Meta and YouTube Lose in Court, Insider Iran Trades, and Sora Shuts Down

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1:21

Hi, everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.

2:03

And I'm Scott Galloway.

2:08

What's going down, Scott?

2:09

What's going down? Just life stuff. All this moving parts around, moving back to the US and then my youngest, who always causes problems, is now like all of a sudden getting as in his school in London. Here. So that's throwing a monkey wrench into everything.

2:10

That's kind of good, though. That means he's capable of great things.

2:28

Well, we always knew that. We just didn't want him to do it at this moment.

2:32

Oh, well, you know what? He can do it anywhere. He can do it. Kids are very malleable. Yes, I moved my. I'm going to read you. Alex is right now taking a signal exam about the Fournier Transform. I don't even understand the things he sends me anymore. I'm. What he's like, let me explain it to you.

2:35

And I'm like, that's a flex. Good for him.

2:52

Flex. He's doing fluid dynamics or. I don't even know.

2:54

When I got at 11:30 on the SAT, I thought that was good. I called my mom and she had no idea what that meant, but she was happy to celebrate with me. She didn't even know what the SAT was. Do you know how much things have changed? This is how I found out. This is how I found out we were moving. My dad came home. I wasn't even sure what was going on with him and my mom and introduced me to Linda, my new mommy. And Linda told me we had all moved. We were all moving to Columbus, Ohio. Cause dad got a promotion. That's how I found out. Not we were moving, but we had already moved and that my parents were, in fact, divorcing. And now we literally obsess.

2:57

You're sensitive to it, let me say. I will give you a story. I moved a lot as a kid, too. My mom was restless and so was my stepfather. And I didn't like it, I have to say. But we moved a lot. Like, a lot a lot.

3:35

How many different schools were you at?

3:45

Only two. Maybe it wasn't the schools, it was

3:47

houses like they were, but in the same school region.

3:49

It was enough that it was not great. I remember thinking. But let me tell you, my own older kids. Thing is, we moved when Megan and I were getting a divorce. She got this offer from the Obamas to President Obama to be the cto.

3:53

CTO of America.

4:08

Yeah.

4:09

Again, another flax.

4:10

And. Well, sorry. I mean, it's what it is.

4:11

Which is true. It's a flax.

4:13

She. She was reticent because she didn't want the kids to have to move from San Francisco, where we had a beautiful house and they liked their school a lot and everything else. And I thought, first of all, it's a great opportunity for you. Second of all, the kids will have a great time in Washington and get to spend time with like Obama and stuff like that. It's like one of this, one of lifetime opportunities. But it was hard. We got him to school pretty quickly but it was a big shift and I felt because of my own childhood stuff bad about it and I have to say I could have done some things better. I should have been there a little bit more. It's complicated but I have to say they did great and they were fine and they really liked San Francisco and this was a shift.

4:14

Well, I think you're going through the same regrets and dilemmas that the primary breadwinner goes through and what I would say is having unfortunately in a capitalist society, money opens too many opportunities. So that sacrifice which was tough for them, you not being maybe as present as you would have liked was harder on you and paid huge benefits for them. At least that's what I say to make myself feel better.

4:57

By the way, primary bedwinner. My ex wife was an early Google executive, so just go with it.

5:26

I'm trying to make myself feel better about not being around when my kids

5:32

were little but I have to say I was, you know they def. There was moving as hard with kids at the same time I think they really benefited and they, they learned to adapt and they loved their. They ended up loving their school and got into sports and so it was, it was definitely not unrocky. But I think you, you have to give your kids more credit for being adaptable than you think.

5:35

Yeah, I just, I don't know. I pretend like I have any fucking say in this decision anyways, anyway. But so yeah, we were.

5:57

America, gotta get back to America.

6:07

I always, I always go to the reason we're worried about this is because we don't have real problems.

6:09

It's like, oh, it's a normal thing to be worried about your kid. You want, everyone wants, no matter where you are in the economic spectrum, you want your kids to do well for the most part. Most people do anyway.

6:13

Yeah, but what you said about getting a chance to hang out with President Obama and go to all those wonderful museums. I've told my partner that my 15 year old, I can get him a fake ID and he can come to shamar. Go with me, talk to the lovely Russian ladies who make eye contact with me because they think he's so old he must be rich.

6:24

No, you know what? New York's an amazing place to be. The age he will be, it'll be really interesting for him. I think it's just really a tremendous city. It really Is it just. It's.

6:40

I think I've said this before. You never know. It's like you don't know you're in the salad days until you're out of them. Like, I, I know that the last. As I get older, I. And I'm already doing this. I'm already really like painfully missing the period when my kids were like three and six. Like that, you know, Sunday morning chaos.

6:49

I have to say, I love it.

7:10

You just really, like, you really long for that. Like, that's the moment you want to. There's a solution.

7:12

You can have more kids like I did.

7:17

Unless my prostate's gonna give birth, I don't think that something is. I don't think that's in the cards.

7:18

In any case, one of the statistics I speaking that I just read was you spend, by the time they go to college, 90%. You have spent 90%.

7:24

Yeah. Of all time you're gonna spend with them.

7:34

And that kills me. After I heard that, I was like, last night my kids were crawling all over me and at first I was trying to eat dinner and I was like, oh. And then I thought, oh, fine, fine, it's fine.

7:36

Yeah, my son's doing orientation at his college and it's a one day thing. And I'm like, let's go for four days, we'll just hang out. And he's like, no, I don't wanna hang out.

7:45

Yeah, it's Cats in the Cradle, my friend. Anyway, I love that song. We gotta get to news, though. There's so much. Oh, that, that. Listen. President Trump plans to install big tech names like Mark Zuckerberg, Larry Ellison and Jensen Huang to a technology council to weigh in on AI policies and other issues. We were not invited.

7:55

AI policy. Buy more of my shit.

8:13

Buy more of my shit.

8:15

US Government. Buy more of.

8:15

This is what I need. You know, it's again, bereft.

8:16

No regulation to buy more of my shit. That's gonna be their recommendation.

8:19

Anybody who has a different alternative view that these are the only experts, I would say our invitation is lost. Or the dog ate our invitation. But he hates dogs, so Trump ate our invitation. I just don't. This list is nobody who has any doubt about it, nobody who has any good research, no one whose interests are not aligned with it. No regulation with any kind of.

8:23

There's conflicts everywhere.

8:45

Everywhere. I just.

8:46

What do you know? Jensen Huang's a big fan of selling, being able to sell his chips into China, despite the fact these are the chips that you do war games with and track Are Ohio class submarines.

8:47

Yeah. And Larry Ellison wants more data centers. And you know, I just this. Oh, God. These people like you think if you were a real president. And I think this guy is losing it every single day. And including the polls which are just like, look out below. But it's really amazing that he doesn't want other inputs like that may vary from his rich friends. It's just. I find it. It's just not good policy not to have people who doubt each other and debate it. I just, I don't understand. Yeah, we're waiting for an invite. Even just you. Even you. If he needs the white guys, even you. Well, you'd be good.

8:57

I love that. Well, I think you even.

9:34

You're the white guy. They're not gonna have me. I'm irritating to all of these people. And so, you know, I'm just saying. I'm just saying.

9:37

You. Speaking of which.

9:45

Oh, yeah.

