PivotInside Elon Musk’s Obsession With Building a ‘Legion’ of Super Babies | Pivot
EVERY SPOKEN WORD
135 min read · 26,724 words- 0:00 – 10:03
Intro
- KSKara Swisher
Elon, you are a sick puppy. I have to tell you, one sick puppy. And I feel bad for these women, I feel bad for these kids. (instrumental music) Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
- SGScott Galloway
So when I'm in New York every morning, a ritual for me is I make coffee and I order a quiche, a blueberry muffin, and a chai latte from Baltazar.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
And then I go and I have my morning ritual, as in my sit down. You know, I like to stay regular. And then the doorman will put the Baltazar delivery in the elevator. And I heard the elevator door open, and if I don't get it-
- KSKara Swisher
Yeah.
- SGScott Galloway
...it goes all the way back down, and I'm always worried that someone's gonna steal my chai latte from Baltazar.
- KSKara Swisher
Okay.
- SGScott Galloway
And so I literally-
- KSKara Swisher
I know where this is going, but okay.
- SGScott Galloway
...with all the grace and strength of a jungle cat-
- KSKara Swisher
Yeah.
- SGScott Galloway
...I leapt up from the basin, and at that moment, it dawned on me, I'm an astronaut.
- KSKara Swisher
(laughs)
- SGScott Galloway
And in between the time (laughs) between my flight between the basin and the ceramic-
- KSKara Swisher
Uh-huh.
- SGScott Galloway
...I realized we're all one part of the same species, Kara. We're all-
- KSKara Swisher
Oh, Katy Perry.
- SGScott Galloway
We're, why can't we just love each other?
- KSKara Swisher
Oh, man.
- SGScott Galloway
And, and I, I, I recognized when I got back to Earth, everything had just changed for me, Kara.
- KSKara Swisher
Yeah.
- SGScott Galloway
Everything had just changed.
- KSKara Swisher
Yeah, did you kiss the ground? Or kiss the basin?
- SGScott Galloway
Can you get over-
- KSKara Swisher
Kiss the basin?
- SGScott Galloway
...how much shit these women are getting?
- KSKara Swisher
Oh my God. But can I tell you, I'm sorry to say, deserved. I, like I was trying to see the goodness in it.
- SGScott Galloway
Wow.
- KSKara Swisher
It, it's because they, they won't stop defending themselves when something was just, they should shush, they... And also, let me say, I know they did some stuff for women in STEM, but they're talking about themselves and not girls and women in tech, especially when people are getting cut. It's just the, uh, uh, it's, they just need to stop talking.
- SGScott Galloway
There's so much about this I love.
- 10:03 – 17:44
Trump Calls Out Fed Chair
- KSKara Swisher
important thing, President Trump has lashed out again at Fed Chair Jerome Powell saying Powell's termination cannot come fast enough. The attack comes a day after Powell warned that terrorists could create a challenging scenario for the Central Bank as it decides whether to control inflation or support economic growth. I mean, cha- that's like the calmest thing, challenging scenario is like a calm way of saying, you know, man the- man the barricades. Let's listen to what Powell said exactly about the Fed's independence too, speaking at the Economic Club of Chicago.
- JPJerome Powell
So our- our independence is a matter of law. Um, Congress has i- in our statute, we're not removable except for cause, we serve very long terms, seemingly endless terms.
- NANarrator
(laughs)
- JPJerome Powell
Um, so it's, it, we're protect- protected in the law. So, you know, Congress could change that law but there's, I don't think there's any danger of that. Uh, Fed independence has pretty broad support, uh, across, uh, both political parties and in- in, um, both sides of The Hill. So, I think that's not a problem.
- KSKara Swisher
Powell's term ends in May 2026. Oh God, I'm so nervous about that. So, he- he keeps threatening to fire him and he's done it at the FTC which had, uh, level of independence and he just does it. Um, obviously he's doing it with everything like whether it's Carvert or- or- Mm-hmm. ... we'll get to that in a second. Um, do you have much confidence in staying power of the Fed's independence? And the Trump administration is doing it at the Justice Department. Pam Bondi has lost her- her m- ever-loving fucking mind by the way, speaking of which, her appearances this week have been embarrassing. Um, can you talk a little bit about the, what- what happens here? Because he's, hasn't, he just runs through stop signs like no problem whatsoever.
