EVERY SPOKEN WORD
135 min read · 27,410 words- 0:00 – 1:06
Intro
- SGScott Galloway
Even if you agree AI is as I do, it's gonna be huge and pay all sorts of dividends and build great companies, if NVIDIA sneezes, the world gets frickin' stage IV or walking pneumonia.
- KSKara Swisher
(instrumental music) Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
- SGScott Galloway
And I'm Scott Galloway.
- KSKara Swisher
How are you doing, Scott? Are you rested and back in London?
- SGScott Galloway
Yeah, I'm back in London. I wouldn't describe myself as rested, but I feel pretty good. How are you?
- KSKara Swisher
Good. I took one more trip to Las Vegas, but now I'm back.
- SGScott Galloway
Are you shitting me?
- KSKara Swisher
No, I'm not shitting you. Don't talk to me.
- SGScott Galloway
Wait, hold on.
- KSKara Swisher
You were in London.
- SGScott Galloway
Back from D.C. to Vegas?
- KSKara Swisher
Yeah, but now I'm back. I'm back for... Until March. I'm not traveling until March, really, except for the holidays.
- SGScott Galloway
It worr- it worries me how much you travel, travel.
- KSKara Swisher
Yes, I know. I know. I know it does. I like that you worry about me. We've got a lot to get to today, including the Meta monopoly verdict, which sort of got lost in the sauce, and Trump signing... With all these news, and Trump signing the bill to release the Epstein files. But first, this is... NVIDIA's shares are up around 3% at time of taping after beating expectations
- 1:06 – 10:23
Nvidia’s Blockbuster Earnings
- KSKara Swisher
for the third quarter earnings. The AI chipmaker reported a record $57 billion in revenue and a big, a big chunk from one company. I, I... It's gotta be Meta. And a 65% jump in profits. Uh, CEO Jensen Huang addressed concerns about an AI bubble, saying, "From our vantage point, we're seeing something very different." Um, Sundar Pichai kind of alluded to it, about bubble fears. Uh, and in new partnerships, NVIDIA and Microsoft are pouring money into Anthropic, raising the AI startup's valuation to 350 billion. Microsoft will invest 5 billion while NVIDIA will invest 10 billion. Again, not a big amount of money for these people. Um, and it's a huge valuation and, also, Elon Musk is raising it an enormous val- valuation. So, talk a little bit about these results 'cause, uh, Michael Burry got killed, right? The, the short sellers got killed on this thing.
- SGScott Galloway
Well, the entire, literally, the entire economy is, has a huge sigh of relief because the narrative had, had shifted just in a few weeks from AI boom to AI bubble, and this popped the AI bubble narrative, uh, at least for the time being. Revenue came in at 57 versus 55, and those were very aggressive expectations. Their data center revenue came in at 51.2 versus expected 49.3. Their adjusted earnings or diluted earnings per share came in at 130 versus expectations of one- So basically, it was a beat on very aggressive expectations, and they also guided up. They're now saying their Q4 revenue guidance is 65 versus 62 billion, up 5%. And also, what's really impre- I think the most impressive thing is they're, they've taken the guidance on their margins up to 75% from 74.6, 74.6. I would have thought they'd be coming under some pricing pressure.
- KSKara Swisher
Margin compression, right.
- SGScott Galloway
Yeah, and margin compression.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
And then their sales growth accelerated to 63%, which is enormous, but it broke six, a six-quarter streak of deceleration of sales growth. And then to your point, everything got lifted. Tesla was up one and a half percent, Microsoft one, Meta one, Amazon 1.6, and Alphabet two.
- KSKara Swisher
They've been declining. Let's be clear for people. They had been-
- SGScott Galloway
Yeah, but not, not really a lot. Uh-
- KSKara Swisher
Well, Oracle is really down. Like, it lost all its gains, but go ahead.
- SGScott Galloway
The economy, and I hate this about our economy right now, and to a certain extent, the Trump administration's cloud cover is really being propped up by these 10 companies. And so the fact that... It, it just, the narrative, uh, was not supported here, and the market was looking... There's just no getting around it. The market seemed to be really grasping for evidence that the AI bubble narrative was... Had some veracity to it, and they didn't get it in this earnings call. They just didn't get it.
- KSKara Swisher
I, I still am nervous about... I've been reading up a lot. Uh, you know, as you know, you introduced Andrew Ross Sorkin for his book and some others, and there's some very persuasive... Bill Cohen wrote a very persuasive piece about possible bust coming, you know. And as you said-
- SGScott Galloway
Oh, yeah.
