PivotScott Galloway: GameStop's eBay Bid Is Just a “Bad Ayahuasca Trip" | Pivot
EVERY SPOKEN WORD
65 min read · 13,367 words- 0:00 – 0:19
Intro
- SGScott Galloway
This is just so fucking stupid and such a waste of oxygen. It doesn't pass the most basic smell test.
- KSKara Swisher
[upbeat 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
So are
- 0:19 – 7:28
Met Gala
- KSKara Swisher
you going to the Met Ball?
- SGScott Galloway
I was invited.
- KSKara Swisher
Why were you invited? I, I'm sorry to ask that. [laughs]
- SGScott Galloway
[laughs] I, I acknowledge it makes no sense.
- KSKara Swisher
I was in The Devil Wears Prada, which may I say, as I predicted, what happened?
- SGScott Galloway
Oh, God, are we ta- Is this your new Taylor Swift thing?
- KSKara Swisher
$233 million globally. Um, but why, tell me why you were invited to the Met Gala. I'm just-
- SGScott Galloway
I'm still not sure. I just, I'm, uh, I think it's because I've talked a lot about and got a lot of, um, social media activity when I went to the Vanity Fair thing. So I think, I sh- Fuck, I don't know. I think someone, I think some intern somewhere said, "Podcasting. What about that crazy professor?" I don't, I'm not sure. A lot of-
- KSKara Swisher
They tried to be your pal, right? Weren't they trying to, like, suck up to you-
- SGScott Galloway
Um
- KSKara Swisher
... for a minute and a half?
- SGScott Galloway
I don't know. The people were pretty nice. Um-
- KSKara Swisher
No, the Bezos people, Bezos and his lady friend.
- SGScott Galloway
Oh, I, I like them. I, I met-
- KSKara Swisher
Mm-hmm
- SGScott Galloway
... uh, I mean, I don't know them, but I, my, I've had, you've had more interaction with, uh-
- KSKara Swisher
I have
- SGScott Galloway
... with them than I have. But I find them to be lovely. I, I was invited, I think I told you this, I was invited to a small dinner with him and another friend, and I, I said, no, I don't. A, I don't like dinners, and two, I don't, you know, two, I don't like people, and three, I don't, I don't wanna know these people because I know what's gonna happen. We talk about the slot. I'm gonna like them-
- KSKara Swisher
Yeah
- SGScott Galloway
... and I'm gonna start speaking-
- KSKara Swisher
You like everybody
- SGScott Galloway
... I'm gonna stop speaking my mind.
- KSKara Swisher
Truly low bar for people.
- SGScott Galloway
It is a pretty low bar. [laughs] I'm pretty easy.
- KSKara Swisher
I gotta say.
- SGScott Galloway
I'm pretty easy for us.
- KSKara Swisher
You're like, they seem nice. I'm like, "Mm, mm-mm, mm-mm."
- SGScott Galloway
Yeah, no, I'm pretty, I'm pretty-
- KSKara Swisher
I think they're getting the shit kicked out of them. Uh, you know, there's protests and, like, billboards, very, some funny things. There was a, um, you know, like a shopping cart out front with a bunch of empty bottles and said, "Bathroom. [laughs] VIP bathroom." I, they're projecting things onto the buildings nearby. Um, they kind of hijacked the whole thing, and it's kind of, I don't know, graspy and thirsty. I find them that way.
- SGScott Galloway
It's a perfect fit. Vogue, Vogue has so much rizz and no money-
- 7:28 – 15:52
GameStop’s Bid for eBay
- KSKara Swisher
and eBay stocks are responding to real train wreck of an interview from the GameStop CEO, what a surprise. Ryan Cohen, who's somewhat of a moron sometimes when he talks, announced the deal of the century over the weekend, a $55.5 billion unsolicited offer to buy eBay at $125 a share, pitching it as a future rival to Amazon. But then he went on CNBC Squawk Box, where our good friend Andrew Ross Sorkin, our famous Canadian friend, pointed out the math wasn't mathing. It was amazingly awkward. Let's listen.
- SPSpeaker
You have $9 billion, uh, on your balance sheet. Arguably, if you're, if you're providing, uh, effectively all of your stock and then, and then the cash that gets you to 20, you have this letter from TD, that's another 20. Uh, we're now at 40, uh, but we're still off, uh, by call it, uh, 16. And, and the 20, as far as I understand, while it's considered a highly confident letter, meaning TD saying they're highly confident, uh, that they would provide the financing, it's not locked financing. Yeah, we'll see what happens. Um, I, I, I hear you. I understand that. I'm, I'm just trying to understand where the, the rest of the money would come from. It's half cash, half stock. R- I, I, I'm, I hear you. I'm just saying that that math doesn't get you to the, to the price that you're offering.
- KSKara Swisher
It got more and more awkward after that. Um, this is just, this is a meme stock s- s- this guy is such a moron. He's always trying to get that stupid stock up, the GameStop thing, and take advantage of people, so I don't know. Reminds me of the, the story about Polymarket and Calci, only the top whatever, 0.1%, make money and everyone else loses. But your thoughts on this ridiculousness? I love Andrew.