9:47

Someone was. Someone said, I don't know. On one of these many, many platforms which are just so good for your mental health, that care was a total shill for big tech. And I wrote. Do you realize I have been on. When you go on a board and they don't want you on the board, they stick you on the nominating and governance committee, which has absolutely no power information.

9:48

Okay.

10:12

And your job is to find new directors. And it's just, it's literally like, you know, put them at the weird kids table. And so I've of course served on a lot of nominating and governance committees and. And where you're supposed to recruit new board members. If you were in such a pain in the ass to these people, you'd be fucking chairman of SpaceX right now.

10:12

I would be terrible.

10:33

Because over the last 20 years, we have correctly started saying, all right, let's try and broaden the aperture and bring in candidates who potentially don't look, smell and feel like us and aren't members of the same country club. So a journalist, a gay journalist who's covered tech. You were built in a factory of

10:34

less than a year. No, I'm gonna go on a board next. Discuss that. You're gonna.

10:55

I know, but the reason. I mean this sincerely, Cara, you're not gonna have me on the reason you haven't been invited to be on.

10:58

I was invited to one. I was invited to one.

11:04

Okay, but the reason you haven't been invited to half a dozen is because you get in their face. And on boards, nobody's gonna put. They don't mind someone who has alternative opinions or Whatever. But ever since, quite frankly, I'll be blunt. Ever since I started becoming more outspoken on podcasts, I used to get invited to go on three or four boards a year. It's gone way down.

11:06

Wow. Interesting.

11:27

Because the public CEOs are like. The public CEOs are like, okay, no, let's call him, let's bring him in, let's talk to him. But I don't want him in my boardroom.

11:28

Yeah. Let me address something, though. This week, I gave a thing at Syracuse University. They asked me this amazing tone of orange Men. The Orange Men. And you know, I was talking about things that I've talked about a lot, about CNN and the Ellisons owning it and this and that, and where AI

11:36

is going, ooh, a little controversy this weekend.

11:52

Ye.

11:55

I just want to say that I find David Ellison very attractive.

11:56

I do, too.

11:59

And Larry Ellison is a nice guy. He's a huge, big brain thinker.

12:00

He's a nice guy. He makes great movies.

12:03

I would absolutely love to work for them.

12:04

Yes. Okay. All right, listen. This is what happened. I was telling things I've said 109 times before. I don't want to work for a tech mogul. I don't. I just never have. Walt and I didn't take money from.

12:06

As opposed to a media mogul. Work for media moguls.

12:17

Yes, yes.

12:20

I'm calling challenge here. So you'd rather work for Rupert Murdoch than Larry Ellison?

12:22

We left Rupert Murdoch, my friend.

12:25

You did work there. You did work there until you cashed his check. Karen.

12:27

As fast as I could get out, I got out.

12:30

How long were you there? Hold on, hold on, hold on. How long were you there?

12:31

Just like two years before we could get out.

12:33

You were only there two years?

12:35

No, I was there a long time. But he didn't buy it for a while in any case, Scott, we left News Corp because of Rupert Murdoch. And that behavior around the taping of

12:36

that dead girl, that was awful.

12:44

Was awful. We left, like, very soon after and we. On purpose.

12:46

Is this the voicemail thing?

12:50

Yes.

12:52

Oh, God.

12:52

I know, Exactly. So we did that and we took money. We were offered money from Silicon Valley venture capitalists, and we took money from Terry Semel, who is. Had a media fund. Oh, yeah.

12:53

Yahoo, cbs.

13:02

Anyway, he's a lovely guy. Amazing guy, amazing person. He had a media fund, and then we took money from NBC, but we were offered venture capital money. And we didn't take it because I was like, these fuckers. They're gonna fuck me. Like that. That was real.

13:03

And Also there's a word for that, venture capitalist. But anyways, go ahead.

13:15

But anyway, we didn't take the money. And then I just don't wanna work for tech people. And I've said that to you on this podcast a dozen fucking times, right? Haven't I? It doesn't. So I repeat that again. But what I did was Scott McFarlane who left CBS and is now with Midas Touch, which is very fast growing thing. And they're going into news now instead of just news aggregation, which is a cool thing. And they've hired. Scott is an astonishing journalist. He did an amazing job around the January 6 and the Justice Department. Astonishing. Very handsome man, by the way. You would love his handsomeness. Very tall, went to Syracuse. And so he was the emcee. And as a joke, he was like, you know, he was talking about going independent. Oh, no. Cause he looks like an ad for an anchor. He a typical TV anchor. And he was, you know, he's like, oh, goodness, I'm taking a big leap. And. And I was like, oh, it's going to be great. And I said to him, I said, you're. You made the right decision. And I, I was looking directly at him and joking. I'm like, you don't want to work for the Ellisons. I mean, he's a terrible person. I was just like, like laying it on as a joke. The whole crowd laughed. I was not. I don't think Larry Ellison's a terrible person. He's. He's got. He's a. He's actually very funny. I don't agree with him on a lot of things. He's an amazing entrepreneur. He has great aesthetic taste, by the way. And his ship, his boats are fantastic. Like, I was joking to Scott McFarlane directly. And somehow these reporters were like, kara Swisher thinks Larry Ellison is a terrible person. And it was crazy. And it's also all the things I've said before many times. Like it's. It's kind of weird. And then it became a thing. Whatever. I like. By the way, let me just be clear. I like David Ellison. He's a nice guy. Larry Ellison is a tough dude. I'm sorry. He really is. And people can dislike him because he's had a really. He's been a tough cowboy of over the many years. That said, I do think he's very innovative and has done it astonishing things. And so. But I don't want to work. I don't want to work for tech people. I don't. And that's perfectly you know, legitimate. And frankly, the decisions they've made have been terrible around stuff that concerns me and that worries me of them taking over Sanon. So what? Big deal.

13:18

I think you're being bigoted against wealthy white men. You know, I don't. You know, you wouldn't have to worry about this if you weren't living forever.

15:26

I know. I'm sure the CNN people are like, it's premiering soon. And she insults the new owners.

15:37

I mean, I'm being very serious. I get. I'm speaking in one of these events tonight anyways. But I get a huge amount of power from my atheism because I find it very comforting to know at some point everyone I'm worried about is gonna be dead. And so am I. Yeah, I find it actually quite liberating to realize, okay, squeeze all the juice you can out of this lemon called life. Cause we're gonna be dead soon. And take risks. And if you fuck up, it really doesn't matter.

15:43

We are on the same wavelength.

16:11

No, In a hundred years, no one's gonna remember us or anybody we care about anyway.

16:13

Moving on. The Pentagon, this is troubling to me, is sending roughly 2,000 from the 82nd Airborne Division to the Middle East. As of this recording, there's been no decision to put. I hate this expression, boots on the ground, but that's what it is. Trump is talking a lot of talk this week saying the war has effectively been won. Iran wants to make a deal and negotiations are happening right now, even as Iran disputes that. And I hate to say it, but I believe Iran and I don't like the people who are running Iran. And he said he got a gift from Iran, calling it a very big present worth a tremendous amount of money and tied to oil and gas. I think he's just making shit up now. He's also sent a. A 15 point plan to end the war demands, including dismantling nuclear sites ending in Richmond and reopening the Strait of Hormuz. We certainly had some of those things in place before. And as potential talks may or may not be taking shape, there are reports that Iran would prefer to deal with Vice President J.D. vance over Jared Kushner and Steve Witkoff. Wow. That's a choice, right? That's a choice. But I would agree with the Iranians on that. And Vance has been the person who, you know, is going to be running for president and could possibly be president and also has been opposed to the war quietly that he certainly ran on the idea of no more wars and he's also a veteran. I don't know. What do you think about that?