- KSKara Swisher
... it can run up before the bust, right? And, and these sort of echoes of this issue. Uh, you know, it's interesting 'cause they were all at this NBS event at the White House, um, uh, and one of the things... And then there was an ensuing Saudi whatever afterwards, like, uh... And, and to me, I feel like, I mean, if Jensen Huang was any closer to Trump, he'd be on the other side of him, right? So they're, they have this sort of, um, grip together that they have to have, right? This company, this particular company, um, has to have, and he's certainly playing it. You know, he's, you know, he's using every card in the book to do this. Um, do you... What is your worry? So we talked about this on the tour, of this worry of it being particularly this company, um, and, and the companies around it, which are all benefiting from it. Do you still have a worry about it, or is this pushed off to another day? Because it still is... The numbers still don't... Math doesn't math here eventually at some point.
- SGScott Galloway
My worry is the following, that the definition of a robust economy is that no one company can take it down.
- KSKara Swisher
Broad, a broad-based.
- SGScott Galloway
If McDonald's... The fast food industry is a robust industry. If the biggest player, McDonald's, went out of business tomorrow, you would still be able to find cheap calories-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... at a variety of places, and the economy would not be taken down.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
JP Morgan is probably so big now. JP Morgan is now worth more than the 10 biggest banks in Europe combined. And if Jamie Dimon called president Trump or Bissen and said, "Oh God, you're not gonna believe this story, guys. There is some rogue trader, and somehow we missed it in compliance, and he figured out a way to lever it all up, and we're $110 billion down, and I need a bailout." If he were to ever make that call, and I don't... I think it's unlikely because I think since Sarbanes-Oxley and stress testing, I think that they did a really good job post-2008 of creating a sort of a Goldilocks-... compliance structure, one of the famous last words that's gonna be, something's gonna happen tomorrow, where there's enough, they allow them enough leverage such that they can continue to grow the economy and loan out mo- more money than they take in, while constantly stress testing for a black swan event. But you can never... But, but the bottom line is JP, if, if, if Jamie Dimon were to make that call, Trump would have no choice (laughs) but to bail them out. 'Cause if JP Morgan goes down, the domino effect would be terrible here. So you could argue that the banking, the banking industry is not robust. Our economy right now is riding on a small number of companies based on the expectations that AI cont- will be bigger than GPS or the internet. And the r- the thing that worries me is that every one of the companies we talk about has been down 50 to 70% or more in a 12-month period in the last five or seven years. They just have hiccups. And the problem is these companies now m- uh, command such an enormous part-
- KSKara Swisher
Right.
- SGScott Galloway
... of the S&P-
- KSKara Swisher
Which was very similar to the tw- 1929 crash, yeah.
- SGScott Galloway
Dot-com. And in addition, as a percentage of, as a, as p- historical PE averages or the Buffett test, they just seem so expensive. And where we are is, if just through the natural cycle, even if you agree AI, as I do, is gonna be huge and pay all sorts of dividends and build great companies, if NVIDIA sneezes, the world gets frickin' stage four walking pneumonia. It doesn't catch a cold. Because unfortunately, our demographics have become less robust, and that is now the top 10% represent 50% of spending. And the bad news about that is that if a middle class household's confidence goes down or their income goes down, their spending goes down, but so much of their spending is things they have to spend money on, food, housing-
- KSKara Swisher
Right. Right.
- SGScott Galloway
... that it affects the economy. But if the top 10% all of a sudden get a chill because their stock portfolio's off 40%-
- KSKara Swisher
Yeah.
- SGScott Galloway
... they can take their discretionary spend down-
- KSKara Swisher
Yeah.
- SGScott Galloway
... 50%. So I-
- 10:23 – 16:22
Meta Monopoly Verdict
- KSKara Swisher
court.
- SGScott Galloway
Yeah.
- KSKara Swisher
Uh, with a federal judge ruling the company didn't break antitrust laws when it bought Instagram and WhatsApp. As I said back in April, this was a weak trial, um, which I, I thought it was, uh, and clearly the judge agreed because he listens to me. No, I'm not, I'm kidding. I just thought this was a silly trial. The judge, uh, and I, and the judge said the government failed to prove Meta's currently a monopoly, noting that TikTok is now Meta's fiercest rival. The case dates back to 2020 when the FTC accused Meta of using buy or bury strategy to crush competition. These big antitrust suits have been mixed bags so far. Google lost the search and advertising cases, uh, though it didn't have to do anything. It didn't have to spin off Chrome.
