SpaceX Wipes Out a Trillion in Value. "How Low Can These Shares Go?" | Pivot

Scott Galloway 0:00 I do have another tagline for Facebook.

Kara Swisher 0:02 [chuckles] Okay.

Scott Galloway 0:04 Meta: Ignore the smell coming from the basement. [upbeat music]

Kara Swisher 0:13 Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.

Scott Galloway 0:17 And I've been doxxed.

Kara Swisher 0:19 You've been doxxed. What? Tell me.

Scott Galloway 0:22 Uh, so I don't know if you've heard, but-

Kara Swisher 0:25 Mm

Scott Galloway 0:25 ... Mayor Mamdani has decided-

Kara Swisher 0:26 I have

Scott Galloway 0:26 ... to release

Scott Galloway 0:27 a list of the nine hundred and fifty thousand residences with addresses and names that might be eligible for his Pied-a-Terre tax.

Kara Swisher 0:36 Yeah. Yeah. And? This is from The Wall Street Journal. This is the story. Explain it. Do you want me to explain it?

Scott Galloway 0:42 Yeah.

Kara Swisher 0:42 Let me read from The Wall Street Journal. "Mamdani’s administration fired a warning shot last week when it published an online list of property owners that might be subject to a surcharge on luxury second homes. The list includes owners’ names, addresses, and market value of properties. The released list threatens to stir up existing tensions between the mayor and the city’s elite. The city has also been sending out notifications to homeowners they might be subject to the new tax. 'If you have a second home in New York worth more than five million dollars, check your mailbox when you’re back in the five boroughs, because you’ve got mail,' the mayor said in a post on social media." I assume y- I am not-- I have, I have an apartment here, but I don't... I'm well below that number. Um, uh, uh, what do you... I, I don't love this. I can't, I can't say I love this. It feels like a little bit like doxing. Just tax them and get, get on with it is my feeling. That's how I feel.

Scott Galloway 1:30 Here's the definition of doxing.

Kara Swisher 1:32 Okay.

Scott Galloway 1:33 Doxing is publishing private identifying information to expose someone to publicly pressure or harm without their consent, tied to status, the publisher's disapproval. Swap elite for any other disavowed group, and nobody's calling this a tax, uh, roll. This is-- I'm a fan of this tax.

Kara Swisher 1:55 Yeah, I know.

Scott Galloway 1:55 I was supportive of it.

Kara Swisher 1:56 Yep.

Scott Galloway 1:57 Rich absenteeism should, should subsidize a nurse in the Bronx making forty percent of her income on rent. I, I, I came out in favor of this tax.

Kara Swisher 2:06 Mm-hmm.

Scott Galloway 2:07 This is the definition. He's taken a legitimate source of tax revenue and he's turning it into a wanted poster. And the question I would have is, other than trying to identify and imply these people have done something wrong, and then eighteen months after a healthcare CEO was executed in the street, and then publish the list, what, what is the upside here? Why is he doing this?

Kara Swisher 2:30 I, I-- There's two things. Uh, I think he's been largely successful, but there's two things that I think are real misses, and they're both s- well, they're not related. They are related in some way. One is this luxury tax. They should not have s- uh, focused on Ken Griffin. I understand what... If they-- I-- They got it passed. Hochul agreed to do it. Just tax people. That's it. That should be it. It got passed. Uh, the elite are gonna be mad about it. Some are, some aren't, like you. And then just tax them. This was a big mistake to try to put targets on these people. I, I find it really disturbing. The second thing was, even though I agree with, with, uh, with problems with Benjamin Netanyahu, to say you're gonna arrest, wanna arrest him seems ridiculous, 'cause it's not your job, right? It's not... I, I get why you might say, "I don't like him, and I wish I could arrest him," but it was sort of weird. I, I thought it was a weird f- another weird flex about-- which is not his job. And so in this case, I think, uh, he's gonna piss off the elite anyway, or many of them, not all of them, over this tax. I don't know why he would... These records are public, I think, I believe, but why call attention to them, correct? Is that... I, I can look up any, any home if you know the address, essentially. But maybe not who's here as a second home. I don't know. Um, that I don't know.

Scott Galloway 3:48 Well, I, I'll just touch on the, the him saying he would, he would arrest Benjamin Netanyahu. His legit-- He, he basically, the justification was that he's been convicted in the International Criminal Court.

Kara Swisher 4:00 Right. Mm-hmm.

Scott Galloway 4:01 Uh, there are dozens, if not hundreds, of people convicted in the International Criminal Court, but he's decided to announce he's arresting the Jew?

Kara Swisher 4:07 Hmm. Well, I, I'm not sure. Okay. I, I think that's-

Scott Galloway 4:09 Okay. Who else has he announced he's arresting that come to-

Kara Swisher 4:11 Uh, he hasn't. He shouldn't have done this. I said he shouldn't have done it. I just, I think it's-

Scott Galloway 4:14 Uh, uh, well, so you and I are in violent agreement on this.

Kara Swisher 4:16 Yeah. Yeah.

Scott Galloway 4:16 And when he's decided... He's not only playing into the worst fears about him, but he's making it harder for all progressives. I believe in a progressive tax structure. I believe we should raise tax rates. And the Republicans, in order to create deficits and continue to transfer money from the poor to the rich, they argue that progressive tax structures are persecution. And this plays exactly into that entire narrative. And l-let me, of course, I never miss an excuse to talk about myself. I left San Francisco in two thousand 'cause I thought I was gonna be rich. Red Envelope was going public, and I thought, "What do I wanna do with my life?" And I thought, "I wanna teach, and I wanna live in New York." New York is the greatest collision of proximity, humanity, culture, creativity, weirdness, and I'm like, "I want that."

Kara Swisher 5:06 Yes, you've said that. Yeah. You love the city.

Scott Galloway 5:08 And I moved there in two thousand. Uh, [chuckles] I ended up I was not rich, and I worked my ass off in New York, and I decided, "You know what? I can't afford to live here." And I moved to Florida. But I decided I'm gonna start a business intelligence firm called L2, and I started it in New York because, A, it's a, an amazing place to start a business, and B, I always wanted to have a foot in New York. I started L2 in twenty ten. I sold it in twenty seventeen, and I've spent a bunch of time this morning trying to figure out what are the taxes, not the federal taxes, but the state franchise tax, real estate taxes, payroll taxes paid by L2 from two thousand and ten to present to New York City and state, and it's about fifty-one million dollars. The average-- In other words, we, L, L2 is paying for what the, one of the largest firehouses in downtown The budget for one of the largest firehouses in downtown Manhattan is $26 million a year. And the, uh, uh... But quite frankly, what he's saying is, okay... And, and when I sold my company in 2017, I was living in faculty housing. My dean called me and said, "Congratulations. I just saw you sold it for this. You need to move out of [chuckles] faculty housing," which was fair.

Kara Swisher 6:24 Right, and you bought your apartment. Yes.

Scott Galloway 6:26 And I bought an apartment. And now, when he starts putting, quite frankly, he-- When he starts putting a tar- I-implying, he's implying we've done something wrong. He's implying that we're guilty of something.

Kara Swisher 6:37 Yeah. He should just, he should just take the tax. I would agree with you.

Scott Galloway 6:40 There's no... They, they have the tax rolls. They don't need this for tax reasons. As a matter of fact, if Amazon released a list of a million names-

Kara Swisher 6:50 Yeah

Scott Galloway 6:50 ... and said, "These people actually owe taxes," or they've done something wrong, or they're-

Kara Swisher 6:54 They buy too many

Scott Galloway 6:54 ... implied something bad about them, and it had a ninety-five percent error rate-

Kara Swisher 6:58 Mm-hmm

Scott Galloway 6:58 ... the same attorney general under Mamdani would be issuing subpoenas right now.

Kara Swisher 7:02 Right. Yeah. I don't love this.

Scott Galloway 7:03 This is, this plays into-

Kara Swisher 7:05 It's doxing.

Scott Galloway 7:06 Th-this is [chuckles] playing-- And like we've-- He's implying we've done something wrong because we're successful.

Kara Swisher 7:12 Right. Right.

Scott Galloway 7:13 New-

Kara Swisher 7:13 No, I, I agree. I agree

Scott Galloway 7:15 ... New York is the l-

Kara Swisher 7:16 I agree

Scott Galloway 7:16 ... New York is the, the last place you wanna demonize success.

