from Paramounts, uh, David Ellison. Other rumored suitors include Comcast, Amazon, Apple, and Netflix. Uh Scott,
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we've been talking about this, but you predict in 2023 that Warner Brothers could face an activist event investor.
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Let's listen. I think you're going to see an activist at Warner Brothers Discovery. The stock is now down to a point where I think
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there's a lot of upside as Zazob to his credit is reducing debt and the assets
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here are trading at about even including the debt about half of what
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uh they paid um uh they paid AT&T for the asset. So uh I think I think that
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there's blood in the water. People see these assets uh have declined to a level where there's a decent amount of upside
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with not too much downside. So it's not an activist investor but it is you know other companies
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the ultimate activist isn't an acquisition. True. True. But it's these are companies that want to what what we've also talked
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about which is taking them cutting costs and consolidating which is a theme you and I have talked about quite a lot. um
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the idea of sort of taking taking you know moving and why should there be ABC, NBC, CBS, CNN, etc. But that's not
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really the focus here. It's um it's the studios and streaming I think probably. So talk a little bit about this because
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one of the things I've talked to a lot of people about this and they feel like if the Ellison's um get to $26 a share,
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I think they're in the 24 area, it's a done deal. Um, essentially, um, Zazloff
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is trying to make an auction happen, I guess. And, uh, he's already in the money. He's going to do really well
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himself. But, um, he's trying to argue that split apart, it's $30 or whatever
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once you split the two together. So, why should they take a cheap offer from the Ellison's? And the Ellison's are trying
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to get the studio and the streaming cheap because once you split them up, there are a lot of suitors, right? Um
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the only issue is that uh the others have one money problems comparatively to
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the Ellison's and two not a friend in Trump like Comcast Brian Roberts uh is
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not a fa a favorite of Trump. Um Amazon probably is more so Apple probably is
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more so Netflix probably not. Um and so there'll be difficulties in in picking up any of these things except for the
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Ellison's which is of course because we live in an autocracy. So friends of Trump get what they want. Um talk a
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little bit antirust concerns of course would be there but not in this not in this uh administration. Um and it does
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in a weird way make a lot of sense to consolidate some of these assets with other assets.
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It just depends if the the gimmies are spread around. But what are your thoughts on this? Well, uh, so there's
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suitors that do it for economic reasons and that is they see an opportunity to create scale or consolidate the back end
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or for growth. So they're buying it for financial reasons. There isn't a financial buyer here because this thing
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the majority of its assets are in decline and not streaming
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or or CNN part but if you look at but I think if you look at topline revenue here
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this isn't a company this is not a growth company and also the stuff I mean the problem is
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you have a mismatch of assets and that is the the streaming company the
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marketplace values growth and but that growth is expensive and then the other stuff the market does value IBIDA but
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that stuff's declining. So what you have is the marketplace wants a clean story
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and if it was just if it was just HBO and say Warner the movie studio that created a vertical integration of
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content to the streaming platform and HBO is still has an amazing culture and still manages to punch above its weight
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class. it would trade at a much larger multiple but at the same time and then it has these other assets that would
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trade at a lower multiple but a strong IBIDA and when you have a mi a mix mismatch of assets in terms of growth
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complexion and where they are in the business life cycle the marketplace finds the shittiest part of the business
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and assigns that multiple to the entire thing right so the merger never made any sense
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except for David Zazoff and David Zazlov so what
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Mark Zuckerberg and Charles Samberg, there's few people who have made more money while causing more harm to young people, right? But they have added
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tremendous shareholder value from a shareholder standpoint. They deserve their their billions. Um, the most
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overpaid CEOs relative to shareholder destruction were probably Marissa Mayor who managed to [ __ ] up everything at
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Yahoo and walk away with a quarter of a billion dollars. But she's about to lose the crown to David Zazz because David
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has taken out about I think a third of a billion dollars so far for taking the stock from 24 bucks where it was when
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they he talked people into merging it and it still managed to take that much money out of the company. And my guess
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is I mean this is what's going on. I've been on these boards before. He's pretending there's other biders. No sane
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rational buyer can bid on this. This is who can bid on this. the children of
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people who made 90 billion dollars in one day, which is Larry Ellis, who want to go to the Academy Awards and have a big vision for AI and
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and will overpay for this thing. And it's it look what media has become. Media has become basically
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just a spa retreat for the for the Nepo billionaires. Who are the who are the players here? The Bronman's, Sherry
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Redstone, David Ellison. What do they all have in common? Daddies. They're children of billionaires.
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Because any rational buyer, Comcast, any rational buyer looks at this thing and says it doesn't pencil out our
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shareholders. The thing is, and we don't, let me let me just interject. Uh, Bill Cohen, who's been very smart on this, I
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think, um, has noted that maybe daddy won't do this. Daddy's a little Larry is a little too smart. Like, at the same
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time, why not? It's like a good get while the getting's good. And it would help Paramount to have the assets of of
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Warner and HBO and then they'll just spin off. They don't care about news. I'm sorry. They just don't. All their
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choices tell me they don't care about news. But, you know, merge them together, cut costs, and then spin it
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off to some PE company. And I mean, the the cable networks and then bleed them dry. Um, cable and news essentially. Is
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that how you see it? Or will they keep it just cuz why not? I I don't know. I don't I don't know what is in Ellison. I mean, at the end
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of the day, um, Larry Ellison is to David Ellison what Peter Thiel is to JD Vance. And
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that is when Larry Ellison calls his son David. David can never say no. It's like, look, boss,
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you have one credit card and it has my name on it and you're allowed to use it, but at any moment I can tell you no.
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And what I think is going to happen, I I think the Ellison are going to get this.
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And Zazoff is pretending there's another suitor, which there isn't at this price. And he's also, I'll bet, spending more
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time trying to figure out his exit package, his golden stay in here. How to stay in here and
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have a fake roll or or pretend. All I know is he's going to figure out a way to get another1 to $300
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million for selling the company at the price he talked other people into buying it for several years ago.
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The above. Yeah. And this guy's going to walk away with Marissa Mayor like compensation for adding no value here. But what I think
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they would do is I quite frankly I don't think I don't buy into these hair on fire that they're trying to control the
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media. I don't think Larry Ellison is that Mcavelian. I I don't think they're going to try and take CNN and turn it
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rightwing. I think they will probably sell it. I don't think they want. Yeah. Like a PE firm.
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So I agree with you. What I do think they'll do is say, "Okay, David, you get to go to the Academy Awards because we'll own Warner
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and HBO." And I think they're going to take AI and Oracle's newfound kind of
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like Oracle is kind of a distant Oracle is sort of a distant number two now to Nvidia and try and figure out a way to
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substantially reduce the cost of the production the means of production and create kind of a new a true Quibby Meg
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Whitman and Quibby said we're bringing together the best of of Silicon Valley and Southern California which I always
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thought that's in and out on a sourdough bun But but these guys are going to try
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and take content and say, "All right, they have amazing franchises, amazing IP." The biggest problem here is we need
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to reduce costs across the board by 30%. And we can do that with AI and we understand AI
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and you're just going to see millions of Tik Toks of creators in the Hollywood community crying into their camera about
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how, you know, they no longer need costume designers. Especially as I I that's the example
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I've used many times is they don't need costume designers. They can do story boards. They can do all manner of
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things, you know, in much cheaper. And it takes a cost from, you know, someone was telling me you could take a cost
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from like 3 million to 330,000, right? Versus something else. And I think one of the one of the things that's hard
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here is um people are very in love with the idea of a CNN or CBS and but these
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are declining audiences. So where do they I think it's smart to grab this before cuz I if there would be an
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auction for the studio and for Warner Warner and HBO there would be I think I
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think there'd be a lot of interested buyers for that asset right um so if it gets away from the CNN part of it that's
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that's a problem for the Ellison's so they want to get it on the cheap right presumably or without a lot of trouble
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without a lot of bidding that that's my assumption none not none of these things are cheap.
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I mean, it's ch Warner Brothers Discovery now is in October of 25. Right
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now, it's trading at a PE of 67. I think they want Warner and they want HBO. They
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want growth assets. The other stuff they can sell to a PE player for cash flow
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that's consolidating the back end. I don't I don't think their desire is to control the world of news. I don't think they want to step into that thunderdome.
