PivotTrump Tariffs Are Back and You're Going to Pay the Price | Pivot
EVERY SPOKEN WORD
50 min read · 9,978 words- 0:00 – 7:23
Intro
- KSKara Swisher
If they did a MicroDrama about your life, what would it be called?
- SGScott Galloway
Cialis?
- KSKara Swisher
Okay. [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
Scott, we are here in California, the hellscape behind us. It's really quite-
- SGScott Galloway
It's awful here
- KSKara Swisher
... hor- It's awful here.
- SGScott Galloway
I don't know how people survive-
- KSKara Swisher
I don't know
- SGScott Galloway
... this dry weather, the breeze, the ocean, the In-N-Out Burger.
- KSKara Swisher
Yeah.
- SGScott Galloway
God, awful.
- KSKara Swisher
Yeah, yeah. So we're here-
- SGScott Galloway
Just awful
- KSKara Swisher
... at a conference. Um, we're recording this live in front of a live audience at CAO Summit in Los Angeles. Uh, this is The Terranea, where, again, I used to run the, uh, Code Conference here for many, many years, and-
- SGScott Galloway
Yeah
- KSKara Swisher
... many memories.
- SGScott Galloway
Yeah.
- KSKara Swisher
There, there really are a lot of memories here of doing things.
- SGScott Galloway
Yeah, this is, yeah, you're absolutely, uh, this is kind of where you're mo- this is where you made Mark Zuckerberg sweat.
- KSKara Swisher
Yeah, mm-hmm.
- SGScott Galloway
Um, this is, it's spectacular down here.
- KSKara Swisher
I didn't make him sweat. He sweat 'cause he had a panic attack.
- SGScott Galloway
Uh, okay.
- KSKara Swisher
Okay.
- SGScott Galloway
Yeah, no, I think you pressed him.
- KSKara Swisher
What's, what's the real memory for me is this is actually the last, uh, interview, uh, that Steve Jobs ever did. He did several interviews here, but the last one before he died was here, which was really an amazing interview. It was actually just in this ballroom here. Um, and uh, one of the things that I remember before that, when we did Gates and Jobs together, is, uh, when we had Mark here the year he sweat, uh, all he wanted to do, he is, was an up-and-coming entrepreneur, that Facebook wasn't very big. Um, and all he wanted to do was meet Steve Jobs, like, kind of like a fanboy, which was really s- something else, so I introduced them. Um, which was kind of a moment, and it was actually literally right down on this lawn right here. So it's, it's, this place is full of memories. So what have you been doing this week, Scott? You, we went to, you just became a regent of this University of California.
- SGScott Galloway
Yeah, and, and, well, thank you. In other news, Joe Rogan has been appointed the head of the CDC.
- KSKara Swisher
Yeah.
- SGScott Galloway
Um, did you, let me be honest, when you saw that this morning, did you think it was The Onion?
- 7:23 – 12:07
Trump’s Tariffs Returns
- KSKara Swisher
more about. Donald Trump's tariffs are making their not-so-triumphant return. Uh, he imposed a 50% tariff on Canadian goods like alcohol, milk, and hockey sticks this week, justifying the move with an unused provision of the 1930 Smoot-Hawley Act.
- SGScott Galloway
Smoot-Hawley.
- KSKara Swisher
Smoot-Hawley. Uh, this, is this the beginning? Trump is reportedly set to unleash new tariffs on a dozen countries, 'cause it worked so well the last time, given his 10%, uh, temporary global tariffs are about to expire. Uh, the Supreme Court struck down his Liberation Day tariffs earlier this year, but the White House keeps attempting various workarounds. Given the havoc that the Iran war is wreaking on the economy, um, which is still ongoing, uh, even though it was supposed to be over many times, um, is it really now the time to impose tariffs?