- SGScott Galloway
Um, (sighs) I mean I've just been, I- I have such a inability to predict what's gonna happen here. There's been so many things that have been disqualifying what I thought were red lines that they've just blown through and people are sort of, I don't know, seem fairly numb to. But if you wanna talk about a move that could take the market down five or 8,000 points, it's fire...... Chairman Powell, because the separation of central banks from politics is one of the key stabilizing factors in the Western economy. Because what you have is a group of people who, leaders, elected leaders, who panic, and the reason they usually get voted out of office can almost always be reverse engineered to economic strain on the citizens. And a, a quick kind of fix or sugar high to get you out of trouble would just be to flood the market or lower interest rates, which might be over the medium or, or the long-term absolutely disastrous. So Western nations, I mean, I think every Western nation through central bank or their fed chair whatevers, or I just interviewed Prime Minister Carney. He was the first non-Brit to be the head of the Bank of England.
- KSKara Swisher
Yeah, he wa- he's a-
- SGScott Galloway
But they-
- KSKara Swisher
... he's a big deal.
- SGScott Galloway
... they all, almost from all pita- political persuasions, all agree that if we subject these people to political pressure it's not, it could be disastrous for the economy.
- KSKara Swisher
Right.
- SGScott Galloway
Because these people have to look at the data and make very important decisions about interest rates that affect currency, flows of capital, and the temptation to just put pressure on, you know, the fed chair and say, "Lower interest rates, I need a sugar high right now. I need the markets to go back up," whatever it is. And then you might end up with crazy inflation or stagflation. So the independence, I, I don't, I think he's gonna back down because just the same way he blinked last week when he saw the tenure spike 50 basis points, uh, I think someone will say, "You do this. Hold on tight when the market opens tomorrow at 9:00 AM."
- KSKara Swisher
Yeah.
- SGScott Galloway
Um, so I don't even think it's, I think they've decided the courts will side with them, who cares.
- KSKara Swisher
Right.
- SGScott Galloway
We got a court order to turn around a plane, we got a court order to bring someone back and we wanna claim... We can bring Katy Perry back from space but we can't bring a person we sent incorrectly to these El Salvadoran prisons. By the way, w- they brought people back initially, they brought back women-
- KSKara Swisher
They did, women.
- SGScott Galloway
... and some Venezuelans. So, but I don't think, I think the thing that stops him from doing that, right now Chairman Powell is probably the most respected appointed, he's the most respected person in the Trump Administration right now, if you could call him part of the administration accidentally.
- KSKara Swisher
Sure, but, le- let me, what does, Powell's termination cannot come fast enough, 'cause he, his, his job terminates next May.
- SGScott Galloway
Right.
- KSKara Swisher
Correct. So that, is he meaning that? What is, what is the language here? Termination. Like-
- SGScott Galloway
I, I don't know. He's threatening to fire him, I don't know what it is.
- KSKara Swisher
Is he?
- SGScott Galloway
I don't know. You tell me.
- KSKara Swisher
That's the problem. I mean, saying things like this, by the way, are so dangerous. Just saying them, what he's doing, is so ridiculous. Um-
- SGScott Galloway
Brand toxic uncertainty.
- KSKara Swisher
Yeah. And it, like, I think that's exactly the term that's correct. I, I think Powell is really just like, "Fuck you." Like, "Come at me sir," essentially, the way he's talking.
- SGScott Galloway
What, what is... Chair- Chairman Powell is, is literally (laughs) he's gonna leave, he's gonna leave his tenure as someone who pulled us back from COVID, who, uh, whose economic policies the markets set new unprecedented highs. Some people would probably criticize it-
- KSKara Swisher
A little too much partying.
- SGScott Galloway
Well, or a little too much, I would say, policies, although you could argue he doesn't control those. The, the reason we're in such a crazy corner right now is because we as Americans, and this is true through Democratic and Republican administrations, are under the delusion that we can spend seven trill- uh, we can spend $7 trillion a year while taking in 5 trillion in tax receipts, and that everything will be all right. And then we get backed into a corner (laughs) where we, the whole world owns our debt, and they not only are reciprocating with a trade war, they're reciprocating with a capital war. And that is they just go into the market and sell a disproportionate number of our Treasury bills, and the tenure spikes and all of a sudden we have an additional $175 billion in interest rate payments, which we weren't planning on making. I mean, we have put ourselves in such a vulnerable position because if you think of the US as a household, we make $50,000 a year in tax receipts, we're spending 70 and we have credit card debt of $370,000, and the scary thing is the kids, despite not (laughs) spending any of this money or really benefiting from it are gonna inherit those credit card bills.