- SGScott Galloway
Yeah.
- KSKara Swisher
The Amazon and Apple trials are still a few years away, so it'll be a while before we know how those shake out. I would say Apple and Amazon are much more monopolistic than any of these others. Um, and we're g- uh, you know, uh, but the thing is, is it gonna cause Meta to make a ton of acquisitions? And just remember before the trial began, Mark Zuckerberg visited the White House, prostrated himself, and tried to lobby for a sent- settlement. He didn't need to do that. Nice job, Mark, for, uh, uh, for, for s- uh, prostrating yourself. But you didn't need to. The case was solid, like I, I thought it was at the time. And you know I'm never on their side, but it was very clear there was competition.
- SGScott Galloway
The gate on consolidation has traditionally been that economists at the FTC and the DOJ said there's gonna be too much concentration of power, which will give you too much pricing power, which will result in a transfer of money from consumers to the shareholders of that monopoly. And monopolies themselves aren't illegal. It's monopoly power and monopoly abuse. So occasionally when scale makes sense, they say, "Fine, you can have a monopoly on cell service or the utility, but we're gonna regulate you to make sure you don't abuse that monopoly power." What the, you have right now is there is no gate.The FTC and the DOJ essentially have said it's a free-for-all, as far as I can tell. Jonathan Kantro would disagree with me and say there's still people doing the work. But as far as I can tell, or the CEOs I talk to, they are sharpening their pencils, one, because they have very fully valued stock, which is like having a pre-loaded credit card that you can go out and go shopping for, right? So, all of a sudden, everything in the eyes of Palantir is 90% off 'cause their stock's up tenfold. So if they do an acquisition for stock, it costs them a tenth of what it used to cost them. So investment banking, M&A, which had been in a deep freeze for several years, is now just booming. If I, I saw Terry Kouacs at a party the other night. He's in M&A. And I just knew, I go, "I bet your business is amazing." He's like, "Better than ever." Anyone in M&A right now is turning away calls unless it's an enormous fee because, A, companies have cash and stock to go shopping with, and B, they're not worried about antitrust. What's interesting is what has somewhat replaced the gating factor of FTC or DOJ review based on monopoly power, has been replaced by this gating power of cronyism and oligarchy, whereas, like, I don't think Netflix can potentially, or could potentially get a deal through to acquire Warner Brothers' assets-
- KSKara Swisher
We're gonna talk about that in a minute.
- SGScott Galloway
... because Trump has decided he does-
- KSKara Swisher
Yeah, like hold-
- SGScott Galloway
... think Reed Hastings is a Democrat.
- KSKara Swisher
Yeah. Let's hold that, 'cause we're gonna talk about that in a minute. But this is, this case was weak. There, there's competition in Mark Zuckerberg's world.
- SGScott Galloway
Well-
- KSKara Swisher
Correct? I mean ...
- SGScott Galloway
Well, some data. Since the year Meta acquired WhatsApp, YouTube active users have doubled, TikTok went from not existing to having 1.6 billion, LinkedIn users increased by roughly 4X, Snapchat users increased by more than 8X, and Meta's total daily active users increased by roughly, um, 4X. Now, I still believe these companies are too dominant. So for example, with Meta, three and a half billion people, or 43% of the world's population, use a Meta product daily. Out of the eight, out of the top eight most used social media platforms globally, Meta owns four of them, and Meta garners 21% of all digital ad spend, more than any other social media company and-
- KSKara Swisher
It's the ad thing that I do think. That's the one. That's a case that's coming.
- SGScott Galloway
Right. And, and I would argue that there's evidence of monopoly abuse here by virtue of the fact that they don't ever, um, feel, feel compelled. I would argue that the, the, the margin power and the monopoly power gets, translates into what I call non-economic costs. And that is, they can put out content that results in teen girls cutting themselves, and they don't feel the onus to do anything. I think the rents that Meta is charging on parents around the world has accelerated dramatically, and is more indicative of a company that's a monopoly-
- KSKara Swisher
That's a very good point.
- SGScott Galloway
... and doesn't need to respond-
- KSKara Swisher
To anything.
- SGScott Galloway
... to concerns of anybody or anything.
- KSKara Swisher
Yeah.
- SGScott Galloway
I, I just, it's like, "Oh."
- KSKara Swisher
You're, that is a, that is the cost. That, that-
- SGScott Galloway
All right.