16:17

It's all, I mean, I go to the markets. So there was an unusual amount of futures that changed hands.

17:39

Please talk about this.

17:48

Well, I believe that in a digital world where forensics and AI and investigative journalists, one of the wonderful things about America is that people see incentive in finding out what actually went down. And I think that's one of the wonderful things about our society. I think you're going to see President Trump four or five years post his presidency, sitting in front of, of a camera and a jury pretending to be too old and he just doesn't remember him telling his buddies, his friends, his family members to buy, buy, buy that. Oh, I think I'm going to announce that the talks are going really well, even though according to the Islamic Republic, there are no talks, which will send the markets skyrocketing. And then when it comes out 24, 48 hours later that in fact there are no talks. And then the market's oil surges again and the markets go down. And this is an insider traders.

17:50

It's right from the White House. It's right from the White House.

18:50

Ivan Boesky could not have dreamt of this situation. The ability to trade on near certainty. The president knows that if he just a. He can say any he believes he can say anything he fucking wants. It doesn't matter. I can lie, I can be full of shit, just put up press releases. It doesn't matter. Kind of the, you know, funding secured over and over.

18:52

Yeah, exactly.

19:16

And I know that the markets will respond swiftly to my comments. There is now zero day options where you can buy options that expire by the end of the day. And I'm gonna go out on a limb here and say that sometimes the President doesn't have that much fidelity to rule of law or conflicts of interest.

19:17

I find it like this has happened over and over again. He must just say things while in the toilet. And people then trade, whatever. And you know, interestingly, let me note, lawmakers are introducing bipartisan bills to ban prediction markets from listing. There's a lot of action on this now from listing sports bets and to prohibit members of Congress from trading in certain markets. Facing the heat. Calci plans to block athletes, coaches and officials from betting on their sports and political candidates from trading on their campaigns. And polymarket announced finally enhanced market integrity rules, including banning trading on stolen confidential information. I mean, this has happened rather quickly and it's quite important that this happen. It's just grift it's just out and out grift these numbers. And you know that Democrats are prepared. This is like so deep in the heart of easy to prove. Right. This kind of stuff and who's doing it. And so I think they better, you know, they better hope they get those pardons from, from, from Trump and he pardons himself. Because this is just really, it's. Let me break it down for regular people. They're making money at your expense and cheating while doing it. Like what? I don't know what else to say.

19:37

Look, the Democrats engage in what I'll call small cap corruption, and that is, it's not illegal to trade stocks right now if you're a U.S. congressperson, I

20:56

think it should be.

21:07

And even though there are regulations and guidelines against it, the fines is a slap on the wrist. So the incentives are, if I'm sitting in a, you know, the Senate, if I'm on the Defense Committee or the Intelligence Committee, and we're talking about a $30 billion contract to Northrop Grumman, and it looks like it's going to go through. And my guess is Northrop Grumman will put out a press release in 72 hours. Hey, honey. Hey. Paul Pelosi. I really like Northrop, and I just want to be even handed here.

21:08

I think what Trump is, Scott, you do this every time. This is like massive corruption in a different.

21:44

It's just corruption on a different scale. But it's still corruption.

21:50

It is, but you tend to go right to Nancy Pelosi, who's leaving Congress. We know we should have passed these

21:52

bills because in order to be taken seriously, we have to be critical thinkers and apply it to both sides of the aisle. I understand this is okay, but let's look at the data. Over the last, what is it, 20 years, the S and P has tripled and the Pelosi portfolio is up sevenfold. And nothing she has done is illegal. This is a certain type of corruption. What Trump has done is said, okay, that's small ball. You're corrupt for millions. I'm going to be corrupt for billions. Because what he's done, and I'm not sure it's illegal, but we've been dependent upon, and Barry Goldwater predicted this 50 years ago. We have been too dependent upon a series of norms as opposed to laws, and have slowly but surely ceded power.

21:57

You're absolutely right.

22:45

So Trump says, oh, everyone's doing it. Marjorie Taylor Greene was doing everyone. Not everyone. A significant number of people in Congress have been trading stocks and beating the

22:46

Market Mark Wayne Mullen was one of them.

22:57

They can't. And also in my solution, I think they should make, I think people in Congress, I think representatives should make a million dollars a year and senators should make $2 million a year.

23:00

I agree.

23:10

They make I think 168,000 or $178,000 a year.

23:11

Small.

23:15

If you have two homes and you're living in D.C. and you weren't rich before running for Congress.

23:15

We should pay for their apartments. I mean I just.

23:21

You can't afford. You can't afford.

23:23

We should have these nice apartments for them that are actually secure. So make them more secure.

23:24

Pay them. The Sing model, probably the best run nation in the world. The Singapore model. They pay their elected officials a lot of money and they have zero tolerance. You cannot go to work for a lobbying firm or a PAC company. There has to be a sunlight period or whatever they call it, a sunshine period. You cannot in any way have any insight domain benefit in any way. We find out you've called your cousin in the Philippines and here she is trading stocks. You're probably gonna get lashed. That's literally what it's like at Singapore. And what do you know, there's no corruption. Anyways. He has taken it to an absolutely new level. But just circling back where I started, we're gonna find out that the greatest levels volume of insider trading in history are happening and originating out of Pennsylvania Avenue.

23:29

Absolutely 100%. I think there are people talking about whether it's treasonous or not to release these things because these are boots on the ground that could get hurt and everything else. So there's a whole level of comple here because they're betting on possible deaths of Americans and others. Sending JD Van where do you imagine this Iran thing? Because it is going back and forth and back and forth and the market is trying to grok it and it feels very whipsaw. So far they've given it hasn't suffered that badly. You had talked about a real decline in the market. Is this the thing that will pull

24:16

it off or the thing that pull. You mean Jade sending daily vans faster as well.

24:51

Yeah, like.

24:54

But sending Vice President Vance is a signal. There's a few signals here. One the scariest signal is we have amphibious ships and combat marines being deployed to the region. This is either you could argue he's just playing poker or in fact he's planning to put in the terminal like boots on the ground in Kharg and maybe do a swap where I'll let the oil flow Through Kharg, if you ensure the Straits of Hormuzer are safe passage. There's all sorts of game theory going on here. He has a tendency to lie and then before a quote, unquote, surprise attack, which I think is bad for our brand long term, America has to be seen as doing what they say and meaning what they say and saying, get ready. But anyways, sending Vance is a signal because.

24:55

Well, no, they're not sending Vance. The Iranians want Vance.

25:36

Well, but the Iranians want Vance. And this is, quite frankly, this is a signal for the people who want this to end because Vance is on the record as saying for a long time that these types of misadventures overseas were a bad idea.

25:39

He's been really quiet.

25:56

Well, he hasn't. He's like, I think I won't let. Let Scott Besant do that. He. The last thing he wants to do is get on with Kirsten Welker and have her bring up about 5 million tapes. And where he said, under no serpent, World War III under Biden, we should never get into these quagmires overseas. There's just.

25:58

He's trying his best to justify it.

26:21

He is L. Just doing everything he can to stay out of the way of mics and cameras.

26:23

He's literally hiding behind the curtain. He's like, don't ask me. He's done a few real pretzel moves that are really problematic.