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But you have I mean you could see them
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right away doing a second auction to pay down some of the debt if they're going to take out debt against this and then
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try and as I said again bring together the peanut butter and chocolate of of
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AI. You you are I think what you've said I think these new I think all these news rooms just for fun I watch CBS ABC and
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NBC evening news and they're what 24 minutes and 6
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minutes commercials 22 minutes is the same [ __ ] thing and then they all then they all pick a different feel-good
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story you know again about a moose that keeps showing up because this old lady fed it
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once and they're literally why on earth is the difference.
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Their newsrooms are no different. They're just no goddamn different. Listen, every now and then, as as does
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any news organization, they come up with a good one, right? Like, so CBS 60 Minutes still is quite good, for
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example. I bet they sell that off. I I I bet they sell that off. That's my prediction here. Um, some CBS Sunday
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Morning is good. I can't, you know what? I don't know what I would do if I wasn't able to watch Andrew Rosorin explain the stock
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market to an 83year-old Leslie Stall. I just don't. No, but watch it more.
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When there's more demand than sellers, the stock price goes up. No, no. Here's the It's a good brand.
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There are pieces of it that you could do. You could presume I could do something with it. Scott Face the Nation
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is an important I had a couple of those assets. I would do I would have lots of ideas of how to
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digitize it and make it more. Yeah. And you you'd take something they spent a billion dollars on and and make it worth$ 120 million. these things
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don't unfortunately journalism is a shitty business $20 billion so one of the things you
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know it's really interesting here is that um yeah and what the media gets all you know like oh no CBS and I was like
00:14:40
you know they're declining businesses like really by an audience point of view and that's that's the problem and when
00:14:46
you talked about ABC CBS they are all the same many years ago I'll tell a very brief story I was with um I'm not going
00:14:52
to say who it was it was a was a I was on this network thing and they showed a package you know when they do those packages
00:14:58
um where like the the the the anchor sits there and interviews people on a like a like a a a gradiated stage where
00:15:06
people are sitting. It was it was a big news event that happened 10 years before and they interviewed people from the
00:15:11
day, right? And I was sitting next to Ken Burns who had just done this really wonderful documentary on um the
00:15:18
Gettysburg Address which just happens to be one of my favorite pieces of writing right in our American history. And so I
00:15:24
was talking to him during the package and the host turned to me and he said, "Why aren't you watching my package?"
00:15:30
And I don't know why I said this and I said it without thinking because I was very interested in talking to Ken about this documentary cuz it was so good. I
00:15:37
said, "Well, if it was interesting, I'd watch it." And he looked at me, he goes, "Well, that's harsh." I go, "It's not
00:15:42
interesting." Like, it's the same [ __ ] You're always doing the same exact setup. And this was 5 10 years ago. And
00:15:49
I just was like, "You have to make stuff people want to watch, right?" like and I just couldn't look at it and it and
00:15:55
that's what that they all are the same in some ways and there's little points of difference sometimes that are really
00:16:02
promising. I still think 60 Minutes is amazing brand. I think it I think you could do a lot with that brand and it
00:16:08
does it does rather well online once they get it up there. Does it? I Yeah. But but look, these
00:16:14
things are being picked apart limb by limb because you have something like The Atlantic which does an amazing job and brings
00:16:20
together I think some of the most talented writers in the world. But I think a guy like Derek Thompson who's prolific and has tapped into like
00:16:27
you know he's he's under the age of 40 so he feels like their grandchildren walking around these places. He goes to Substack and
00:16:35
he's making more money on Substack now. Yeah. I think a lot of the truly great individual contributors
00:16:42
are going to use the platform for prestige and then veer off and do their own thing.
00:16:47
Nice to meet you. What do you What do you think I've been doing all this time at the New York and everything? But
00:16:53
there is more. Let me just say the Atlantic under Jeff Goldberg like and also Wired under Katie Drummond, they
00:16:59
found invigoration in terms of higher subscriptions. They're doing pretty good with those. Only the editors that are
00:17:05
invigorating are doing okay like comparatively to to the individual players. But go ahead.
00:17:11
Yeah, but you're you're the perfect example and and that is you were the Washington Post. You could be the
00:17:17
premier tech p tech reporter. You were the premier tech reporter at the Washington Post, New York Times,
00:17:22
the Wall Street Journal. You make a half a million. Okay. Sorry. And the Wall Street Journal, excuse me.
00:17:27
Off with his head. Um, anyways, let's be generous and assume with comp and everything and you make a half a million
00:17:34
bucks a year. Not a salary. No, that's cuz I created the conference. I made more than that.
00:17:39
But, well, okay. 1502 200. My point is, it's crazy. You make 10 or 20 times more than that
00:17:45
finding finding a guy who tells dick jokes and doing your own thing. And now racist.
00:17:51
Go ahead. So young so young is racist. I'm making fun of you. I understand. I'm gonna I'll all allow
00:17:58
it. I love Korean baseball players. They often hit it out of the park. Oh my god. Oh Jesus.
00:18:04
Is that racist? Anyway, finish up with this. So So what happened? So I the the news to PE the
00:18:10
the the studio stuff, the cable the cable the ads supported cable stuff gets sold off, you know, to
00:18:16
to just get them just get rid of that [ __ ] It's more trouble than it's worth for them. And nobody they're getting this. I think
00:18:23
the deal is probably done, Cara, because no rational buyer. They're going on record and they're creating I doubt
00:18:30
Comcast is anywhere. Comcast is like, well, call us if you take 11 bucks a
00:18:35
share because that's what we would need to pay for this thing to be able to explain to our shareholders in an
00:18:41
earnings call why we paid, you know, we can't justify anything above that. David Ellison's criteria are different because
00:18:48
he he is the son of a guy making $90 billion in a day when he announces a contract with open AI. So,
00:18:54
and that's what media has become. It's become a series of irrational buyers whose parents
00:19:00
are, you know, worth hundreds of billions of dollars. This thing goes to the Ellison's. They will spin off the
00:19:06
news. It's not a Mavlian attempt to control the to enter control. They'll get as much as they can. And then I
00:19:12
think they're going to use Warner and HBO and some of the content or some of the studios as their playground
00:19:19
on to do really interesting [ __ ] with AI and on Tik Tok. I mean they also I brought this up
00:19:26
over that's a really you know what I had thought of that is the most important thing here. That
00:19:32
is really an interesting taking that content and slicing it up and putting it on TikTok. But that it all comes back
00:19:39
the occasionally have one of those mind-blown moments. When I was in the Fantastic 4,
00:19:44
the credits took seven minutes. I know. I just did that the other day. As many as many people worked on the
00:19:49
Fantastic 4 is work at Palunteer or Reddit. And it's a risk. They don't know how
00:19:55
this thing's going to do that. that business other than health care.
00:20:01
I think big budget content production is the most vulnerable thing to AI right
00:20:07
now. Very much they're just going to go line by line and go do we really need 22 costume
00:20:12
designers for our shoot in Sweden. Do we really need Sweden? Do we really need every single thing will be uh you
00:20:20
know every single thing will be and all all the existing guys I zazzlov they are still very empathetic and also
00:20:26
because they're all 100 years old they don't want to rattle the unions and saga after cages like this
00:20:32
but Ellison Honey Bear don't give a [ __ ] he's going to be like put out 10 block
00:20:37
but put out the new superman yeah but Ellison is very talent friendly he was involved uh very deeply in the
00:20:44
Mission Impossible movies the Stark Star Trek movies and of course in Top Gun Maverick.
00:20:49
Yeah, he's a rich kid. I just had I just had dinner with a friend of mine who's an amazing producer and does these
00:20:56
incredible films. Cara, whenever I meet someone
00:21:01
at an event and they say, "Oh, I'm like, "What do you do?" Like, "I produce documentaries." I'm like, "Oh, how did
00:21:07
your husband get rich?" I mean, the people in this business,
00:21:12
it's like meeting a kid who's working in an okay job, not a great job in New York, and living in Soho. It's like, oh,
00:21:19
your parents are rich. No young person can live in Manhattan now, unless they're working for JP
00:21:24
Morgan or got transferred by Meta or their parents are rich. And every player
00:21:29
now in film production in Hollywood effectively is someone who is so [ __ ]
00:21:36
frighteningly talented, they managed to break through. They're literally the the and and they're there, but they're
00:21:42
in the 0.1%. They're the Michael Jordans of content or their parents are putting them
00:21:48
through Hollywood. They're in the system. They're in the system. So, you don't think Netflix is trying to wait in any way? Netflix.