- KSKara Swisher
... is, that's where the real action should happen. Not here, unfortunately. Okay, Scott, let's go on a quick break. When we come back, Trump signs the Epstein files bill and takes a v-, unearned victory lap. (instrumental music plays)
- SGScott Galloway
Support for the show comes from Vanguard. The lineup includes over 80 bond funds. To all the financial advisors listening, let's talk about bonds for a moment. Capturing value in fixed income is not easy. Bond markets can be massive, murky, and let's be real, a lot of firms throw a couple flashy funds your way and call it a day. But not Vanguard. Vanguard bonds are institutional quality. They're actively managed by a 200-person global squad of sector specialists, analysts, and traders. Lots of firms love to highlight their star portfolio managers, like it's all about that one brilliant mind making the magic happen. Vanguard's philosophy is a little different. They believe the best active strategies should be shared across the team. That way, every client benefits from the collective brain power, not just one individual take. So, if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com/audio. That's vanguard.com/audio. All investing is subject to risk. Vanguard Marketing Corporation, distributor. (instrumental music plays)
- KSKara Swisher
Scott, we're back. President Trump has signed the bill ordering the Justice Department to release the files on Jeffrey
- 16:22 – 32:03
Trump Signs Epstein Files Bill
- KSKara Swisher
Epstein within the next 30 days. Trump has also taken credit for the bill overwhelmingly passing through the House, uh, whatever, Senate. But after this, the full file s- still might not get released. The bill has some major loopholes. Before Trump signed the bill, Attorney General Pam Bondi was asked about the DOJ releasing the complete file. She didn't exactly give a straight answer. What a shock from Blondie. Let's listen.
- NANarrator
We will continue to follow the law with maximum transparency, while protecting victims. Yeah. Would you say- And- ... by the law, ma- Attorney General, do you mean that you will provide all the files by 30 days? We will follow the law. The law passed both chambers last evening. It has not yet been signed, but, but we will continue to, to follow the law, again, while protecting victims, but also providing maximum transparency.
- KSKara Swisher
Uh, anyone else saying that, I believe she does not. She's gonna follow the law, Scott. The files remain a touchy subject for Trump. When Bloomberg Ka-, uh, Bloomberg's Catherine Lucey asked him about it on Air Force 1 this week, Trump snapped, "Quiet, piggy." Uh, the White House official backed up Trump, saying, "If you're going to give it, you have to be able to take it," I guess. Um, let's start with the release of the files. Um, will it finally put things to rest? And part of the ongoing fallout, there's o-, people are paying the price. Larry Summers is stepping down from teaching at Harvard, where his ties to Epstein were investigated. He also resigned from Open E- Eyes board. Of course, he had a series of his, his "How do I date this lady" emails between him using Epstein as his dating advisor got out, and that was all it took for that. Um, uh, thoughts on this, 'cause I mean, I think it's a question of what's gonna get out. Um, I talked about this a little bit last night. It's a question of what they're gonna release, how they're gonna release it, what's it gonna say if they expunge things or try to favor, uh, Republicans over Democrats, et cetera, et cetera. There's, it's sort of everything's in the details. But I don't think he can ... I think if he, if he does something like that, he'll look even more guilty. But your thoughts?
- SGScott Galloway
Well, first off, j- just how ridiculous it is that Trump wants to take credit for the release of the Epstein files-
- KSKara Swisher
Yeah.
- SGScott Galloway
... while at the same time, calling it a hoax.
- KSKara Swisher
Yeah.
- SGScott Galloway
The ridiculous notion that they will continue to follow the law and be maximum transparent, uh, the head of the FBI has already claimed that they released everything they could.... and she has done nothing but s- be, essentially-
- KSKara Swisher
Destructive.
- SGScott Galloway
... an acolyte and an instrument. Sh- she's acting like his personal lawyer.
- KSKara Swisher
Yeah.
- SGScott Galloway
They, they were doing anything they could. I've said the third most powerful person in the world is a dead pedophile who convinced Mike Johnson to, to let Congress, uh, tell Congress to go home 'cause they were so afraid of a vote. He has denied democracy. He wouldn't seat a duly-elected representative because he was worried that she was gonna be the 183rd vote or whatever it is.
- KSKara Swisher
283rd vote, yeah.