- SGScott Galloway
This is... Well, first off, Andrew did a great job. I, I think Andrew is one of those... Y- you're like this, too. It is very difficult to ask really piercing, hard questions to make people look stupid while remaining dignified and not coming across as an asshole, and Andrew's able to do that. You're able to do that. Um, this is off, off, off Broadway theater, not strategy. This is just so fucking stupid and such a waste of oxygen, and a CEO who has, I looked into this, a compensation strategy that says, "If you can get GameStop to 100 billion, you get 35 billion," in a Musk-like compensation strategy.
- KSKara Swisher
Yeah.
- SGScott Galloway
So he's trying to meme-ify his stock again. So this is noise. The, i- i- it doesn't pass the most basic smell test. First off, there's a scale mismatch. eBay is a 30 to $40 billion enterprise. GameStop doesn't have the balance sheet to do without, without massive dilution or leverage, and the stock they would have to offer, they'd have to issue m- so much stock that the stock would immediately go into a downward spi- there's no way they can do this. The strategic fit is thin. We're both commerce isn't a strategy. eBay is a two-sided marketplace with, with decades of, of liquidity and m- uh, tens of millions of customers. GameStop is still figuring out what the fuck it wants to be other than trying to become a meme stock. And then as Andrew was pointing out, the financing reality here is nothing but a, a bad ayahuasca trip. Even a, even a partial bid would require issuing a ton of equity, see above, massive decline in the stock. That's effectively asking shareholders to fund a, a, a ketamine trip. So what's left here? Th- th- there's nothing here but signaling to retail investors. He's trying to say, "We're bold. We're swinging. Start taking... Get, get someone on Reddit. Get Roaring Kitty fired up so I can get an irrational compensation for not actually adding any fucking intrinsic value." To the market, what he said is, "We're a melting ice cube," and he's also, in my opinion, this has backfired. And by the way, GameStop stock, as we record, down 9% today. This is-
- KSKara Swisher
Should be down to zero
- SGScott Galloway
... this is not only... I, I blame the board here. Uh, uh, a board of directors is supposed to be fiduciary.
- KSKara Swisher
Is there one? I mean-
- SGScott Galloway
Well, that's a fair point
- KSKara Swisher
... to speak of
- SGScott Galloway
But this should never have even been allowed. Real acquisitions, the real work is done behind the scenes. And if you're gonna make a hostile bid for a company, you show up with your financing locked and loadedAnd it's done. And if you have to go hostile because they reject your initial offer, this should be a one-sentence response from the board of eBay.
- KSKara Swisher
Oh, come on. This-
- SGScott Galloway
"You are not a serious people," period.
- KSKara Swisher
Mm-hmm. Yeah.
- SGScott Galloway
That's it. Uh, uh, so this makes a headline. This is using financial markets and the press as you're taking them for clowns because you got a, you got a trip to the circus in COVID with your meme stock adventure.
- KSKara Swisher
Well, he's trying to get it going again. It's like that Wall Street Journal piece about who's benefiting from these prediction markets, and if you don't know who the sucker in the room is, it's probably you. It's, this is not a real thing. It is a-- It's, it was, it was showing who makes profits, and it's a small group of people who make all the profits. Everyone else loses, thousands and thousands, whoever's using it. And so it's, you know, you're a, you're a, you're a, a sucker. There's just... It's just like, I don't know why this is legal, this kind of nonsense. I just don't.
- SGScott Galloway
Now it's down 10%. You're allowed to... I don't know if it should be illegal. I-Here's the bottom line. The market, [chuckles] the market is doing its job. They, they say, "Oh, remember GameStop? Okay, the CEO's a fucking idiot, and he has no-- He clearly has no fiduciary oversight, and it's taken his stock down 10% today," one day.
- KSKara Swisher
Right. Except this has gone on for a long time, this nonsense, and people have benefited, just like they are doing over on these predictions market. There, the certain people who have s- who are a little smarter, you know, supposedly ch- like I think Chamath was in there. Remember when it was going up and up and up, GameStop? It just feels like there's, they're just taking poor people's money. Like, the, it just is so grotesque, the, what they're doing here.
- SGScott Galloway
I, I think that's, I, I think the meme stock movement, I, I, I hated it. I, I got dragged on the internet 'cause I, I said young men should spend less time on their phone and trading. This was just stupid.
- KSKara Swisher
Yeah.
- SGScott Galloway
The-- I do think a lot. I'd be curious to know. I mean, quite frankly, the meme stock movement, the whole gestalt of it was stick it to the man, stick it to rich people.