00:21:55
That's the wire that you had. Netflix. I don't I think I think Netflix is
00:22:00
becoming like Apple in the sense that we'll just do what I think Ted Sarandos realized our culture is so strong and so powerful.
00:22:07
That's what the CEO buy [ __ ] and then try and integrate it and deal with whoever is running [ __ ]
00:22:12
Warner Brother. We don't we don't we have a way of doing things. We're outstanding at it. And if he was
00:22:19
going to buy anything, if Strandos was going to buy anything, he should buy Disney because he would just he would that would be they have a succession
00:22:25
problem. The content, they could have Disney as the f Netflix family, they would just own streaming. They
00:22:31
would it would just sort of be game over. But I don't even think if I'm Ted Sandos, it's like we're so good at doing
00:22:38
what we do. The the the the existential threat, the only reason Netflix would potentially weigh in here is that they
00:22:45
want to get a ton of content. So to compete with YouTube, so for example, 20% of television viewing time last
00:22:51
month is 12.6 of YouTube, 8.3% of Netflix. Netflix is squarely figured out
00:22:57
YouTube is their competitor. That's why they're doing if if you look at what Netflix does need
00:23:03
though, and the only reason they might weigh in here and buy some of this content or buy pieces of it postacquisition by the big price they
00:23:09
can't compete with with the Ellison's is Netflix's content library is roughly
00:23:15
36,000 hours long, right? That's their entire library. 36,000 hours.
00:23:20
That's the same amount of content that YouTube users upload to the site every
00:23:25
70 minutes. So every hour YouTube is uploaded content equal to the entire
00:23:31
Netflix library. And what you have is the two are going to come together. YouTube content
00:23:37
has is going to get much better. The only thing the only the thing moving podcasts in and out of the top 100 is
00:23:44
the quality of their video game. And then you're going to see Netflix start to look more like YouTube and that is
00:23:49
they will figure out ways to have quote unquote a deal with a podcast. The deal with podcast they just did is
00:23:55
essentially them dipping their toe not into podcast but into a form of usergenerated content that costs much less.
00:24:02
So you've got to see the means of production and the content come down on the one end and it the quality is going
00:24:07
to go up on the bottom. things on the news cuz I I agree with you that they like this week it's all like the ter the
00:24:13
ter we'll talk about the ter on the west because it's really kind of grotesque but um but it's what you said about why
00:24:19
don't they take my two interviews a week on on and make them into a show I was like I had Bernie Sanders and Kla Harris
00:24:26
you could have done a great like by the way it was great I I I don't like to watch your stuff the but I did break
00:24:31
down the interview with Bernie was great he's great he was great I could take a billion I don't them All
00:24:39
good millionaire. It's fine. Some of them believe him. Did you like his little Democratic
00:24:44
voice? That was my favorite thing. Oh, I think we'll he had a tiny little voice for the Democratic establishment that
00:24:50
made me laugh hysterically. If like literally if that guy was 70 years younger, I'd vote for him for
00:24:55
president. Yeah, a lot of people were. That's why he was all the Trump voters. Uh let's move on. Let me ask you one
00:25:01
more quick question here. One more very quick and answer quickly. So if you had uh would something like Versent want to
00:25:07
buy a CNN and then merge their newsrooms and then have two good brand two decent brands to try to work with or not at
00:25:13
all? Like why bother? They get the cuz they lost all the news stuff. They lost all their news stuff to
00:25:20
NBC. So they're building their own news organization. So why want to take a shortcut and get because CNN has a very
00:25:26
good news organization around the world? Just a thought. Your thought? I think I think it's just I think it's all about I
00:25:32
think it's all about price. I don't you know there's a bunch of these upstarts and and who's backing them.
00:25:38
Yeah, it CNN would probably it would go for above market because it's such a
00:25:45
powerful brand. But CNN it has really stumbled the last 12
00:25:50
months. I think its viewership is down something like 30%. I mean it is really
00:25:55
hurting right now. And it's not even the content. I I think I think Anderson
00:26:01
Cooper, Caitlyn Collins, Dana Bash, Jake Tapper, they consistently Michael Smircon, they consistently for Reed
00:26:07
Zakaria, they have some of the finest journalists in the world, right? And across the world, by the way,
00:26:12
which people don't pay attention to. Yeah. And backed by what a 1,200 or 2,000 person newsroom.
00:26:18
These guys, they're great at what they do. It's the distribution and the business model that's [ __ ] and that
00:26:24
is nobody's turning even turning on their the screen that is their primary distribution channel
00:26:30
and they haven't figured out a way to monetize it on a very small screen. Yeah, it's tough. So that's all I'm saying. Someone could
00:26:36
consolidate these two and be be the news organization and and invigorate Comcast could buy it.
00:26:41
Comcast could buy it, but so could Versent anyway. We'll see. We'll see if that happens. I think it's going to be a PE company and then you know AA leego
00:26:48
for Caris Swisser. Anyway, um in any case for Caris Swisser, that's it. You're going to North Korea
00:26:54
and you're not coming back. So young. He died so young. Oh my god. I'm not going to let you do this anymore. Okay. Uh so uh I'll start
00:27:02
making Scottish jokes in a second. So uh let's go move on. Oh yeah. Oatmeal Savage.
00:27:07
Oh, you did it. You did it. I knew you would. You're not even drinking. What do the brightest people in Scotland have in common? What?
00:27:13
They left, Carol. Okay. All right. Very good. Okay. That's actually true. Open AI. Some of the finest minds in the history
00:27:19
of science and economics. They all left. I'm getting like exclamation points from the producers. Open a has launched a web browser Atlas. Sam Alman
00:27:26
called it a once in a decade opportunity to rethink what a browser can be. The launch comes a few months after the
00:27:32
company said it would be interested in buying Google's Chrome had it been uh forced uh into a sale that uh Chrome has
00:27:40
3 billion users worldwide. um talk a little bit about this and um also Reddit
00:27:45
has sued Perplexity AI alleging the company scraped the comments of millions of Reddit users on an industrial scale.
00:27:51
Again, these I'm going to comment on last. These wars are going to break out all over the place until the numbers get
00:27:57
right when they start paying. Perplexity has been the one that usually gets into the most trouble here. But talk a little
00:28:03
bit about this browser because this browser knows will remember everything you read, not just where your search
00:28:08
was. They're going to be like super browsers essentially. I love this. I I love competition. Um I
00:28:16
think it's good. I think the biggest the biggest tax cut in the history in
00:28:21
modern economic history would be if the Chinese and and American leadership decided to kiss and make up and stop
00:28:27
cyber attacking each other and take their tariffs to zero. The second biggest tax cut in history would be the
00:28:33
breakup or more competition in big tech. I mean people don't realize you are paying a huge toll. You don't realize it
00:28:41
because it's it's paid visa v advertisers trying to reach you but probably the biggest corporate tax in
00:28:46
America other than federal income tax is the tax of alphabet to reach consumers
00:28:51
online in terms of advertising right in terms of advertising.
00:28:57
You have to be on Google. I if you want to acquire customers online, which is where all customers are now, you have to
00:29:04
start increasingly buying search keywords and and boost your videos on
00:29:09
YouTube. These are the biggest toll boosts in the history of mankind for corporations. And so I and they don't
00:29:16
have competition. So every year they raise their prices or the taxes they charge consumer and B2B brands greater
00:29:21
than inflation. So these companies need competition. There's some more existential things going on here. One,
00:29:29
Sam has to figure out a way to become kind of Google before Google becomes
00:29:34
Open AI. So, him launching Well said. Him launching a browser makes a lot of
00:29:40
sense. I like that it tracks your searches. I don't I I I think all of the concern that was in your voice around
00:29:46
privacy, I understand, but anyone comp talking about privacy is usually over the age of 50 and lives in Brussels or
00:29:52
DC. Young people will tell Uber everything about where they a thin layer
00:29:59
of AI on top of your Uber records, which by the way you cannot delete. You cannot delete your Uber record, your Uber
00:30:05
driver history. And that you people will be able to figure out if you just terminated a pregnancy.