26:27

But the IRGC probably believes correctly, he's more likely to be empathetic, to want to de escalate. So this is a good side. The fact that the Trump administration is entertaining this, both sides. I think he is probably the guy. They can find common ground.

26:34

Not Rubio. Well, we'll see.

26:54

But Rubio is perceived as a bit of a hawk. A lot of people think he's the shadow president right now. What has been the most militarily adventurous administration in a long time.

26:55

Incredible. And they're planning Cuba next, which is like, oh, God, I mean, let them die themselves. They're already on their last legs. Just let them fall and then we'll move in the hotels.

27:04

I'm sorry. Under the auspices of having an opinion about shit. I have no domain, expertise in. Let me just say that the smartest thing we could do geopolitically as it relates to Cuba would be to be sending humanitarian aid to them right now. If you want the people to rise up and think, you know, the Americans aren't that bad, maybe we should normalize relations at some point. The Castro family will die out it would be starching our hat white and sending power, fuel and food to Cuba right now.

27:14

Yeah, it worked out so well for the Kennedy administration. But what's really interesting is this is all having an effect. Democrats pulled off a surprising win in Florida, actually a pair of them, but one that was particularly prizing. Flipping two legislative seats including the district that covers Mar? A Lago. Like he now has a Democratic representative. Emily Gregory, a first time candidate with a background in public health won by a little over two points. Astonishing. This was a big Trump district. Trump has taken to social media to support her opponent, obviously. And President Trump who's called voting by mail cheating. Voted by mail in the election. I mean these, the, the list of things Democrats have won recently is really something I else to see them winning in all sorts of districts and from people I know down there, they're just furious at him. They really are. These are all his fans or people who voted for him. And it's really, I'm not sure, I think they're going to try to steal the election. I don't think it's going to be possible given the overwhelming numbers that are going to happen. And another thing that's affecting him and these are two topic as we record negotiations to end the five week DHS shutdown or standstill. With Congress scheduled to go into recess any minute. The Republicans have brought a number of possibilities to Trump, but he's turned them all down and the Democrats are sticking. The sticking points are still ice, funding and enforcement reforms. Very simple things. Don't wear masks. Bring in judicial warrants and cameras. TSA officers will miss in their paycheck this Friday if the deal hasn't reached. On Tuesday morning, Delta Airlines suspended specialty services for members of Congress. They're going to have to wait in line like everybody else, which I think is great. All of them. You said in our last show that grounding private planes might move the needle and I love that. Delta and others are pushing back. The TSA is pushing back against ice.

27:42

Great move by Delta. Great, great brand enhancing, brilliant fucking move by Delta.

29:33

And no one likes ICE there. Like TSA has said it's useless. The airlines think it's useless. There was a pilot that got on, on social media where he's like, this fucking sucks people. And I have to say this is all at Donald Trump's door because he's refusing to deal because of the SAVE act and letting people wait in line. I love that congresspeople have to wait in line. I love it. And so talk about this win in Mar a Lago and what's happening with tsa. Because besides Iran, this is yet another series of things that are indicators, leading indicators.

29:40

District 87, Palm Beach county, as you notice, includes White House, Florida and a really impressive young woman. I love this.

30:13

Emily Gregory, fantastic.

30:21

40 year old small business owner and military spouse running for office for the first time, defeated Republican John Maples, who had Trump's complete and total endorsement. She won with 51.2% with turnout roughly at 29%. Trump carried the district by 11 points in 2024.

30:23

Yeah, that's a lot.

30:43

The previous Republican incumbent won by 20 points. I mean this is. And then let's go up, let's go up the, you know, let's go up the coast of the great state of Florida. Democrat Brian Nathan, a Navy veteran and union organizer, upset Republican Josie Tomkow by just 408 votes, a margin of 0.5%, which could trigger a machine recount. But Tomkow outspent Nathan more than 3 to 1. And it looks like Nathan won and received over 400,000 in kind contributions from the Florida Republican Senatorial Campaign Committee. The previous Republican incumbent, Jay Collins, won the seat by 10 points in 2022. And this all bubbles up to the most shocking, exciting in somewhat. I'm almost worried we're peaking too early right now. No, the prediction markets, Kalsha is saying for the first time that it's more likely than not that Democrats take the Senate. When have we heard that? Everyone has said the narrative so far from quote unquote, all the experts is it's likely, very likely Democrats will get control of the House. But the map is really difficult for Senate. Really difficult. Like looking at the people. And now, now people, more people are betting their money on Democrats taking the Senate. This is, it's wild.

30:44

I think the Democrats are fielding much better candidate. This woman seems, I love her. I was like, I love you. She was focusing on maternal health and affordability issues. You have Abby Spanberger in Virginia. You've got Mickey Sherrill, you've got even Mondavi. There are people, good candidates everywhere.

32:12

Calorico.

32:28

Yeah, calorico. And not just centrist ones, just really good everywhere.

32:29

Young people, fresh ideas.

32:34

Yeah, fresh ideas.

32:36

Tough, regular sized prostates, still childbearing. Actually think about kids, actually have kids at home.

32:38

Yep. Yeah, I feel really good about the candidates. And the Trump ones look like a bunch of cult members or acolytes that really hate him secretly. And by the way, let me stress to everybody, if you hang around Republicans, off the record, they Eviscerate Trump on the record. They suck up to. It makes them so awful. At least the Democrats fight in public, I guess, and they do. But it's really something to see what's happening here. That was, I think there's the Mar a Lago one is particularly notable, obviously, but across the country, in places where Democrats have never won, Georgia, Kansas, all these places, they're knocking up wins. And so that creates a real opportunity if Democrats walk into it. And I think so far, on the local level like this, the candidates have been speaking what they're listening to voters, and they're not. I don't think they're just mouthing things like, I think they actually are concerned with what do voters want? This is our customers and we're gonna give them what they want anyway. Delta, let's give Delta a big old clap.

32:43

I met the CEO there, and a good friend of mine's on the board. Whoever came up with this idea. Except that is one of the most brand enhancing, thoughtful, egalitarian American thing. This was such an amazing corporate move. And it directly. And again, it flies in the face of. Or not flies in the face. It supports what I believe is the greatest commercial opportunity. I just had a phone call with, I think, one of the most thoughtful business leaders in America who runs an iconic investment bank. And I said to him, the greatest commercial opportunity in a long time has been presented, and that is in a thoughtful, non ad hominem, non personal attack, discussing values of America and how they have been so incredibly important to our capital markets. To do what Dario Modi. And now, to a certain extent, what Delta Airlines is saying and to say, no, this isn't a direct affront on the Trump administration.

33:50

No, it's all congresspeople. For people who don't know, congresspeople can sail through security.

34:45

Yeah. But what this is saying is people don't know that. The people blame Trump and the Republicans mostly for this shutdown. So by them saying this is unacceptable, but Delta's saying this is unacceptable. And our leadership, who has fucked this up by quite frankly, demanding that the SAVE act be a part of this or ICE funding, we are no longer going to engage in facilitating this.