- SGScott Galloway
Well, look, i- if you were, were running above 4% inflation, and if you were-- and it came down, but it looks like it's blipping back up, that doesn't sound like a lot, but that means if you're about to have a kid, we just met, uh, someone who's expecting, by the time that kid goes to college, if it maintains at 4%, that means tuition, uh, 40,000 goes to 80,000. So inflation is how countries basically go-- devolve into chaos. Like, the Fed is there basically to ensure employment growth and to make sure inflation doesn't get out of control. And you can have a lot of unemployment and people don't riot, but when people are working two jobs and they can't afford, you know, bread, that's when they, that's when they overthrow the government. So inflation is, is really scary. And if you were to reverse engineer that four points, two of the four points can be attributed to, one, the skyrocketing energy cri- uh, energy prices and tariffs. Tariffs will take approximately a $1,000 toll on every household this year. It'll go to $1,200 on every household average if these tariffs go through, and about 90% of, uh, those tariffs are being borne by US consumers. When I was in graduate school, we, we literally used to look at tariffs as an example of could you believe how stupid we were to do these things?
- KSKara Swisher
Right, specifically the Smoot-Hawley Act.
- SGScott Galloway
E-exactly, and it was considered antiquated and something we would never do again. And then unfortunately, probably our strongest ali-ally, largest undefended border in the world is Canada. 80% of their exports come-- I mean, this is really ugly for Canada. 80% of their exports come into the US, and to believe that somehow, part of this whole narrative is this grievance culture, that we're victims, that we're being taken advantage of. If there's anyone being taken advantage of, it's our trading partners, 'cause the way-- If you think about what we sell into Canada, we sell iPhones and JP Morgan and advertising services into Canada. Those are high-margin products. The margin on an iPhone is 40 or 60 points, so on $100 worth of iPhones that we ship into Canada, we get to hold onto 40 or 60 bucks, call it 50 bucks. Apple trades at a P of 30, so that's about $1,500 in shareholder value. When they sell $100 worth of timber or unrefined oil-
- KSKara Swisher
Or hockey sticks or whatever
- SGScott Galloway
... or hockey sticks, you're talking about 20 or 30 points of gross margin in a company that trades at a multiple of 10. So for every dollar we ship over, we get about 20 inch-- or 10 to 20 in shareholder value. For every dollar they sell of their stuff, and they're getting two to three. So there, there's any dramatic asymmetry in trade that's accreting to one partner, it's the US. If anyone should be putting tariffs on a nation, logically they would be putting tariffs on us. So the net effect of tariffs is that the market for our products declines or shrinks-
- KSKara Swisher
Right
- SGScott Galloway
... but our products, the things we buy, become more expensive.
- KSKara Swisher
And they, and they find other partners or allow other partners in-
- SGScott Galloway
Workarounds
- KSKara Swisher
... whether it's Chinese cars or Chinese AI open source models or whatever they happen to buy, they will have stronger relationships with others, sp- particularly China.
- SGScott Galloway
Oh, absolutely. I think they've-- I mean, they're gonna pay a huge price, and I've said this, it's like that Animal House film when Otter says to the guy who errantly lent his parents' cars to the-- car to the fraternity brothers and they crashed it, and he looks at him and said, "You fucked up. You trusted us." That's how Canada feels about the US right now. They fucked up. They trusted us. They thought they had a great ally. They thought they had a great trading partner. They don't. We were willing to basically neuter them economically.
- KSKara Swisher
So why do you think Trump is doing this? I mean, he was mad about the wildfires. I think they were sending us beautiful orange skies in honor of him. Um, but, uh, but why?
- SGScott Galloway
I, I ca- I can't imagine a more elegant way to reduce the prosperity of Americans than tariffs. I don't-
- KSKara Swisher
No
- SGScott Galloway
... I can't understand what he's thinking. Even supposedly his inner circle has said this is a terrible idea.
- KSKara Swisher
Right, and yet.
- SGScott Galloway
And yet here we are.
- KSKara Swisher
Here we are.
- SGScott Galloway
Yeah, I know.