Kara Swisher 7:20 Yeah. I would agree.

Scott Galloway 7:20 The, the reason people move to New York is they think, "I wanna be successful on Broadway. I wanna be successful in business. I wanna be successful in the arts, and no one's gonna get in my fucking way if I'm really talented and work hard." We're gonna celebrate it. We're not gonna, we're not gonna put a big R on your door and say you've done something wrong because you're successful.

Kara Swisher 7:38 Yeah. I don't know quite why he did it since he got the tax, the tax was going through. I don't, I, there... Is he seeing some polling where it's not? I don't... He's already won, and I'm not sure why he's doubling down with a losing move. I, it, it's bizarre. I find that bizarre. And I don't... I, you know, in a time when people's public information, even if it's public, to call attention to it, the, uh, when you're so prominent, is a real problem. I mean, we all complain about Facebook and others using our information, and justifiably. To do this is very similar. It feels very creepy. It feels very surveillance. It feels very, um... Even if you don't like Ken Griffin, uh, even if you don't like all these rich people lording it over New York, they'll pay, they should pay their taxes, and that's that. It should be that's that. And I, and it's, it is-- seems really, um, unusually pugnacious toward... I don't, I don't under- I was sort of shocked by this story, and I, I'm, I'm gonna wait for more reporting on this, but it seems ridiculous to, to, to call attention to it, um, when it's, it's people you want to also stay here and you wanna get their taxes. Anyway, I, I would agree with you, Scott. I just, I, I don't like it. I don't like it, and people can call us friends of rich people, but it seems unfair, uh, on, on every aspect, not the tax, but the-

Scott Galloway 8:55 Ninety-five percent of the people on the list, though, is not gonna be subject to the tax.

Kara Swisher 8:58 Yeah.

Scott Galloway 8:58 Like, what-- Other than implying these people have done something wrong and publishing their address without their permission, without their consent, what, what possible upside is, is there from publishing this list?

Kara Swisher 9:10 I would like to know what, what the, what the idea is. It's not a good one. I mean, it's not good. It's not good. Uh, I know. It's been a tough morning. By the way, I've gotten yelled at by Facebook and-

Scott Galloway 9:20 No

Kara Swisher 9:20 ... and then Ari Emanuel called and yelled at me too [chuckles] 'cause I didn't like his column. So that, that was my morning. Um, yeah, uh, they didn't like your Jeffrey Dahmer joke. Didn't like it. But let's get to, let's get to the topic Mark-

Scott Galloway 9:30 Well, I'm sorry. They, Meta called you about something I said?

Kara Swisher 9:34 You know, on the-- Well, 'cause it's on social media. The, all the jokes we made on the last show about-

Scott Galloway 9:39 Yeah

Kara Swisher 9:39 ... you did remarketing. I was like, "You know what? Y- we didn't like the Michelle Obama is a man joke, and you didn't obj-object to it enough," you know, or whatever. I, I just feel like... Anyway, let me say, I feel like, I, I feel like there's not gonna-- that they were not happy with our jokes about

Kara Swisher 9:57 Mark. But he's still on his AI optimism tour. Um, in an opinion piece in The Wall Street Journal, Zuckerberg asked whether AI will be centralized and restricted to a few institutions or a tool that empowers everyone. His own proposal, he says, is a philosophy based on individual empowerment as a source of prosperity and a balance of power as a foundation of safety. In the piece, which was rather long, uh, and needed, in desperate need of editing, Zuckerberg expresses concern that others creating AI talk about it in a way that is filled with doom. He continues this idea in The New York Times interview, which he also, he's on a, he's on a chatting tour, saying developing AI in a tightly controlled manner is akin to abandoning values and stifling innovation. He was taking aim at OpenAI and, and, uh, Anthropic, who are way ahead of him, actually. Um, I suspect he wouldn't be making this speech if Meta was ahead. Um, uh, uh, it was interesting. They're, they're very, they, they're really doubling down on this we love humanity thing, um, and AI optimism, and rightly so, because they went too far in the other direction in saying how bad it would be for everybody except themselves. And so they're, uh, they're sort of doubling down. What do you make of this? Uh, and no Jeffrey Dahmer jokes today, if you don't mind. [chuckles]

Scott Galloway 11:09 No, no, it's not like he's buying bottle service after being dumped and trying to pretend-

Kara Swisher 11:13 Yeah, sure

Scott Galloway 11:13 ... everything's okay. Uh, look-

Kara Swisher 11:14 Yeah

Scott Galloway 11:14 ... CEOs consistently, consistently try to focus on their reputation, right? And a CEO trying to convince us that AI will empower everyone, it's not marketing, it's preemptive regulation. And I thought it was just so hilarious that he's claimed to be worried about the concentration and power of AI. What he's worried about is it's not concentrating around Meta.

Kara Swisher 11:36 I would agree with that. Yeah.

Scott Galloway 11:38 Well, well, when one company controls, I think it's sixty-three percent of all or sixty-eight percent of all social media, he's worried about the concentration of power.

Kara Swisher 11:47 Yeah.

Scott Galloway 11:48 So that, that comes across as cynical. The companies with the largest distribution will likely be the most successful, and Meta has three billion users. That's an unfair advantage if you want to talk about concentration of power. History highlights that we consistently overestimate the short-term impact of technology and underestimate the long-term impact.

Kara Swisher 12:04 Yes

Scott Galloway 12:05 So AI will likely disappoint this year, but-

Kara Swisher 12:08 Mm

Scott Galloway 12:08 ... will likely permanently reshape certain parts of our society and economy over the next decade.

Kara Swisher 12:12 Yes.

Scott Galloway 12:13 Essentially, it feels like every AI ad right now is an attempt at a reputation management campaign.

Kara Swisher 12:19 Mm-hmm.

Scott Galloway 12:20 It's not even talking about the products. It's saying, I mean, it, it, it, they're... It, it's really interesting. They're running their ad, ads saying it'll connect everyone.

Kara Swisher 12:29 Mm-hmm.

Scott Galloway 12:30 And then someone who founded one of these companies will say, "It's a human extinction event" on-

Kara Swisher 12:37 Right

Scott Galloway 12:37 ... on, on PBS. [laughs] You know, it's just sort of, well, which is it, guys? Is it gonna connect us or is it gonna, is it gonna destroy us?

Kara Swisher 12:43 Well, I think they're coordinating their talks now. They're like, "Maybe we should slow down on the doomsaying," right? Or, "Maybe we should say open is good," 'cause Dario Amodei also noted that there should be an open, that it, there should be open systems. I think they're... What, what it is, is they've got microphones in front of their faces, and they've said too much, and now they're trying to pull it back. And so Mark is sort of walking into this breach by saying, "I believe it's for everybody." Except he's not handing... He did this in the beginning of the... I remember, uh, very vividly, a, a late-night phone conversation when he did this long essay, another long essay in desperate need of editing, um, where he talked about how it was about c- how social media was about community, and he wanted to lean into people, and that we're all in this together. And I recall asking him, "If we're all in it together, why do you control everything?" Like, "Why are you the monarch of Facebook?" And he never had a good answer for that. Like, you know, he was like, "Well..." I said, "If we're all in it for community, why don't we all share your money? Why don't we all share if we're, if our privacy is being used, why aren't we being paid?"

Scott Galloway 13:46 [laughs] We're in this together, Mark.

Kara Swisher 13:47 We're in this together. Like, together, I would like some of the money you're using my privacy to sell. Like, I, uh, and it was... I had the same argument with Steve Case many years, many, many years before that. They all are like, "We're here for you," but except when it comes to divvying up the goodies and, or control. And so I was, I, I, I was... It's the same... If you go back to that essay he wrote about social media, none of which came true, it became a very negative force in society, although there are some definite positive aspects, no question. I, I, I literally can't... It's weird that he's trying this out again, 'cause I think he actually believes he's helping people. What you were right, I have to say, away from all your jokes, which they did not like, um, and I feel like ads are not forthcoming in the future, um, is, is that they should just stick to, "We're making capitalism, and we're gonna, there's gonna be a lot of jobs from the things we make." I think that's wh- or, "Here's vocational training," or, "Here's..." Like, I think they should lean into the stuff that they actually deserve credit for, I suppose.