- 17:44 – 27:52
Trump vs. Harvard
- KSKara Swisher
escalating. Uh, the White House is asking the IRS to begin the process of revoking Harvard's tax-exempt ta- status. This is not an easy thing to do by the, by the way but the IRS, because it's under the control of Donald Trump, is reportedly considering it. The move comes after Harvard declined Trump's demands to scrap DEI programs and overall hiring, teaching, admissions. It made a ton of changes by the way, it has made a ton of changes, uh, that are-... probably laudable in many ways. Trump's initial response to Harvard's pushback was freezing more than $2 billion in federal funds for multi-year grants and contracts, apparently it wasn't enough. The Harvard President, Alan Garber, condemned the Trump Administration in an open letter earlier this week writing, "No government, regardless of which party is in power, should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue." What do you think? Uh, Harvard fighting back here is really interesting. Let me, um, give some statistics. Um, uh, Harvard is gearing up for this fight financially. They issued $750 million of taxable bonds last week to shore up liquidity. It does have a $53 billion endowment but they're a restriction on how the money gets spent. Um, I see you're wearing a Harvard T-shirt. Uh, I can't believe m- uh, one of the jokes on, on Threads was, "I can't believe we like Harvard again." Like we're, we're, we're backing Harvard here, which is sort of the pinnacle of snooty elitism I think, for most people in general, um, but at the same time, this is a real shot across... But along with MIT, Princeton, um, Columbia, of course, caved. So, it's a really interesting situation happening here with these schools saying, "No, fuck, we've done enough," and showing their work. Now today, for people who don't know, the Trump Administration is trying to do this with no proof whatsoever, very similar to what they did with the im- the, with the migrants who they sent out of the country, with no proof on any... They don't give any proof to their allegations on almost anything they're doing, no matter what it, across the spectrum, and in this case, they filed something without any proof that Harvard did anything wrong. Um, so there's, there's several, and of course they're hurting funding of really important research that's going on. Scott?
- SGScott Galloway
Yeah, it took Donald Trump to get me to like Harvard.
- KSKara Swisher
Yeah.
- SGScott Galloway
Um, look-
- KSKara Swisher
You weren't? That T-shirt is handsome. Where'd you get that?
- SGScott Galloway
Um, my assistant got it for me because I, I don't know, I just wanted a Harvard T-shirt to wear around. Um, I was strolling around in a Canada T-shirt last week, and it was the, like, if you look at the m- the darkest moment of the last 100 years, there were some key attributes of a move to fascism. Uh, one, they started demonizing people and rounding them up. And it takes on a different complexion, but let's be clear, we have demonized illegal immigrants, of which we have turned a blind eye to because it's very profitable, and now we're rounding them up. We're taking them off the street and we're sending them to hellscapes. The other, one of the other key steps is you come for, quote unquote, "The academic institutions and the cultural elite," and you demonize them. And that's what's going on here. So, this is... You know, I'm not a fan of these institutions. I've even suggested their tax-free status be revoked if they have an endowment over a billion dollars and not growing their freshman class faster.
- KSKara Swisher
But you're about making bigger, becoming bigger.
- SGScott Galloway
Yeah, bigger.
- KSKara Swisher
Not to tell them what to do or how to run.
- SGScott Galloway
No, I don't, I don't care. They, they have the right to pick their curriculum, they have the right to pick their faculty, they have the right to talk about what they want to talk about on campus. I think if you're gonna have a law... And be clear folks, this has about as much to do with antisemitism as evangelicals liking Israel. They just see these (laughs) the, the, the notion of anti... Putting this under the banner of antisemitism, they're just using it as a vessel to go after an ideology and centers that typically, uh, traditionally and right now are not supportive of these types of policies. They... And there is, is it true that there's not enough intellectual diversity at these campuses? Sure. But when you start targeting individual universities and going after, quote unquote, "The cultural elite," under the auspices of antisemitism, it's just, it's not... A, it's not true, and B, it's morally corrupt. But more, I'll just go to the economic argument. The funding of research at universities has been the greatest investment in history. And that is... And I've said this before, that the most successful venture capitalists in history are middle class taxpayers who give money to the government and then the government funds research that private enterprise can't afford, to make these types of staggering investments.
