PivotElon Musk’s Political Spending Spree Is Over | Pivot
EVERY SPOKEN WORD
150 min read · 29,507 words- 0:00 – 3:29
Intro
- KSKara Swisher
... my Top Gun shirt. See it?
- SGScott Galloway
Oh, God. That's literally the worst spring break I've ever seen.
- KSKara Swisher
(laughs) (instrumental music) Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network, and I'm Tom Cruise.
- SGScott Galloway
(laughs) You're excited about that, huh?
- KSKara Swisher
I am. I'm g- I got the 10 o'clock show. I'm going to the late show. It's three hours fucking long, do you know that? Two hours and 49 minutes.
- SGScott Galloway
Wow.
- KSKara Swisher
I know. Could be a lot of Tom Cruise.
- SGScott Galloway
That is a lot of, that is a lot of Tom Cruise.
- KSKara Swisher
Right.
- SGScott Galloway
You're a big fan though.
- KSKara Swisher
I'm not a fan of him as a person, the Scientology part, but I love all his movies.
- SGScott Galloway
Oh, the whole woke conditioning thing. He doesn't, he doesn't-
- KSKara Swisher
No, it's not-
- SGScott Galloway
... pass my purity test, so I need to condition everything.
- KSKara Swisher
No, I don't think it's a very good group of people from all that I've read. It's not a purity test.
- SGScott Galloway
He's, but-
- KSKara Swisher
Well, neither is the Catholic Church.
- SGScott Galloway
He sounds like a pretty nice guy, though, no?
- KSKara Swisher
He's always... He really sells these movies, I have to say. He's out there. He's in theaters. He, like, he does the work. Uh, he is a very hardworking, massive celebrity I have to say.
- SGScott Galloway
He really is the, kinda the movie star that defines our generation at least.
- KSKara Swisher
Absolutely.
- SGScott Galloway
Um, anyway, I'm a, I'm a... Uh, I don't love Tom Cruise movies, but I'm a huge Tom Cruise fan. I just think he's, he works so hard.
- KSKara Swisher
Tom Cruise.
- SGScott Galloway
I love that he has a certain fidelity to movies and the big screen, and he's trying to promote theaters.
- KSKara Swisher
Yeah.
- SGScott Galloway
And everything I've heard about him anecdotally about people who have interactions with him, is that he's a very lovely guy.
- KSKara Swisher
Yeah, hard worker. Hard worker.
- SGScott Galloway
Yeah.
- KSKara Swisher
That's what I appreciate.
- SGScott Galloway
Yeah. So, yeah.
- 3:29 – 9:49
Trump Admin Attacks Harvard
- KSKara Swisher
excited to go. One quick note before we move on about an extreme escalation in the Trump Administration's war with Harvard. Homeland Security Secretary Kristi Noem, also known as ICE Barbie, and that's a compliment, ordered her department to terminate Harvard's Student and Exchange Visitor Program certification, effectively barring the university's ability to admit foreign students. Harvard says it has nearly 10,000 people in its international academic population. And in an unusually petty move for the Trump administration, which has, specializes in petty moves, uh, they have attacked Harvard in this way that really, uh, could hurt a lot of foreign students. I think probably this will not happen. I think Trump administration will back down as it always does. It's just another salvo that it likes to do publicly. Uh, probably, if they keep at it, it will go to the Supreme Court, um, and which is interesting because four of the nine justices went to Harvard Law School, and two of them also went to Harvard College. The rest went to Yale and other, you know, important universities around the country. Um, I do think that eventually, the Trump administration is gonna pay for this kinda behavior and will lose, lose, lose, lose, lose again in court. Anyway, um, I have a quick update for you on the fake Scott scam that's floating around on Instagram.
- SGScott Galloway
(laughs)
- KSKara Swisher
Um-
- SGScott Galloway
And all the... Kara Swisher's so powerful. (laughs) You connect me with literally, like, uh...
- KSKara Swisher
Top people.
- SGScott Galloway
Anyways, go ahead. Tell 'em the story.
- KSKara Swisher
So you had complained about this. This is fake Scotts, and I think it's absolutely something to complain about. I have the same issue on Amazon with fake Kara Swisher books. Um, they don't take the care to get them down, and I think you made the very salient point that you don't see this in the New York Times or MSNBC or CNBC, but these are-
- SGScott Galloway
Or Snap or even YouTube.
- KSKara Swisher
Anything. What is... Tell them what happens. There's fake Scotts selling investment advice, right?
- SGScott Galloway
A bunch of my friends texted me and said, "Have you seen this?" And some even said, "Should I do this?" And I click on it, and it's an AI-generated Scott saying, "Please sign up for my WhatsApp group," and there's a fee involved, "where I will share with you two to three stock tips every week."
- KSKara Swisher
Right.
- SGScott Galloway
And it was everywhere.
- KSKara Swisher
Good idea for us to do that, but go ahead.
- SGScott Galloway
Well, it was everywhere, and it was a scam. And that is just terrible-... for my brand. And I, I, we purposely, uh, I don't, we don't take crypto investments. We turn down a lot of money, and I'm, we- we're even quite cautious about, uh, doing financials 'cause w- I take very seriously that I want young men to have economic security. And I think there's a bunch of grifters out there that have moved from finance to health, who basically claim they can outperform the market if you just send them your 49 bucks, and they'll give you insider stock tips. Or that you can't trust the industrial food complex, so buy their fucking ridiculous supplement even though they, they, they, they, they failed biology in high school. And I'm very sensitive to the fact that young men can be very seduced by this, and I think, uh, we both take economic viability very seriously in young people.
- KSKara Swisher
Yes.
- SGScott Galloway
And so the fact that I'm out there-
- KSKara Swisher
Only yoga pants for our customers. But go ahead.
- SGScott Galloway
But there's literally probably tens of millions-
- KSKara Swisher
Yeah.