Scott Galloway 14:52 This is not only wasteful advertising, which is everyone's worried about. This, this hurts. This brings up... This will just inspire a lot of conversations like this one, showing just how cynical this is, and that, and reminding people that this is a firm that, uh, when social went on mobile, y- we saw the greatest increase in young adult depression that we've registered since we began tracking it. I mean, it just stirs up a lot of things that are not gonna be good for them. Um, so I don't... I think this was a real, uh, own goal. But in just going to the story of, you know, if you will, open, open AI versus closed AI, open, open systems usually win. Linux won the cloud. Android, Android won mobile. The internet beat AOL. You were talking about Steve Case.

Kara Swisher 15:40 Yeah. Yeah.

Scott Galloway 15:41 Closed models try to ring-fence and maximize profits. Open models optimize, um, for adoption, right? And you're, you're probably am... And this is, this is how this war is playing out with China. You don't, you don't win or beat China by restricting knowledge. You beat China by commercializing it faster. Now, NVIDIA's incentives are obvious. They sell the picks and shovels. The more AI models that exist, the more GPUs they sell. But s- you know, trying to stop open source AI is like trying to ban calculus. It's just, it's, it's not gonna work, and, uh, but, but for Zuckerberg to talk about it, it's because h- he failed trying to ring-fence his own AI.

Kara Swisher 16:23 Yeah, I would agree. All right. Let me, let me pu- pull out, do an exercise. Instead of calling Jeffrey Dahmer, what, what... If he was standing in front of you, you obviously aren't gonna insult him, possibly. Maybe you would. What would you say to him? How, how should he be messaging this? What, how should he be marketing this?

Scott Galloway 16:39 How should he be messaging around AI or Meta?

Kara Swisher 16:41 Yeah. Uh, Meta, AI, whatever.

Scott Galloway 16:44 Yeah, but at some to- at some point, your actions reveal more than, than your words-

Kara Swisher 16:48 Yeah, I would agree

Scott Galloway 16:49 ... or an ad campaign from someone hot-

Kara Swisher 16:50 Right

Scott Galloway 16:51 ... you wanna hang out with who wears black. I fell into that. When Red Envelope went public, I hired all these ad agencies so I could hang around cool people and see ads on bus shelters and have lunch with David Carey at the Condé Nast cafeteria in New York. His actions are his branding now. I mean, anything Meta does is worth hundreds of millions of dollars in print advertising 'cause it gets reported on and crawled on by a ton of people, including us. The best branding that Mark Zuckerberg could do right now would be for him to age-gate his platform.

Kara Swisher 17:22 Yeah. I agree.

Scott Galloway 17:22 Just to say, look, I think Mark Zuckerberg never intended to hurt children. I don't think that's who he is. Their evil and their mendaciousness is not a function of their malice. It's a function of their indifference and their, their obfuscation, and their... They're guilty not of, um, errors of commission, but omission. And then, and they constantly push back and say ridiculous shit like, "Well, we're worried about 14-year-olds' First Amendment rights," as opposed to saying, "Look, we make a lot of money from teenagers, and until it's a law, we're gonna continue to serve them ads, even if it's extreme dieting."

Kara Swisher 17:56 I would agree. I did, I did, I did push back. I said it's really interesting that you would cut all ability to stop really heinous speech about trans and gay people. That's what you did recently, and then you're worried about Scott making his Jeffrey Dahmer joke. Or I didn't-- I noticed there wasn't a real pushback on Michelle Obama is a man. I noticed there wasn't a real pushback by anyone in the GOP on, um, on, on the, uh, heinous things that Trump said about this time any day of the week. But Kaitlan Collins, I was like, "No one said anything." So he- he-- Sort of in the vein of what you were talking about with speaking of Ari Emanuel, he, he did an essay saying this deal should go through. I wrote him back saying, "You might point out that it-- because it, it makes us a banana republic, essentially." And I said-

Scott Galloway 18:43 He's got money all over this deal.

Kara Swisher 18:44 Uh, exactly. I agree with that. But aside from that, it was, um, y- I think he does actually believe that there's, there needs to be four strong studios to have a healthy Hollywood system.

Scott Galloway 18:55 I think that's fair.

Kara Swisher 18:55 He was saying it's a bana-- I, I agree with-- I completely agree with him. But he, he was-- I was like, "The reason why the state's attorney generals, all of whom are Democrats, pushed back is because the very first approval, which was the Justice Department, was so tainted with political things. So if you're gonna do politics, they're gonna do politics." And he was like, "But that's not the point, that there should be four." I said, "Yes, but you-- they've wrecked it from day one by being so egregiously political in so many ways that this was the natural, this w-- Democrats are..." There's ex-- There's, there's a song by the, by the Chicks, um, which is "Not Ready to Make Nice," and the Democrats are not ready to make nice now, and y- they better get used to this. That's my-- And, and Trump started it all by, like, insulting people and having the GOP stay silent, like doing these egregiously cruel things. And the same thing with Zuckerberg. He's created a s-- he's created a platform where ugliness is far too, is far too powerful, and then he's like, "Why are things so ugly?" And you're like, "I don't know. Maybe you could have done some..." Like you said, the actions. I think I agree with you. Um, can I, can I go on about the open source? NVIDIA, SpaceX, Microsoft, and other

Kara Swisher 20:06 tech companies have launched an AI safety initiative to develop open source tools for AI safety and cybersecurity. The initiative follows a recent cyberattack involving an OpenAI agent that breached Hugging Face during internal testing, raising new concerns about AI security. Notably absent from the alliance are OpenAI, Google, and Anthropic, highlighting the growing divide between supporters of open models and companies building closed systems. This follows Anthropic and O-OpenAI lobbying Washington for some restrictions on the latest open source models coming out of China. However, Anthropic's Dario Amodei, as I noted, emphasized in a letter this week that the company has never advocated for a ban on open weight models. Like you said, we, uh, it's gonna be-- It's-- Open, OpenAI will win, correct? No matter what they do.

Scott Galloway 20:52 The honest answer is, well, or what I think is gonna happen, and I said this on our last one, I think the market for AI is bifurcating into a series of frontier models that aren't open source, that are better, and, and people will pay a premium for them, and I think they'll still be the largest businesses by a dollar volume level. And then the Toyotas and Hondas and Hyundais of the world will be the open source coming out of Asia.

Kara Swisher 21:14 Yeah, Corolla is a great way to think about it, Toyota Corolla.

Scott Galloway 21:17 And, and there'll be a market for both. But I think the more relevant one are the open weight models. They tend to, in technology, they tend to be the ones that kind of win long term. Now, iOS is, I guess, technically a closed system and Android's open. Android has more users. iOS creates more shareholder value.

Kara Swisher 21:35 Right. No, that's a fair point.

Scott Galloway 21:37 But I-- But there's a, you know, there, there's huge... I mean, you could argue that Android creates more shareholder value because it informs what is the greatest toll booth in history. You could argue it both ways. I think there's a market for both. I mean, it, it's so funny. Business and technology usually comes down to iOS versus Android.

Kara Swisher 21:53 Yeah, it does.

Scott Galloway 21:54 It-- that's what's happening here. It's the frontier models versus the open weight Chinese models.

Kara Swisher 21:58 It's weird they're having this weird beef. It sort of happens all the time, doesn't it? Well, there was so much pushback when Linux and the others came around, and it al- it's always the same. It's always the same.

Scott Galloway 22:08 Ma-Mark Zuckerberg right now is using basically this, you know, c-corporate Vaseline as Axe body spray. He thinks if he sprays enough on himself, he'll no longer stink. Mark, you fucking reek. You have terrible BO.

Kara Swisher 22:24 [laughs] There he goes. There he goes.

Scott Galloway 22:25 I just got you another call.

Kara Swisher 22:27 Don't. Oh.

Scott Galloway 22:27 I just got you another call, Kara.

Kara Swisher 22:28 Oh, I tried. I tried. I tried.

Scott Galloway 22:31 I smell the Axe, but there's something else I smell here.

Kara Swisher 22:34 Oh, no. Okay, we're gonna stop.

Scott Galloway 22:34 Oh, it's teen depression and self-cutting.

Kara Swisher 22:36 Oh. All right, and we're out. Okay, I tried. Okay, well-

Scott Galloway 22:39 It's polarization of our elections.

Kara Swisher 22:41 I, I think they have a lot to answer for.

Scott Galloway 22:42 It's a coarsening of our discourse.