- SGScott Galloway
They have done everything possible to try and delay the release of this, and it has done nothing but create this stench of guilt-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... around the presidency. But even more bigger than this, last night, I was reading through some of these emails.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
I think this is a really big moment, and not just for the reasons we think, that it might implicate or embarrass the president or other people. I think this is that Caesar moment in Planet of the Apes where he says no and it inspires a revolution and reconfigures the social order, or Tiananmen Square, or, uh, the Arab Spring when that young man em- em-
- KSKara Swisher
Yeah. I love that you used Planet of the Apes for metaphor, but go ahead. (laughs) No.
- SGScott Galloway
Uh, by the way, when I was with Bill Maher, they gave me Planet of the Apes figures. (laughs)
- KSKara Swisher
Yeah, that's right. We love Planet of the Apes-
- SGScott Galloway
Um-
- KSKara Swisher
His producer did.
- SGScott Galloway
... but you know that moment that inspires a revolution?
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
I think this is it. And it's not, it's not even whether it should be or not, that we might find out about the abhorrent, aberrant, weird behavior of certain individuals. If you read these emails, the thing that I think is going to, that is gonna make this a moment that inspires a pretty serious shift in the ground beneath us is that the tone and the vibe of these men is literally like, "We can do whatever the fuck we want."
- KSKara Swisher
Yes. Really? (laughs) Like-
- SGScott Galloway
No, but I, I, I think it's easy to be signa- I, I don't think that's true.
- KSKara Swisher
I'm not significant, I, I, that's how they behave.
- SGScott Galloway
I, I don't think ... I, I, I think, uh, I found it shocking, and I consider-
- 32:03 – 32:16
Musk Back in Politics
- KSKara Swisher
White House dinner hosted by Donald Trump and Saudi Crown Prince Mohammed bin Salman on Tuesday. Aside from Charlie Kirk's memorial, this is the only time Musk and Trump have been seen together since their big feud. Uh, I'm not sure if the bromance rekindled.
- 32:16 – 40:13
U.S.-Saudi Diplomacy and Dealmaking
- KSKara Swisher
And while we're on the topic of Saudi, uh, the Saudi Crown Prince Mohammed bin Salman's visit, let's hear what Trump had to say when a journalist at the White House brought up the murder of journalist Jamal Khashoggi. I'll remind people, uh, our intelligence services have linked, uh, the, the, they cut him into pieces, they, bon- I call him Mohammed Bone Saw. Um, uh, and, and it was at his behest, so let's listen.
- NANarrator
As far as this gentleman is concerned, he's done a phenomenal job. You're mentioning somebody that was extremely controversial. A lot of people didn't like that gentleman that you're talking about. Whether you like him or didn't like him, things happened. But he knew nothing about it, and we can leave it at that. You don't have to embarrass our guest by asking a question like that.
- KSKara Swisher
It's ridiculous. What a ridiculous thing. He did know. Our intelligence services, he, he ordered the murder. And actually, oddly enough, MBS was more, I guess, like, "We've made... mistakes were made," and I think he, he, he was actually more truthful about what happened, which is he ordered this murder. This is a murder. It's, there's no other way to put it about Jamal Khashoggi. And what was really... uh, it just striking because, you know, he sort of slathered himself, which I don't think is gonna help him with his MAGA friends. Um, uh, but I just think he's slapping himself and this guy was making all these claims about $1 trillion in investment, which the Saudi economy isn't that big, right? It's kind of-
- SGScott Galloway
Mm-hmm.
- KSKara Swisher
... and there, of course, are s- that, that PIF, which they don't like, P-I-F, is having problems 'cause of, of all ki- n- I think it's NEOM or whatever they're building.
- SGScott Galloway
Mm-hmm.
- KSKara Swisher
They're all, a lot of their investments are turning, you know, you know, tits up, as they say. So, you know, don't embarrass guests about murders they've committed, Scott. That's, I guess that's what I would take away from this. This was the strangest encounter lately. And mostly Trump looking kind of weirdly, again, corrupt once again.
- SGScott Galloway
It, it goes to what you said, it's incompetence. They, they should have been prepared for that question. And I actually think that MBS, if he'd said, "Look, uh, uh, my government makes mistakes." And, and-
- KSKara Swisher
He did. He did actually.
- SGScott Galloway
... and without referencing... he actually said that.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Also, quite frankly, he could have said, "You know, a lot of people think that your country coming into my region and killing 400,000 people in Iraq was a mistake."
- KSKara Swisher
Yeah.
- SGScott Galloway
I mean, they, they just should have been prepared for that question.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
And I think they could have answered it. You're, you're not gonna find moral clarity, moral clarity in geopolitics.
- KSKara Swisher
Correct.