- SGScott Galloway
... of people who have seen me trying to shill a fucking investment-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... form on WhatsApp. That is just not, and most of 'em don't realize it's a scam. They just ignore it. That is not good for my brand. That inhibits my ability to make a living. That hurts my brand equity, my reputation. It, that is the definition of libel and defamation. And they, they can, with u- AI, figure out if someone in your house is about to go to a Beyonce concert, but they can't find (laughs) , they can't take that one ad and p- send out a crawler across their network and go, "Anything saying this is fake, and we're gonna pull it down right away." They could do that in about a fi- if they took two minutes of an engineer's time or two hours of an engineer's time to do it across everyone, they could get rid of all this shit. But instead, they throw up their arms and say, "It's just too complex." And then they send me-
- KSKara Swisher
Or, "We've gotten most of it." That, that's what sets you off.
- SGScott Galloway
That was my favorite.
- KSKara Swisher
Yeah.
- SGScott Galloway
"While some still remains." I'm like, "Oh, okay."
- KSKara Swisher
Yeah.
- SGScott Galloway
"So you've taken the knife 90% of the way out."
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
"But some still remains." Anyways, these people, you texted them. Immediately, they got back to you.
- 9:49 – 22:42
Elon Reduces Political Spending
- KSKara Swisher
a lovely photo. Uh, but first, Elon Musk says he plans to significantly reduce his political spending moving forward, saying in an interview with Bloomberg at the, the Qatar Economic Forum, "I think I've done enough." I think we all think that. This after he poured over $290 million in the 2024 election to support Trump and Republicans. He also spent roughly $25 million on that Wisconsin Supreme Court race that he, like, shit the bed. Uh, the cheese head hat, the whole thing. He shit the bed, essentially. Things got a little testy in that same interview when he was asked about Doge saving less than originally promised. It, the whole thing was friggin' testy. What a little baby, what a little wussy baby he is. Okay, let's listen.
- NANarrator
I wanna ask you about the total amount that you're planning to save through Doge's work. Before the election, you said it was going to be at least two trillion. The number currently on doge.gov is $170 billion. That's a big change. What happened to the two trillion?
- ECElon Musk (in inserted interview clip)
Well, do you expect it to happen immediately?
- NANarrator
Well, is it going to happen? Because Doge is supposed to run till next July.
- ECElon Musk (in inserted interview clip)
But, um, what, what do you say about ... I mean, your question is absurd in, in, in its fundamental premise. Um, are you assuming that, that on day, you know, in, within a few months, there's an instant two trillion saved?
- NANarrator
No, uh, not at all. I'm just asking you, is that still your aim then?
- ECElon Musk (in inserted interview clip)
So, have we not made good progress given the amount of time?
- NANarrator
Is that still your aim, to get to two trillion?
- ECElon Musk (in inserted interview clip)
Have we not made good progress given the amount of time?
- NANarrator
That's exactly what I'm asking. So, is it still your aim to go from 170 billion to two trillion?
- ECElon Musk (in inserted interview clip)
Uh, the, the ability of, of Doge to operate is a function of whether, uh, the government, and this includes Congress, uh, is willing to take our advice.Uh, we are not the dictators of the government, we are the advisers. (screen whooshes)
- KSKara Swisher
This is such horseshit. I mean, he closed down a ton of stuff. He didn't do well. That's all. It's, it's th- just like the Cybertruck, this was a flop so far. Um, and of course Congress has to pass it, but he ran through an- all the government cutting things, closing things, firing things. He had plenty of power. He, and he had the, the president of the United States behind him, so he was running rampant. What happened is, he ran rampant, he did stupid things like the chainsaw thing, he pushed around, and now there's story after story coming out about what a fucking nuisance he was to these people. Ran over Co- Congress, ran over, um, uh, cabinet members, did stupid things, made idiotic mistakes. He's not getting to two trillion. And the entire interview was just ridiculous, saying, "Tesla's doing great." He's just such a, it's such horseshit. This guy is full of horseshit. He, this was a failure. It was too bad. As we all say, good thing to cut things, and, um, he didn't reach his goals, and even the 170 billion dollars is questionable. I'm sure he's cost the, the US taxpayer money, but he got his. He got his regulatory relief. He's gonna probably be part of that golden dome thing. He will probably benefit in lots of ways with Starlink and everything else. So, let's just say, um, he got his. So one headline described this interview as, "A billionaire man-child, Elon Musk, gives his most petulant interview to date." Uh, I think that was correct. Scott, any quick thoughts? And then, uh, we'll talk about, uh, the Tesla part.
- SGScott Galloway
Well, just some data. It, this has backfired. It was initially the best investment anyone had made for a quarter of a billion dollars and sort of the promotion of Tesla and the belief of the markets that this would pay off, because we had gone to a kleptocracy. It's now the rivers have reversed and the tide has turned entirely against him, and this has arguably been one of the greatest brand destructions. And Tesla w- was a great brand. According to Axios-Harris Poll, Tesla has fallen from the eighth most reputable brand in 2021. I mean, that's in the company of, you know, Amazon and Coke and Apple. Well, it's fallen from eighth to 95th. And also, we talked a lot about this, their revenue was down 20%. Do you realize Tesla, despite the fact it trades at 150 times earnings and most automobile companies trade at 10, Tesla's sales are declining faster than any automobile company in the world? They declined 20%. Uh, profits are down 71. Sales-
- KSKara Swisher
Hmm.
- SGScott Galloway
You wanna talk about s- sales declines, down 59%-
- KSKara Swisher
Yeah.
- SGScott Galloway
... year on year in France, 81% in Sweden, 74% in the Netherlands. It's, their sales have been cut in half in Switzerland, 33% in Portugal, and their sales are down by two thirds in, um, Denmark. And, uh, eh, wha- what I don't get is, he's such a, he is a brilliant guy, but w- he's alienated his core demographic about-
- KSKara Swisher
And he's alienated the Republicans. L- you should read these stories.
- SGScott Galloway
Well, yeah, but the Republicans doesn't, he's alienated the wrong people.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
That third- three quarters of Republicans would never consider buying an EV.
- KSKara Swisher
Right.