Kara Swisher 22:44 I think they have a lot to answer for. [laughs] Don't say he has BO. Anyway, w-while we're on the to-- BO, I-- There was a lot of BO on the subway this morning, by the way. While we're on the topic

Kara Swisher 22:54 of AI, we've been hearing feedback from some of you who have been impacted by data centers in your communities, so we wanted to bring an expert voice. Let's listen to a clip from Evan Halper, a business reporter at The Washington Post, who's been covering data center build-outs and their impacts about how tangible these issues are.

Speaker 23:09 This is not propaganda. This is not media misinformation. The backlash is driven by very real concerns in these communities, many of which I've been to. They, they're, they get all kinds of promises made to them by tech companies, that things are gonna be run on clean energy, they're gonna bring all kinds of jobs into the community, they're not gonna have impact on the water, et cetera, et cetera. But what we're seeing on the ground is the impacts are very real. Suddenly, a community that wasn't expecting it, that was rural, has been, has seen a large amount of land rezoned, big power plants getting built. The power plant is big enough to serve a medium-sized American city, all to serve just one data center. It's run on gas. Gas creates public health problems. It creates climate problems. There's backup diesel generators on top of the data center. Those backup diesel generators are major polluters that are supposed to run very infrequently. But now, because there's not enough power on the grid, because the data centers need so much, these emergencies get declared, and the backup diesel generators get to ... function even more, often on the lowest air quality days, creating an even bigger air quality problem. So these problems are real. This is not just an imagined thing. This is not political opportunism. These communities are suffering real impacts from these data centers.

Kara Swisher 24:22 Yeah, I think, uh, I th- you know, as you said, some of them should be fine if they're done correctly, but they aren't being done. They're getting, they're running over these areas, and people, real people are very concerned. They really are. And this is, this is a message that I have been trying to get through to these tech companies. They really do think it's fake. They think it's the media being negative. I've heard this over and over again. By the way, Willie Nelson just spoke out about data centers, saying an AI data center is the last thing his Texas hometown needs. So again, one of the things is it's the same theme that we're talking about. They have painted themselves into villains, and then they wonder why we think they're villains, and we don't trust them. And you know, you can talk all you want about trust the media. I agree. People have never trusted the media, but they really don't trust tech companies at this point, and it's a real problem. And doing these ads about humanity is not... You're right. Actions speak louder than words. And these data centers, we are gonna suffer as a country if we don't stay ahead in this area. But the way they're introducing data centers is so overwhelmingly feels corrupt, feels like, feels bad to the citizens of this country, and I like that they speak up. I do, even if, even if some of them are, are necessary. Your thoughts?

Scott Galloway 25:39 Look, I, I think his comments are powerful, and our nation has a terrible legacy of outsourcing the externalities of progress, whether it's the factory, the, the, the, the, the, the coal plant, a chicken processing plant, or, or, uh, a plant that contaminates the water table. We have a habit of putting these in the most vulnerable communities who have the least resources to push back on it. That is nothing new. Um, so I think it is up to local civic officials, and I think it's great that when the populace speaks up and asks their fiduciaries, elected representatives to make sure that the upsides, and I do think there's an upside around tax revenue and growth-

Kara Swisher 26:20 Mm-hmm. Yep

Scott Galloway 26:22 ... um, to a data center that's well-planned and well-regulated. I do think there's an upside. It's up to the local civic official to say, "Is the upside greater than the downside here, or is this a function of me getting money from Meta for my next campaign or ma- or just making a stupid decision?" I do think it has become... I think a lot of people talking about this are having a knee-jerk reaction around what has become an empty vessel being filled around rage, around income inequality, and because these individuals have not acquitted themselves. And I think what could fix this is, um, essentially, um, a, a, a Facebook ad that says, "Facebook, where your parents go to get catfished by AI Jesus." I think that would solve everything.

Kara Swisher 27:07 [laughs] You should stop.

Scott Galloway 27:09 Seriously, Meta putting out fucking ads right now is like trying to put lipstick on a landfill.

Kara Swisher 27:16 Okay, lipstick on [laughs]

Scott Galloway 27:19 Should I stop?

Kara Swisher 27:20 I love angry-

Scott Galloway 27:20 At what point should I stop?

Kara Swisher 27:21 No, it's, uh, uh... It's, it's just funny. It's just funny. It's... I'm gonna get another call. In any case, uh, it, it's, I, I... It is a real issue here, and I think Evan is speaking exactly. Willie Nelson is speaking to it. You better listen to these people, uh, all you tech companies. You really better. And, and, and your actions-

Scott Galloway 27:37 It'll become an issue in the next electoral cycle

Kara Swisher 27:39 ... 100%.

Scott Galloway 27:40 Yeah.

Kara Swisher 27:40 Anyway, let's go on a quick break. When we come back, uh, SpaceX's trillion-dollar, uh, wipeout. [upbeat music]

Scott Galloway 27:47 Support for the show comes from CoreWeave. AI isn't just a new tool. It encompasses so much more. It's spurring a revolution across all industries and reshaping itself to become a big part of our future together. CoreWeave is at the center, powering some of the biggest names in AI. As the essential cloud for AI, CoreWeave provides an AI platform that combines next-generation infrastructure, intelligent tools, and expert support. It's powering the world's most complex AI workloads faster and more efficiently, from medical research and diagnosis to education, from complex visual effects for movies to breakthroughs in science and technology. If it's AI, CoreWeave is uniquely ready to power it with purpose-built tech. The big ideas, the wild visions, and what-ifs and why-nots. CoreWeave is working to build what's never been built before. CoreWeave is the essential cloud for AI. Ready for anything, ready for AI. To learn more about how CoreWeave powers the world's best AI, go to coreweave.com/readyforanything.

Kara Swisher 28:41 [upbeat music] Scott, we're back. The SpaceX rollercoaster

Kara Swisher 28:45 continues. The stock plunged more than 20% below its IPO price this week, wiping out more than $1.2 trillion in market value, roughly the market cap of Tesla. Tesla's also suffering. The stock has bounced back somewhat, uh, as of this recording. It's down, but it's down 3%. Next week could be another wild ride, with SpaceX reporting earnings on Tuesday and the first insider lockup expiring two days later. How low can these shares go? They look like they're headed to... They look like they're headed to 100. I feel like they, I feel like they're going down, but I don't know. I'm not, again, I'm not a stock picker, and m- again, Elon has enormous power. But it seems like, especially after that interview, he seems insane. Like, it seems people are not memeing him as much. Just me.

Scott Galloway 29:30 Well, price is what you pay, value is what you own. And the price that people paid after what was arguably, I think, one of the greatest engineering feats in history between Goldman and J.P. Morgan and Elon Musk and the NASDAQ 100 and President Trump and the head of the SEC to get this thing at, out at 120 times revenues. There's a... My son told me this, and it just fascinated me. No basketball, no, no basketball player has ever been able to be in the air longer than a second. It's really weird. For some reason, the, the unit of measurement of a second, no one can stay in the air for a second. Gravity eventually pulls them down. Valuation is gravity. Eventually, I don't care if it's GameStop. Uh, no one has been able to defy gravity. No one gets closer to that one-second limit than Elon Musk. "Hey, look over here. Oh, we're autonomous. Oh, we're robots. Uh, don't value me like a car company." Let's talk about being an interplanetary species. Let's not talk about-

Kara Swisher 30:20 Right

Scott Galloway 30:20 ... the fact that it's, you know, it's an interesting company, and one great company and then a bunch of money-losing companies. The lockup expiration here matters more than earnings, and that is supply, I think any reasonable math shows that supply is gonna overwhelm the fundamentals in the short run. And retail investors, and this is what happened at the IPO, retail investors consistently confuse a great company with a great stock. And, uh, at some point, the best company in the world is overvalued, and at some point, the worst company in the world, unless it's going to zero, is undervalued. But where's... I mean, I, I, I'd rather than making a recommendation, I tell people what I'm doing. I'm not getting near this thing because Elon's not afraid to come out and say, "I- I've have funding secured at $450 on Twitter and not get punished and run up the stock." He's also... His stocks tend to be meme stocks that totally disassociate-

Kara Swisher 31:22 From value

Scott Galloway 31:23 ... from, from actual values, so stay the fuck away from this thing. But if you're looking for a bottoms-up valuation in terms of comparing this to its competitors and saying it's the best in that space, that bottoms-up valuation would put it at, like, 20 to 30 bucks a share, which by the way, would still make it one of the most valuable companies in tech.