- KSKara Swisher
Tuberculosis, for example.
- SGScott Galloway
Or, uh, uh, a, a catalog listing all things on the internet for academic research that ultimately ends up becoming a $2 trillion company called Google, or vaccines looking at how mRNA might, might be more effective than traditional vaccines, or diabetes medication. Most studies show... And then the vessel for this unbelievable investment are universities. Government funding of university research has proven to be one of the highest ROI public investments with economic impact studies suggesting returns of, get this Kara, somewhere between 20 at the low perc- at the low end, 20% and 60% annually on federal research dollars through job creation, new industries, and increased productivity in agriculture, genetically modified crops, food safety technologies, in energy, solar panels technology, advanced battery companies, natural-
- KSKara Swisher
We got researchers going all week. This is fantastic.
- SGScott Galloway
Natural, natural gas racking, LED lighting, advanced materials, Moderna and BioNTech, hundreds of drugs-
- KSKara Swisher
Yeah.
- SGScott Galloway
... including Lyrica, Remicade I think it's called, we did that... The HIV protease inhibitors, the cocktail drugs came out of universities. Genentech was based on-
- KSKara Swisher
Stanford.
- SGScott Galloway
... recombinant DNA technology from UCSF and S- Stanford. Google, smartphones, Cisco Systems. I mean these, this is the best... The, the US does actually a small number of things better than anyone but we do them really, really well.
- KSKara Swisher
And people think it's not enough because, like, they haven't been as involved in AI and it's been taken up by pri- What happens is private enterprise takes the juicy bits and the parts that are harder, the universities used to do, they used to do the combination.
- SGScott Galloway
That no one else will fund. They sometimes end up being unbelievable. Lithium ion batter- batteries.
- KSKara Swisher
Yeah. I- i- it's... You don't have to make this... This is fucking ridiculous.
- SGScott Galloway
(laughs)
- KSKara Swisher
And here it is, why do you think Harvard decided and fuck this shit... and Columbia didn't? Like think about being inside these comp- these, these places. Did anyone even give in?
- SGScott Galloway
Columbia has literally...... uh, has just this, uh, virus of a lack of leadership right now. I- I don't... I would argue that Columbia, between the response... I mean, there were two, there were two campuses with protests. President Linda Mills just handled it much differently than the folks at Columbia.
- KSKara Swisher
Yeah.
- SGScott Galloway
And I also think Columbia, quite frankly, for whatever reason, has been a flashpoint and has been, uh, you know, unfortunately targeted, whatever you want to call it. But I do think the reason that Harvard decided to stand up, I think they have more leadership, I think there's, they're, they're, they have more moral clarity, and quite frankly, it just really helps to have $54 billion endowment.
- KSKara Swisher
Yeah. Or 53, yeah.
- SGScott Galloway
All right. It's, it's this is... They can afford to do this. So... And it's also great, it's great for their brand. Harvard probably... This is probably one of the better brand moves of 2025, that is-
- KSKara Swisher
Yeah, 'cause they were sort of the, like, elite irritants and now they seem like freedom fighters.
- SGScott Galloway
Yeah, and the president of Harvard unable to condemn anti- you know, antisemitic speech as hate speech or whatever it is. You know, they, they, they've had their hits the last, the last six months. This is absolutely them standing up and doing the right thing even when it's hard.
- 27:52 – 39:01
Elon’s “Legion” of Babies
- KSKara Swisher
Scott, we're back and Elon Musk is trying to build an army of super babies with "no romance, just sperm." It feels like you would have said something like this, Scott. That's from an explosive report in The Wall Street Journal about the tactics he used to recruit and manage his offspring and their mothers. This romantic hero has even used social platform X to recruit willing wombs. Uh, here's what Jimmy Kimmel had to say about the latest revelations.
- NANarrator
It is believed that Elon has fathered at least 14 children and based on this photograph, he may have given birth to them too.
(laughs)
He's probably carrying a few around in his pouch like a kangaroo. Sources told The Journal they believe there could be more Mini-Musks out there, many more Mini-Musks. You've heard of Alien vs. Predator? Elon might be both of them.