- SGScott Galloway
So he's cozied up to the people who aren't interested in EVs. And then California, which is the biggest EV market in the US, Tesla sales in the state have dropped almost, have dropped 12% and its market share has dropped almost 8%. A- and, and then let's just be clear about Doge. It's not saving the US money, it's costing money, because one of the recommendations they made was a plan to cut the IRS by 50%, which would essentially lead to a $400 billion increase in uncollected taxes. So if you're talking about effect on the treasury and our receipts, let's give him the benefit of the doubt and say it is 150 billion. Well, but if you lose 400 billion in uncollected taxes, that's a quarter of a, that's a quarter of a trillion dollar net loss to the US government. So you're, you're down about one and a half or two trillion dollars over the next 10 years because Doge has emasculated our ability to collect taxes from the people who know 'em. And I'm writing a newsletter this week called Toligarchs. Tran- I think there's this transnational oligarchy class that's emerging where people get so rich they can afford their own security and their own rights, their only, their own family planning, their own schools, and as a result, they have less of a vested interest in the wellbeing and democracy of their native country. Anyways... And the, the problem is, or w- how this has arisen is the following. And that is, what you see in America, and this has happened consistently, is that as income inequality has, has increased, a smaller and smaller group of people who are unified in their love of low taxes and getting richer continue to weaponize the government. And the result is, as wealth concentrates, political spending capacity increases, which secures policy outcomes that further concentrate wealth, and you enter into a doom loop. The share of wealth at the top 0.1% since 1980 has tripled, their share of wealth. Political spending has increased 17 times in real terms on inflation-adjusted basis. So that means cor- and what do you know? Combined corporate and top, uh, top individual tax rates fell from an average of 58 to 29%. So as the 0.1% gets wealthier over the last 40%, their effective tax rate has been cut in half. So you just see a correlation here. And that is, unless you step in and redistribute income from corporations and the 0.1% to the middle class, they increasingly... And, and I lived this firsthand. It's just, when you're paid not to understand something, it's really easy to not understand it. And people can talk about, oh, income inequality, but at the end of the day, they vote for candidates and give money to candidates who are gonna find a way to continue to cut their taxes. We have to have class traitors. We have to have rich people, uh, you know, FDR was a class traitor, Truman was a class traitor, who turn around to these very rich people and these special interest groups and these lobbyists and say, "No, you're gonna hate me. I appreciate all the money you gave to me, but you're gonna hate me. I'm coming for your ass."
- KSKara Swisher
So, so when, when he asked, was asked about returning to Tesla and his commitment to the, um, the company, Baby Huey attempted his usual brand of awkward comedy. Check it out. (screen whooshes)
- NANarrator
Do you see yourself, and are you committed to still being the chief executive of Tesla in five years time?
- ECElon Musk (in a different inserted clip)
Yes.
- NANarrator
No doubt about that at all?
- ECElon Musk (in a different inserted clip)
Well, no, I might die. (audience laughing)
- KSKara Swisher
(laughs) Um, you know, I think, uh, one of the things that I don't believe is he will stop his, his financial involvement in politics. Back in March of 2024, he said he wouldn't be donating to either candidate in the presidential election. I called that horse shit then, very clearly, uh, that he was obviously gonna back President Trump because it was an existential crisis for him to be atta- for a Harris presidency, and that's exactly what he did, and he lied about it. He just lied about it. Um, his posts on X have become less political in recent months. A Washington Post analysis found under 20% of his posts are now about Doge or politics, while more than half are about tech and his businesses. Um, I- I, this interview was such a disaster. The reporter was trying her best to try to get an answer out of him. And then in a separate t- interview on CNBC, he should just shut up, he also said, "Robo-taxis will be driving around Austin in June, and LA and San Francisco after that." I would not get in a robo-taxi because they haven't had any... They, and even one of the, the people who was doing this said they were years behind Waymo, and I was reticent. I, I, I now go in Waymos quite confidently, but I would never get in one of these. Um, and before we move on, I just want to note that in that CNBC interview, Elon was asked about his plans to combine Tesla and xAI, a merger I predicted a few weeks ago. He didn't rule it out completely. Let's listen to what he said.
- ECElon Musk (in a different inserted clip)
It's not out of the question, but that would have to be something that the Tesla shareholders would vote, would wanna vote for, so.
- 22:42 – 31:54
Joe Biden’s Cancer Diagnosis
- KSKara Swisher
responsibility lies with him. Um, speaking about responsibility, we're learning more about former President Joe Biden's prostate cancer diagnosis. Biden did not receive his diagnosis until last week, and his last known PSA screening, that's what they use to do these, was in 2014, according to a spokesman. That is an astonishing thing. I cannot believe that. Uh, you, you had noted this and I was shocked, again, when I saw that. That information comes amid ongoing speculation about a possible cover-up, including from President Trump, who claims somebody is not telling the facts. He, he would know about that. Medical experts point to guidelines that advise, uh, against PSA screenings for men over the age of 70, I guess. He's the president, though. Though some people are raising questions about whether Biden as president should have still been screened, such as you did. You also spoke with CNN's Jake Tapper on Prof. G this week. Jake is the co-author of the new book, Original Sin: President Biden's Decline, Its Cover-Up, and His Disastrous Choice to Run Again. Uh, let's listen to the clip of when he talks, uh, about what it means for Democrats.
- NANarrator
All of Democrats right now are being blamed for-... the Biden fiasco, and by that I mean his decision to run for reelection and his decision, uh, to hide his deterioration. As our reporting suggests, this was the fault of President Biden, his wife, and his son, and, like, a number... A few top aides. But this isn't necessarily something that could be laid on the feet of every single elected Democrat in the country. My personal view is that until the Democratic Party reckons with that, people are gonna have a very difficult time trusting them on anything.
- KSKara Swisher
So, what do you think about the, the screening? And then tell me a little bit about your thoughts here.
- SGScott Galloway
(sighs) Look, so I've tried to be... I think like a lot of people during COVID, I decided I was a junior epidemiologist-
- KSKara Swisher
(laughs)
- SGScott Galloway
... and what I realized is I had no fucking idea what I was talking about.
- KSKara Swisher
Yeah.
- SGScott Galloway
So when it comes to medical advice, I try to be more measured. And, uh, w- what I'll say as a citizen who gets regular prostate exams and even has a regular MRI that looks and images my prostate, and the PSA test is a blood test. That's it. It costs 100 bucks. I, I... It just seems weird to me that this guy wasn't getting the most robust scans in history and PSA tests all the time-
- KSKara Swisher
As president.