- KSKara Swisher
Um, another
- 12:07 – 17:32
Kalshi’s Midterms Hub
- KSKara Swisher
story, Kalshi just launched a, a new midterms hub tracking real-time odds for every House and Senate ra- race across the country. Kalshi is calling it a one-stop shop for election forecasting, serving the public, campaign journalists, policymakers, and researchers. By the way, roughly 75% of people are going to Kalshi are there to check odds. 25% are trading. More than $30 million has already been traded in wagers about the control of the House and the Senate, and a spike in the prediction market volume is expected as we get closer to the election. Now, you, you put a lot of faith in the predictions market. I find them very game-oriented, meaning they can be easily gamed, uh, by, by not-so-great people. I also have an issue with Polymarket, uh, given the kind of things they allow people to bet on. Uh, there was an interesting story in The New York Times today about an investment firm that Don Jr. is involved in that somehow has 200% returns. Which are unprecedented, and it's, well, probably because of his large brain. Um, I'm guessing not. But talk about, about these markets, 'cause if you were advising a campaign, h- what would you tell them about them? You've put a lot of faith in them. I put less so.
- SGScott Galloway
Yeah, so I'm not, I'm not making a qualitative judgment on whether prediction markets are good or bad. I have real concerns around gaming and gambling and its impact on young men. But polling companies are basically going out of business because if you wanna know how someone, what someone really thinks, don't ask them what they think, ask them where they're putting their money. That is, it ends up that the wisdom of crowds in terms of their, what they're actually wagering on, what they're actually voting with their wallet. So, for example, Kalshi has never gotten a Fed rate decision wrong, and it sh- the data I've seen is that sev- they're 78% of the time they're able to predict an outcome in election which is greater, or they're 78% more accurate. And some polling firms are basically going out of business because think about the people a polling firm calls, that you pick up your phone, you fill out a survey. That's not always very accurate in terms of the actual election. Um, so these, these firms, what's interesting about the election side, it'll get more headline news than it is a business. The total election business for Kalshi is somewhere between one and 2% of their revenue.
- KSKara Swisher
Right.
- SGScott Galloway
Five and a half billion dollars was wagered on the World Cup final. This is a tiny business for them, but it gets a lot of headline press because it's pretty accurate. They're predicting, I think about a 70 or 78% likelihood that Democrats overtake the con- take the Congre- uh, take the House, but only 45% that they take the Senate. But I find that that data so far, if I think of a source of truth or accuracy, I think of the, I go to the prediction markets.
- KSKara Swisher
Do you differentiate between Polymarket and Kalshi? These are the two big ones.
- SGScott Galloway
So I go to-
- KSKara Swisher
And, uh, apparently Facebook is also considering putting one together.
- SGScott Galloway
Yeah, I, I think Ka- I think of Kalshi just 'cause I think it's a, bigger and has more liquidity and has more, just more volume of people spending their money, if you will, or-
- KSKara Swisher
What's the biggest worry you have of them right n- right now? Because a- as they become more and more, 'cause they were betting on drug outcomes, they're betting on, uh, illnesses, disasters, you know, the, apparently Trump, the guy who does the teleprompter for Trump was betting on what he would say in the speech since he knew, uh, and is, is under investigation for that.
- SGScott Galloway
Yeah, th- there's some scenarios where you could see someone, uh, finding a market where they say, "Okay, uh, someone's gonna be hurt or killed," or whatever, and they start doing strange acts i- in order to bet money. But that's no different than fixing, like, the World Series. And then there's fears around insider trading, but I think ultimately the insider trading will be arb'd out when people realize that if there's anyone that could have inside information, they shouldn't bet on the other side. My, my biggest fear is very simple, and that is we have millions of young men who every day are being seduced by screens and algorithms to spend another second on a screen and another second less with their relationships, and we're slowly but surely evolving a new species of asocial, asexual males. They become obese, depressed, anxious, and start blaming women for their romantic problems and immigrants for their economic problems, and some, we're producing a cohort of really shitty citizens that threaten the nation. That's what I'm worried about, Kara.
- KSKara Swisher
Oh, all right. Other than that, Kalshi's fantastic.
- SGScott Galloway
Yeah.
- KSKara Swisher
Um, [laughs] all right. Let's go on a quick break. We come back. Speaking of the midterms, we'll talk about Anthropic's big spend. [upbeat music]
- SGScott Galloway
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- KSKara Swisher
[upbeat music] Scott, we're back.