- KSKara Swisher
So, another... other tidbits from The Journal's reporting, and by the way, I- I've spoken about this with so many reporters. I'm so glad that they're finally writing about this and not pretending it's just a silly, you know... an ex who's mad at him. This is really significantly weird stuff, and especially since he's in such a position of power. Musk believes population decline is massive threat and wants, uh, to make enough babies to "reach legion level before the apocalypse" and Musk urged former girlfriend Ashley St. Clair to... or I don't know what she is, I guess girlfriend, to give birth via C-section because he believes that vaginal births limit brain size. You remember I was arguing with him about this given I had a C-section. Scott, uh, I... where shall we go with this? Where should we go? (laughs) Where should we start? I mean, I'm thrilled that reporters are actually doing these things around the drugs, around these weird- weirdnesses around children. Um, it is really demented in a way that's really around the bend and it's fine if someone w- wants to have a lot of kids but this is a whole theory. I think the one person in this story that didn't get enough shit is Jared Birchall who works for him and is his facilitator. He's happens... they wrote about him being a Mormon and he- talking about him having such a stable family. Jared, if you're facilitating this, you don't get to hide behind your perfect family and your, you know, that you don't behave like this. You're just facilitating a rich person behaving badly and, um, and, and manipulating women, um, who are having kids. I mean, everything sounds so pathetic and at the very e- and I'll let you go on, Scott, but the children are really what really concerns me here, is that these kids are getting manipulated by Musk, uh, in, in terms of what they're gonna pay the mothers and this and that. Um, you don't need $15 million to do... to raise a kid or anything else, but the, the, the ethical implications of all of this, for all of you who are facilitating this for Musk, are rather deep and you should be ashamed of yourselves. Go ahead.
- SGScott Galloway
Look, there's a, there's a kernel of truth here, just calling balls and strikes. There was this fear, um, or this moral panic around a population explosion that we were gonna absorb, that our population-
- KSKara Swisher
Hmm.
- SGScott Galloway
... was growing faster than the, than the earth's resources-
- KSKara Swisher
Yes, I know.
- SGScott Galloway
... and we, it was gonna collapse under population, uh, growth. What's actually happened is that bomb has detonated but it's imploded, and that is, western nations, as they become wealthier and more educated, women decide that having a lot of kids is a bad deal for them, and also men, and basically birth rates go down. And evidence has shown that as population has gone up, poverty has gone down. It ends up that if you put 10, 10 new brains into society, you know, one is a problem, eight do just fine, and one might solve more problems than those 10 brains create.
- KSKara Swisher
Sure, absolutely.
- SGScott Galloway
So, population growth is actually really... It's a huge problem in Japan, in South Korea supposedly like only three or four people will have grandkids right now with these birth rates. Now, you can solve it with thoughtful immigration policies, and also restoring a tax code that doesn't rob from the young and give money to the old such that young people, should they decide to have kids, which 60% did 40 years ago at the age of 30, now it's 27%. So we can solve for this problem. I do believe that his basic theory is rooted in something that's true, like having more kids. Now having said that, having said that, if you look at what I believe, uh, maybe next to income inequality is the biggest thing threatening the US, it's extremism led by a group of young men who feel, are sequestered from society and becoming shitty to, uh, citizens. They're not attaching to work, they're not attaching to school, they're not attaching to relationships, they become prone to misogynistic content, they start blaming women and immigrants for their problems, they become less likely to believe in climate change. And w- if they don't have a relationship or work by the time they're 30, the levels of substance abuse and self-harm-
- KSKara Swisher
You get watch out below.
- SGScott Galloway
... just go crazy.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Just go crazy. That is a hu-... Struggling young men in this country is a huge threat to our society.
- KSKara Swisher
I heard someone wrote a book about it out in November.
- SGScott Galloway
There you go. What... Now, if you were to reverse engineer it to the, the point of failure, where a boy with a lot of potential comes off the tracks, you might say, well, their prefrontal cortex doesn't mature as quickly. Well, the education system is biased against them. They're twice as likely to be suspended on a behavior adjusted... There's a lot of things-
- KSKara Swisher
It's bizarre.