34:49

We're not going to let you wait in line. We're getting the back of the line. Back of the line, which is great. All right. We think it's great. Get back in the line. Lines suck, by the way. And it's terrible for the TSA people who deserve to be paid. And ICE people are being paid and they're doing nothing but buying coffee and irritating people. They handed out water in the flying through security. How stupid can you be anyway? Okay Scott, let's go on a quick break. We come back Meta and YouTube are found liable in the first of the social media addiction lawsuits. Support for this show comes from Vanguard. If you're a financial advisor, then you're probably thinking about how to set up your clients for success. A fixed income strategy like bonds is a good place to start. However, with traditional tricky markets and rate shifts, there may be some unforeseen risks. That's why having a partner with scale and expertise matters. Vanguard brings both. 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I almost like it as much as my kids anyway. That's right. The Chevy Bolt is back and better than ever now with 2.5 times faster charging with DC Public fast charging that goes from 10% to 80% in just 25 minutes. I've been riding around in the Bolt for years and again I have have to say I love it. I don't know why I love it so much. It's just. It's a happy car. Some times you sad cars. Happy cars. I've had the cars for a couple of years. I've never had a problem with it. It's freezing cold here in D.C. right now and nothing happened to my battery. I. I charge it. I happen to charge at my house. It does take a little longer but with this new Chevy Bolt it's much faster. I'm thinking of trading it in. Although I love my Bolt so it's a very difficult decision. I just think I can't say enough about the Chevy Bolt and the amount of time you've been listening to this show, your Bolt could have charged and be ready to hit the road mode. Best of all, 2027 Bolt features upgraded tech, has an 11.3-inch diagonal touchscreen. All that and more in Chevy's most affordable ev. It was easy to use before. It's easier to use and easier to charge, and I know some people are worried about that. You shouldn't be. Learn more@chevy.com bolt 2.5 times faster charging with 150k kilowatt plus DC fast charging 2027 volt when compared to the 2023 bolt, which is the one I think I have have actual charge. Times will vary. See the owner's manual for details and limitations. Support for this show comes from Shipstation. When your company is growing fast, order fulfillment can make or break your success. Shipstation's intelligence driven platform brings order management, rate shopping, inventory and returns, warehouse systems and comprehensive analytics all in one place, saving customers 15 hours per week on fulfillment. With Shipstation, everything you need to manage getting your product to customers is in one place. 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A California jury found Meta must pay $4.2 million and YouTube 1.8 million. It's not very much money. She asked for a billion. The case focused on features like infinite scroll and algorithmic recommendations. As a reminder, both TikTok and Snapchat settled before the trial began. Meta has also been found liable for failing to protect young people from online dangers. In a New Mexico case there, meta must pay 375 million. A little more, but still a parking ticket for this company. The company made 160 times that in revenue last quarter. These verdicts are the first in social media addiction trials, social media impact trials. As the New York Post cover said, meta culpa, which we love. We love. Scott, what do you think? Here we go. We're. We're over the edge with juries involved. Juries are tired of social media.

35:11

I generally want to get your viewpoint on it, but my initial instinct is that this is actually a big deal.

40:34

It is.

40:38

And it's not about. It's, as you said, it's not about the parking tickets that have been issued. It's that there's now legal precedent for what the activities these firms engage in makes them civilly at least liable. And the other piece of information I got that I found fascinating is their insurance company are trying to reject the claim, saying that they intentionally. They knew they were intentionally doing this, and so they're not covered by insurance. And my sense is it's not about this case. It's that the other several hundred or several thousand cases against these firms just got a lot stronger because of this decision.

40:39

Yeah, there's a real backup. You know, this has been something you and I have been talking about. I went back.

41:16

Oh, you think?

41:20

Yes, yes.

41:21

I thought I wrote a book on this about 10 years ago.

41:22

You did. I was just saying you wrote a book on this, this. And I wrote a book on this and talking about these problems and how liable they were. Lack of accountability, lack of regulatory scrutiny of anybody except some in other countries, in fact, rolling over for them, but both by Obama and Trump, of course, because he takes money from them. You know, I think their high water mark was standing with Trump at the inaugural. I think this was. Was in. This was starting to be in place when people realized after January 6th, I think that social media has a real impact. And it's been a slow bur. That's for sure. And our regulators have done nothing, let me just say, not in states, in our federal regulators. And I don't mean to say Amy Klobuchar and others have not tried. I just think they have not been successful because of the pushback. And in this case, I think you're gonna see furious pushback by these companies even for this small an amount. Right. This tiny amount of money, because they don't want any accountability for what they're doing. They want to skate out of responsibility, and they can't because now it's in front of juries. And every person knows addiction is an issue. Sloppy management is an issue. And threats to kids are an issue.

41:24

I saw you on Anderson Cooper last night, and I mean, and you had it, I thought was exactly the right point. And we've been talking about this, and that is the nation is actually pretty good at recognizing externalities and harm. It just doesn't act crisply. It took about 30 years with tobacco, 20 years with opiates. Social went on mobile in 2012. It feels like that timing's about right. That about at 2032, unfortunately. And I'm personally aggrieved, quite frankly. My kids got fucked up on these things. You know, your kids, your first generation, your older kids, Alex and Louis had to endure this. In my senses, they've come through a pretty. Pretty, pretty unscathed.

42:37

They had less of it. They had less of it. It wasn't quite, you know, they were. Your kids are the zero. Ground zero. I think my kids were near a blast zone, but not the same quite thing. I think they like you too. They were a little bit on Snapchat, you know what I mean? But it wasn't as intense and hateful as it became.

43:20

But as big tech always does, this preys on the poor. Because if I'd had these devices and a mother who was gone before I got up in the morning and got home sometimes after I was asleep because she was working and I was totally unsupervised, and I had YouTube and Snap and Uporn and Meta and Facebook, I think I just would have been on these things all damn day long. And as I was going through puberty, my brain would have been wired for constant squeezing of a dopa bag, which I believe could have very easily taken me away. I used to leave my house to go hang out with my friends because I was so bored. I'm not sure I would have left my house.

43:39

You wouldn't. Why would you? Why would you? I mean, one of the things that they've done, and I think as these cases come to fruit, the discovery is gonna be brutal. I mean, I think they know there's all kinds of evidence that they know it. In this case, a lot of stuff came out that they want to. They want to attract tweens because they're lifelong customers, right? It's like cigarette. It's literally like Joe Camel when you read this stuff, if you put cigarette in there. And what's incredible here is I actually believe the cigarette manufacturers knew exactly the problem of nicotine. I think these guys think that they're not. It's not their fault. It's never their fault. And then they hide behind the First Amendment. Hey, it's just people talking. And there was a great story in the Washington Post today about Republicans worried about young Republicans being so anti Semitic, Nazi focused, sort of hateful. And where do you think this comes from? And again, I don't blame them fully. I don't, I don't, I don't think it's fully. But they've created addictive and necessary features without any kind of guardrails in place or any kind of. It's not like they're like, hey, let everything go. And I think that's, it's sort of like they're evil babysitters. Right. In some fashion. And at some point the babysitter has to get dinged in some way they consider themselves. It's not their fault if people eat their shitty food, you know what I mean? Like our tainted meat. It's okay. And of course everyone else gets regulated but them.

44:27

Yeah, I think their argument would be we don't get any credit for all the good we. Yeah, all the good we.

45:51

Why aren't there parades, right?

45:56

That we, that people do learn. People do it helps them with their homework. They do make connections, you know, parents of kids with childhood, rare childhood diseases. Social media does add a lot of value. It creates tremendous economic growth, a lot of high paying jobs. They would argue we're a net good. And I would argue that's actually true. The problem is with the word net, and that is we're net beneficiaries from fossil fuels and pesticides. But we still have, we still have a Clean Air act, we still have an epa, we still have an fda, right? And this is fossil fuels and pesticides with absolutely no emission standards. Now when I lived in la, I was talking, I went on vacation with a buddy of mine. We grew up in LA together. There were days where by the end of the school day you couldn't breathe in. And they cleaned it up.