Kara Swisher 31:43 Yeah. It's down for, it's down 30%. It was at 201 when it, when it deb- The highest has been 201, uh, or 202. 202 really, and now it's at 113. Um, i- if it crosses that $100 barrier, I would worry. You know what I mean? I think I would worry o- of where it was going, 100%. And I would... And same thing with Tesla. They seem like they're... That, right, to this today, it's on a real decline. Um, but over the past six months, it's dropped. If you look at anything the past month, it's dropped like a, like a, like it's incredibly. It's down to 302. It probably will pass the $300 barrier. Um, and those are, those are mental things for people. You know, I think they're mental things for people. And, and again, valuation may be making a, making a very strong return here, and Elon's various, you know, jazz hands is not seeming to work here. I, I don't know what he can do to... Well, he could have results, right?

Scott Galloway 32:41 Well, he's... Okay. But even to, to look at the glass as half empty, the fact they were able to engineer-

Kara Swisher 32:46 Yeah

Scott Galloway 32:46 ... such an incredible valuation out of the gates gives some people the impression that it's cheap now. If it went public at this valuation, we'd all be like, "Jesus Christ, can you believe this?"

Kara Swisher 32:58 Yeah, you're right.

Scott Galloway 32:59 So-

Kara Swisher 32:59 Trillions

Scott Galloway 33:00 ... it, it's, uh, so it, it-

Kara Swisher 33:02 Don't go near them

Scott Galloway 33:03 ... the IPO was a win for him, even if no matter what you say, even if it's down and it's a bro- technically a broken IPO now, the fact that he was able to put that number on this, this set of assets is nothing short of remarkable. And also, a lot of the people who he has said finance a $44 billion purchase of a, of a microblogging platform that I signed the paperwork under probably some sort of drug-infused haze that by most measures is worth 3 to 5 billion, he said to his investors, "Just hold on. Trust me. I always, I always make you whole." And you know what? He did.

Kara Swisher 33:40 He did. Yeah. Okay.

Scott Galloway 33:40 He probably gave those same, same people... Those are probably many of the same people who have invested along the way in SpaceX, and quite frankly, they didn't, they're not subject to lockups.

Kara Swisher 33:48 You got in at 20, it sounds great. Like, 100 is great. 200's better, but 100's great, too.

Scott Galloway 33:53 Yeah, but I, I had lunch with a guy here in LA who's, who's, who's this really charming, smart, intelligent guy who's what I would call totally agnostic about all this stuff, and he's known Elon for a long time, and he's invest in everything Elon does. And so when he started investing in SpaceX like 10, 12 years ago, someone just told me he's made $5 billion. And regardless of what you think of, of Elon's paranoid white nationalist rant on, uh, with the head of The Economist and calling her a traitor because she asks him tough questions, if someone makes you that wealthy, and if someone is able to create that kind of value, you just put money into anything they do.

Kara Swisher 34:36 Right. Right.

Scott Galloway 34:36 And so-

Kara Swisher 34:37 Yeah. Yeah. I guess

Scott Galloway 34:38 ... that, that, you know, his, his ability to do that, I mean, there's a lot of positives. It's a huge win for him. I do think there's positives for the economy. But in terms of any bottoms of valuation, forget that it was a two... 204. Just look at it now, and you would, in the absence of any history, you would go, "This thing is the most overvalued stock in America right now."

Kara Swisher 34:58 Right. Yeah. Absolutely. Well, speaking of a very valuable stock,

Kara Swisher 35:02 Al- Apple briefly hit a $5 trillion market cap for the first time a day after passing Nvidia to become the most valuable public company. It's a busy week for Apple. The company is launching a new program for customers to lease iPhones, iPads, Macs, and Apple Watches instead of buying them outright. This was interesting. The program called Apple Upgrade uses buy now, pay later company Klarna to let people make monthly payments on the device, then upgrade, buy, or return when the lease ends. The cheapest iPhone option is $1799 a month. Apple's move comes a month after the company raised prices on iPads and Macs, citing skyrocketing chip costs. iPhone prices are expected to ra- rise later, uh, this year. Do you like this idea? I didn't know what you would think of it. And also note we're recording ahead of Apple's reporting the Q3 earnings, Tim Cook's final earnings as a CEO. And whatever we think of his stupid golden statue, he has done an astonishing job here as CEO in the, in the years after, uh, Steve Jobs died. What a, what a impressive CEO he's been except for the golden statue, which will follow him the rest of his days and going to the Melania premiere, but go ahead.

Scott Galloway 36:04 I don't know who the head of strategy is at Apple, but I think this group of people, this man or woman, are literally some of the brightest people in the history of business. And wh- whether it was taking $6 billion out of broadcast advertising and moving it into 550 temples of the brand in a market, one of the biggest markets in the world, technology, that had just shitty distribution. Remember where you used to go to buy computers?

Kara Swisher 36:26 Yes. Ugh.

Scott Galloway 36:27 Egghead Comp USA.

Kara Swisher 36:29 Egghead Compu- oh, Comp USA.

Scott Galloway 36:30 You, you, you literally walked in-

Kara Swisher 36:32 Oh, worst

Scott Galloway 36:32 ... and, or-

Kara Swisher 36:33 The worst

Scott Galloway 36:33 ... or you go to get your computer fixed, there'd be some guy-

Kara Swisher 36:36 Yeah, creepy guy

Scott Galloway 36:36 ... in a Harley Davidson shirt, and he'd give you a number and put it on a steel rack and tell you to come back in two weeks so he could tell you it's, it doesn't work and you need to buy-

Kara Swisher 36:42 Yeah

Scott Galloway 36:42 ... a new computer. And then they built these place... I'd like to live in an Apple Store. I think if Apple owned a- opened a coffee counter in their stores, it'd be the most successful retail in the world per square foot.

Kara Swisher 36:53 Oh, that's probably true.

Scott Galloway 36:53 And it already su- surpassed Tiffany when they opened their stores.

Kara Swisher 36:55 Yeah.

Scott Galloway 36:55 The most successful retailer in history is a tech company. In addition, their stock... [laughs] Okay, you wanna talk about genius? Genius is not only what to do, it's what not to do. Who has invested the least in big tech in AI?

Kara Swisher 37:11 Uh, I don't know. Uh, well, Warren Buffett? I don't know. Who?

Scott Galloway 37:14 Apple.

Kara Swisher 37:15 Apple, yeah.

Scott Galloway 37:16 Apple, Apple's decided, "Okay. Kids, you go play in traffic. We'll wait till this all gets sorted out after trillions of dollars in CapEx, and then we'll move in with an elegant interface and ownership of the consumer, and we'll, we'll monetize it. Or if we, or we'll just rent it from you and give you access to the billion wealthiest consumers in the world." Apple's stock, it's no accident that the company, the one company that's decided not to get into these AI wars is up 61% over the last 12 months. The most valuable company in the world is up 61% over the last 12 months.

Kara Swisher 37:56 Yeah. It's amazing.

Scott Galloway 37:56 These guys, these guys... And this is, this is the, this is what separates the truly, the great CEOs from the iconic CEOs. It's not what they do, it's what they don't do. And the-

Kara Swisher 38:07 So what do you think of this upgrade, then? What do, what do you think of this? I think it's actually a good idea, I have to say.

Scott Galloway 38:12 Oh, Kara, I'm sorry. A long-winded, long-winded preamble. This is fucking genius because the reason why hardware companies and services companies don't trade at the same multiple of services re- of, of software companies is not because software is just, quote unquote, "A, a better product." It's because it's a better business model because it's recurring revenue.

Kara Swisher 38:34 Right.

Scott Galloway 38:34 Adobe changed everything. Adobe used to s- used to sell, I forget what it was called.

Kara Swisher 38:38 Big box. Box.

Scott Galloway 38:38 Director whatever for 20-

Kara Swisher 38:39 Yeah

Scott Galloway 38:39 ... you know, software in a box for $2,500. And then they hope-

Kara Swisher 38:42 Right

Scott Galloway 38:42 ... three years later you go buy another one for $2,400. Instead, they said, "We're gonna charge you 25 bucks a month." And their stock got cut in half, and since then it's up 40X. Because the market loves recurring revenue. You can better plan your CapEx, you can better plan your revenues. It's just more... The, the way I described, I was in a relationship with someone who was bipolar, and I said, "I'm in a revenue, I'm, I'm in a relationship with a transactional business model. I don't know who I'm waking up next to."