- 17:32 – 21:27
The AI Election
- KSKara Swisher
Um, Anthropic is making a big bet on the midterms, recently doubling its spending to a total of $40 million. The money is going into Public First Action, a PAC pushing for AI regulation. It's a counterweight to Leading the Future, a PAC backed by Andreessen Horowitz and OpenAI's Greg Brockman. It's not just execs. Filings show Anthropic and OpenAI employees are emerging as a new donor class, pouring money into races. Anthropic is also writing big checks outside of politics. A federal judge approved the company's $1.5 billion settlement whose, with authors whose work were used to train Anthropic's, uh, AI model, Claude. They're essentially thievery of copyright. Uh, the crypto folks have had a major impact on the last election. Is this the AI election? Um, we had talked about that. Obviously, Sherrod Brown got his, he may be back, uh, got, got whacked by the crypto people. Uh, I think Elon's now put $90 million into the midterms right now. Is it again gonna b- is it all about AI at this point?
- SGScott Galloway
Well, I've been doing all the talking. What do you think?
- KSKara Swisher
I, I think that's what they're doing.
- SGScott Galloway
Yeah.
- KSKara Swisher
I think they really very much wanna control. They're very worried about a couple of things. One is, um, the regulation around the country around AI in states. They're particularly nervous about that, of which are popping up everywhere, the uses of AI. They're worried about the uses, um, I think the, the idea of social media being banned, they're sort of getting used to that, and France just did that. Um, I think that they are worried about data centers and, as you say, as a proxy for everything else. I had a long talk with someone from one of these companies today about what to do and maybe change their tone, uh, with citizens on data centers, uh, 'cause they realize they look like villains. Um, and what can we do to not look like villains? And they were asking me, uh, my advice, and I said, "Well, maybe don't be villains." Um, which they were like, "We're not villains." I'm like, "People hate you." I-- Which is what I had told them at a dinner a while back. I said, "People hate you, and they're gonna hate you more." Um, so I think them entering even more politics is really problematic for all of us because, you know, it, it... I-- We don't wanna get into a, a Sharks versus Jets thing between the Anthropic people and the, um, and the OpenAI, Elon Musk, Andreessen gang, essentially. That's what it feels like, um, because I don't think it's in the interests of good legislation. I don't think it's in the interest of safety. I don't think it's in the interest of bringing AI to all of us. I think it's in the interest of protecting what their business is, essentially.
- SGScott Galloway
Yeah. The way I read this, so, um, Anthropic is claiming they're putting money into an organization that's actually promoting stricter AI regulation, which feels sort of counterintuitive because typically an industry or a PAC representing a, an industry gives money to try and stave off or delay and obfuscate regulation. I sort of saw it as they recognize how powerful and what a great ROI it is to invest in Washington, so this is sort of their ticket to the conference where they're gonna network and establish relationships should they need, uh, those relationships.
- KSKara Swisher
I don't think any of them have an interest in any actual legislation.
- SGScott Galloway
Yeah.
- KSKara Swisher
None at all. I think this w- Mark Zuckerberg did this, "Please regulate us. Please regulate us," and then did everything possible to stop it. Uh, even Apple does it. They-- We talk about age verification and other things, and they block it everywhere you go, and I don't think-
- SGScott Galloway
Yeah.
- KSKara Swisher
I think these people like no regulation, and I think this money is incredibly dangerous by this one group of people, um, no matter what side they're on. I, I mean, I don't like either side pretty much.
- SGScott Galloway
Yeah. Look, it's all, all roads lead to the same place. Unless we overturn Citizens United, and we get some semblance, uh, y- I mean, I, I, I think that money is gonna decide this election for the most part or have a big influence on it, and, uh, companies running unfettered, it's just, uh... Anyway, we-- I'm, I'm a broken record here.
- KSKara Swisher
Well, speaking of that, the, they may not
- 21:27 – 25:45
AI Execs Warn About China
- KSKara Swisher
have unfettered money. Executives at OpenAI and Anthropic are warning about the rise of cheap AI from China, which we've talked about a lot, saying it will lead to security risks and a dystopian future. The Trump administration says it will look into whether AI has been distilled from American models, of course they have, saying it doesn't support IP theft, huh, which is rich from these people. Um, in an attempt to gain ground over China, the US plans to overhaul federal funding to support individual scientists and the use of AI rather than universities, uh, which is individual... This is a real problem. They're starting to give money to individual star scientists. Meanwhile, on a security front, OpenAI models went rogue and hacked a startup, Hugging Face, during a security test. Um, they were bragging about it a little bit. It was unprecedented that we managed to attack another company. What happened was the AI jumped out of the sandbox it was in and went around all of OpenAI's security, uh, efforts and, and went and attacked a company, uh, on its own. Um, so I, to me, I'm not sure these executives are worried about the future or just worried about competition. W- How do you look at this? You were the first to mention this to me, this, this threat from, um, this threat from China.