- SGScott Galloway
... they've been told for 40 years that they're the opp- the oppressor and they're starting to believe it. They have big tech trying to sequester them from society with gambling and porn. They have a lot of things going against them, but the number one point of failure to be reverse engineered to is when they, they lose a male role model. The worst thing, or one of the worst things you can do as a man, or let me put it this way, the best thing you can do is to stay involved in your kid's life. He's no- he's not around. And what's interesting is that when you have a single parent household, which he is creating, he's creating 14 single parent households. He doesn't have 14 kids, he has 14 single parent households.
- KSKara Swisher
More, more kids than that I think.
- SGScott Galloway
And what's interesting is that the daughters in single parent households have similar outcomes as dual parent households. And I'm not saying girls don't need their dad, but if you look at high school and college attendance and rates of self-harm, they're not material ad- materially different in single parent households and dual. It is an entirely different story for boys. And what it ends up is that while boys are physically stronger, they're mentally and emotionally much weaker. But him creating a series, uh, uh, uh, a, a cadre of children that don't have their dad around, even if he sends checks, that is bad for society.
- KSKara Swisher
But, but he also, Scott, two things. He uses checks as the control point, by the way. O- a- and secondly, it's n- he, I, listen, there's a pronatalist movement going on obviously, and he's part of this. They're not, h- h- he's talking about smarter people. And w- a- and that reads to me white people essentially, right? I don't think he thinks all people are equal in, in that-
- SGScott Galloway
Well, it's almost as if he'd give a Nazi salute.
- KSKara Swisher
Right, yes, exactly. Who knows, who does that?
- SGScott Galloway
Or that his dad started banging his stepdaughter?
- KSKara Swisher
I mean s-
- SGScott Galloway
Is that right?
- KSKara Swisher
... the level of dyspho- n- his stepdaughter, I think. Yeah, correct. Um, but here's the thing. The, it's about white people, more white people. That is (laughs) or w- more people he considers smart, which is I think the s-
- SGScott Galloway
I hadn't even thought of that. Is he only procreating with other, with other white women? I guess that-
- 39:01 – 40:35
NVIDIA’s ‘Made in the USA’ Plans
- KSKara Swisher
just really quickly, NVIDIA says it will start producing AI supercomputers manufactured entirely in the US. The announcement comes conveniently after-
- SGScott Galloway
Mm, yeah.
- KSKara Swisher
... reports of upcoming tariffs. Uh, we'll see. The company plans to use $500 billion of infrastructure in the US via manufacturing partners over the next year. They all say 500 billion. They, i- Apple did this. They've commissioned over one million square feet of manufacturing space to build chips in Arizona. They're working with Foxconn and Taiwan's Wistron on additional plants in Texas, of course. Um, and then Trump said, "All the necessary permits will be expedited and delivered." They're trying to appease Trump, or, or I'm sure he'll still screw them on tariffs. Jensen Huang said, made a surprise visit to Beijing to meet with Chinese trade officials. This follows NVIDIA's revealing on Wednesday it's taking a $5.5 billion hit thanks to new US restrictions on the exports of its H20 chips to China. Uh, the shares have been plunging. Very quickly, thoughts on the planet or NVIDIA?
- SGScott Galloway
N- n- no- uh, nothing other than that this, all of this stuff announcing investment is performative thinking. He's an idiot. If we just repackage existing investments, he'll go for it-
- KSKara Swisher
Yeah.
- SGScott Galloway
... and he'll potentially leave us alone. And the-
- KSKara Swisher
Exactly.
- SGScott Galloway
... stocks are now trading based on Tr- the prediction markets of the Mad King.
- KSKara Swisher
Yeah.
- SGScott Galloway
I mean, this is just not the way (laughs) to run an economy.
- KSKara Swisher
They, and they weren't gonna do this before. And, you know, just this j- you can force manufacturing back in the US but it will have a price later, um, if it's not economic. That's just the way it goes unfortunately. All right, Scott, let's go on a quick break. When we come back, we'll talk about Zuck taking the stand and how much he was willing to pay and, uh, to get the antitrust case to go away.