Kara Swisher 39:10 Oh, wow. Okay.

Scott Galloway 39:10 "I don't know how to predict this person." A recurring revenue business is in a, being in a relationship with someone who's just totally consistent and you know, you know what to expect. And the-

Kara Swisher 39:19 But now you don't always like buy now, pa- pay later. You, you, you often decry buy now, pay laters as-

Scott Galloway 39:25 Yeah, but that buy now, pay later is you come up-

Kara Swisher 39:26 This is different. This, this is, yeah

Scott Galloway 39:27 ... buy now, pay later is you come up to the till at Urban Outfitters and you're going to Coachella and they go, "You know what? Go, go shop and buy another $300 and we'll give you instant credit." I think that's different than this. This is basically selling a subscription to the Apple ecosystem.

Kara Swisher 39:41 I would agree.

Scott Galloway 39:41 And you-

Kara Swisher 39:41 It's hardware as a service. It's HaaS.

Scott Galloway 39:43 And people-

Kara Swisher 39:44 HaaS

Scott Galloway 39:45 ... it's easier to say, "I'm not gonna buy the next iPhone," versus, "I'm gonna cancel my subscription." It increases lifetime customer value.

Kara Swisher 39:51 I'm, I'm gonna do this. I'm doing this.

Scott Galloway 39:52 And it lowers the psychological barrier to higher prices.

Kara Swisher 39:56 Yeah.

Scott Galloway 39:56 So, and I belie- I believe, I've just presented, I'm bragging, I just presented to the CEO and the management team at Mercedes, and I basically said, "The future of consumer products isn't ownership, it's recurring revenue, it's subscription." And they asked me for one idea, and I said, "I, I love the Mercedes brand. I think it's... They do great products. I love the brand. I wanna pay a monthly fee and have you just show up with the car I should have, take care of everything, service it when I'm out of town, know everything about me. Maybe you invite me to a cool couple events. Say, 'Okay, you've had this thing three years. You just had a kid, you need a truck now.' And take all of the decisions, all of the brain damage."

Kara Swisher 40:35 I agree.

Scott Galloway 40:35 "I never wanna go into a car dealership again."

Kara Swisher 40:37 Yeah.

Scott Galloway 40:37 "And give me a good deal. I don't wanna know the pr- I, I don't wanna negotiate price. By the way, include insurance, include finan- Just do everything for me-

Kara Swisher 40:44 Yeah. Mm-hmm

Scott Galloway 40:44 ... and charge me a monthly fee."

Kara Swisher 40:46 Yep.

Scott Galloway 40:47 And the market takes-

Kara Swisher 40:47 It might be slightly more. It might be slightly more, but you don't care 'cause it's the convenience factor. I, I'm doing this. I have to say, I had never, I have not bought a new phone, and I was gonna buy another one. I'm like, "Oh, it's $1,000." It probably will cost me more, but I can always upgrade it. Like, I feel, like, good about it. I know it sounds... I can, I feel that I just wanna rent it. I just wanna rent it, really, in many ways.

Scott Galloway 41:10 If Apple said to you and me, "All right, Scott, you buy everything Apple. We have your purchase history. With your permission, we wanna use AI to know exactly what you need when you need it. We're gonna charge you 100, 200, $300 a month, and you're gonna get everything a month early. And, uh, by the way-

Kara Swisher 41:28 100%

Scott Galloway 41:28 ... in case you're interested, you can come to the cool Apple event or whatever if you're really that big a fan."

Kara Swisher 41:32 Yeah. Yeah.

Scott Galloway 41:33 "Oh, y- And by the way, we're gonna invite you occasionally to an, um, a premiere of a great Apple movie. You're gonna become... And it's $300 a month." And I'd think, "Oh, $300 a month? I spent so much on these, about 200. I spent so..." "We're gonna send you the latest MacBook. We're gonna send you the coolest-

Kara Swisher 41:47 AirPods

Scott Galloway 41:48 ... AirPods. We see you're an AirPod weirdo and you love these things. We're gonna send them with your name inscribed."

Kara Swisher 41:52 You want a hat? You want a T-shirt? Cool T-shirt?

Scott Galloway 41:53 Whatever it is to-

Kara Swisher 41:54 Yeah.

Scott Galloway 41:55 Uh, I'm in.

Kara Swisher 41:56 Yeah.

Scott Galloway 41:56 And then the market turns around and it says, okay... My first company, Profit Brand Strategy, was a strategy firm. It sold for 2.8 times revenues. I started the same business, called L2, basically helping firms make better decisions with data, but I charged an annual membership fee. I charged Nike a-

Kara Swisher 42:15 Oh

Scott Galloway 42:15 ... half a million dollars a year instead of charging them a million dollars every three years for a strategy engagement. L2 got sold for eight times revenues. The market loves recurring revenues.

Kara Swisher 42:26 Recurring revenue.

Scott Galloway 42:26 And Apple keeps figuring out big decisions-

Kara Swisher 42:29 Yeah

Scott Galloway 42:29 ... and ways to not only be the most valuable company in the world, but to provide unbelievable return on investment. I'm just-

Kara Swisher 42:35 Yeah, I agree

Scott Galloway 42:35 ... I'm so impressed, not with what they do, but what they don't do. Do you remember how many people were calling for Apple to launch new products, launch a car? You wanna... You know what it takes big balls? Not to launch a car, but to pull the plug on a car, 'cause you don't think it's gonna offer the same return on invested capital as other products.

Kara Swisher 42:52 Yep. Yep. Absolutely.

Scott Galloway 42:53 And I'm very impressed with Apple.

Kara Swisher 42:55 I, I agree. I agree. I actually had a, a just a funny little basket of st- tech stocks with $10,000, and Apple just... I was losing money on a bunch of them. Ga- I'm just testing things, and Apple has taken me back [laughs] up to the top. I was like, "Thank you, Apple." I, just interesting, some of the things we talk about is just sort of a test thing, and I do thank them. I'm gonna do this program. I am. I just, it easier. It's just easier. It's just easier and more convenient. And it also lets people who wanna have an Apple phone and can't, maybe f- uh, can't afford the $1,000 to be part of it, like, in a way that's much more, you know... It, it sort of, it gets them to the lower price customer. I do think this happens. Um, and it doesn't break these customers the way, say, a, like a ridiculous mortgage or something would do, and it gives them a better phone. All right, let's go on a quick break, and we come-

Scott Galloway 43:42 But, but, but just before we go on a quick break-

Kara Swisher 43:43 But, sure

Scott Galloway 43:43 ... I do have another tagline for Facebook.

Kara Swisher 43:45 Sure. [laughs] Okay.

Scott Galloway 43:47 You ready? Meta, ignore the smell coming from the basement.

Kara Swisher 43:51 [laughs] Oh my God. Oh, I shouldn't have said anything. I should...

Scott Galloway 43:57 Ugh.

Kara Swisher 43:59 God. Thank God it wasn't an extingent.

Scott Galloway 43:59 God, this show brings me so much joy.

Kara Swisher 44:01 I know. It does. Okay, let's go [laughs] on a quick break.

Scott Galloway 44:04 It's great.

Kara Swisher 44:04 When we come back-

Scott Galloway 44:04 All I'm doing is I'm addicted to the meth and I'm shitposting the dealer. I'm allowed to do that.

Kara Swisher 44:08 [laughs] Okay. Okay. When we come back, Mitch McConnell gets an ultimatum.

Scott Galloway 44:14 [upbeat music] Support for the show comes from ZBiotics. Being in rough shape the day after drinks comes with the territory. It feels like it's just a contract you sign with that first drink. But what if you could change that before you even take that first sip? Enter PreAlcohol. ZBiotics PreAlcohol probiotic drink is the world's first genetically engineered probiotic. It was invented by PhD scientists to tackle rough mornings after drinking. Here's how it works: when you drink, alcohol gets converted into a toxic byproduct in the gut. It's a buildup of this byproduct, not dehydration, that's to blame for rough days after drinking. PreAlcohol produces an enzyme to break this byproduct down. Just remember to make PreAlcohol your first drink of the night, drink responsibly, and you'll feel your best tomorrow. I have been using, no joke, ZBiotics before they became an advertiser. I like to drink. I am drinking less as I get older. But I find, in general, if I take ZBiotics before I indulge, it takes away about a third of kind of the, I don't know, the gross feeling the next day. So I'm a customer. With PreAlcohol, you don't need to choose between a great night and a great next day. July is packed with barbecues, fireworks, and late Saturday nights with friends. Keep the good times rolling into the next day. Drink PreAlcohol before you go out, and wake up ready for whatever Sunday brings. Remember to head to zbiotics.com/pivot and use the code PIVOT at checkout for 15% off.