- SGScott Galloway
As president. Your brother immediately reached out to me and said, "It's not unusual for a man of this age to find out in a screening that it is this advanced." And I, I believe Dr. Jeffrey Swisher, who spent a decade of his life studying these issues, over my instincts. Having said that, I, I, I still think this is just incredibly odd, and we don't... There's so much understandable and deserved affection and goodwill towards Joe Biden right now, but this is the reality. He has ruined his legacy. This is what he'll be remembered for. He'll be remembered for the guy who fucked up and got an insurrectionist elected. This is, this is the fine point on his career that will be the thing that he was known for, our years of public service-
- KSKara Swisher
Plus he stopped him and then he got him elected, right? He stopped him initially.
- SGScott Galloway
And he would have gone down a hero. Eh, this was such incredibly poor judgment, and it brings up two issues around how we move forward. The first is, and we talked about this last week, when age... If we're gonna have age limits on the lower end, we need them on the upper end. And two, the Democratic Party needs to recognize that one of the greatest tools we have in history, in terms of our democracy, is the primary process. The primary process is such full body contact violence and incredible competition that it matures not only the right person but the right person for the moment. No one had heard of Barack Obama. No one had heard of Bill Clinton. No party, no... The, the Democratic Party wasn't gonna pick either of those people. But you know what? They just rose every week and did the work, and America fell in love with them. So when the Democratic Party tries to clear Bernie Sanders out of the way for Secretary Clinton, or, or, or Barack try, you have to let, let our primary process run. And the fact, in my opinion, another mistake they made, in addition to this consensual hallucination we all entered in with each other, is that I think they should have had a super Shark Tank-like mini primary-
- KSKara Swisher
Yeah.
- SGScott Galloway
... rather than just anointing-
- KSKara Swisher
You had talked about that. You re- yeah.
- SGScott Galloway
... Vice President Harris.
- KSKara Swisher
I remember.
- SGScott Galloway
I think they could have made it. We... And, and I want to be clear, I don't think we're g- I don't think we're guilty of Monday morning quarterbacking. I was Saturday afternoon quarterbacking.
- KSKara Swisher
Yeah, you were.
- SGScott Galloway
I said have a mini Shark Tank-like primary with the best eight candidates, go from ed... To two debates with eight, then to four, then to two. It would have dominated the media cycle.
- KSKara Swisher
Yep.
- SGScott Galloway
And by the way, Trump was dominating it because they were afraid to let Joe out of the basement.
- KSKara Swisher
Right.
- SGScott Galloway
We would have... Democrats would have dominated and, and who knows? Maybe it would have been Vice President Harris that would have matured. I don't think she would have, but the woman-
- KSKara Swisher
She needed more time.
- SGScott Galloway
Well, eh, eh, the bottom line is, uh, we don't want to acknowledge this, she's not a great candidate. I think she did a good job given the hand she was dealt with, but this is a candidate who didn't make it to Iowa four years earlier, which says to me America didn't think of her as a great candidate. If you had-
- KSKara Swisher
Yeah. I thought she did a lot better. The first 60 days I thought were terrific. I thought-
- SGScott Galloway
Look, I, I-
- KSKara Swisher
... for her.
- SGScott Galloway
... I, I think given the hand she was dealt, Vice President Harris... First off, I think one of the great performances in political history-
- 31:54 – 38:25
House Passes Tax Bill, Stocks Slide
- KSKara Swisher
bond market gets a little yippy again. Scott, we're back. Republicans in the US House of Representatives passed President Trump's big, beautiful tax bill on Thursday morning with a 215 to 214 vote. I mean, it was one, one person. The stocks slid this week with the DOW dropping over 800 points on Wednesday as bond yields spiked following a weak auction of the 20-year Treasury bonds and concerns about the budget bill. I mean, this is just what you're talking about, selling out the, the poor to feed the rich. The 10-year and 30-year bond yields also jumped sharply, a very disturbing indicator. The 30-year rising above 5% to its highest level since October 2023. The sell-off isn't just a US story. Bond yields are rising globally too, with Japan and the UK seeking similar moves. The bond market got yippy back in April as Trump put it, which led him to pause the tariffs. Um, I'd like you to explain what's going on, uh, without a penis joke and as pithy as you can be-
- SGScott Galloway
Yeah.
- KSKara Swisher
... for the people who don't understand it.
- SGScott Galloway
Well, look, this is, and several non-partisan economic think-tanks have said that this, this tax bill is the greatest transfer of capital and, you know, money from poor to rich in history. And adding five trillion to the debt, which will increase interest rates for everybody and young people. It's basically a deferred tax on young people such that, uh, the, the ... It's very simple to understand this tax cut. The top 5% are getting a tax cut, the bottom 95% are getting a tax increase. And I was hopeful that this thing was gonna be rejected. I thought the arguments were just so insane and cruel that they weren't going deep enough in the cuts. But effectively, uh, I was with Anthony Scaramucci last night, who I just continue to be so impressed with. I think he's so thoughtful. And he brought up something so interesting, he said, "Look, you had ... Effectively, you had ... Republicans were fiscal budget hawks."
- KSKara Swisher
Yeah.