45:58

They cleaned it up.

46:50

And unfortunately here, unfortunately I thought of it yesterday. I was trying to think. I was asked to go on and talk about this and instead I decided to go out and drink. But I was thinking, okay, is this the beginning of the end? It's not. You know what this is? This is the end of the beginning. This industry's not going anywhere. But the era of we need to do better from Sheryl Sandberg or Mark Zuckerberg weaponizing thousands of lawyers and lobbyists to delay and obfuscate and gloss over the internal research that showed 1 out of 12 teens in the UK was cited Instagram for their suicidal ideation. I do think that ERA is coming to a close. And my favorite part of the case is that there was an undercover operation, I think from the Attorney General in New Mexico where they, they created accounts posing as an 11 year old girl, which was almost immediately inundated with images and targeted solicitations from, wait for it, child abusers.

46:51

That's right.

48:00

So it took the attorney general about 48 hours to figure this shit out. And we're supposed to believe that Meta wasn't aware of it?

48:01

Yeah, we don't believe them and neither did the jury, by the way. We're gonna move on a second, but I gotta say I did quote you last night on Anderson where you say, you know, we're bound by the. But not protected by it. And they're protected by the law. Not bound by it. Now they're bound by it and they are going to fight their asses off. You know what, Mark? Just pay the money and fix it. Like just stop. Like stop. Because the more they resist, the more a growing group of people, bipartisan across the country, recognizes the damage these companies. And then of course, the same day, Donald Trump names all of these people to a committee on AI with not nary a critic on it, right? Everybody with self interest is on that advisory committee. And nobody who's going to talk about the possibilities of problem, only up and to the right. And once again they're going to try to do it. And let me tell you folks, we need to stop them now because the damage they will do, they have shown no ability to control themselves.

48:09

You need to age gate. No one under the age of 18 needs to be on any of these platforms.

49:09

And we hate to say that, I have to say, I hate to say that, but this is where we are. Okay, Scott, moving on. I want to start our next story by playing a prediction you made just last week.

49:12

My prediction is OpenAI Sora social media app will be shut down soon.

49:23

Oh, Sora. What do you know? You know something.

49:28

No, I don't. I've done no original reporting. Trust me.

49:32

Okay. All right.

49:35

Upon its release, Sora came out in number one in the app store and actually got more downloads out of the gates than ChatGPT did. However, the party's ended. Downloads fell 32% month over month in December and another 45% in January. And some Sora is the little engine that didn't. And also users continue to drop like flies.

49:36

You were right. I still think you had inside information. OpenAI announced this week that it's discontinuing the Sora app. This is the video app they're doing just months after launching it. This reportedly one of several steps the company has taken to refocus the business ahead of its potential ipo. Sam Altman says the Sora team will now shift to prioritizing longer term bet like robotics. As for the Disney deal they did at the time, if you remember, Scott and I talked about it, a $1 billion investment in OpenAI, which we thought they weren't really going to give them that. And it was just a little experiment that included licensing characters for Sora. Disney is out. Disney's out. It was more of a press release than anything yet. So talk about this prediction. I'll also note OpenAI is closing in on a deal to raise about $10 billion from investors, bringing its latest funding round haul to more than $120 billion. Jeez, the fucking wheeze talk about this. I mean they shift very quickly. I don't know what they're doing in robotics, but they should just focus on their core business. Seems to me. But thoughts on this? What did you know? Come on, tell me the truth.

50:01

Cara, Cara, Cara. I don't. I don't enjoy talking about myself or taking credit for what is arguably one of the most prescient predictions of the year on tech now.

51:01

Oh my God, it was so good, Cara. I gotta say, I was like, he was right.

51:10

Damn it, my nipples are hot. Touchdown. Jesus.

51:15

I approve these hard parts.

51:18

I am fucking John Travolta when he was thin and could dance.

51:20

Yeah.

51:22

This is a ladies for the people tuning in on the YouTube channel. Watch his shoulders.

51:23

Watch his shoulders.

51:27

Hello. To resist his feudal. Okay, the weirdest thing. That was literally the easiest prediction ever, by the way.

51:28

Why did you like when you said it, I was like, why is he talking about that? Like, I get it, but what prompted

51:38

you goes on a deeper level. This goes to the notion greatness is in the agency of others. I have a data and research team that feeds me with every good idea I ever have. And this young man named Dan Shalon. I said I need a prediction for Bivit today. And he wrote sora is going to be closed down. And he gave me a bunch of data. So I can't take credit for this as usual. I take credit for it, but it was my team that came up with the prediction.

51:44

He just saw the downloads. Because a lot of apps go up and down, right? And many like took forever for Meta to really kill off avatars.

52:06

Okay. OpenAI didn't shut down Sora. Anthropic did.

52:15

Yeah.

52:19

Of all the incremental or new dollars being won by AI companies in the enterprise market, it used to be 60% of new dollars being spent on AI from the enterprise were going to OpenAI. It's dropped to 30 cents on the dollar and anthropic had. Has screamed a 70 cents on the incremental dollar being spent by the enterprise on AI. Why? Because see above. Biggest commercial opportunity in history. Say no to the Trump administration. And also, to be fair, Anthropic's new products are just outstanding.

52:22

They are so much.

52:53

I have to say they have more momentum right now than any company in the world.

52:55

They're better. They're better. It's like when you were using browsers, I remember using Explorer and then Netscape and then Explorer was better. But then, you know, it was, it was like that. You're like, oh, that's like Google. There was a lot of search engine. And then it was like, oh, this is better, this is better.

52:58

And to OpenAI's credit and Sam's credit and the board's credit, they've said, okay, the best business strategy when you're starting to wobble, quite frankly, is focus moved fast.

53:12

I would agree.

53:24

Focus. We okay, folks. And by the way, my. It doesn't end with Sora, folks, in terms of shit that's about to be closed down. And that's going to be my prediction at the end, end of, at the end of the show. But you knew they were going to have to focus. You knew this product wasn't working. It was hemorrhaging money. The whole visual space around AI just hasn't panned out the way people had hoped.

53:25

Slop. It's slop.

53:47

Yeah. It's just not. It's so interesting. The one just was. What's one of the most interesting things about Amazon is it started in books and books has probably been the least disrupted industry it's gone into. The book publishing industry, although it's been consolidated, is actually still pretty strong. Big advances, agents are still making money. Independent booksellers are actually making a bit of a comeback anyways. But what's so interesting I find about. If you'd said, what's going to happen to designers? 24 months ago, you would have said, oh, like customer service and mediocre lawyers. They're just going to get cleared out by Sora. And I forget Google's one. And what's interesting is as a percentage of the employee base, the number of designers has actually gone up at tech companies because it's the coding that is being commoditized. But the front end human faced UI design, really compelling. Is now the point of differentiation. But because these things, this AI I've played with this stuff, it's just not very good.

53:48

It's not good. You know, the only thing I like is when they show they like do all the. They have celebrities, like, they did a Game of Thrones in high school. Some of it's fun, but it's sort of like for a minute and then you're like, okay, now I want to look at something real. I think the human eye can see it.

54:53

It exhausts you.

55:08

It is. The human eye is like, not. So I don't think you get used to it either. Everyone's like, oh, kids will get used to it. I'm like, it's ruined.