Kara Swisher 45:31 [upbeat music] Scott, we're back.

Kara Swisher 45:34 Kentucky Governor Andy Beshear is giving Senator Mitch McConnell an ultimatum: prove you can still serve or resign. Beshear sent McConnell a letter this week demanding he directly and verbally address the people of Kentucky to prove his capacity to serve. If that doesn't happen, Beshear is urging Senate Majority Leader John Thune to investigate McConnell's condition. This comes as McConnell's office released another photo that again sparked conspiracy theories 'cause of the shirt or something, with a statement that the senator is not medically cleared to leave his rehab facility. It was very... I have to say, the, um, the, the note was very... What it left out, speaking of omission, it didn't talk about cognitive issues. It just talked about physical issues, which was interesting. Um, but it's not enough. It, the doctor tried his best to tell the truth [laughs] is what I f- when I looked at it. But it's not enough, uh, for Beshear. Let's listen to what he told reporters on Tuesday.

Speaker 46:24 If he can have a 17 minutes conversation with his protege, he can call into any of your news stations for three. All we're asking is just a little bit of proof. And I get that everybody wants a certain level of privacy, but when you run for these jobs, you know you're giving, uh, some of that up. Uh, we have seen rampant speculation across social media and elsewhere. It could all be fully avoided, and it's all within Senator McConnell's power.

Kara Swisher 46:49 So under Kentucky law, Senate vacancies are filled by a special election. Beshear is not allowed to appoint a temporary replacement. Um, it's also important for his presidential run for him to look strong here. Uh, it's, it's, that, that's what it's playing into. Um, is this a strongly worded letter gonna do anything [laughs] here? 'Cause that's what it is. It's a s- "I, I urge you to say something." Um, or will they just ignore it? I would assume McConnell, who is, you know, has always been sort of [clears throat] taking the lowest road he could in many ways, um, although Trump has managed to get on lower roads than he is. Um, I, I think he'll, they'll do nothing. They'll just, they'll just ignore this.

Scott Galloway 47:25 I don't know. I, I think the pressure will, will mount. Uh, I mean, I feel like Mitch McConnell has become the modern day equivalent of Bigfoot. Like, "Oh, wait, we saw him. It's not real." I, I, it's... And look, this is... Am- America has mandatory retirement ages for airline pilots, but not for people making decisions about nuclear weapons and fiscal policy, which is just insane, and this is an example of it. This is... This story really isn't about Senator McConnell. It's about a, a political system that has no graceful exit for aging leaders. And every institution, especially democracy, needs succession planning. And politicians are some of the few people that are allowed to ignore mortality and biology. And just to, another shout-out to Apple and Tim Cook, uh, again, one of the hardest things in leadership-

Kara Swisher 48:16 To leave

Scott Galloway 48:17 ... isn't knowing when to take over. It's knowing when to leave. And it's insane that these people... When you get older, we purposefully have a difficult time believing that we're ever gonna die. We know it, but we don't believe it. And that is we think, "Oh, I'll figure it out, and I'm still adding value." And also, to be blunt, for a lot of these people who have devoted their lives to work, them leaving is them acknowledging they're about to die, and so they don't wanna leave, and they keep coming up with reasons why they should stay. The political system rewards incumbency, and so we need mandatory retirement ages and term limits.

Kara Swisher 48:56 Well, can I... One of the things that's been interesting about, besides the social media stuff, which some of it is very funny, some of the fake things, it's, it's been a very, it's been a very amusing, uh, people doing things around McConnell. And actually, um, I was with Joanna Coles and, uh, Ben Sherwood last night at dinner, and they were saying the McConnell stuff really is popular. [chuckles] Like, and I was surprised. I thought it would be all Trump or whatever, but McConnell stuff is really popular on this, on The Daily Beast. Um, but what's interesting is some things that I think are more serious, where people are going, "Okay, I had a cesarean, and I had to get back to work in five seconds." Like, you know, "I had, I was out for a medical thing, and my work didn't let me." And I think even if it's, like, kind of, like, that to me is actually very resonant, is like, he gets to be quiet. He has a, one of the most important jobs in the country, and he gets as much time off as he wants, and he doesn't have to explain himself. I have, like, a minor me- a thing that requires a lot of medical attention, and I've gotta get back to work. There is something brewing. It's like the data centers. I feel like there's sort of this anger, like, "Why does this guy get to be, get, get the, get the, get to be, have privacy when I have to get back to work immediately?" I've seen a ton of that lately.

Scott Galloway 50:11 Mitch McConnell is, is another empty vessel for, for rage, and it's, it... People look-- I think the most secretive thing in the world right now would be if, if all of a sudden everyone over the age of 70 had, had to announce their retirement. Would the world be a better place? Benjamin Netanyahu and Donald Trump are too old to be serving. They're too old. And yeah, you, you, you need wisdom, but more than that, you need rigorous critical thinking and energy, and also you need a fresh, creative dynamism. The, the best thing, in my opinion, that the s- the far left that we talk a lot about, they are bringing the creativity and the dynamism. You need that. You need turnover. And i-i-it's the same-- This is, this is why I think we're gonna win the, the, the seat in Maine. Uh, or when I say "we," Democrats. I think people see, are gonna see... At some point, Susan Mc- Susan McConnell seems to be, like, hiding in Mitch McConnell's-

Kara Swisher 51:11 Susan McConnell [chuckles]

Scott Galloway 51:11 ... hospital bathroom.

Kara Swisher 51:12 It's not Susan McConnell. [laughs]

Scott Galloway 51:14 I'm sorry.

Kara Swisher 51:14 Susan Collins.

Scott Galloway 51:15 Susan Collins.

Kara Swisher 51:15 You can call her Susan McConnell. [laughs]

Scott Galloway 51:16 Might as well, might as well be Susan McConnell. I get the sense she's in the room next door.

Kara Swisher 51:21 Yeah.

Scott Galloway 51:21 I mean, she's not-

Kara Swisher 51:22 Yeah.

Scott Galloway 51:22 She's an old lady.

Kara Swisher 51:23 Yeah, she's an old lady.

Scott Galloway 51:23 And she presents as even older.

Kara Swisher 51:25 Yeah.

Scott Galloway 51:26 And aging comes for all of us.

Kara Swisher 51:28 Yeah, I agree.

Scott Galloway 51:29 It comes for all of us.

Kara Swisher 51:30 I agree.

Scott Galloway 51:30 That's not, it's not an indictment, it's a reality, and I think that's why we're gonna win the seat. We found a guy with chest hair who doesn't appear to be a rapist, and he's not 105.

Kara Swisher 51:41 Yeah. [laughs]

Scott Galloway 51:41 Ding, ding, ding, ding, ding. And-

Kara Swisher 51:44 But it is a proxy. It is a proxy of, like, why don't we know about the president's health? All of them. Like, why don't we get... Why do they get off? Why, why do they get to build data centers and we have to put up with it? Why do we have-- Why do they get all the money? Why do they get all the deals? There is a-- It's part of the same, like, you're getting-- These people are fucking you. And I, I, I do think it's, uh... I think it could take very ugly turns as, as it-- I agree, Mamdani should not have done that. It takes ugly turns. Uh, instead of, "Yeah, why not? Why can't we get our fair share?" And I think it's a very good, uh, I think it's a very good, fair share is a very good way to talk about it. And why does Mitch McConnell get to be quiet? Why does he, precisely? I don't care about his privacy. He, he shouldn't have been the majority leader or whatever.

Scott Galloway 52:32 That, that's like saying a 65-year-old pilot can't have, can't be tested for cognitive ability or reflexes because of his privacy.