00:30:10
Yep. If your sexual orientation, I mean, they'll be able to figure out everything based on where you're going
00:30:16
and when. Uber, they don't need AI to do it. They could do it now. So, as long as there's a coupon and utility and I can
00:30:22
see that my QX60 is parked around the corner, violate my privacy. That is what America has said, it's listening to our
00:30:29
phone conversations so it can and and by the way, I'm down with that as long as we have judges who are going to say,
00:30:36
"No, ICE can't use this information to start rounding up people." I I'm, you know, I'm I'm all about vi
00:30:42
violating my privacy in exchange for utility as long as we have thoughtful judges who heir on the side of civil liberties. Anyways, uh
00:30:47
oh, Scott, but go ahead. Yeah. Yeah, that's the the operative term there is if. Right. So,
00:30:56
what I think is the more interesting thing here is first off, keep in mind consumers are pretty lazy in terms of
00:31:03
getting used to a certain UI. And even with all the existential threat that Open AI supposedly poses to Google
00:31:10
search, they get, I think, roughly 96 times the traffic of Chat GPT still. And
00:31:17
Google search impressions were up 49% year-over-year. Alphabet was my stock pick of 2025 because I think people
00:31:24
overestimate the threat, if you will. Chrome has a roughly a market share of 70% making it the most dominant web
00:31:30
browser. Apple's web browser, Safari, even without unbelievable access. It's not Microsoft.
00:31:36
It's Safari is at at 14%. Not Safari, that's Apple. Chrome.
00:31:41
Yeah, Chrome. No, no, no. Chrome is uh you're thinking of Internet Explorer. Chrome is uh Alphabet. 70%
00:31:49
70% share. And what is what is Explorers? Well, remember Microsoft attempted to
00:31:55
get into the game with Internet Explorer, remember? And put Netscape out of business. No, I know. But what is their what is
00:32:00
their market share? I don't think it registers. Okay. Um, I mean, basically between
00:32:05
Chrome and Safari, I mean, and then you have the weird ones like Duck.Go and [ __ ] like that, but basically
00:32:12
what Sam has said is I want to bring AI into search or uh into browsing and
00:32:20
I mean, so let's look at some of the facts. Google has uh Google has an extremely
00:32:26
strong competitor to chat GPT and Gemini. Gemini has actually gained more share than any other company in in um in
00:32:35
AI. They have 400 million monthly users. It's now the fourth most popular free app on the on the Apple App Store. Just
00:32:42
two months ago in August, it didn't even crack the top crack the top 50. And according to multiple benchmarks and betterers on both Cali and Poly Market,
00:32:49
Google currently has the best performing AI model. Either way, I think in my
00:32:54
opinion, yeah, you're right. Alphabet still at 29 times earnings is a steal for the for roughly the multiple of S&P. You're
00:33:01
getting a search business with 90 plus% market share, the largest ever streaming service in the world, a dominant AI
00:33:06
effort, a digital ad network, Google Chrome. Love you some Google. You love you some Google.
00:33:11
Two two other businesses that do over 30 billion in annual revenue and four other products have two billion users. The most interesting thing about all of this
00:33:19
in my view is that and that preages what might happen geopolitically and it'll be
00:33:24
my prediction at the end of the show is that it technically the new browser is open weight or open source and it's
00:33:31
actually built on the same technology that Chrome is built on which Google spends or alphabet spends like a hund00 million upkeeping and essentially I
00:33:40
think this is I think this says a lot about the future of AI and I'll come back to this but Sam has to justify a
00:33:46
half a trillion dollar market cap. So what he says is, okay, I'm going to be the next browser
00:33:52
and I'm going to be Alphabet and Alphabet's trading at a trillion and a half or$2 trillion dollars. I don't know what it's at right now, but why can't I
00:33:59
be a better version of Alphabet? And by the way, okay, go ahead. When you look at Google searches, what
00:34:05
do you the first thing you see? You see that AI summary at the top? They do. Let me let me introduce you because I've covered these companies for
00:34:10
so long, but you know, Chrome really came in and lapped, you know, Explorer and Safari and and all of them very
00:34:17
quickly, you know, in terms of how they in terms of market share, but it is moving away from the browser. So, the
00:34:24
more Chrome moves into an AI a chat GBT like environment, the better for it,
00:34:30
right? Um, and so I it doesn't what there has there's I remember
00:34:36
interviewing Ben Horowitz once and he goes there's never going to be a funding of a search engine. There's never going
00:34:44
to be a funding of a social network and there's never going to be a funding of a big commerce platform because of Amazon,
00:34:50
uh, Google and Facebook at the time. He goes, why should we? And so why should we? Because you haven't seen a lot of
00:34:56
innovation in Chrome. You haven't seen a lot. And it took Open AI to get Chrome to innovate, right? It wasn't It didn't
00:35:03
happen. And they came in through a side door. Yep. Exactly. And so Sam Alman's vision wasn't wasn't to have a browser or a search,
00:35:09
right? But you know, it always changes things. So it's nice to have it. Um, honestly, I feel
00:35:16
I don't use browsers. I browse I'm trying to think of where I search. I guess I search within maps, within
00:35:21
Amazon, within like the search search has dissipated all over the place, but it's still owned by the same groups of
00:35:26
people, which is interesting. Any thoughts on We'll get to your prediction at the end, but any thoughts on the
00:35:32
Reddit suing perplexity? Some people don't like this lawsuit, others thinks it's
00:35:37
Why is that? You know more about this? I you know, Mike Masnik was like, "This is a stupid lawsuit." But, you know, that some of this stuff is um is
00:35:46
available and so they can do it. other people, you know, I think it's what what it is is another indication of who gets
00:35:51
to own the information and who gets to scrape it and what people do with it. But it's open season on everybody's
00:35:58
content. That's just the that's my feeling. And so everyone's going to try to defend the content they have, no
00:36:04
matter what it is. You know, Reddit certainly has created a really valuable property full of information that they
00:36:09
should take advantage of by themselves that others will take advantage of. Um, okay, Scott, let's go on a quick break.
00:36:15
When we come back, Trump's White House demolition. Support for this show comes from Upway.
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00:38:25
Scott, we're back with more news. The White House is demolishing the entire East Wing to make way for President Trump's 90,000t ballroom. The tearown
00:38:32
should be finished by the weekend. Trump initially claimed his privately funded ballroom wouldn't interfere with the existing White House structure, which
00:38:39
was a lie. He's also now saying the ballroom will cost $300 million, $und00 million more than originally estimated.
00:38:45
The White House is dismissing the shock and criticism around the depolution as manufactured outrage. No, mostly he's a
00:38:51
liar. Um, and uh release the Epstein files. That's what I have to say about
00:38:56
this. What do you think? The pictures are still very upsetting in some weird way. Although the White House has been
00:39:02
renovated before, there is a need for a bigger room for some of the functions there. It is, if you've been to the
00:39:08
White House, they're quite small, actually. They're they're shockingly small. Um, and they do should have a lot
00:39:14
of functions, but there's plenty of other land around the White House they could have built these things on. Instead, he just did this cuz he felt
00:39:20
like it. Um, probably it is safer. I'm going to try to try to understand, but they he did it without asking anybody
00:39:27
essentially. And it's of course it's the people's house, not his house. But it's his house as it turns out. Thoughts?
00:39:33
There's a clutch in your pearls. This is a desecration. It's not your What this means is the following is that
00:39:41
he is normalizing federal troops in cities. He's creating doubt around the election process and he
00:39:47
has no intention of leaving cuz I won't if I'm running a place, I won't put in a new refrigerator, much less tear down an
00:39:53
entire wing. So let's be honest, folks. You really think he'd go through this if he was
00:39:59
planning to leave in 36 months? Yeah. It's his new Mara Lago. He's building Mara Lago.
00:40:04
Yeah. And uh so to me, I immediately like, okay, when do we wake up and
00:40:09
realize the guy's not planning to leave? He's making long-term renovations. I mean, how long is it going to take to even do this to build this thing? It
00:40:17
it's not. So, but he's planning to leave, but he's going to So, look, I I
00:40:23
don't I I find the whole thing yet again, um everything's adding up to the
00:40:29
following. He wants to normalize sending troops into cities during the election
00:40:35
process to make sure whether it's to discourage people from voting or to lie
00:40:41
or to um show up. Uh Bill Maher said it perfectly. It's like what happens when two people show up to inauguration?