- KSKara Swisher
Yeah, but it never... And then it became about a con at certain-
- SGScott Galloway
Right. And when any, when, when you have the Winklevii telling you to stick it to the man, it means you're about to be impaled as a retail investor. And so I agree with you that a-anyone, this is just pure gambling. It's not speculation. And, and the reality is for, for younger people or people doing this, if you wanna have some fun, it's like Vegas. Fine, have at it, but the thing is you gotta stare at your phone all fucking day 'cause the, the, the moves are so wild here. But this is, in my opinion, um, I, I think, uh, and I don't know if there should be regulation here. It's free speech. But, uh, the question is should you be able to, should you be able to have this kind of impact on the markets, which I don't think it has, when you make offers that are not in any way realistic? In other words, is this market manipulation? Is it trying-
- KSKara Swisher
Yeah
- SGScott Galloway
... to do something-
- KSKara Swisher
Right. That's what I mean, yeah
- SGScott Galloway
... with absolutely no serious intent-
- KSKara Swisher
Mm-hmm
- SGScott Galloway
... of, uh, of... Uh, I wonder what's happened to eBay stock price.
- 15:52 – 22:55
SCOTUS Restores Abortion Pill Access
- KSKara Swisher
move on. The Supreme Court just temporarily blocked a lower court's ban on the abortion pill mifepristone being sent through the mail. Two pharmaceutical companies had filed an emergency appeal warning the lower court's ruling could create chaos and leave pa-patients around the country in limbo. Medication is now the method used in nearly two-thirds of abortions in the United States. The FDA approved the drug in 2000. Experts say it's safe and effective. Um, we're gonna be talking more about the midterms in a bit, but is this a fight that Trump and the Republicans wanna have right now? As Melinda French Gates said on Threads, "Everyone deserves healthcare that's guided by science, not politics." Melinda, Melinda for the win, FTW. Thoughts?
- SGScott Galloway
Well, I'm just gonna refer to it as M tone. Uh, M tone is an enormous breakthrough. It's used by millions of patients worldwide. It's one of the most studied and safest medications on the market. Serious complications are very rare. The safety profile is comparable or safer than many common prescriptions. It's effective. It reduces the need for more invasive procedures, and not only that, it expands access, especially in underserved areas. It, you know, earlier care, safer outcomes. It's consistent with medical authority and standards. Uh, the legal consistency argument doesn't hold up here. Other medications with higher risk profiles remain legal. Singling this one is often just inconsistent. And-
- KSKara Swisher
Well, it's 'cause it's working. The anti-abortion activists, that's why they're-
- SGScott Galloway
This is, this is what is-
- KSKara Swisher
... focused on
- SGScott Galloway
... Again, this is what is so mendacious and un-American. [sighs] Rich people don't need government. I, I don't, I, I, I have benefited enormously from standing on the shoulders of other people and taxpayers, assisted launch, University of California, rights, rule of law, the SEC, all these things I benefited from. Now that I have wealth, I don't need the government. I have my own transportation. I have my own security. I have my own schools. I have my own healthcare. The people who need government the most are the most vulnerable among us, and just when the government needs to step in and protect a 15-year-old non-white woman in the SouthFrom something that could impoverish her for her lifetime, traumatize her, put her in real, uh, serious health risk. That's who they go after. This isn't-- I've even said, the, the anti-abortion movement is not a war on women. It's a war on poor women. This is-- Who needs this? Who is this a breakthrough for? The people who don't have the resources or, quite frankly, the sophistication to get on a plane and go to a, a, a clinic to get an abortion in a state where it's legal.
- KSKara Swisher
Yeah.
- SGScott Galloway
And by the way-
- KSKara Swisher
And then they disdain them when they're bor- after they're born. They don't take care.
- SGScott Galloway
They could make this illegal.
- KSKara Swisher
Yeah.
- SGScott Galloway
You and I would have no problem getting it.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
None. This is government at its worst, at its worst. This is not protecting the people who need government and laws the most. This is-- There is, there is n-no, no medical, no moral, no, in my opinion, American reason to do this.
- KSKara Swisher
Well, they want no abortions. You, you get why. They want no abortions whatsoever.
- SGScott Galloway
No, I, I get that. But when you... But here's the bottom line. They want abortions, but only on the down low for if and when it happens-
- KSKara Swisher
Yeah, for their friends and family
- SGScott Galloway
... to one of their friends. You're not into abortion, [chuckles] then don't have an abortion. But I think you would find, uh, that, that the, one of the reasons that people are-- A lot of people, especially wealthy anti-abortion people, have no empathy for this, is they know if shit ever gets real for them or anyone in their family, they can figure it out. And so I find this, I find efforts to do away with... This drug is a gift.
- KSKara Swisher
Yeah.
- SGScott Galloway
And, and-
- KSKara Swisher
Well, the Supreme Court has just temporarily, though. This is just a temporary stay.
- SGScott Galloway
Well, my understanding is, as we were spe- uh, s- just a couple hours ago, they've temporarily halted the ban or blocked the ban.
- KSKara Swisher
Yeah, they did. Yeah.