Kara Swisher 52:40 Yeah, exactly. Same thing. Like, I feel like-- I said this to a public official. They were giving me a hard time. I go, "You know what? You work for me. Like, sorry. Like, I, I know you've forgotten that, but the fact of the matter is you work for the public, and you don't get to, you don't get... Like, we don't have to be nice about it." I just, I-- There's just a brewing thing, and it could go in a really ugly direction. I wish it wouldn't, if these people would just... He should resign. He's clearly not able to do his job. He should resign. That's-

Scott Galloway 53:07 Well, this is all-

Kara Swisher 53:08 ... the obvious thing

Scott Galloway 53:08 ... isn't this like they're trying to hold out-

Kara Swisher 53:11 Mm-hmm

Scott Galloway 53:11 ... such that-

Kara Swisher 53:12 I don't think that there's any plus or minus

Scott Galloway 53:13 ... such that the governor doesn't get to appoint it. It's the Republican-

Kara Swisher 53:16 No, I don't think there's-- I don't--

Scott Galloway 53:17 No.

Kara Swisher 53:17 I think he's not there, so he doesn't vote, so great. Let him sit there, like, and stew. He doesn't get to vote. He doesn't... Uh, it, there's, the vote is gone in the Senate right now, is what it is. The vote is gone. If he tries to vote, that's-- He better walk in. That's all, you know, if he tries to vote or anything else. That's-

Scott Galloway 53:34 No, I meant in terms of who's his replacement. Who gets to decide-

Kara Swisher 53:38 No, I think-

Scott Galloway 53:38 ... when he dies or-

Kara Swisher 53:39 ... I think it doesn't matter at this point.

Scott Galloway 53:40 It doesn't?

Kara Swisher 53:40 I think it doesn't.

Scott Galloway 53:40 Okay, fair enough.

Kara Swisher 53:41 No, I think it's just a, it's just a point that... And I think Beshear's presidential election is gonna hinge a little bit on this. I'm sure he doesn't love it. But if I, if I were him, I'd show up at the hospital. I would. For the people of t- of, of the state. "I'm here as, for the, representing as the governor of the state. I wanna see how you are and assess your ability to do your job for the people of the state." That's what I would do. He, he won't do it, but that's what I would do. And then just get turned away. And get turned away even if he did it. I think it's a pretty good stunt. Anyway, one more quick break. We'll be back for predictions.

Kara Swisher 54:17 [swish] Okay, Scott, let's hear a prediction and try not to [chuckles] make an insult to Mark Zuckerberg if you can. [chuckles]

Scott Galloway 54:23 It's really... Yeah, no, this, it's totally inappropriate what I've been saying. My prediction is that this ridiculous notion that, uh, one of the most corrupt organizations is gonna get financing from a crime family, the Trump family, to take FIFA private And or turn it into a public company. This won't happen, or it's gonna get watered down-

Kara Swisher 54:45 Oh?

Scott Galloway 54:45 ... beyond recognition, and here's why.

Kara Swisher 54:47 Okay.

Scott Galloway 54:47 UEFA, which is-

Kara Swisher 54:47 It's a $20 billion dollar, it's a t- i-i-it's $20 billion company.

Scott Galloway 54:52 UEFA's already fi-fired an opening shot, and they have, and they effectively have veto power. I'm not, I'm, I'm not just saying this because of what I wanna see happening. I think just if you look at the industrial logic here or the mechanics, this isn't gonna happen. The bottom line is the World Cup is not FIFA's to sell. And, and UEFA, the governing body, has already said, "None of us are, are the owners of football." That's not a press release. That's the body that controls the Champions League, FIFA's most credible commercial threat, declaring war on day one. And there's also a precedent. In 2018, Infantino tried the exact move with SoftBank's Saudi money at $25 billion, uh, and UEFA killed it because they saw it as a threat to their own prize assets. So this is the same playbook, same opponent, and same likely outcome. He's, you know, he's already tried this, and he's O for one in the exact same context.

Kara Swisher 55:41 Right.

Scott Galloway 55:42 And 211 members have to say yes.

Kara Swisher 55:44 Yeah.

Scott Galloway 55:44 And FIFA's already trying to buy their votes with cash, not consensus. Uh, you know, uh, uh, the, the-- and also the Kushner connection makes this whole thing radioactive, just not, you know, not just controversial. Kushner is even less popular. Have you seen what's happened at this Albanian island that Ivanka decided was just magical?

Kara Swisher 56:01 Yep, yep.

Scott Galloway 56:02 Um-

Kara Swisher 56:03 Yes, I did

Scott Galloway 56:03 ... so Trump's s-

Kara Swisher 56:04 Yeah, the Albanians are not having it.

Scott Galloway 56:07 Trump's-

Kara Swisher 56:08 They're not having it

Scott Galloway 56:08 ... son-in-law running the money side of the World Cup right after Trump and Infantino stood together at the final after Infantino gave him a peace prize. It's a conflict of interest story that writes itself for every journalist and every rival federation looking for a reason to vote no. Um, anyways, this isn't, uh, uh, FIFA doesn't need the money. This gets re- this gets rebranded-

Kara Swisher 56:31 By the way, it's Josh Ku-Kushner's investment vehicle.

Scott Galloway 56:35 Right.

Kara Swisher 56:35 It's Josh's-

Scott Galloway 56:35 If someone's gonna finance it. Uh, look.

Kara Swisher 56:37 Yeah.

Scott Galloway 56:37 They're trying to monetize what is this global asset of goodwill.

Kara Swisher 56:40 They are separate, just so you're aware. They're separate. But go ahead.

Scott Galloway 56:43 So anyways, my prediction, this thing gets rebranded or negotiated or shrunk to a much smaller Kushner optic scrub version before September 19th because Infantino keeps proposing commercialization deals that die the moment a rival, um, confederation smells a threat to its own assets. There are competing assets here. Uh, so he'll probably get some increased member payouts. He won't get kind of a privatized World Cup. The soccer-- You wanna talk about an asset that the world believes they have a vested ownership in?

Kara Swisher 57:15 Everybody does, yeah.

Scott Galloway 57:16 So I just-

Kara Swisher 57:17 Yeah, it's the same, it's the same themes we've been talking about.

Scott Galloway 57:19 This is gonna be more-- You wa- you wanna see the emotion of data centers times eight? By the way, speaking of which, I'm going on Bill Maher today-

Kara Swisher 57:28 Mm-hmm

Scott Galloway 57:28 ... or whenever this thing's released.

Kara Swisher 57:31 To, to... Yeah.

Scott Galloway 57:31 And you know who the upfront interview is?

Kara Swisher 57:33 Who?

Scott Galloway 57:34 Erin Brockovich.

Kara Swisher 57:35 Oh, yeah, she'll, she's coming on my podcast in a couple, in two weeks. Yeah.

Scott Galloway 57:39 Yeah.

Kara Swisher 57:39 Yeah, she's doing the data center stuff.

Scott Galloway 57:41 So that'll be make for an interesting, um, uh, that'll make for an interesting conversation.

Kara Swisher 57:46 She's actually galvanized a lot of people, which is interesting. Um, let me just read something from a story in Politico, um, that, that, uh, Infantino's political future may be on the US midterm ballot. There's a lot of p- Democrats waiting to pounce here 'cause it's such a popular thing. He's, of course, uh, this says, "If control of Congress flips in the fall, those same ties could become a political liability for Infantino as he seeks re-election atop the Swiss-based nonprofit he has led for a decade." Listen to this quote. "The perfect storm scenario in the FIFA world," said one person involved in the highest levels of global soccer granted anonymity to discuss sensitive internal politics. "I think they will find a candidate to run against him, especially if midterms flip control and if things were to start pouring out. But a lot needs to happen in the next three or four months." I think he's reached too far, Infantino.

Scott Galloway 58:33 Actually, you know what? That would've been a better prediction because-

Kara Swisher 58:35 [clears throat]

Scott Galloway 58:35 ... his rival competing for the p- top spot will just attach him to Trump, who's even le- less popular overseas than he is domestically.

Kara Swisher 58:42 Yeah. Yeah. I think, yeah.

Scott Galloway 58:43 That would've been a better prediction. That would've been more relevant.

Kara Swisher 58:45 Yeah. Anyway, I think you'll, you'll like, uh, uh, congrat- g- I'm excited to listen to you on Bill Maher, by the way. I think that'll be-

Scott Galloway 58:51 Oh, thanks

Kara Swisher 58:51 ... interesting. Anyway, wanna hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com/pivot to submit a question for the show, or call 855-51-PIVOT. Okay, that's the show. Thanks for listening to Pivot, and make sure to like and subscribe to our YouTube channel. We'll be back next week. [upbeat music]