- SGScott Galloway
Well, in January of 2025, which was not long ago, about 10% of token usage was coming from Chinese open weight models. As of today, it looks like it's 58%. So what you effectively are seeing is this bifurcation in the market where, uh, American models are turning into German automobile manufacturers. They're high-end. They're more expensive. And even though you have 58% token usage from the Chinese models, on a revenue side, the American models, the frontier models, are much bigger businesses because DeepSeek charges about one thirty-fifth of the price for token usage. So I think this is just turning into the automobile market, where you're gonna have a high-end BMW or Mercedes, uh, and then you're gonna have Toyota, Hyundai, you know, uh, uh, Honda. So they'll produce more cars. They'll produce more AI. It'll be lower margin, but the market's bifurcating, and we're-- There's still a market for the frontier models. So there's certain applications where people want the best, latest, greatest model with more security, more testing, someone you can sue, someone you can call with customer service complaints. They'll probably do a better job of hiring some of the people in this room to figure out how to monetize it through advertising. But you ha- now have, essentially, I would argue, that AI, I mean, on a volume level, that China has already won.
- KSKara Swisher
Yeah.
- SGScott Galloway
And it's not a race to see who has the smartest model. It's a race to see who can put the most AI in the most people's hands.
- KSKara Swisher
Correct. Yeah.
- SGScott Galloway
And right now, right now, that's China.
- KSKara Swisher
And the backlash to data centers will be part of that. They'll be able to do, they'll be able to do more compute there. They'll be able to get it to more people. Um, and the backlash to data centers is these companies' own fault for the way they've behaved, even if some of them... You know, I ran into the mayor of Lansing, Michigan, who had a great deal from one of these companies, and the citizens just didn't want it anyway.
- SGScott Galloway
Yeah. Yeah.
- KSKara Swisher
'Cause they hate them, like the-- I ke- which I keep telling them. I don't think they like me saying that, but they do. People hate them. Um, all right. Let's go on a quick break. When we come back, we'll talk about France banning social media for kids under 15.
- SGScott Galloway
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- 25:45 – 29:55
France Bans Social Media for Kids
- SGScott Galloway
apply.
- KSKara Swisher
France has banned social media for children under 15. It's the first country in the EU to pass a blanket ban, and the bills also bans the use of mobile phones in high schools. Last year, Australia banned children under 16 from having social media accounts. The ban is failing to keep teens off the platforms. Um, this is, this is an worldwide trend, and it, it will be coming here at some point, uh, and relatively soon. And I suspect the social media companies, some of them are gonna get on board with it.
- SGScott Galloway
Yeah, look, we've, we've been talking about this for a long time. We're gonna, we're gonna look back on this era, I think, and regret income inequality, we're gonna regret Citizens United, money overrunning Washington. But I, I genuinely believe our biggest regret for parents is we're gonna look back and think, "How did we let this happen to our kids?" I think that, I just don't see any, any piece of research, any rational argument for why any of our children should ever be on social media under the age of 16. I mean, just im- just imagine being that age, just as you're thinking about your social capital, your sense of self. You're physically awkward. You're, you know, you're, you're growing too fast. You have weird skin. You're, you're being evaluated. You're starting to, you know, recognize your own sexual self and what's attractive and not attractive. I mean, you're just so fucking insecure, right? Remember that?
- KSKara Swisher
No.
- SGScott Galloway
No? Well, uh, the rest of us. And then, and then the high school cafeteria is following you around 24 by seven. And I think social media is really damaging to young men because they get radicalized, and they sequester from the relationships. I think it's especially hard on teenage girls, though, because boys bully physically and verbally. Girls bully relationally, and we put these nuclear weapons in their hands called smartphones. And I think in high school, I just think the level, the expectations on aesthetics, the, the unreal memetic benchmark that teen girls are supposed to live up to, the bullying, the, it, it just, it's like a giant eating disorder waiting to happen.