- SGScott Galloway
A- and (laughs) I, I wanna be, I wanna be clear. I believe that MBS ordered the murder and hacking of a U.S. resident who-
- KSKara Swisher
So does our intelligence services. It's not, I don't think it's in question by anybody but Trump.
- SGScott Galloway
But, uh, the, what I always put forward is, "Okay, now what? Now what do... uh, we went in and killed 400,000 people in Iraq. Does that mean no one in the region should ever do, deal with our econ..." I mean, it's like, "Okay, now what, folks?" And, but for the President to get defensive and weird about a question they knew was gonna come, they should have been able to... uh, and MBS, I don't wanna say I'm a fan of MBS. I'm a fan of U.S.-Saudi relations because I think it's ultimately the, the smartest thing for U.S. defense and security. And also, I, I, I, I, I think any hono- honest a- analysis s- would have to position MBS as actual, an actual reformer. So I don't... uh, w- but this is incompetence for the President not to know this question was coming, be this defensive-
- KSKara Swisher
Uh, but, but why the, why this slathering, you know, the insulting of our allies that are more important than MBS, Europe, et cetera, and the sort of like... it was, speaking of blow jobs, it was like a blow job of a dinner. It was a blow... and pretending that these... I mean, and ridiculous repetition. He's gonna invest a billio- a trillion dollars. Their economy is not that big.
- SGScott Galloway
Yeah. Uh, for sure.
- KSKara Swisher
It's just, it's, they're, they're a minor... they're, they're having their own troubles with their investments, by the way. Uh, they've made all kinds of bad investments. And, um, a- and, and of course most people just went there to get money from them, right? They were sort of like the ba- the, the, the cash machine, essentially, the, uh, for people to go over there from Silicon Valley and elsewhere. And a lot of it has just turned up shitty. So why are we giving this much attention to this group of people and handing over... I think he did great. He got the F-35s. What the fuck did we get except our President decided that being Bone Saw it is just, you know, things happen, my friend. Like... (laughs)
- SGScott Galloway
Oh look, we have, we get a lot. We, we have military bases there. We cor-
- KSKara Swisher
But in this deal right now, right?
- SGScott Galloway
Well, we're getting a lot, we're getting a lot of money. We continue to get access to cheap capital f- to fund our companies.
- KSKara Swisher
But they're not actually. As I sent you that story. They're not. They're cutting back rather su- substantively on all their investments here.
- SGScott Galloway
Uh, the pivot, if you will, or the change in complexion around investments coming out of the Gulf is the following. They used to send their capital overseas. And what they're saying now is, "We'll invest in your company, but we want you to build facto- we want you to build an economy here."
- KSKara Swisher
Right, which we don't want to do.
- SGScott Galloway
So rather than giving you money to, rather than giving you money to go build a ride-hailing service in Miami-
- 40:13 – 1:00:47
Warner Bros. Discovery Bids
- KSKara Swisher
and Netflix are expected to make offers for some or all the company. Paramount is widely considered the front runner thanks to financial and political advantages, but we'll see. The company is denying a report that it's partnered with sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi for a $71 billion offer that was reported. Warner Bros. board is expected to review the offers before Thanksgiving and aim to have the process wrapped by the end of the year. Um, they could also still just do the spinout thing, but there's enough interest here at this ... And this is real interest, and let me say, Comcast is definitely interested, um, uh, in this. I think they're perplexed about the non-economic bid by Paramount because Daddy Warbucks has the money to do so. And they wanna make an economic, and they mostly are in- they're interested in, in the, in the studios and the streaming service. Netflix has promised things like putting movies into theaters. They're trying to m- m- make themselves seem attractive. Um, so any ... I know you think this is a small thing, but it's a, it's a big deal for Hollywood, right?
- SGScott Galloway
Yeah. No doubt.
- KSKara Swisher
This is ... And it'll also make, uh, it'll go, it'll make the number of studios smaller, which of course now the writers and the directors, they're all sort of weighing in here. So I, I expect plenty of, of pushback from them, um, depending on what happens here. Most people, I think Zaslav is favoring Comcast. That's my impression. Um, he'll get a bigger role there. Uh, I don't think people much like, I think the, the worm has turned already on David Ellison a little bit. They, they st- they, they're very, to me, they're very freely calling him nep- nepo baby, and, you know, his UFC deal seems a little overpaid. It seems like a ... Uh, one of them said they just, uh, these other billionaires just took advantage of the dumber billionaire, young billionaire essentially. Um, so I don't know, but they have money and they have, you know, non-economic power, I guess. They just, they just want it. I just, y- you know, daddy wants to buy his son the car, I guess. I don't know. Uh, what do you think? I, I feel like Comcast is the best owner here or Netflix, but, um, in terms of quality and, and the ability to, to move forward, I think Paramount desperately needs this. Uh, thoughts about what did you hear in LA?