- 40:35 – 49:08
Zuck on the Stand
- KSKara Swisher
Scott, we're back with more headlines. There's lots going on. Mark Zuckerberg has taken the witness stand for three days in Meta's antitrust trial this week over its acquisition of Instagram and WhatsApp. Also, Sheryl Sandberg was also on the stand. If the FTC wins, Meta could be forced to sell off the apps. Some highlights. Years before, the FTC sued Meta under the Trump administration. Zuckerberg considered having Instagram be its own company to avoid antitrust issues. Meta tried to buy Snapchat for $6 billion, which actually I think I broke that story at the time. He thinks it would have been bigger now if he'd accepted the offer. Zuckerberg had... Of course, it then copied Snap- everything Snapchat did. And s- it's, they, it's buy or bury really, and bury was the choice that unfortunately Snapchat had to face. Zuckerberg once had a crazy idea to wipe out all Facebook users' friends, uh, to start again. The Meta CEO called TikTok the highest competitive threat for Facebook and Meta. If it were up to Zuckerberg, this trial never would have happened. Too bad, Mark. He offered, uh, the FTC $450 million, which is laughable. Um, later upping the amount to $1 billion, but the offer was well below the $30 billion the FTC wanted. This is under, uh, its current, um, chair, Andrew Ferguson. Oh, oh, s- you got a set there, Ferguson. Uh, Zuckerberg reportedly felt confident President Trump would back him. Uh, obviously he didn't and allowed it to go forward. Um, it's not the strongest cases that we've talked about. And this idea of who its competitor is. In, in the, in the then, it's a strong case. In the now, it's not as strong a case and everybody has shifted from social media to entertainment in a lot of ways. Social media in the, with the stress on media, not on social. Um, so w- g- give me... Uh, is there... Th- this ass kissing doesn't work. Give me one of your crazy ideas, Scott, here on this trial.
- SGScott Galloway
Well, I, I just think that if they're... So there's different remedies. One is a fine, which it looks like they're pursuing right now if they're found guilty of monopolistic behavior.
- KSKara Swisher
And certain consent decrees also along with the fine, by the way.
- SGScott Galloway
N- nine out of ten people in the world outside of China are on a Meta app. Um, if not, I think it's either every day or every week. And they have 70% share of social media. Now that alone isn't...... isn't illegal. What's illegal is if you're using that 7%, 70% share to, uh, deploy monopoly pricing that's bad for consumers. And I would argue, or engage in anti-competitive behavior, and if you look at the notes that have come out in discovery, a big justification for acquiring Instagram is he said, "We need to neutralize a competitor." That right there, that statement, that's illegal.
- KSKara Swisher
Mm-hmm. Yeah.
- SGScott Galloway
That, you're not allowed to-
- KSKara Swisher
It's enough.
- SGScott Galloway
... acquire a company to neutralize a competitor. You're not allowed to do acqui-kills.
- KSKara Swisher
Yeah.
- SGScott Galloway
In addition, what, I always like to appeal to people's greed glands on this, if they were forced as a remedy to spin Instagram-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... you know who wins here?
- KSKara Swisher
And WhatsApp, and WhatsApp too.
- SGScott Galloway
And WhatsApp. You know who wins here? Shareholders.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Because the company right now, it trades at a really healthy multiple of 7.7X times revenues. Instagram on its own, I think would trade at 15 to 20 times revenues. Instagram, just to give you, you were at my birthday in Scotland, Scotland is overrun-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... because a bunch of Instagrammers went there and went crazy talking about Scotland two summers ago. Instagram now dictates global tourism patterns.
- KSKara Swisher
It does. You see it happen in Los Angeles-
- SGScott Galloway
As in-
- KSKara Swisher
... and parts of n- your neighborhood. People take a picture in front of-
- SGScott Galloway
Oh, if we went to my window right now-
- KSKara Swisher
Yeah.
- SGScott Galloway
... we would see three or four I- Asian women-
- KSKara Swisher
Yeah.
- SGScott Galloway
... with their Hermes bags, in my, on my cobblestone street, taking pictures of one another.
- KSKara Swisher
Yeah.
- SGScott Galloway
It is literally, it is-
- KSKara Swisher
There's one area where they're all taking pictures.
- SGScott Galloway
You talk about commerce, you talk about, I mean, that Instagram is an independent company.