- SGScott Galloway
"They were very concerned about the deficit. And Clinton, who was a moderate, figured out a way to have a surplus. And Al Gore said, 'With my economic plan, over the next eight to 10 years, we're gonna have four to $5 trillion in surpluses.' Bush won, and that was really the pivot point, 'cause what Bush, Bush did was the following. He convinced, he decided - and the American public has gotten used to this - he decided, 'We can have our cake and eat it too.' And what he did was, he decided to go to war and lower taxes at the same time. And nothing really happened in the short term to the markets 'cause we have built up so much, uh, borrowing capacity 'cause of the responsible fiscal approach of our predecessors, and the result is, when we decided during, uh, uh, W's administration that we could cut taxes and spend more, we began, um, essentially a downward spiral of fiscal irresponsibility that Democrats and Republicans have both taken a play from. That the haunting or the negative impact of deficits don't come to fruition during my administration, so whatever, I'm just gonna keep everybody happy. I'm going to ... The far-left and the far-right meet around, 'I know, let's cut taxes,' and 'I know, let's increase social spending.' By the way, government expenditures are up $200 billion since Trump took office per- compared to last year. And also, Biden, despite railing against th- the billionaire class not paying enough taxes, during the Biden administration, taxes went down. So this is a continuation of the same irresponsible fiscal behavior, but this is a focus, and this kind of embodies what America has become a- about, and that is the bottom 95% are here to optimize the lifestyle and economics of the top 5%. And one of the reasons we do this is 'cause the Republicans are very good at representing the top 5% and convincing the top 50 that they'll be there, that Americans are so optimistic, they believe at some point, they might be in the top 5%. And because Democrats, quite frankly, just don't wanna be serious about, about ... Neither side wanna be serious (laughs) about either raising taxes or cutting spending. Ne- neither is willing to have a serious conversation. The dem- best the Democrats will do, will say, "At some point, when I interviewed leader, Leader Jeffries, um-"... uh, with Jess. He said, "Well, at some point, we should probably have that conversation, but no Democrat will stand up and say, 'We probably need to means test Social Security.'" The only person I've found who's being kind of responsible is Senator Chris Murphy. He's actually naming programs we should, we need to take a hard look at, but th- th- just-
- KSKara Swisher
Well-
- SGScott Galloway
... this is a transfer of wealth.
- KSKara Swisher
... bond market. Explain what the bond market's saying very quickly.
- SGScott Galloway
Oh, the bond market is saying that this irresponsible fiscal behavior makes that, means that lending money to US companies and to the US government is now riskier, meaning that you need to get paid more to take that risk.
- KSKara Swisher
Right.
- SGScott Galloway
And effectively, what you have is, um, the bond y- the 30-year treasury is at 5.09%, and that's the greatest or the highest it's been since October of '23, and this impacts... This means you're paying more for your student loans, your credit cards, your mortgages, and companies are less inclined to borrow money to grow because it's more expensive. In other words, everything everywhere gets a little bit more expensive. Now, that's okay if you're the 5% getting a huge tax credit because, uh, I don't have student loans. My mortgage, if it goes up 25 bps, that still will be overcompensated by the tax cut that I will get. But the n- bottom 95% see their taxes go up and see an increase in costs across their debt instruments, and their kids are really gonna have a tough time because essentially ha- you know, uh, uh, th- the government... The fastest-growing expense line in the government budget right now is the interest on our debt. It's not investing in infrastructure. It's not social services to keep seniors out of poverty. It's... Uh, uh, so we're moving towards, and this is how nations fail. Nations don't fail because they get invaded. They fail because they go broke.
- KSKara Swisher
Go broke. That's what we're doing.
- SGScott Galloway
And-
- KSKara Swisher
And we're not creating the economic opportunity because-
- SGScott Galloway
That's right.
- KSKara Swisher
... we have, we're paying interest rates. That's r- it's usury against ourselves, which is really astonishing. Anyway, we'll see what goes on. They're gonna pass it, but that was a tight vote. I, you know, again, I have to insult all the congressional Republicans who pretend they're hawks. Fuck you for voting for this. Like, if you really cared, you would do something not like this, but you did it anyway. I don't know what deal you got or whatever promise, but it's
- 38:25 – 48:24
Jony Ive Joins OpenAI
- KSKara Swisher
all nonsense if you don't stick to your guns on this stuff. Um, iPhone designer Jony Ive and his design firm are taking over creative e- design at OpenAI, this is an interesting story, speaking of expansion, to develop consumer devices and other products. Ive's, Ive's design firm and OpenAI's, uh, CEO, Sam Altman, have reportedly been working on a device that moves beyond screens, including headphones and other devices with cameras. Ive will also work on future versions of ChatGPT, audio features in its OpenAI's app. Ive also leads Ayo, a company founded to design and develop a new family of AI products. OpenAI will require Ayo in an all-equity deal valued at $6.5 billion. So here we are. We have Jony Ive coming back, the obviously famous iPhone guy, um, aluminium. Um, uh, I just want to note, I spoke to Ive at Code in 2022. He was on a panel about Steve Jobs with Lorraine Powell Jobs and Tim Cook. It was the last Code session ever, and I was... Because Jobs was the first one. Um, I asked him about intentionality and responsibility when designing tech products. Let's take a listen.
- JCJony Ive (in short inserted clip about AI / unintended consequences)
There will always be unintended consequences, some of them, um, wonderful and some of them not wonderful. And, and I think the issue is, is just how, you know, your, your decision in terms of what responsibility you need to shoulder. I think the more powerful... I mean, there's wonderful historic, um, precedent for powerful tools, um, having that, you know, that, um, ability to be used in both ways. Um, but I think it, it's, you know, the consequences, uh, at the end of the day, I, I think it comes down to how you view your responsibility.
- KSKara Swisher
Yeah, he's a very articulate person about design. He also insulted the current, th- the cu- there was a Humane pin, a couple of pins. He thought they sucked. Um, but is it too early in the process here at OpenAI? They're clearly, as you noted, going consumer if they're bringing in Jony Ive. And I will note, Ive and Altman are very close friends, and again, the picture they took together was really kind of odd and interesting, looked like a, they were... It was like an engagement photo in the New York Times. What do you think about this?
- SGScott Galloway
Well, it is a big moment in business history because this is now the most expensive acqui-hire of all time-
- KSKara Swisher
Yeah.
- SGScott Galloway
... at six and a half billion dollars. And at just 55 employees, that's 120 million per employee.
- KSKara Swisher
Yeah.
- SGScott Galloway
Actually, no, the biggest... Number three was Instagram. I think it was 20 people, uh, billion, so 50 million. This is now... I was wrong. This is now number two at 120 million per employee. Number one was Meta's acquisition of WhatsApp, which was purchased for over $300 million per employee. But this was an acqui-hire. They're getting stock. I don't think they're getting cash, but even if it gets cut in half or by 75%, I, I think OpenAI is dra- dramatically overvalued right now. But this is an acqui-hire, and I can see why... The justification is they got, they got a lot of press, a lot of awareness today. Quite frankly, this isn't a, as big a story as Google's, uh, announcement of some of their AI products yesterday. OpenAI stepped on it.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Basically-
- KSKara Swisher
Ah, yes.