- SGScott Galloway
The fulcrum in this deal is simply put how wealthy Larry Ellison feels when he gets up in the morning, when he gets a call from his son and says, "Okay. What's our best and final?" Because, and Warner Bros. and their bankers have done the right thing. They've put a deadline on this thing to try and impose some discipline and say, "Okay, let's-"
- KSKara Swisher
Explain why they did that for people who don't know 'cause you're-
- SGScott Galloway
Oh, you do, whenever you're selling a company and you have multiple bidders, which it appears they do now, or at least multiple interested parties, you put a deadline on it, and you force people to get serious and put their best foot forward. You try and create a sense of urgency. Um, and so you impose some dis- discipline and say, "Okay, all letters of intent need to be in by a certain date and your best and final offers have to be in by this date." And then you, and then you go back and ask them for a little bit more to get the deal done. But just to give ... It's a little bit confusing, so I just wanna sort of break it, break down the parties here.
- KSKara Swisher
Please. Mm-hmm.
- SGScott Galloway
So Paramount, after having their 23.50, $23.50 a share bid rejected, they're reportedly preparing an offer alongside of sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi, although par-
- KSKara Swisher
Which they've denied.
- SGScott Galloway
Although they've denied this.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Although that felt like good reporting to me.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
I don't know if you saw it.
- KSKara Swisher
I did.
- SGScott Galloway
That, that doesn't feel like a rumor. It felt too obtuse to be just a rumor.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Netflix execs have met with Warner Bros. and reportedly said that a potential bid would include continuing the release of Warner Bros. movies in theaters. They're trying to appeal to the creative community. Comcast, the company has retained bankers for an offer and we now know that they are specifically interested in streaming and studios and networks.... it, the, but here's the bottom line, it, because of what was called the Revlon law or whatever it was called, the, Warner Bros. has an obligation to just accept the highest bidder. Uh, all this other stuff is somewhat noise. They will get shareholder lawsuits at the end of the day. They can say to someone, "We like you, and if you match this, we'll give it to you." But at, at the end of the day, if Ellison shows up with 10 cents more per share, they have a shareholder obligation-
- KSKara Swisher
So will he do that? That's what I'm-
- SGScott Galloway
Well, that's, uh, that's a-
- KSKara Swisher
... asking. The shares are down. They went, they had that big run up, and now they're running down. This, uh, of all the companies.
- SGScott Galloway
That's the correct question.
- KSKara Swisher
(laughs)
- SGScott Galloway
This all comes down to, in my view-
- KSKara Swisher
Daddy.
- SGScott Galloway
... Larry Ellison wakes up in the morning, and David, his son, calls him and says, "Okay, it's gonna cost us 24.75 to get this." This is, the bankers will do their job. The bankers will get the highest number, and then they'll go back to the Ellisons, who have the deepest pocket, and say, "We have an offer at 24 bucks a share." At the end, it makes sense to be fairly transparent. The truth has a nice ring to it. Say they get 24 bucks a share from Comcast or, uh, or Netflix, whatever, they basically, the smart thing to do would be to go back and say to the Ellisons, "At 26 bucks a share, by 5:00 PM tomorrow, it's yours." You go back and say, "This is your strike opportunity."
- KSKara Swisher
And then do you go back to Comcast and say, they, they-
- SGScott Galloway
I don't think ... I, when you get to this point, I think you pick, you pick the person with the deepest pockets, and you go back to them and say, "In my view-"
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
"... it's yours." I think going back and forth, at some point, you know, at some point, people are gonna tire. I, I, I personally think you get, you have a bidding process, and then you go back to one, and you ask for a bigger-
- 1:00:47 – 1:06:33
Predictions
- KSKara Swisher
here, I'm gonna make a very brief one.
- SGScott Galloway
Mm-hmm.
- KSKara Swisher
New York City mayor-elect Zoran Momdani is meeting with Trump at the White House when this airs on Friday. Um, I think they're gonna get along like peas and carrots. I don't know why I think that. I think ga- like, Tr- Trump has often, even though he insults Momdani, seems to think he did a good job at the campaign. Um, and, uh, and so, uh, I, I just, I just think it might go better than we think, but we'll see.