55:09

Animal videos.

55:15

I don't think so. Yeah, animal videos are pretty cool.

55:16

Remember how amazing animal videos were? Animal videos were amazing because now they have them do. When you. When you saw a narwhal or a beluga whale retrieving a nerf football from adventurers or scientists in the Antarctic or wherever the fuck that was, you're like, this is an incredible moment. And now I see it and go, is it fucking AI?

55:18

Yeah, exactly.

55:38

Because if it is AI, I don't care. It's not real. I don't.

55:38

Yeah, I know. They make weird. I agree, I agree. And that's. It just. It's not satisfying in a way that real is, I have to say. And I do think the human eye can. It's just years ago, when I was at the MIT Media Lab when they were having problems with robotics that talk to you, you know, on a screen, and it was always the eyes. There's something wrong with the eyes and humans perceive it differently.

55:41

And the lips and the voice. I'm telling you, though, if AI starts producing cute, cute pictures of babies seeing or hearing for the first time, I'm out. I'm logging off of every platform.

56:01

I would agree.

56:12

Anyway, it has to be real. Those things change my day. Those things are my mood lifter.

56:13

Amazing prediction. Once again, you have triumphed. Anyway. All right, Scott, let's go on a quick break. When we come back, we'll talk about the return of the Amazon fan phone.

56:17

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57:54

Scott we're back with more news. Amazon is reportedly getting back into the phone business, working on a new device internally known as. Oh my good God, the Transformer. According to Roy. What a bunch of idiots they are. This would potentially be an AI driven phone that syncs with Alexa and could eliminate the need for traditional apps. Oh sure, why not? Details are slim, there's no clear timeline or pricing, and sources say the project could be scrapped. Priorities or finances change. That's a lot of maybes, but let's not forget Amazon's last phone foray. I have not forgotten it since I wrote about its creation and decline the Fire phone, which launched in 2014 and quickly flopped leading to $170 million. Write down and I remember getting sent like it's like the home, the Facebook home. I kept getting sent these things. I'm like what is this? And like I'm calling Steve Jobs immediately because I need to talk to someone who knows how to make these things. Why would Amazon have a phone? I want you to give me the argument why it's a good idea despite their. And I think people fail at things and they come back, but I don't feel like Amazon is my device place. I think they got, they got knocked over in the, in the audible space. I think they got knocked over in the reader space. I mean it's still a business but it's not on fire. It got knocked out by the iPad in a lot of ways. Any thoughts on the phone from Amazon and why give me the argument?

58:52

Well, the argument could be that it becomes a new piece of the flywheel around Amazon prime and that is if you're an Amazon prime plus member you get a very competent phone phone that perhaps has even better bandwidth because Project Kuiper starts to pay off and they have satellite based connectivity. So what this is is potentially, I would imagine in the conference rooms where Amazon Strategy group, who are some incredibly bright people are saying yeah, they need a thing. Well what if, why don't we go after Android and that is we can offer people, oh okay, we can offer people an unbelievable phone for free as part of their Amazon prime membership and then say and get off of AT&T and we'll wrap it all into the greatest loyalty program in history, which is Amazon Prime.

1:00:15

It is indeed.

1:01:03

So I think there's a really solid argument. The problem is this all works on a whiteboard and then people hold these phones, the Facebook phone, the Amazon Fire and they go, I don't like it.

1:01:05

The Microsoft phones.

1:01:16

Yeah, all the handphones and by the way, just a shout out. A colleague of mine who teaches brand strategy at another university called me and said, said saying that Apple shouldn't go into a lower priced computer is all wrong. And he said my views on it were all fucked up and I just want to give him his props. He said that look at all the luxury car brands. They were all shitposted for going into lower end models and it's expanded their share. And I thought that was a really good point.

1:01:18

Think they're going to give people a really good version of it and then you have to buy the shitty Dell version.

1:01:44

Yeah, well all the Porsche purists said they should never launch an suv. They did. It sells more than any other car in the Porsche lineup. And also Mercedes has an A class in Europe. They have, what is it? Not the E, the C class. That's a fair argument.

1:01:51

Well if they don't do it too much. Right? You can't do it too much. You have to do it just.

1:02:03

The VW has the three, the two, the one. Anyways, I just want to acknowledge the point because when he called me and told me this, I'm like, okay, all

1:02:07

right, so this is a good Android now I see.

1:02:13

Thank you, Android. This could be, in my opinion the biggest increase in shareholder value that's fallow is a function of the friction between silos at different companies. The new CEO Disney should have something called Disney and you get Disney videos, you get free merchandise, you get the princess experience. And most importantly, when you come to the parks, it's on only Disney members days where there are no lines and it would be the ultimate loyalty program. And Amazon, if they added telco and a device into Amazon prime crime, I think theoretically it's worth, you know, it's worth a couple billion dollars to investigate.

1:02:15

They don't do that. They don't do that often. You're right. They just like here you go free. Here's. It's like a, it's like a, a club. And you would do that with Amazon because they do deliver really well. They, the thing they're talking about autonomous like the core stuff they do, they do really well. So.

1:02:58

But preloaded free Amazon music, free Amazon Zooks or whatever they're their autonomous is those are cool.

1:03:13

Zoox is cool.

1:03:20

And just say, okay folks, we're going to take care of you. Amazon is arguably the most trusted brand in the world right now.

1:03:21

Yeah, Kuiper they could offer that for

1:03:27

and they say, all right, you don't need to trust us when you're in front of the TV screen or the computer screen. You should trust us as much when you're in front of the phone screen.

1:03:29

The CEO, the one person running at division I'm supposed to meet with him. Anyway, one more quick break. We'll be back for predictions

1:03:38

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1:03:48

Hi, I'm Brene Brown. And I'm Adam Grant. And we're here to invite you to the Curiosity Shop, a podcast that's a place for listening, wondering, thinking, feeling and questioning. It's going to be fun. We rarely agree, agree, but we almost never disagree. And we're always learning. That's true. You can subscribe to the Curiosity shop on YouTube or follow in your favorite podcast app to automatically receive new episodes every Thursday.

1:04:50

Okay, Scott, let's hear a prediction. I'm going to say very quickly, just so you know, at the time of this taping, SpaceX is aiming to file its IPO within a week. And I predict I will not be asked on the board. As you noticed at the beginning, anything.

1:05:20

I predict that people literally don't. If I was your financial, your wealth advisor and I kind of have been for the last few years.

1:05:32

Yeah, you have.

1:05:38

But if I gotten a hold of you 10 or 15 years ago, I would have been like, tone down the anti musk, anti big tech thing and we're going to make hundreds of millions of dollars on boards.

1:05:39

I know, I know. I can't do it. I just said as a Joe player, I wasn't a terrible person. I can't help myself. That was a joke.

1:05:49

You can't. You know when you text me mean things at 2 in the morning, it's not a good idea. And you can't help yourself. You literally can't.

1:05:54

Some of them are very good.

1:06:01

You can't help yourself. I get it.

1:06:02

I can't. I can't.

1:06:04

I get it. I know I shouldn't drink as much as I do.

1:06:05

By the way, speaking of, I was right about these people. I was right. Anyway, your prediction, please.

1:06:08

Okay, so what do we have here? OpenAI is in a five car alarm right now. In the last six months they have. Oh, and by the way, this, this. Have you seen the deals of this financing? To top off the round with, I think it's TPG. They are guarantee a 17.5% return.