00:40:48
And he's he's basically saying, okay, if the second person tries to show up, legitimately wins, I'm going to show up
00:40:55
with troops and masked agents that are basically my secret police. That's where I see this going. And this is just more
00:41:01
evidence that he's not planning to leave. You don't have you don't initiate an enormous construction project when
00:41:08
you know you you constitutionally have to leave in three years. Yeah, I would agree. I think, you know,
00:41:14
I think a lot of people think this, right? Or put whoever in place that he wants to cuz as you say, which my
00:41:19
favorite expression these days, biology is undefeated. He seems more adult than ever, missing words and everything else.
00:41:25
But only reason I'm not worried. Yeah. Right. Biology is going to take care of me, right? Except then then what? Right. And
00:41:31
would it be interesting? Let me just posit that that doesn't happen and a Democrat becomes president. What do you
00:41:36
do? He's going to gold this thing up, right? All over the place. It's going to be so ridiculous and grotesque. What do
00:41:43
you do the ne when you get walk in there and you have this ridiculous over badly sized ballroom next to a a
00:41:51
East Wing was quite it's not really lovely. I don't love the White House, I'll be honest with you, but um it it it
00:41:58
was a scale. It was to scale, right? And so this looks like a weird like mutated
00:42:03
tumor onto the White House. Um uh that's my architectural determination. It's a
00:42:08
tumor. It's a tumor. Um, but what what do you do the next day with this weird
00:42:14
patio and then the and then the thing this behemoth this grotesque golden
00:42:20
behemoth? What do you What do you do? Nothing. Right. I don't know. I just I I know what
00:42:26
happened here. He sat down with some crazy right-wing probably hot blonde decorator and and what
00:42:33
decorators do is they say, "All right, I want mood boards. like tell me what they you know they try and make you feel
00:42:38
special like you're involved in the process and they say like I'm I'm I
00:42:45
redid my place in Manhattan and they said what do you want it to look like? I'm like I want it to look like what it is a a a professor who's who's done
00:42:53
fairly well. Yeah, that's what I want it to look like. That's what it looks like. And and what
00:42:58
he did was he said, "I want this place to look like you walked into the best Iraqi wh house."
00:43:04
And they have delivered against it. The decorator, this feels like you are in Baghdad at a brothel, but it's a
00:43:12
high-end brothel. But it's a high-end brothel. Really? I mean, it's it's absolutely perfect.
00:43:19
It's Anyways, not enough marble. We need more marble.
00:43:24
And as Forest Gum said, and that's all I have to say about that. But what what do you do the next day if you're the Democrat who you're like, "Oh
00:43:30
my [ __ ] god. What do you do? Let everyone." By the way, the only I've only been to the White House once, you know, that was
00:43:36
me. Yes, that's right. Yes. You've been And I didn't want to go. I was intimidated. I had to bring a suit. I
00:43:42
met you in the lobby. I was wor I don't I don't The idea of seeing all those people and having them kiss your ass like I knew they were going to like the
00:43:49
vice president. Cass wish I want to hug you and kiss you. Secretary Blinken, Cara. Cara, and all the
00:43:57
And the only thing is people like me, oddly enough. So strange. So strange. Yeah. Key word. There are some.
00:44:03
Well, no. More than you'd think. More than you'd think. I don't know why. Well, you're exceptionally likable.
00:44:08
I guess I don't know. Um I literally say I dislike you and think you're a bunch of fascists. They're
00:44:13
like, "Yeah, come to our party." The the other thing that struck me about my one tour of the White House
00:44:19
was uh I could not relax living there. There were two things. One,
00:44:25
this situation room where you're deciding whether to have nuclear war or not. You can hear the microwave in the
00:44:30
kitchen. And I'm like, can they smell popcorn when they're popping it out here? It's actually really small.
00:44:35
It's poorly designed in my view. Those off like the West Wing the offices are like weirdly a warren of very
00:44:42
uncomfort. It's a very He is right that it's kind of a mess. It It's in terms of as as a building like
00:44:48
as a as an office building. And and then I thought, how does anyone relax here? There are
00:44:56
140 people here hanging out who look like they're about to invade Fallujah.
00:45:01
It is there. That place is armed to the teeth. I'm like, you get up at night to grab
00:45:06
some milk. I guess the residence is different and you're going to run into someone with an AR-15 and people
00:45:12
military like there's no taking the dog for a walk. Anyway, we'll see. It's just grotesque.
00:45:17
And release the Epstein files. Thank you. Just release the Epstein. I don't know what they're going to do tomorrow. I'm like waiting to see what are they
00:45:23
going to like paint the paint the Washington Monument so it looks like the penis that it is. Anyway, um Trump is
00:45:29
demanding $230 million, by the way, from the Justice Department, saying he deserves compensation for federal
00:45:35
investigations into him, according to the New York Times. The compensation is tied to two claims Trump filed against the DOJ before his second term. One is
00:45:42
tied to the investigation of Russ Russian interference in his 2016 campaign. The other the FBI's 2022 Mara
00:45:48
Lago search. I'm sorry, sir. We have the pictures. Payment would likely come from taxpayer money would have to be approved
00:45:53
by the DJ potentially by Deputy Agent Todd Blanch. Todd Trump's former attorney uh personal attorney Trump
00:45:59
commented on the unprecedented nature of all this to put it mildly when asked about his claims. Let's listen.
00:46:04
It's interesting because I'm the one that makes a decision, right? And uh you know that decision would have to go
00:46:10
across my desk and it's awfully strange to make a decision where I'm paying myself. In other words, did you ever
00:46:16
have one of those cases where you have to decide how much you're paying yourself in damages? But I was damaged
00:46:22
very greatly and any money that I would get I would give to charity. Oh my Oh my god. Lie. Huge lie at the
00:46:29
end. Enormous lie. And by the way, yes, he has made decisions where he pays
00:46:35
himself. It's the presidency and evidence in action is cryptocurrency and
00:46:41
his his children, but his children, his adult sons. And uh anyway, I don't know.
00:46:47
We're not paying him, are we? Good God. Uh I I I I think we probably are. And
00:46:53
keep in mind if the federal government comes for you and the case ends up let's assume that
00:46:58
that this was politically motivated and there was no legitimacy or veracity and and these things were politically
00:47:04
motivated and unjust and unethical. Uh let's assume that happens quite a few
00:47:10
times when the federal government comes for people. I I if you're found guilty, which he was
00:47:16
in one case and not in others, when that happens to average American citizens, they the government doesn't
00:47:22
pay them back for their legal fees. Now, we're going to have to pay. But we've become we've become no sometimes
00:47:28
in I believe in certain legal cases if you win u I think if you win a civil
00:47:33
case sometimes the other side has to pay your legal fees and but if the government comes for you and
00:47:39
you're found innocent you they don't pay you back your legal fees. Too bad, Donald. So, anyways, but we've become this has
00:47:45
become normalized and to think that this not going to happen. He gets to a point
00:47:50
he got to appoint the head of the the DOJ. Now, it to think that they're going to
00:47:56
stand up to him. Keep in mind, there are whatever 53 Republican senators. These people were
00:48:03
freely elected. You'd think they'd have balls, right? They don't. They're watching. This guy sent pe This guy sent people
00:48:08
after them to kill them on January 6. I just think it's hilarious that they try
00:48:13
to they try to position the protest last weekend as violent and weirdo. I'm like, no, that was January 6. If if you're
00:48:20
looking for violence and people who hate America, right, just go back to the protest of January 6, if you can call it that. It was an
00:48:26
insurrection. But the notion that these people are going to stand up when they can't get duly elected senators who he sent a mob
00:48:33
after to kill and they won't stand up against the guy to think that Pam Bondi is going to say
00:48:39
this is a bridge too far. No. No. So, I I think the sad part is Go ahead.
00:48:45
Here's the thing. Trump's not going to pay for this, but if they do this, they will at some point. All his minions are
00:48:50
going to get God at every that's who I'd go for if I was I'd get all of them. Like Trump will get away with it. It's
00:48:57
just everybody knows he's going to get away with it. Um but the minions, not so much. I think that's my feeling.