- SGScott Galloway
Uh, I think your instincts are absolutely right. I think it's in both of their interests. First off, uh, Trump is very looksist, and Momdani is a young, handsome man. He's very drawn to these young, handsome men. And Momdani, uh, Momdani will come out looking very... Momdani can come out and say, "I ha- I gave it to him," and he said... I think they're gonna come out and say, "While we had our differences, we're committed to getting along," and this is his native city. I think they both have mutually vested interests in coming across as statesmanlike.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Uh, so I agree with you. I don't think... Why would they invite him down only to then have more and-
- KSKara Swisher
They've done it.
- SGScott Galloway
... antagonism and bullshit?
- KSKara Swisher
Zelensky. They could do it. It could happen. Like, if, if he, if... Here's, let me tell you, Momdani, don't get caught in a, on a couch with JD Vance. That's all. Just don't, he's too savvy.
- SGScott Galloway
Are they, are they planning to do a joint press re- or a joint-
- KSKara Swisher
I don't know, but you never know. Look, Gretchen Whitmer got sucked up into that. Like, he's gotta be very careful about where they sit him. That's, you know, they could be trying to like, "It's a trap," c- like from Star Wars. That's all I'm saying. Be very careful about how they present you and what they-
- SGScott Galloway
Huh.
- KSKara Swisher
... 'cause they could pick a fight. That's the other opposite thing. They could pick a fight, a public fight with him.
- SGScott Galloway
(sighs) I gotta think someone in Trump's orbit's smart enough to go, "You know what? We're fighting a battle on a lot of fronts right now." (laughs)
- KSKara Swisher
This one's not a good one, and people like this fella. I, he, he, every time Trump insults him, he compliments him. It's really interesting-
- SGScott Galloway
Yeah.
- KSKara Swisher
... 'cause he's like, "Hmm, mm-mm, I kinda like the cut of your jib even though you're a communist," kind of thing. Anyway, your prediction.
- SGScott Galloway
I really do think we're, we're on the precipice of a pretty significant shift in what I'll call the societal structure, control structure, wha- wha- the societal order. I think the vibe and the tone that will become increasingly apparent amongst these billion- uh, the, quote-unquote, these billionaires, across leaders, business leaders, I actually think the tone and the vibe is gonna have more impact than the crimes themselves. And I think we're gonna see a dramatic reconfiguration of, uh, uh, Congress's approach to tax policy and how, uh, I, I, I think this is a big moment, and I think, uh, I'm now increasingly believing that the Democrats are supposed to take back the House. I think they're gonna take it back viciously.
- KSKara Swisher
Viciously.
- SGScott Galloway
I think this is gonna feel like the Republican wave under Gingrich. Uh, I think this is gonna be pretty severe, and I think we're going to see ... And unfortunately, the cl- you know, the, the, whatever's, the chime or the pendulum on the clock is nev- you can never visually see it at exactly the median. I think we're gonna see, uh ... I don't think they'll go through, but I think you'll see proposals for wealth taxes similar to the ones that's been proposed in California. I think you're gonna see a dramatic shift back-
- KSKara Swisher
I would agree with you.
- SGScott Galloway
... to progressives, because when you read these emails, you're like, "Wow, these guys, they really have become Marie Antoinette with, with, with, you know, with blazers."
- KSKara Swisher
They wear cashmere hoodies.
- SGScott Galloway
Whatever it is. Yeah, khakis.
- KSKara Swisher
Cashmere hoodies.
- SGScott Galloway
But this, I think the vibe of these emails is really unsettling, and I think it's, it's gonna, it's, it's gonna accelerate a decline or accelerate a pretty serious move to ... I don't, you know, call them progressive policies. Call them what you want. This is gonna, this is ... I think we're at a pretty pivotal moment, and it's more about the culture and the vibe than the specific crimes.
- KSKara Swisher
Yeah, I think what, I think what you're talking about. I don't ... Th- th- if, I think if Democrats were smart, they'd call it common sense and decency. Like, if they just kind of do that, it's such a c- ... 'Cause Trump seems not common sense and not de- and, and indecent. It just is a ... Anyway, that's my thing, like common sense and decency.
- SGScott Galloway
Hm.
- KSKara Swisher
Common sense and decency. I like that. I agree with you. It's a Marie ... You must have had some interesting dinners in Los Angeles. That's what it sounds like.
- SGScott Galloway
You'd be so proud of me. I-
Episode duration: 1:06:34
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