- 49:08 – 51:37
Google Loses Monopoly Case
- KSKara Swisher
this is just in, by the way. A federal judge has ruled that Google did act illegally to maintain a monopoly in online advertising technology. The judge said in a ruling that Google had broken the law to build its dominance. No shit, Sherlock. The Justice Department and a group of states had sued Google, arguing that its monopoly in ad technology allowed the company to charge higher prices and take a bigger portion of the sale. Yes, 'cause they're on both sides of the deal, everybody. Remember, a federal judge ruled in August, a separate federal judge, that the company had a monopoly in online search. He is now considering a request by the Justice Department to break the company up, spin parts off. Um, Google's, I, this is a much stronger case, and it is so obvious, the dominance of Google in both advertising and search, and their behaviors around this. Um, uh, it's really interesting. And of course, Sundar was at the inauguration. It doesn't seem to be helping. Now, a lot of these cases were started in the previous Trump administration. Again, I cannot underscore this. Um, so thoughts, thoughts on this one? This one's stronger, and, and they've lost. They've clearly lost. They, this will go on. They will appeal, but they've lost again, once again.
- SGScott Galloway
I, like I said, I just, uh, I think everybody wins if these companies start to... I think their share price goes up. I, I, I don't know what to say other than that, although I- I was more cynical about antitrust under a Trump administration. And Jonathan Kanter, who knows a lot more about this than me-
- KSKara Swisher
Yeah.
- SGScott Galloway
... sent me straight, and said, "You're underestimating some of the people who are at Justice and the FTC."
- KSKara Swisher
Yeah. The person who replaced him, his very well... Gail, I think it's Sla- Sla- Slaughter or Slater, um, is very well-respected. She's a J.D. Vance person, from the J.D. Vance side of the aisle, who has been very antitrust-focused. Um, great respect for people, like in terms of they understand... Here's the thing, everybody. Less competition, less innovation, higher prices, shittier products. I, I, I... That's the way it goes, and the fact that these company- And by the way, the, the side effects of both these companies for their dominance in both social media and advertising and search, which is linked to ad, they're all linked to advertising, is the death of regular media. They have, two of these two companies have run over... Now look, media, old media has done a lot of things to kill itself, but this is not... The, the, the hollowing out of the business model by these companies using these tactics has been right in there to really hurt these companies. So, that's another, that's another, uh, you know, deleterious effect of these things, so.
- SGScott Galloway
There you go.
- KSKara Swisher
There you go. Anyway, we'll be right back and we'll get to predictions.
- 51:37 – 1:04:46
Predictions
- KSKara Swisher
Okay Scott, let's hear a prediction. What's a prediction from you?
- SGScott Galloway
Um-
- KSKara Swisher
Besides children of Scott all over Southern California.
- SGScott Galloway
(laughs) You might not get the point.
- KSKara Swisher
Are you creating a legion of babies?
- SGScott Galloway
Well, you know you can-
- KSKara Swisher
Just got babies.
- SGScott Galloway
There's now a website, if you go to it, you can-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... type in your name and say, "This was the clinic-"
- KSKara Swisher
Yep.
- SGScott Galloway
"... I donated." And-
- KSKara Swisher
Yes, I know all about it.
- SGScott Galloway
And they send you a certified, I think certified mail, and if you sign it, an email goes out to all your biological children saying-
- KSKara Swisher
Did you do it?
- SGScott Galloway
... "This is your biological father." I would do it if you could gate it, and you can't. Uh, and, and the problem is, you don't know if it's-
- KSKara Swisher
Oh, I'm absolutely gonna do this now, so I can meet all of Scott's children. Go-
- SGScott Galloway
Well that's why I don't do 23andMe, 'cause-
- KSKara Swisher
Yeah.
- SGScott Galloway
... people get figured out. But I don't know-
- KSKara Swisher
I'll just delete my data from that.
- SGScott Galloway
... if I have two kids or 2,000, 'cause it wasn't regulated back then. So-
- KSKara Swisher
They let you have like hundreds of kids.
- SGScott Galloway
Well-
- KSKara Swisher
You remember the Vince Vaughn movie, where he had hundreds of kids?
- SGScott Galloway
Yeah, I told you this. My mom made me stop, because she said, she said, "I put my..." I'm not exaggerating. I paid for my junior year at UCLA doing this.
- KSKara Swisher
I wonder how many kids you have.
- SGScott Galloway
And, and my mom said, "You need to stop." And her rationale was, "What if your son ends up marrying your daughter?"
- KSKara Swisher
Oh my God, that's the typical fear thing, the fear thing.
- SGScott Galloway
I know, but anyways-
Episode duration: 1:04:46
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