- SGScott Galloway
But this also goes-
- KSKara Swisher
But it's a temporary block
- SGScott Galloway
... this also goes back to, um, you know, what I think of a lot about young men, and the number one reason m- uh, a lot of m-- I think it's most women who have terminated pregnancy go on to have children. One of the top reasons stated by women, uh, as to why they terminate a pregnancy is lack of partner support.
- KSKara Swisher
Right, or the money.
- SGScott Galloway
And so if you're-
- KSKara Swisher
Yep, or the money
- SGScott Galloway
... if you're really serious... And by the way, since-- If you're, if you're really serious about reducing the number of pregnancies terminated, then we need economic policies, and we need more men my age to get involved in young men's life and instill a set of values such that we produce more economically and emotionally viable men who are good-
- 22:55 – 37:13
AI and the Midterms
- KSKara Swisher
to go until the midterms, AI regulation has become a hot button issue, and the money is pouring in. Uh, AI super PACs are taking a page out of the crypto playbook, which worked rather well, spending millions to influence elections. They're backing both Democratic and Republican candidates, uh, whoever is more friendly to AI and big tech. The biggest PAC, Leading The Future, is funded in part by Andreessen Horowitz and OpenAI co-founder Greg Brockman. On the other end, there's the Public First Action, a PAC backed by $20, uh, million donation from Anthropic, and tech billionaire Chris Larsen is putting up $3.5 million in New York to back Democratic congressional candidate, uh, c- candidate Alex Boris, who supports AI regulation. This w- I was texting with Chris about this, um, the other day, and also Alex. Um, let's take a look at the ad that Larsen's PAC just launched.
- SPSpeaker
Oscar, what is wrong?
- KSKara Swisher
You think you know what they're watching, but with AI, they can land on anything, violence, child sexual abuse, and predators. Who would be against AI safety laws? OpenAI, the company behind ChatGPT. They're attacking Alex Boris for writing the toughest AI safety law in the country. Don't let OpenAI shut down child safety
- SGScott Galloway
You Can Push Back is responsible for the content of this advertising.
- KSKara Swisher
It, it's an interesting ad, and from a marketing perspective, it's an interesting way to counter child safety is the number one, uh, the number one, uh, thing that people are all bipartisan about, and, and, and also AI increasingly. Um, and just for f- speaking of AI legislation, the Senate Judiciary Committee just advanced a bill that would require AI companies to implement age verification process. It would also, uh, ban minors from using AI chatbot companions. Um, I'm not sure this will, um, will pass. Um, and at the same time, the Senate just unanimously passed a ban on prediction market trading for senators and their staffers, effective immediately. Smart. Kalshi and Polymarket both praised the Senate's move. Um, the Senate m- minority leader, Schumer, called it a no-brainer, saying we must never allow Congress to turn into a casino. He urged the White House to follow suit. Of course, the White House has already warned staff about betting on the Iran war, but I doubt they'll go for a full ban. And again, the White House is probably in the way of any of this AI legis- even the safety stuff passing because they're in the pocket of the AI industry. So thoughts on, on this effort by, um, Chris, who was... Chris was a tech billionaire at a company. He's really interesting. He's been very involved in San Francisco politics, but this was interesting for him to sort of go against these pro-AI PACs, which are led by essentially Marc Andreessen and his gang, his mob. Um, thoughts on this?
- SGScott Galloway
Well, it's just, it's filling a vacuum. It feels as if there should be federal legislation. What, what-
- KSKara Swisher
Sure
- SGScott Galloway
... I find most interesting is I think that the entity or the part, the, the touchstone or the, the visible object or the cudgel, whatever you wanna call it, is gonna be data centers. And what's interesting about AI is that your approval of AI... The, the two brands that have inc- registered the greatest brand destruction have been the US abroad over the last few years. We used to be the enforcers protecting people of the West from rogue nations. Now we are that rogue nation. And, uh, AI. The brand AI has just taken an absolute nosedive because the only population or the cohort where the, where AI has over 50% approval is people making over $200,000 a year. Because if you're wealthy, you see AI as powering your 401 (k) , an opportunity to make money. You may use it at work. You feel pretty secure about your job. But what a lot of, um, lower income people think is that AI, their only visible representation of AI, is a data center that's gonna send their electricity rates up, while private companies that they don't even have access nor the money to participate in boom in value. I think data centers are gonna be ground zero for this battle.