00:49:06
Oh, I but see this is where this is the opportunity and why I'm and one of the shortcomings of the Democratic party
00:49:12
right now. If this goes Okay, take the
00:49:18
the ICE whatever sending people to Yeah. sending people to El Salvador. There are people all along the supply
00:49:24
chain that made the decision to send American citizens, incarcerate them, and
00:49:30
send them out of the country. I would be drawing up all sorts of bills and publicizing them saying the statute of
00:49:35
limitations on these crimes, whether it's crypto crimes, whether it's fraud, whether it's lying in front of Congress,
00:49:41
just keep in mind these laws, the statute of limitations are longer than
00:49:46
37 months. And this is exactly what we're coming for you for. You may think
00:49:52
you feel safe now and you better hope you get a pardon, but I would be drawing
00:49:58
up legislation that says or basically advertising a guy like Senator Murphy or Senator Bennett or Senators Clolobashar
00:50:05
and say these are the crimes we believe have been committed and he may be the head of the crime family but the
00:50:11
soldiers go to jail too and he might be safe because he'll probably be dead or
00:50:17
he'll pardon himself but there are thousands of people and I'd start naming pardon himself and his
00:50:23
family. Can I tell you something? Several of the Trump people I've met said they're asking for pardons already.
00:50:29
Why wouldn't you? That's what I was. And I at first I was like, "What? What did you do?" He goes, "Nothing." And I said, "Well," he goes,
00:50:36
"Oh, they're coming for us." Like, and we probably kind of said, "We deserve
00:50:41
it." Like it was really weird. I was, this is an or this is an orgy of
00:50:47
corruption. Yeah. They're coming for you. And where the Democrats again the Democrats should
00:50:53
be articulating exactly what crimes they believe have been committed putting out
00:50:58
Kazar has but go ahead Republic list of hundreds of people they believe they believe have potentially engaged in
00:51:04
these crimes and then next to their name what the statute of limitations is on that crime.
00:51:09
That's a great idea. let's make that list and start saying, "Okay, be clear, folks. Throughout for our 250 year
00:51:17
history, the White House and the DOJ flip back and forth. At some point, we're going to have the
00:51:23
gavvel. We're going to have the power of the purse. We're going to have the power of subpoena, and we're going to have our own DOJ. And unlike the unlike this
00:51:30
corrupt DOJ, we will be holding people to the letter of the law. And these are
00:51:37
the letters that you have violated and this is their statute of limitations
00:51:43
because the world is shaped on incentives. What incentives right now are there not to engage in this
00:51:49
corruption? They're not getting enough money for what they're going to pay Trump is and the Trump families. He'll he'll he'll pardon himself and his family and a few
00:51:55
choice people, but everybody else, you're [ __ ] you're going to be [ __ ] out of luck. Anyway, we have to move on. Um
00:52:01
Scott, let's go on a quick break. When we get back, we'll talk Netflix and Tesla earnings, which are super interesting. Support
00:52:08
for the show comes from Apple. Before the show was even a podcast, all I had was an idea. And once I had that, all I
00:52:14
really needed to get started was a mic and a Mac. I have been starting businesses my whole life. One thing that
00:52:20
has been static, a constant in all of my business is Apple products. They just
00:52:25
work. They send the right signal. Uh it sounds sort of strange, but they make me feel good about myself. They make me
00:52:31
feel creative. but they have been just the foundation upon which I have built my businesses. No matter what you have
00:52:37
an idea for, whether it's starting the business you've been dreaming of, a game-changing piece of tech, or finally
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writing that book, go for it. You just need to get started. Your great ideas start on Mac. Find out more on
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apple.com/mac. Scott, we're back and it's time to talk
00:52:56
about some earnings. First up, Tesla. Tesla's third quarter revenue was up about 12% from a year earlier, but
00:53:01
profit fell short of expectations. That's because a lot of people rushed to buy cars, but then Tesla sold them for
00:53:07
cheaper prices and uh there was an ability to get loans, so people bought more. Vehicle delivers were up 70 7%
00:53:14
from a year earlier, but the company says it plans to hit volume production of cyber cabs and Tesla Semi in 2026. I
00:53:20
wouldn't believe that. Um, also, uh, uh, uh, Musk was saying he has to create an
00:53:26
army of robots, and if he doesn't have control over his army of robots, he he was he's trying to get his million his
00:53:32
his trillion dollar deal, which is going to be voted on in a week or two. Um, and next Netflix shares of the company are
00:53:38
down 5% in the last 5 days at the time of taping after a miss of third quarter earnings. Netflix cited ongoing dispute
00:53:44
with Brazilian tax authorities for weak results. However, revenue for the quarter rose 17% and the streamer said a
00:53:49
quarter ad sales uh in the quarter were the best ever powered largely by my favorite K-pop Demon Hunters, there's
00:53:56
also going to be some merch. Uh great news for Cara Swisser. Uh announcing Mattel and Hasbro will release K-pop
00:54:02
Demon Hunters toys, plushies, and games. Let me tell you, among the toddler set in the young below 10 set, they're all
00:54:08
dressing like Roomie uh for Halloween. not my daughter but um and son but uh but all the kids in school they're all
00:54:16
dressing like Roomie which is one of the car main characters in the uh in the in the show. Um so thoughts on these
00:54:22
earnings? Yeah, I think Netflix is one of the best run companies in you know in business.
00:54:28
Um their revenue increased 17%. That didn't meet expectations. Their stock fell 10%
00:54:35
but the stock's been on a tear. uh net income increased nearly 8% to 2 and a half billion missing estimates by about
00:54:42
15%. Their operating margin was 28% and that was also short of the 32% that it
00:54:48
was expected. They highlighted a onetime tax expense in Brazil of 600 of $600
00:54:54
million for why their profitability mixed. Um that that by the way that that charge
00:55:01
had been previously disclosed to investors on past earnings reports. So, I I think at this point a lot of people
00:55:07
are just taking profits. K-pop Demon Hunters, which is a huge success. They keep hitting it out. Uh, the movie the movie was produced by
00:55:15
Sony Animation, but released directly to Netflix at the end of August. It's now the most watched movie in Netflix
00:55:20
history with approximately 325 million views. So, essentially the population of America has watched
00:55:27
K-pop. I haven't seen it. Will you please watch it so we can discuss it? I only watch things starring
00:55:32
my favorite actor, Hitler. Late at night, I take an edible. I have a makers and ginger and I watch World War II in
00:55:38
color. And then we can sing it together on the tour. Are you ready for the take down?
00:55:44
I'll keep singing it until you watch it. That's what we need to do. The soundtrack is also topped the Billboard
00:55:49
top charts. Uh cross promotion. Netflix, Mattel, and Hasbro have have joined
00:55:55
together to produce K-pop Demon Hunter toys. Look, the company I still think I
00:56:00
think like I I wouldn't buy Netflix here. I think that their growth is going to be international. I think it's a great company. I think they'll probably
00:56:07
grow into their price. I'm of the mind now that I think just as we talk about cable cutters or people who cut the
00:56:14
cord. I think we're going to start hearing about an entirely new generation of people that just don't own TVs. And
00:56:21
also I think our desire for I don't know if you seen these trend I forget what they're called mini soap operas as one
00:56:27
minute content and these guys are smart they'll figure out ways to get into those fields but I worry I I think that
00:56:35
I just think everything's moving away have I ask you this I know you like the diplomat I've I've been struck in the
00:56:43
last 12 months all of a sudden I'm not turning on the TV are and I realize that's anecdotal
00:56:50
But I'm supposed to be in the age where I'm sitting around watching Murder She Wrote. Are you watching less TV? No, I'm watching specific TV. I I like
00:56:57
television appointment. So yeah, like I I watched the entire season of the diplom which is wonderful as I said. Um
00:57:03
and I noticed a lot of people said when I mentioned that said, "Oh yeah, I did the same thing." So I'll I I'll watch,
00:57:10
you know, spec hunt like I always talk about hunting wise, but I'll watch specific or the guilded age like but
00:57:15
it's all over the place by the way. And I'm I'm watching this Martin Scorsesei documentary. I think it's on I think
00:57:21
it's on Apple TV. Um but I watch specific things and I watch the hell out
00:57:26
of them if that makes sense. And some shows I do watch week to week, right? Um
00:57:32
like the morning show. Well, that that goes out every week. I'm actually in this episode. This is my episode this
00:57:37
week. Yes, I'm on it. Yes, it's lovely. This week? This week? Yeah. Whatever this
00:57:42
Oh, we'll definitely tune in. Yeah. Yeah. Um, I got a bunch I can't watch it here in Korea, so I I'm not
00:57:47
able to watch my amazing Emmy Ward. Just use a VPN. I know. I didn't I guess I could. Um, so
00:57:53
I don't I'm too tired. I don't I don't care to watch myself on TV. You don't know where you are. You don't care. I don't care. You don't know what's going on.