- SGScott Galloway
... it took the oxygen out of the room.
- KSKara Swisher
Good point.
- SGScott Galloway
It was... I don't know if they planned it, but it was quite brilliant. As soon as Google came out with this, they came out with this, this loved picture of them, and Jony Ive is a very compelling, charismatic guy, and they stepped all over-
- KSKara Swisher
They did.
- SGScott Galloway
... Alphabet's big announcement, which, by the way, is a lot more meaningful- (laughs)
- KSKara Swisher
Yeah, that's a jobs move.
- SGScott Galloway
... in terms of tech news.
- KSKara Swisher
That was a jobs move.
- SGScott Galloway
Yeah.
- KSKara Swisher
You know?
- SGScott Galloway
They stepped on it. They basically-
- KSKara Swisher
Yeah.
- SGScott Galloway
... they basically said, "Now back, back, back of the bus."
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Um, in terms of your story, uh, it... Look, good for Jony Ive. He's a, he's a visionary. This is him saying that if we can come up with a better user interface or some sort of hardware product, it signals to the market that there... more leadership. Is it worth six and a half billion dollars? That's a 2% dilution at a $340 billion... I mean, that's real fricking, uh, um, dilution, but if it gets them awareness and they can end up having a cleaner user interface on their search or-
- KSKara Swisher
They need it.
- SGScott Galloway
... whatever product, you know, good for them. So...Look, I, I think it was a risk worth taking.
- KSKara Swisher
Talk about the consumer. The con- 'cause they're obviously leaning, and Jony Ive is the, probably the greatest designer in consumer technology history, right? One of them. I mean, beh- possibly the one. Um, and so this is the idea of how do you make AI useful, right? And so a lot of it is very kludgey, how you use AI. And those pins were just ridiculous. We made fun of them. Um, but there has to be some way because I have to say, I've been noticing, I mean, you use AI all the time. I'm really using it. I don't use Google Search anymore.
- SGScott Galloway
Mm-hmm.
- 48:24 – 54:07
Google AI Mode Roll Out
- KSKara Swisher
a quick break. When we come back, Google introduces AI Mode. Scott, we're back. Google has announced it will roll out its AI Mode, the new... It sounds so scary. A new search feature which will function like a chatbot to all users in the US. The feature will include personalized and automated email replies, can automatically purchase items when they're on sale, and with a new addition, uh, can click around the web for y- uh, for you, like to book travel. This is the idea behind all this stuff. For now, AI Mode will just appear as an option inside of Google Search. However, the group of the biggest news published in the US expressed disapproval in a statement on Wednesday saying the new feature deprives publishers of traffic and revenue. No shit. An internal document disclosing Google's antitrust trial this week revealed that the company decided against making publishers, asking publishers for permission to have their work featured in AI search features. Uh, talk a little bit AI Mode. I mean, again, they've got to, um, uh, they've got to, uh, this is, they've got to fight back 'cause they sort of are, have the pole position being the leader in search. They should be dominating this, and they're certainly not, um, although they're cert- they've certainly got a lot of power. So, talk about, would you use AI Mode to replace your other apps? I find myself using Google a lot less than a lot more in my experience, and I'm s- shifting over to ChatGPT and whatever's on Apple. And I ce- I guess, I'm, I'm just about to shift from Google Maps to A- to Apple Maps 'cause they've gotten as good, for example.
- SGScott Galloway
Hmm.
- KSKara Swisher
So, thoughts?
- SGScott Galloway
Well, the metaphor I use is that Google is big box, everything at the lowest price.
- KSKara Swisher
Walmart.
- SGScott Galloway
But there's some decision calorie expenditure. You have to decide which, which of the 45 brands of peanut butter you want. Whereas AI, especially retail, and so we're not gonna give you ans- every answer, we're just gonna give you the three best toasters or the one best, and that's specialty retail. I think there's room for both, but specialty retail took market capitalization away from big box, and I think that's gonna happen here. Having said that, I actually like the chat-like interface with Google Search. I use it. I find it's now at the top. They're integrating into the search, and they're saying, "Look, if you wanna go down the aisle and pick out which of the 100 toasters is fine, but we're doing, like, similar to what AI does, we're trying to at least start with what we think is the best toaster or the best answer." I also, one of my predictions in October for 2025 was I called it The Empire Strikes Back. I think, I think Alphabet is about to strike back, and I think still the largest concentration of IQ and even IQ related to AI is in fact at Alphabet. And also, the scale they have is, uh, uh, uh, uh, the scale they have, so just, just one piece of data here. There are 373 times more queries on Google than on OpenAI right now. Now granted, their search has declined, but I still think that Alphabet with their I- their IP, their IQ, their capital, and the interface they have, is still, I just, I think it would be very dangerous to count Alphabet out. And I believe that Alphabet's market cap will go up, and I think OpenAI's is gonna go down. And when I saw that product release yesterday of the different things, their, you know, their AI Mode, the chat-like interface, um, I think that, I, I thought it, I, I was blown away by that (laughs) for the, that, those product releases yesterday. I think it's really incredible-
- KSKara Swisher
Yeah.
- SGScott Galloway
... what they're doing.
- KSKara Swisher
So d- did, did they not get stepped on? How do you look at that?
- SGScott Galloway
Oh, from a PR standpoint, they lost.
- KSKara Swisher
Yeah. Okay.
- SGScott Galloway
I mean, one guy, Jony Ive, and his $6.5 billion acquisition is the bigger news today. They released so much stuff that I think a lot of the stuff kind of stepped on each other. I would have paced it out, uh, and had a series of product releases, but some of the things, like, eh, basically putting a movie studio (laughs) on your phone, some of the, the, the stuff that feels like Midjourney but better, I, it just, some of the stuff they announced yesterday, I felt like I needed a few hours to really digest and understand, but I just got the sense they have all of a sudden, that they got the memo that they're behind and they need to catch up, and I think the distance between, that they're lagging OpenAI substantially narrowed yesterday, is how I, I w- did, did you see it and what did you think about it?