- KSKara Swisher
Yeah. It's one of them. I think a lot of it, I think people just have a, like a, a, a, a real antipathy towards AI at this point, even if it's, it's a good thing in some ways, right? I think they've really... You know, these PACs, they, they'll work, they'll work day and night. The same thing with the crypto industry, you know, which had sort of a faint distasteful ar- aroma to it. Um, and it real- but it still was effective with all the millions they're spending all over. And by the way, Musk is part of this. They're all trying to stop it. It's interesting that Anthropic's on the other side, or Chris Larsen's on the other side. So there's a lot of tech billionaires, um, lining up to, to stop that, and I th- it's, it's not good for anyone. Alex Boris is a really interesting candidate. He's in that part of Manhattan. I think it's, uh, Jack Schlossberg, George Conway are all... There's a whole pack of people running in that area. Um, and Alex is trying to sort of stick his head up and as the Mr. AI regulator. But it'll be, uh, it'll be an interesting case of who wins here. A lot of people think the candidates or the party that is sort of, sort of vaguely anti-AI has a better chance in the midterms. I don't know if you think that's so, but there, there is legislation. It's just that this in, this, um, administration is just not going to pass any of these laws because they're, they're getting so much money from the AI companies. I don't see them... That's, the only people they ever have at the White House are AI people. Never have a critic, never have anybody who's against it.
- SGScott Galloway
There was this great Hugh Grant, Nicole Kidman show called "The Undoing" where they're trying to solve a murder, and the defense attorney says, "People hire me t- to, um, create muck," and that's what's going on here. I think that's what the, the AI guys are gonna do. I think they're just gonna create a ton of confusion around this and make it difficult to pass anything. And-
- KSKara Swisher
Yeah
- SGScott Galloway
... also, they have the money. My understanding is they've already-
- KSKara Swisher
Yeah. I do
- SGScott Galloway
... pledged about a quarter of a billion dollars. And just for reference, leading up into the '22 midterms, pharma spent-
- KSKara Swisher
'26.
- SGScott Galloway
No, this is, uh, I'm using 2022 just as a benchmark.
- KSKara Swisher
You said 2020. Oh, oh, okay. Got it. Crypto, yeah.
- SGScott Galloway
But the pharma lobby spent 380 million, insurance spent 159, real estate spent 139. I think you're gonna see far more than that spent by the pro-AI lobby. I think it's gonna be sort of, uh, they'll try to couch it as we're, we're for safety and children, we need to do this thoughtfully. And the anti-AI will be a grassroots a- and it'll be focused on data centers. They're environmentally damaging to us. They're not creating any jobs, and all they're gonna do is send your ele- uh, already soaring energy costs even higher.
- KSKara Swisher
Right. Yeah.
- SGScott Galloway
Um, so I, it's gonna be, it's, it's gonna be an interesting, it's gonna be an interesting proxy for how people feel about AI and technology.
- KSKara Swisher
Well, I, I don't know. I feel like it goes back to the Bezos thing, is they're trying... Nobody likes them anymore. Like, they have become villains. They are villains now. And so I d- no matter how much money they spend, people are like... I, I can't tell you how many people co- Scott, really interestingly, over the past week, people have come up to me and said, "Thank you to you and I for being at least critical in a smart way." Like very, you know, not just screaming about it, but explaining it. Um, I just feel like these are villains now, and they can spend as much money as they want, but I don't think it's gonna... I think people in their heart feel very nervous about it and very, very distrustful. And I know it doesn't correlate with how much money, like the PradoWas, but the story is about corporations fucking you, tech companies fucking you. That's really what it's about. And I think... And it was, it did it in a very subtle way, um, but it, it, it's, they've got... I'm not so sure it's gonna work. And the same thing with these, the prediction markets. As much as they're interesting, everyone's got a little funny feeling about them. I mean, obviously the Senate, nobody in the Senate should, should be on prediction markets if they have information-
- SGScott Galloway
Or trading stocks
- KSKara Swisher
... Trading, well, both. You're right. Um, the, the prediction market is even worse on some level 'cause it's like, let's bet on the mor- let's bet on death, essentially. Um, and, and it, it should be the White House, it should be the, the House, it should be all of them. And it's not free speech. It's, you have unique information, you're there for the public service, and while you're there, you're not gonna be gambling, essentially. That, which is what I think it is.
- SGScott Galloway
We, look, i- there's two issues here. One, and we'll come back to this. One is how the general public feels about AI and how the brand has eroded dramatically. And then there's, in my view, we should follow the Singapore model. An entry-level minister earns the equivalent of $800,000 and 1.7 million US for a prime minister. The objective of our elected representatives, the incentive should be you are there to make Americans wealthier, not to enrich yourself. And what Americans see right now around AI is the following: it's making a lot of people a lot of money, but the only thing I see is risk, peril according to these guys, and my electricity costs are gonna go up. So I'm supposed to like this? Oh, and by the way, the, the, the ultimate poster child for big te- for tech in this age is Musk.
- KSKara Swisher
Mm-hmm. Yeah.
- SGScott Galloway
And he does not acquit himself well.
- KSKara Swisher
No, he does not.
- SGScott Galloway
So it used to be, it used to be Gates, who was a little bit awkward. It used to be, and then went on to, I think, uh, I think get very concerned about public health and Amer- and developing nations. Steve Jobs at a minimum was, was likable and seen as a visionary. The new spokespeople for tech are Musk, Altman, right? It's ki-
- KSKara Swisher
Bezos.