1:06:14

What?

1:06:36

Yeah, they're guaranteeing to top up the round in private equity. The deal is along the lines of the following. It kind of makes industrial sense, but it's more of these circular related party deals. They're saying to these private equity firms, if you invest and top up my round, I'll guarantee you a 17.5% return. Now the idea is it makes kind of industrial logic because all of these firms have massive, a massive portfolio company of firms which likely means they're going to encourage these firms to adopt at an enterprise level OpenAI products. So OpenAI goes immediately we get eat

1:06:37

the dog food is what you're saying.

1:07:17

Yeah, we get industrial scale here and because we're going public and Sam's bankers have probably said distinct to the problems you're going to get valuation hundreds of billions or even possibly trillion dollar plus valuation. So he said to the private equity guys, I guarantee you a 17.5% return on your money. The problem is a guarantee at the top of the kind of the capital stack means that the people underneath them, the investors might get squeezed out if they have the first if a decent amount of returns has to go to the top. But it is more of this kind of what I'll call shell game game and as long as things keep increasing it's fine. But this is the kind of thing that could absolutely brush or trickled or

1:07:19

if they don't go people like you, Scott, that's not, that's like a let me pay you to be my friend.

1:08:02

Well this is.

1:08:07

Don't like it.

1:08:08

It's a really. That's the most interesting component of the deal is a you never offer. I have never seen. It's a preferred return that aggregates and would you invest then I would want want for OpenAI. I feel that what I would want to do is the following of just being purely capitalist. I'd want allocation in the IPO because Sam is smart and Sam and his bankers will say okay, the first trade of this is likely going to be 80 bucks so let's price it at 50 so we can say we're the best performing IPO of the year.

1:08:09

Yeah, yeah, they'll do those tricks. That's nothing new.

1:08:41

It's a once in a lifetime branding event, the ipo. So the investment banks have an incentive because they get to buy shares at a discount. They get to give shares to their buddies and institutions at a discount and the firm for a modest dilution, 3 to 5% dilution gets a branding event that they're in the news for the rest of the year as the best performing IPO of the year or a great performing IPO of the year. So they leave.

1:08:43

Quite frankly, SpaceX is going to leave them.

1:09:05

They leave money on the table and it's yet another transfer of wealth from the lower middle class who don't have access to pre IPO or to the IPO.

1:09:07

Don't you think SpaceX will leave them in the dust?

1:09:15

SpaceX in terms of an IPO?

1:09:18

Yeah. That'll get all stuff done.

1:09:20

That'll all be about valuation. Because while SpaceX, while SpaceX has the biggest moats in the history of business, as far as I can tell they're talking about a $1.5 trillion valuation on 13 billion or 14 billion in revenue. I mean that's 100 times revenue. So it's all about pricing. But anyway, so this, where I was headed is the following. It is a five car alarm and Sam and his board are smart, they are focused. First area of focus. Sora, we barely knew you, you're gone. The next area of focus, it won't be a headline item, it'll be euthanized slowly. It is IO and that is the six and a half billion dollar acquisition of Jony I've's company to build hardware. This is the Metaverse. On a smaller level, this is Mark Zuckerberg's consensual hallucination cost Meta shareholders 70 billion. This is going to cost six and a half billion to open AI. It was an all stock transaction. But there is no way. If I am on the board and I am Sam Altman and I'm like, okay, playtime's order. I am losing my core business to anthropic. We need to focus that. They're not going to, they're going to decide to not play in the traffic of hardware. So there's been delays, technical difficulty, unclear product definition, high cost.

1:09:22

I think I'd buy the Amazon phone first. So that's a bad sign because I

1:10:49

wouldn't buy the Amazon brutal category. And then if you look at what's going on here, persistent technical problems. All right, of course, compute constraints always on AI reliability, privacy concerns, interaction with output screens. Basically this isn't right now IO or the division of quote unquote OpenAI's hardware products. It's not just about execution risk. It's unsolved product physics.

1:10:53

I love it.

1:11:17

And the timeline keeps slipping. I've been tracking this originally expected.

1:11:18

You know what, let me give you a piece of advice that I heard a long time ago. Hardware is hard.

1:11:23

Well, it was originally, get this Kara. It was originally expected around 2026 and now they're saying it's not shipping before 2027. Get guess what, it's never going to ship.

1:11:27

Oh, all right. There's a prediction right there. All right, we'll see what happens. Anyway, great job on your prediction. I like this new one. And by the way, next week, I just want people to know. Speaking of predictions, Jeffrey Epstein's lawyer and accountant just told Congress they were never interviewed as part of a formal federal investigation. We're going to talk about this next week because we're not going to let Epstein out of the news either. Trump is making all sorts of hand waving in order to pay it, but this to me was a malpractice on the part of federal investigators. Any you know that they were not interviewed as part of a form. I mean, you might talk to the lawyer and accountant. Seems to me they might know a few things. In any case, we'll see where that goes. We're going to talk about it next week. So I want to get that back.

1:11:36

So can I just have one addendum? The cloud and the silver lining of these Democratic wins. What we need a Nancy, a Speaker Pelosi like figure who understands how to tell the children what. Okay, the grownup is here. This is what you need to do. Do. As good as things are for Democrats on a Senate and on a congressional election level, we are about to snatch defeat from the jaws of victory. And while no one was looking, we're about to elect a president of the fourth largest economy who's going to be a Republican because of the jungle voting construct in California.

1:12:16

We'll talk about that Monday. Let's see.

1:12:55

We are probably going to elect a Republican unless Democrats get their heads out of their asses.

1:12:56

I'll do a little. I've been contacted by every one of those Democratic candidates and also Steve Hilton, who I know well, I haven't heard

1:13:03

from Chad, the sheriff, Gavin Newsom and Chuck Schumer. You need to start promising these Democrats something and getting them out of the race. I literally out of the race.

1:13:09

They also had to cancel a thing. The whole thing is a fucking mess and it's suicidal. It's suicidal. It's really weird.

1:13:21

And by the way, Governor News Newsom, who I am a huge fan of, if you don't show some backroom dealing here and make sure that the next that your heir apparent isn't a Democrat, it's really gonna hurt your chances of getting the nomination.

1:13:28

It is. Okay, before we go, I just wanna say my brother Jeff, who is a friend of our pivot, had emergency surgery this week, heart surgery. He had a blocked. I don't know what, I'm gonna say it wrong, but he had to have a stent put in and it was because he was on Kaiser or something like that, and he went on Medicare and the internist said to him, you should check your calcium levels. Turns out out he had 80 to 90% blockage. It's called the Widowmaker, the issue. And he got it all cleaned out and he's doing great. But one of the things he said for me to tell you is make sure you all check things like that and get a checkup. I just thank goodness that this didn't happen because he would have died of this very suddenly. So I wanted to give him a shout out. In any case, that's the show. But thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We'll be back next next week.

1:13:40

Today's show was produced by Lara Naman, Zoe Marcus, Taylor Griffin and Brad Sylvester. Bernie Anders Todd engineered this episode. Manola Moreno edited the video. Thanks also to Drew Bros. Misavera and Dan Shalon. Nishat Crow as Vox Media's Executive producer. Podcast make sure to follow Pivot on your favorite podcast platform. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine ny mag.com pod we'll be back next week for another breakdown of all things tech and business case care. Have a great rest of the week.

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