00:57:58
I don't care. I don't I saw O speak. I saw a good movie. I saw a cute movie. Um, I'm trying to go to the movies tomorrow
00:58:04
with my boys. I saw Good Fortune with Seth Rogan is I'm sorry. Oh, it's supposed to be good. Yeah. And Karus. The movie's actually
00:58:10
not that well done. Uh, but it it's a wonderful message though. Oh, okay. It's really a nice
00:58:16
Yeah, I'll go see that. I think it's all about increment like I'm going to see Wicked. That's it. The new the the Wicked sequel. They're now
00:58:22
making Crazy Rich Asians Against. I'd see that in the theater. Like it just it's just specific. I'm a very specific
00:58:27
watcher. When I used to just watch whatever as you and I grew up, we just turned on the boob tube and just stared
00:58:33
essentially. So, I'm highly specific. Um, but and and I watch I watch threads.
00:58:38
I know it sounds crazy, but I watch Instagram. It's scary, isn't it? I've noticed that, too. I get so much my
00:58:44
information now from But it's nice. It's easy. Threads and Tik Tok snackable. The algorithms are great. They figure
00:58:49
out what we want. Yeah, absolutely. So, but but anyway, so so Tesla, talk very quickly about Tesla.
00:58:54
What's your thoughts on that? Well, look at Tesla, it's a little bit hard to to extrapolate from these
00:59:01
earnings because there was a pull forward and that is that because the tax credits were expiring, a lot of people
00:59:06
they gave very went in and and bought probably more cars. Deliveries were up 7%.
00:59:13
So, this is this was the greatest revenue they've seen and registered in two years. But again, this is probably
00:59:18
due to pull forward demand due to the expiration of the EV tax credit and also other things. about some other
00:59:24
things they get to put in their earnings all that that Trump got rid of about around the environment and not carbon
00:59:30
but another one air quality or something. Well, that's right. Because of the expiration of regulatory credits and
00:59:36
also their increased spending on AI, their net income fell 36%.
00:59:42
So last year they made about $2.8 billion from selling regulatory credits and about 40% from America. And this is
00:59:49
essentially just lost revenue. And this this quarter, Tesla reported the regulatory credit revenue was down 44%
00:59:55
year-on-year. And R&D expenses, including AI spend, rose 57%. They've got to enter the same spending war as
01:00:01
everybody else. Uh, and it rose to 1.6 billion. And Tesla also blamed tariffs for scratching profitability,
01:00:08
but provided no numbers. It's interesting because they're actually the most vertical automobile maker. The they have more quoteunquote made in America
01:00:15
parts still than anything. the the earnings call was
01:00:20
really him trying to pivot to AI and robots, but so far it's off to a rocky start. They've delayed the production of the
01:00:26
Optimus bots, abandoning previous plans to make I think it was 10,000 robots by the summer.
01:00:31
He says it's nonsense. And the head of Optimus has left from for Meta. And not only that, this guy is
01:00:37
pissed off at Elon because he made a point of saying, "I left despite taking a cut in pay," which means you're angry.
01:00:44
They also launched their robo taxi service in Austin and since then they've also expanded to San Francisco and in
01:00:50
both cities safety monitors are in the car during the ride. In SF the monitor
01:00:55
sits in the driver's seat so that's I don't know so far ahead it's crazy and this is going to be hard to make money.
01:01:00
There's so many players in this. Well, you know what I didn't you know what I you said something I
01:01:06
occasionally do listen to you and you said something that's always stuck to me and that is it is easy to it's it's difficult to have empathy for victims
01:01:12
when you've never been a victim and I've that has really registered with me
01:01:18
because I've always said oh London is safe New York is safe you don't need to worry there's a different set of fears
01:01:26
for a guy who's 6'21 190 and quite frankly just like like this is a bad
01:01:32
thing. You know, this is a dangerous thing to say. I have never been I don't think a victim of a crime.
01:01:39
Now you're going to get killed. I've never been assaulted. I've never been mugged. I've never been pickpocketed. I've never had my phone stolen.
01:01:45
So, it's just not I it's just not easy for me. And I have to realize I need to have, you know, I need to have uh you
01:01:53
know, more empathy for people who are victims. And the thing that really struck me is I
01:02:00
have heard several women say the following. They hate getting in Ubers because the
01:02:07
Uber driver starts chatting them up and they feel unsafe.
01:02:12
You can ask for a woman Uber both Lift and Uber. You can and you can ask for a woman. But that's something Uber drivers have
01:02:19
no desire to talk to me. They have they don't. It's usually me and I'm not proud of
01:02:24
they know that you would put out. That's the thing. Well, that's the thing. There you go. Yeah, it's they sometimes I tip
01:02:30
them off when I get in the front seat. No, but and I thought I thought that's
01:02:35
the last [ __ ] thing I would want to deal with is I'm coming home late from a dinner. And by the way, I want to be clear, some
01:02:42
of these guys, nor guys are probably just friendly, right? But they
01:02:47
but they shouldn't have to deal with that [ __ ] Most most are. And I thought and that's why
01:02:52
that's why and then on the Whimo caller the guy who runs Whimo was saying I think it was the guy who runs Whimo says
01:02:58
this some of their biggest uptake has been the guy that runs it with her but go ahead
01:03:04
but have said some of their biggest uptake has been from women and I'm like that just makes sense
01:03:09
right you don't want to deal with it and quite frankly I don't I don't if I could
01:03:14
have a driverless car I was thinking about would I want to do it my experience so far in driverless I
01:03:20
haven't enjoyed other than the technical sophistication and the wonder because they go so [ __ ] slow. It's like having your 16-year-old overcautious
01:03:26
driver. I hate that. They've got they're now like an aunt who's a good driver but too slow. It used to be grandma who's not such a good
01:03:32
driver and but but the promise of the promise faster I've noticed they're faster in San Francisco. Oh, that that's great cuz I think the
01:03:39
promise of of autonomous is the following. In London, the most uh one of
01:03:45
the most crazy frustrating experiences is the open road, no traffic, and on
01:03:52
certain places where there's cameras, the guy is no joke, has to go 25 miles an hour, and you're trying to get to
01:03:58
Heathro to make a flight and you're on a highway and he's going 25. And the real, in my opinion, the
01:04:03
promise of the promise of autonomous is that you'll be able to do away with speed limits and you'll let the supercomput decide if
01:04:10
the thing can go 90 miles hour. That would be a great thing. That would be great. Yeah. Why do we have those signs at all? Anyway, uh we'll see. You
01:04:16
know, we'll see. I think he'll probably get that pay package approved. Although the two big shareholder services who he keeps trashing said this is [ __ ]
01:04:22
ridiculous. Um and he said there'll be he has enough control that he'll be able
01:04:27
to control his robot army, whatever that means, but not enough. What do you think Bernie Sanders thinks of that pay package?
01:04:33
Oh god. Doesn't like it. Doesn't like it. Um he has to hit certain numbers by the way, everybody. Like if he doesn't,
01:04:39
he'll find a way to get paid this guy. But um he said he doesn't have enough control if he's insane not to get fired.
01:04:46
And I'm like um sorry. I think we passed that station on the train of of Tesla at
01:04:53
this point. Let me take the other the other side of his pay package. He has to earn. I'm actually relatively unoffended by
01:04:59
the pay package and that is made a lot of money for it. Well, what he's saying is what he's saying is if I
01:05:06
make shareholders four or five trillion, will you give me a 10 or 20% commission on that?