- SGScott Galloway
Um, I don't even think Bezos. He was kind-
- 37:13 – 45:29
Apple Earnings
- KSKara Swisher
earnings and what they mean for the company's future strategy. They just had their best March quarter ever, beating expectations with $111 billion in revenue, up 17% from last year. iPhone is still the engine, $57 billion in sales, up 22% in their services business. That's iCloud, Apple TV, and subscriptions just hit an all-time record of nearly 31 billion. But the company also announced it's abandoning its net cash neutral target. Some analysts say this is a signal that Apple's about to make a, a major AI acquisition, possibly the AI startup Perplexity, which has struggled compared to the others, but, uh, uh, and has a range of issues around it. Um, talk about should Apple buy into the AI, uh, business? Um, first, what do you, what do you think about this?
- SGScott Galloway
Well, first off, this really is sort of a, a run through the tape, high five, you know.
- KSKara Swisher
Nice last quarter for Tim Cook.
- SGScott Galloway
Yeah. Uh, best Q1 ever. Revenues of 111 billion, up 17% year on year, beating Wall Street-
- KSKara Swisher
Yeah
- SGScott Galloway
... estimates of 109 billion. The stock's trading up 3% after hours. They... O- one of the things I love about Apple is they've figured out we're a mature company. We're not a growth company. We're still growing, but we're going to return, um, uh, money to shareholders, and they do it through buybacks. They just announced a $100 billion share buyback. They've raised their dividend 4% to 27 cents per share. iPhone revenue rose 20 per- 22% in the quarter with Cook calling the iPhone 17 lineup, which I wasn't a fan of, I gotta, I gotta own that, the most popular in our history. Got that one wrong. Though revenue was constrained by supply issues. Q3 guidance, revenue growth of 14 to 17% year on, year on year. And the new CEO joined the earnings call and was introduced by Cook, uh, which was the first time, I think, um, first appearance since the transition was announced. He praised Apple's financial discipline under Cook, and, uh, uh, the thing I love or respect so much about Apple is that companies typically have a tough time acknowledging they're no longer a teenager, and they stuff their face with Botox and fillers, and they don't wanna, they don't wanna act like a mature company w- and be very disciplined, which goes to your question around AI. I personally think, and watch, by the time this airs, they'll announce they've acquired Perplexity. I think Apple's culture is so strong that they've decided that they are not an acquisitive company, that they don't like acquiring. They, they real-
- KSKara Swisher
They don't
- SGScott Galloway
... they've made fewer acquisitions than any company of their size.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
And I wonder-
- KSKara Swisher
The headphone company's the last one I remember
- SGScott Galloway
... Beats, right? But in my view, what they've decided is similar to the search wars, let's return, let's not, let's not engage in the AI, in the AI wars. It's too expensive. There's too much capital in it. Let's continue to be the arbiter, the toll, um, a- and custody of the billion most attractive consumers in the world.
- KSKara Swisher
Like with Maps, the way they got out of, sort of got out of Maps.
- SGScott Galloway
They get, and they manage, and granted, uh, there's been antitrust action against it, but they managed to get a $20 billion licensing fee to be the default search engine from, from Alphabet. I wonder if they're gonna say, "Look, we'll use AI to improve our targeting and improve our Apple Music, but we're going to, at some point, have an auction and auction off access as the default LLM," and they're gonna get tens of billions of dollars from one of these guys.
- KSKara Swisher
Or should they buy something and just... 'Cause this, this is sort of the heart. It, uh, uh, whatever you think of AI, it is at the heart of your services, and you can't just, like, it's not, you can't vendor it like you would, um, search or, um, or mapping.
- SGScott Galloway
Search has been pretty central.
- KSKara Swisher
Yes, but it's not that... There's a whole bunch of things you do on an iPhone that's not just searching, and you don't use search internally on the phone. You use it when you go outside. That's what they use Google for, for your, for your browser. They don't do it, they don't power the search inside of Apple. They have to have a AI company. They just do. They need it to integrate the way Google has done with Gemini. They need one. I think they have to buy one, um, because they're not gonna be able to build it. They keep having people leave who are running AI. It's just there's not enough action happening there, um, for people to stay.
- SGScott Galloway
So you think it'll be an acqui-hire, or do you think they'll actually offer it as a service?
- KSKara Swisher
No, I think it'll be integrated into their services. It'll, y- it, the way Gemini is. I mean, there is a Gemini separate service, but most, most of the usage of Gemini is within the search engine, right? Into their current product. I don't think people necessarily... Like, like, I go out when I wanna use AI and go to Claude, right? And, a- and sometimes I get it in Gemini, but Gemini's not quite specific enough, and I don't wanna pay for it, and I don't want more relationship with Google, and probably one of... And Claude is better, for me at least. So I think they have to have something they integrate into their business for lots of reasons. And then they could also say, "If you wanna do something outside, like with search, we have a deal with OpenAI." I think they did have some sort of deal. Anyway, I think they, they buy something. I don't see how they could.