- KSKara Swisher
Uh, I think OpenAI's principal competitor is Google. That's it. That's it. I don't, I don't... Meta from the outside with the Open stuff, and they're certainly a player, but if I had to, the top three are those three, absolutely. Um, I did see it, and I do use, I, I think what I like about n- Google Search, and I still, I still use it, I'm just using it less, just slightly less. Uh, I c- I can, I wa- I feel my patterns, right? 'Cause I went, Google was the go-to period, and now it's not the go-to period. Uh, but I do like when you search for something, the questions they add, like, like, it, it anticipates your next question of why this is this, um, and why this is this. And so I like that. I think, I think Search is a lot more use- searchable and useful, and I t- never go down below the first six inches, right? Of the whole thing. I, they usually get my answer to me pretty quickly. Um, and so that's, that's great, except for everyone else below the line, right? Um, they are deploying it well. I, they still, still have a problem with design, you know? I, I always thought this was Apple's to lose in terms of delivering. I, Apple I don't think is...... doing anything that's really fantastic in terms of AI deployed to help me through my day. Uh, I think Chat PT- GPT is much more helpful, um, and, and I think they're kludgey too. I think they're all kludgey. So we'll see. I think obviously Google's, I think you're absolutely right. He- it's the empire strikes back, and they have to. And so they
- 54:07 – 1:04:14
Democrats Still Want a Joe Rogan
- KSKara Swisher
have to get more dynamic, I suspect. Anyway, um, let's move on to the last thing. Democrats still want a Joe Rogan, Scott. Uh, since their loss in November, donor retreats and pitch documents have been full of asks for rich backers to contribute to the party's efforts to develop an army of influencers. Efforts include American Bridge, one of the largest Democratic donor networks, which has launched a plan for a nonprofit called Achieve Narrative Dominance, and aims to have a budget of over 70 million dollars. Project Echo, a new four-year, $52 million influencer program from the progressive nonprofit American Way, and several other smaller projects looking to amplify left-leaning influencers. Um, I'm just looking at the top charts. I'm just using podcasts, because there's lots of ways to influence on all, all the different platforms. But actually, Joe Rogan's dropped rather considerably. He's now down at six. Um, I think left-wing ones or left or softer ones are near the top. Uh, Good Hang with Amy Poehler is really burning the charts these days. The Daily is still up there. Obviously Megyn Kelly's still up there. But I gotta say, a lot, it's, it's not so much a right-dominated, um, uh, thing. Tyle- uh, Tucker Carlson's up near the top, but so is Michelle Obama right next to him. MeidasTouch is right there, um, along with, um, things like Diary of a CEO, you know, more the- or the crime ones that are up to the top. So, you know, I feel like, um, it's a mixed bag these days on a lot of these shows. Um, I don't know. What do you think? Should they try to do this? It seems kind of silly. It's sort of like making Fetch happen.
- SGScott Galloway
Yeah, I, I do think they dominate. There's been some ... So I think the, first off, I, I, I-
- KSKara Swisher
Pivot is 76, just so you know, in the world.
- SGScott Galloway
What is?
- KSKara Swisher
Pivot.
- SGScott Galloway
Pivot? We're 76 in the world? Yeah. Um-
- KSKara Swisher
Yeah, we're top 100. We're in the top 100.
- SGScott Galloway
Watch out, 75.
- KSKara Swisher
(laughs)
- SGScott Galloway
Um, the- but also we get hard-
- KSKara Swisher
We're higher than Charlie Kirk, so.
- SGScott Galloway
Well, but here's the thing. When you're Democratic, we're, you know, we're seen as center left to crazy left.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Uh, I won't say who's who. Um, but-
- KSKara Swisher
You.
- SGScott Galloway
(laughs) We have ... (laughs) I like that you said I'm a-
- KSKara Swisher
You've become much more liberal.
- SGScott Galloway
I'm a San Francisco lesbian.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Anyways-
- KSKara Swisher
I'm just saying.
- SGScott Galloway
... the, um, the, uh-
- KSKara Swisher
Prop G is 87. I'm just... Sorry, go ahead. (laughs) Keep going.
- SGScott Galloway
What's Pivot?
- KSKara Swisher
Uh, Pivot is 76.
- SGScott Galloway
And Prop G's 87.
- KSKara Swisher
Yeah.
- SGScott Galloway
I love that you threw that in.
- KSKara Swisher
I'm just saying.
- SGScott Galloway
Oh my God, that's such a Kara Swisher thing. Oh, by the way-
- 1:04:14 – 1:12:06
Predictions
- KSKara Swisher
all right, one more quick break and we'll be back for predictions. Okay, Scott, let's hear a prediction.
- SGScott Galloway
My prediction is that, um... uh, it goes back to a prediction I made in October of last year. And my prediction is The Empire Strikes Back. And I, I just want to be clear, my financial advice to anyone, especially a young person, is hope you go double platinum or sell your company, but just in case you don't, save 3% to 5% of your salary in a tax advantaged vehicle in low cost, diversified index funds, not only in the US but across the world. And by the time you're my age, even if you haven't gone double platinum or sold your business, you're gonna be fine. And try to resist the temptation of believing you're smarter than everyone else and do stock picking and limit that to 20% or 30%. And I do think it's worthwhile to take some of your money and do stuff 'cause it forces you to learn about the market. And also, quite frankly, it's fun. Anyways, that's my big asterisk there. Having said that, my prediction is that, um, Alphabet is gonna outperform the market. And if you look at Alphabet right now, they have so many incredible businesses. So the Google Cloud is a, basically a $43 billion business going to 50. And if you put the same multiple on that business that Oracle gets, you get about a $400 billion, a company worth about $400 billion. YouTube, which is essentially the biggest streamer in the world, if... it does $54 billion in business. If you apply that Netflix multiple, you get a 650 billion, so at $1.1 trillion. Waymo, in my opinion, let's not even count that. Uh, but I still think... I think that's worth a lot of money. I think the autonomous war is about to break out and the leader is going to be Waymo. And if they spin that out, I think that'll get a huge valuation. So essentially what you have is, at the most conservative level, Google is being...... Google's being valued at, uh, about 800 billion to a trillion, or four to five times revenues. And Chipotle and Coca-Cola ta- trade at six times sales, so, you know,, Cava trades at 10 times sales. So, a $200 billion, a $200 billion tech business that grew at 13% last year does not deserve a lower multiple than Coca-Cola merch- a mature food and beverage firm with less than 50 billion in revenue that grew 3%. So, if you do a sum of the parts analysis, it's undervalued. So, the question is, well, why is it undervalued? And the, the two reasons I think are one, the existential threat posed by OpenAI, which is a threat, but I think it's been overestimated, and two, the likelihood of antitrust and a breakup, which I believe would actually be accretive to shareholders if they were forced to spin some of these companies, 'cause they would be unlocked from this conglomerate tax that the company is paying right now. And my final point here is that right now Google trades at a PE of 19. The S&P 500 with its drawdowns trades at 24. So, take an average company in the S&P, a PNG or a Dow. Like, I don't know what company sort of embodies the S&P, but those are both great companies. But any average, quote-unquote, "average" company in the S&P is not nearly as impressive, isn't growing nearly as fast (laughs) , doesn't have nearly the margins of an Alphabet.