01:05:12
In my opinion, from a pure capitalist standpoint, sure, I sort of get it. What I am not
01:05:17
comfortable with is someone who aggregates that kind of capital and then pieces out to taxes and
01:05:22
engages in massive tax avoidance and that he makes he pays a smaller percentage of his earnings than a person
01:05:28
on the factory floor. That's what he does. So don't get in the way of upside of compensation, right?
01:05:34
But tax people, you know, it is linked, it is linked to his performance. And but that said, when
01:05:39
he said my robot army, it made me like frightened of humanity.
01:05:44
Just he does this all the time. He's such a troll. Anyway, um he'll probably get it. It doesn't matter. And we'll all
01:05:50
be outraged and then they'll tear down the West Wing and we'll be outraged and except Anyway. All right, Scott. One
01:05:56
more quick break. We'll be back for predictions. Support for the show comes
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01:06:59
Okay, Scott, let's hear a prediction. What is your prediction? Just so you know, New York City Mayor Eric Adams
01:07:06
just endorsed on Andrew Cuomo, which I predict will make Zoran Mandami the Well, that that'll give him another 11
01:07:12
votes. Jesus, they want that Curtis to get out. Curtis ain't getting out. I think I
01:07:18
think Curtis is in with him and his cats are in it to win it. No, I think Curtis is the Ralph Nater of the Conservatives. He's like, "No, it's
01:07:25
democracy." I like Curtis a little bit. I like he's seems insane, but I like him. I like the hat.
01:07:30
I like the whole thing. I like the cats. I like I like I I actually have enjoyed him weighing in during these debates.
01:07:36
It's usually Mandani and Kuomo screaming. So was a guy like that. New York New York's such an amazing city. They always
01:07:41
bring out an interesting guy. Remember the guy, the rent is too damn high. The guy with the black gloves. Hey, he just
01:07:47
kept saying the rent is too damn high. You know what? He was right. I know. But I They're trying to get him to pull out
01:07:54
so that Cuomo is doing everything possible that nothing to do with the voters. It's like Trump's help get Adams
01:08:02
out, you know, everything except appeal to voters, which would seem to me to be
01:08:07
the thing to do if you want to be mayor of New York, but whatever. Um, what is your other prediction?
01:08:14
Uh, that trying to get people to pull out often doesn't work. Haha. Okay, let me hear this prediction. Said my 15 and 18-year-old. Um, my
01:08:22
prediction is the following. So, America is run for profits. Uh, what
01:08:28
dictates our society is shareholder value. The worth of someone's character,
01:08:34
their ability to have health care, their ability to have freedom, their ability to have a broader selection set of mates is based on their ability to acquire
01:08:41
[ __ ] or signal that they can acquire [ __ ] through monetary economic power. That's how America is run. The Chinese
01:08:48
government is essentially run and China is run for control and for power. And
01:08:54
one of the ways they do that is they're much longer term thinkers about what positions them long-term geopolitically.
01:09:00
And I think essentially what's going to happen here is the following. I was sort of blown away by the fact
01:09:07
that this openweight browser that Sam Alman is basically shoplifted that
01:09:13
anybody can use because it's sort of technically openweight is sort of like open source. I think if I'm the CCP I am
01:09:22
pissed off. They have their problems, but essentially Trump is really [ __ ] with them with these sclerotic 100%
01:09:29
tariffs, non-tariffs. And they are being very strategic and they said, "Okay, we're going to come for the heart and
01:09:35
lungs of Republican voters." And hey folks, I don't know if you heard, but we buy 50% of your soybean crops and from
01:09:43
these red states. We're stopping and we're starting to buy from Argentina. And your president is stupid enough to give Argentina money as we transfer
01:09:50
business. If that business is never coming back, farmers are out of business. They're now going after rare
01:09:55
earth minerals that are key play a real strategic role in everything from cars
01:10:01
to missiles. And I think the next I think after going for our hearts and
01:10:06
lungs, they're going to go for our jugular the following way. I think they're going to release a series of
01:10:12
open-source or openweight AI tools that crush or put real pressure on our
01:10:19
magnificent 10 and take down our market and put us into a western recession. If
01:10:24
I were in charge of CCP defense and strategy, I would be saying to Shei, if
01:10:29
we really want to go for the jugular, America is now a giant bet on AI. Let's
01:10:35
make this a bad bet. And the way we're going to do that is we're going to release a series of
01:10:40
deepseek and deepseek like competitors that are free, open source and essentially do the following.
01:10:47
My biggest client, I started a strategy firm when I was 26. My biggest client was the gap. We did a bunch of demographic research and the group we
01:10:54
found that was most underserved and I could relate to this was single mothers who wanted their kids to feel good about
01:11:00
themselves because they were very self-conscious about their in lower income and the dad wasn't around. And so
01:11:05
we positioned what I thought was the most brilliant thing in the world at that time. And that as we said 80% of
01:11:10
the gap for 50% of the price and we targeted single mothers and it was called Old Navy. And Old Navy went from
01:11:17
zero to a billion faster than any retailer in history. I think China is about to go Old Navy with open AI or Old
01:11:24
Navy on AI going BYD on Exactly. But they're going to do it in AI
01:11:30
and they're going to say here's an idea. We have a bunch of amazing AI tools that are all free that you can build on top
01:11:36
of. You don't have to pay a subscription fee. We're not going to pelt you with advertising. And guess what? We're going
01:11:42
to take the magnificent 10 down and we're going to take your whole [ __ ] economy down. Five and a half. The magnificent five
01:11:47
and a half. Oh, wow. That's really good. I like that. I like it. I like it a lot. And by the way, for people who aren't
01:11:52
paying attention, she has just consolidated power over the CCP. He's made it smaller. He's gotten rid of
01:11:58
people. He's really runs the show. Anyway, great one, Scott. Okay. Well, that's quite a I like that. I'm going to
01:12:04
watch that one carefully. Anyway, we want to hear from you. Send us your questions about business tech or whatever is on your mind. Go to
01:12:09
nymag.com/pivot to submit a question for the show or call 85551 pivot. Elsewhere in the Karen
01:12:15
Scott universe this week on ProfG Conversations, Scott spoke to one of my favorites, Heather Cox Richardson, a
01:12:21
historian at Boston College, author and the voice of the newsletter Letters from an American very popular um uh let's
01:12:28
listen to a clip. One of the things that frustrates me to no end is the idea that there was ever a United States of
01:12:34
America that was not multicultural is simply a fantasy. And you know, we
01:12:40
talk in history about how whiteness is a constructed category. And you know that you know, you get all kinds of push back
01:12:46
on that, but it is worth remembering that Irish immigrants to the United States were not considered white. You
01:12:53
know, I just sit there and think, okay, we're just going to make it up, right? we're just going to construct our idea of what the past looked like because the
01:13:00
reality has always been that the United States was about working together as
01:13:06
communities within a very very broad range of people. Uh she is amazing. Uh I she's an amazing
01:13:12
and everybody should read her and and listen to this. I love her. I I think she's an inspiration. I love a professor who's
01:13:19
just like so passionate about a very narrow niche of the world and is like after working her ass off for 30 years,
01:13:25
she's an overnight success. She's I just love that she's getting a ton of what I think is well- earned recognition and
01:13:30
attention. I love having her on for her. Yeah, she's very sharp historian. Um and reminder, we're going
01:13:36
on tour. We're going to be going to Toronto, Boston, New York, DC, Chicago, San Francisco, and LA. We're sold out in
01:13:41
Toronto and San Francisco already, but please visit pivotour.com for tickets. Especially you, Chicago. We want we got
01:13:47
an extra-L large venue for you guys cuz you have big shoulders. Come see us there. Okay, that's the show. Thanks for
01:13:53
listening to Pivot and be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us
01:13:58
out. Today's show is produced by Larara Neman, Zoe Marcus, and Taylor Griffin. Bernie Todd entry in this episode. Jim M
01:14:05
edit the video. Additional support from Kate Gallagher and Anakah Robbins. Thanks also to Jubos, Miss Ao, and Dan
01:14:10
Shalon. Michox Media's executive producer of podcast. Make sure to follow
01:14:16
Pivot on your favorite podcast platform. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com/
01:14:23
pod. We'll be back next week for another breakdown of all things tech and business. Cara, safe travels.