- SGScott Galloway
But to be serious in AI
- KSKara Swisher
Right
- SGScott Galloway
... involves this, this CapEx. You see, Apple's complexion in shareholders is Apple shareholders have gotten their lips wrapped around the crack cocaine of profits. You start waiting-
- KSKara Swisher
I'm not talking about a customer service, a consumer service. I'm talking about integrated into their other services.
- SGScott Galloway
Well, it-
- KSKara Swisher
They need to have some, uh, some ability to do that.
- SGScott Galloway
But why... Uh, I, I guess my question is the following. Why Anthropic and OpenAI both get public? One at, you know, both of them call it a trillion dollars. Uh, the new CEO shows up and says, "Who wants to be the default AI for Apple products?"
- KSKara Swisher
Yes, but for Apple products externally, not internally. They need to have AI-
- SGScott Galloway
Oh, yeah, they need... I, I agree. They need to have AI competence.
- KSKara Swisher
Right. And that's why they need to buy something like Perplexity, not one of the big ones.
- SGScott Galloway
Because you don't think they can recruit the people to build that.
- 45:29 – 54:46
Pentagon’s AI Deals
- KSKara Swisher
the Pentagon just made a slew of AI deals. Speaking of, this is an AI w-week here. Um, Jeff Bezos' tuxedo and AI dudes, um, announcing last week that it reached agreements with Amazon, Microsoft, Nvidia, Oracle, and a startup called Reflection to use their technology for, quote, "lawful operational use." Uh, [scoffs] I don't trust them at all. These companies join xAI, OpenAI, and Google in providing Pentagon, Pentagon with AI tools. The Pentagon says these agreements will accelerate transformation toward making the US military an AI-first fighting force. Notably, Anthropic is still out of the mix, despite that recent productive meeting at the White House. Just last week, Defense Secretary Pete Hegseth called Anthropic CEO Dario Amodei an ideological lunatic. Uh, he's such a moron. Um, you know, it's, it's... They should spread around the wealth here, but, and not just rely on one company, obviously, and let them fight it out. But I think, nonetheless, from what I understand, from everyone who works in government, Claude remains the top player here, and it's, it's stupidity on the... Well, it's kind of saying things twice. Stupidity on the behalf of Pete Hegseth. You have to assume he's smart in the first place, which he isn't. I think he's gonna be out. I f- I have this feeling he's gonna be out.
- SGScott Galloway
You think?
- KSKara Swisher
I do. I don't know why. I just was like, "Oh, he's gonna get rid of him." He's too much of a moron. He's such a... Like, I know he looks the part, and he's like, does his chest puffy thing for Donald Trump, which he likes, but I just think he's... I think the knives are out for this guy 'cause he's such an... I just can't figure out which one they're gonna get first, Patel or, uh... And by the way, SNL did a great job on both of them this week. Um-
- SGScott Galloway
Oh my God. Did you see Aziz Ansari?
- KSKara Swisher
Aziz Ansari did Patel.
- SGScott Galloway
Oh, he was so good.
- KSKara Swisher
And of course, Colin Jost jost as Pete Hegseth [chuckles] is just fantastic. Um, but I think he's a moron, and it's fine to have all these people come in and do this stuff. Sure, why not? It just seems like that's a lot of people in there in that room. I don't think it's... I, I feel like somehow it's probably too chaotic to have all of them there on some level. Maybe not. I don't know.
- SGScott Galloway
It, it just seems to me that, uh, to a certain extent, extent Anthropic can declare victory and go home and be one of the seven companies or not.
- KSKara Swisher
Yeah.
- SGScott Galloway
Uh, the Department of Defense-
- KSKara Swisher
Again. Yep
- SGScott Galloway
... they blackli- they blacklisted Anthropic. Anthropic feels like, and Dario Amodei feel like kind of the first person who sort of said no to the tech bros and to Hegseth and Trump, and he's gained, I think, a lot of stature from that.
- KSKara Swisher
Yep. Mm-hmm.
- SGScott Galloway
And, but at the same time, he can say that, "Fine, I'll be one of the seven companies." The, the breakdown wasn't over capabilities. It was over guardrails, right? The DoD wanted, uh, Claude deployable for all lawful purposes-
- KSKara Swisher
All... Right
- SGScott Galloway
... to have a-
- KSKara Swisher
Which they didn't. Yes. I... Yes
- SGScott Galloway
... and An- and Anthropic said no to autonomous kill decisions. And so a, a federal judge said the Pentagon's move looks like an attempt to cripple Anthropic, which is an... It, it's just so weird. All these, all these tech bros who are all, all looking for the next check and bailout in their own crypto schemegoing after Dario. I think it's, I think Dario's in a great spot right now.
- KSKara Swisher
Oh, for the next era? Oh, wow. Let me tell you.
- SGScott Galloway
Yeah, he looks really solid.
- KSKara Swisher
Next, if there's a Democratic president, he's gonna be the poster child for the Democrats.