- KSKara Swisher
All right.
- SGScott Galloway
So-
- KSKara Swisher
Sundar Pichai thanks you.
- SGScott Galloway
Well, I really think this company of all of the big tech right now is the most undervalued, and it's being overly punished because of this existential threat of O- OpenAI and the notion of antitrust, one, I think is overstated, I think they are absolutely striking back in terms of AI, and two, I think antitrust, if it, if it, the law was passed and they had to spend something, would actually be accretive to shareholders. There is no reason. Alphabet, at the end of the day, is a much more impressive company than your average S&P company, and yet it's trading at 18 or 19 versus, uh, 25. And it's traded at an average of 26 over the last five years. And even this year, even with its bump up yesterday, it's down 12% year-to-date. It's, this is an impressive company that e- some, I think, is undervalued.
- KSKara Swisher
So, so interestingly, um, because Sundar Pichai is sort of never mentioned. You know, you give Satya lots of props. He's kind of a plodder. I know him very well. I've known him since he was a young, um, product manager on a bunch of stuff at Google. Um, he's kind of a plodder. He's always thought of as, doesn't make decisions fast enough. He certainly isn't a hand-waver about himself. You know, he's quite, he's a lovely person in, in terms of, of being, um, he's just a nice guy. He's just a really nice guy. So, he doesn't get the kind of props, and you're right, um, uh, it's, it's a difficult company to tell the story of 'cause there's so many parts of it. So, that's an interesting prediction. I think that's, that's interesting. But I, I will note, I use Google a lot less than I did. I don't know why. Um, but you're right. They, they have a lot of, they, they really, it's theirs to lose in many ways. But it's good they have competitors.
- SGScott Galloway
Let me, let me bring in a totally unrelated topic.
- KSKara Swisher
Okay.
- SGScott Galloway
So, Sundar Pichai and-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... Satya Nadella, t- two guys who created unbelievable market cap-
- KSKara Swisher
Uh-huh.
- SGScott Galloway
... hundreds of thousands of high-paying jobs, incredible ecosystem, incredible shareholder value. Uh, Sundar's from Madurai, India, and, uh, uh, Satya is from Hyderabad, India.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
I- the, the, the fact that we are not saying to every Indian (laughs) , "Co- golden visa for anyone?" I can tell you, and I get, I'm being, I'm being a racist here. I think the Indian population that immigrates to America is some of the most accretive, positive human capital flow in history. Walk around the halls of Stern. These Indian-Americans, these people who got to IT and then decided of all their options to come to America, they are a gift to America (laughs) .
- KSKara Swisher
At one point, uh, w- the, uh, the head of Microsoft, Sundar was a name that was floated as the head of Microsoft also because he hadn't gotten the CEO of Google job. Um, but, uh, yes, they're both really remarkable, uh, citizens of the United States and also immigrants. Um, and, uh, you know, uh, I've had lots of really interesting discussions with Sun- Sundar about the Tr- anti-immigration Trump stuff. But he's a quiet leader. We'll, I think he'll probably, you're right. The- it's theirs to lose. That's a really interesting prediction. My prediction-
- SGScott Galloway
Yes.
- KSKara Swisher
... is that at 10 o'clock tonight, Kara Swisher will be so happy 'cause she's watching.
- SGScott Galloway
Oh, you're gonna? I'm curious. You gotta text me-
- KSKara Swisher
(laughs) .
- SGScott Galloway
... and tell me what you think.
- KSKara Swisher
10 o'clock. I'll, I'll text you at 2:00 in the morning 'cause it's a three-hour movie. Anyway, 'cause it'll be, like, a half an hour of previews, I'm sure. Anyway, I'm so excited. I've got the, I bought the popcorn in advance and the drink, and I'm very excited to watch-
- SGScott Galloway
That's very exciting.
- KSKara Swisher
... Mission: Impossible Final Reckoning. Anyway, uh, I feel like an ad for them, but I don't care. I love that movie. Anyway, I love the, the series. Anyway, uh, we wanna hear from you. Send us your questions about business, tech, or whatever is on your mind. Go to nymag.com/pivot to submit a question for the show or call 855-51-PIVOT. Uh, okay, that's the show. Thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel, which is growing handily. Scott, we're actually dark next Tuesday for Memorial Day, but we'll have a great episode of Stay Tuned with Preet in our feed. We'll be back next Friday. Uh, Scott, read us out.
- SGScott Galloway
Today's show was produced by Laura Naiman, Zoe Marcus, Taylor Griffin, Kevin Oliver, and Corinne Roth. Ernie Neider tot engineered this episode. Thanks also to Drew Beros, Miss Saverio, Dan Shalon, and Kate Gallagher. Nishad Kurwa is Vox Media's executive producer of podcasts. Make sure to follow 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/pod. We'll be back next week for another breakdown of all things tech and business. Kara, enjoy the movies.
- KSKara Swisher
Hey, I have a little favor to ask you. Pivot is planning for the future of the show, and we want our listeners to be part of the conversation. That's why we're hoping you'll help us out by filling out a brief survey. Your feedback will help us figure out what's working, what's not, and how we can make Pivot even better. Just visit voxmedia.com/survey to give your feedback. That's voxmedia.com/survey.
Episode duration: 1:12:06
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