- SGScott Galloway
The, the most interesting argument I've heard, and it really made me think about this, was that all of these guys are claiming that this is more powerful than nuclear weapons.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
We don't have private venture-backed companies making nuclear bombs.
- KSKara Swisher
Correct, sir.
- SGScott Galloway
[laughs] So it's, so it's like, okay, if you really believe that, then shouldn't, shouldn't you all, by virtue of defense, for, for defense reasons, be government controlled and owned companies?
- KSKara Swisher
Yes. Yes, yes.
- SGScott Galloway
And, or highly regulated? [laughs]
- KSKara Swisher
Yeah.
- SGScott Galloway
Because you're claiming that these things are more powerful than any technology ever. We don't, like-
- 54:46 – 1:07:20
Wins and Fails
- KSKara Swisher
Why don't you go first this week?
- SGScott Galloway
Uh, well, my fail is the board of directors for GameStop. If you're gonna be an SEC publicly listed company, you have a fiduciary responsibility to not, to not impose a tremendous burden on other companies who are trying, uh, to serve their shareholders and, and serve their consumers and their employees. And when you make these ridiculous offers to another company that has absolutely no credibility, veracity, likelihood of going through, you're just i- in a, in some weird attempt to, like, ignite another meme craze in your stock, that's just irresponsible and reckless. And there needs to be... Generally speaking, in business, within, from public companies to other public companies, there is sort of a code. You don't... L- like when, when w- w- when we were thinking about acquiring a company at a public company, and then we decided internally it doesn't make sense, we immediately sent them a letter saying, "We're withdrawing consideration," 'cause we don't wanna tie them up. We want, we want them to get on with their business and their life, even though you could do it to, uh, distract them. But I was on the, I was on the board of Urban Outfitters, and at one point we were considering acquiring Abercrombie & Fitch, who at the time was-
- KSKara Swisher
Oh, God. [laughs]
- SGScott Galloway
... hugely diminished.
- KSKara Swisher
Wow, that's a failure.
- SGScott Galloway
Oh, by the way, Kara.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
We missed that one.
- KSKara Swisher
Oh?
- SGScott Galloway
We could have picked it up for pennies.
- KSKara Swisher
Pennies, yeah.
- SGScott Galloway
And it's come, it's come back hugely.
- KSKara Swisher
Oh, has it? I didn't know.
- SGScott Galloway
Oh my gosh, Abercrombie? That would've been... That one got away from us. We came very close. The Haney family that runs and controls Urban Outfitters are very, very smart people. And, and... Uh, but ultimately we passed. But the moment it was, like, the moment we made the decision, we could've gotten in the way of other competitors, American Eagle or whatever, to acquire it, kept it on the market for longer. But it was like, no, there's a code amongst good fiduciaries where you immediately say, "We're not gonna be a bidder here," such that they can get on with trying to sell it to somebody else. And this is such... Uh, uh, it's just irresponsible. I just, I just hate this from, like, a, [chuckles] a decorum standpoint. It's a waste of everyone's time. He's not serious. And I love the fact that the market has responded by taking the stock down 11%. Anyways, it's kind of a weird fail.
- KSKara Swisher
Yeah, he's a-- Ryan Cohen's an ass clown. I mean, is that the right word?
- SGScott Galloway
Um, the, the, uh, my win is, um, uh, uh, Senator and university president Ben Sasse. Did you see his 60 Minutes interview?
- KSKara Swisher
Oh, God. Oh, it's heartbreaking.
- SGScott Galloway
I, I... It, it really... And of course I turn everything back to me. I find he is such a... Like, he's the best of conservative values.
- KSKara Swisher
I would agree.
- SGScott Galloway
You know, his ability to talk about his faith, uh, God, his fidelity to the Constitution, his fidelity to his family, and couch it a- as, as he struggles with, uh, pancreatic cancer. It's so eloquent and so moving. And I was, um, um, uh, struggling with something that happened to me that really upset me this weekend. And he, I watched his interview, and he talked about, um, that at one point before it was, he had the diagnosis of pancreatic cancer, he had, he said, hundreds of tumors around his spine unbeknownst to him. And he was in such intense crippling pain that he was taking a dozen scalding hot showers a day that would provide him just minutes of relief, and then he'd have to take another hot shower. And so I started a practice [chuckles] where I'm like, okay, imagine you have that kind of pain, tumors all over your spine, and all you can do is lay down and then take another scalding hot shower. I'm like, what would this problem mean to me at that point?
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
And it's a really healthy practice.
- KSKara Swisher
Oh, yeah.
- SGScott Galloway
Anyways, I have my-
- KSKara Swisher
It is
- SGScott Galloway
... my Ben Sasse tumor practice now.
- KSKara Swisher
Oh, goodness, yeah.
- SGScott Galloway
And we-
- KSKara Swisher
He's... You know, can I point out, there's a lot of really amazing mRNA technology happening right now about pancreatic. It's not gonna save him.
- SGScott Galloway
Well, he's still alive because of some of those technologies, though.
Episode duration: 1:07:21
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