- KSKara Swisher
Or it's a distraction in school, where you aren't paying attention to teachers. You're watching some latest dance video.
- SGScott Galloway
Most, yeah, but most schools, even before, if they don't ban phones, they only use them in class.
- KSKara Swisher
Correct. But, but I think y- it, the use of them creates a distraction and a lack of, and this, including the chatbots that are now very popular among young people.
- SGScott Galloway
But what a lot of people, their initial argument was ridiculous shit like, "Well, 15-year-olds have First Amendment rights, and they're, they're socializing," and th- this no sh- And then they went to, "Well, it's bad parenting." And anyone who thinks [laughs] keeping your kid off your phone is about parenting doesn't have kids because u- unless there's a collective ban, the research my colleague Adam Alter did at NYU was that what they found is that unless you ban it all for all teenagers-
- KSKara Swisher
For everybody
- SGScott Galloway
... the kids whose parents take it away are more depressed 'cause they're ostracized and isolated from everybody else. So unless it's a collective universal ban, it doesn't work. But this is just, this is literally a no-brainer. This is, in my opinion, one of the most, it's got bipartisan support, all the research in the world showing there's just very little we give up when we don't let our 15-year-old daughters and sons on social media. Um, another colleague, Jonathan Haidt, I think has done real w- real good work. I think this is gonna sweep over Europe-
- KSKara Swisher
Absolutely
- SGScott Galloway
... in a matter of months.
- KSKara Swisher
It's a question when it's gonna sweep here in this country, which, uh, we'll wait and see. I, I do think the social media companies are suddenly starting... The only reason I realize that is suddenly they're calling me, which they don't speak to me ever, and now they're like, "Hey, girl." I'm getting a lot of "Hey, girls" from all these companies.
- SGScott Galloway
They speak to you all the time. Didn't you just, uh, I thought you talked to someone today that-
- KSKara Swisher
I, I did, but I'm just saying. I'm just saying. They're "Hey, girling" me recently.
- SGScott Galloway
Yeah.
- KSKara Swisher
I'm just, but it's not, but they haven't in a long time, which is interesting. Which is an interesting thing is like, "We know we have a problem." I'm like, "You know, no shit, Sherlock." Um, in any case, moving along, speaking of which, this makes me laugh. The Daily
- 29:55 – 30:45
“The Daily Show” MicroDrama
- KSKara Swisher
Show is taking on micro dramas. Comedy Central announced a show. It will produce a first of its genre, a serialized soap opera shot vertically designed for phones. Uh, a title will be Two Billionaires Fight to Dominate the Country and My Heart. The series falls, follows Ilanka, a daughter of an aging and sleepy president, two moguls, Egon Husk and Jiff Davos, who will compete to build an AI president to run the country. Uh, s- I feel good about this. I feel great about this. If they did a micro drama about your life, what would it be called?
- SGScott Galloway
Cialis.
- KSKara Swisher
Okay. [laughs] I love that they're doing this. I think they've done, I think they've-
- SGScott Galloway
Doesn't this feel like everyone should come here, like, when they're divorced?
- KSKara Swisher
Yeah.
- SGScott Galloway
I think my third wife is here, so my next ex-wife is somewhere in this crowd.
- KSKara Swisher
[laughs] I'm not gonna say a word about that. Um,
- 30:45 – 38:46
Tesla Earnings
- KSKara Swisher
I'm gonna move on. I'm moving on very quickly. Tesla earnings just came out with the company reporting weaker than expected numbers for Q4, even as revenue rose to $28 billion, up 26% from last year. The company is citing a hit from lower vehicle prices despite increased auto sales. Tesla also shares jumped in operating expenses and CapEx as it pours money into robotaxis and robots. But as part of Elon Musk's master plan, he's calling it a massive CapEx year that will yield, quote, "Maybe the best CapEx returns that we've ever seen." But thoughts on Tesla? He's gonna fold it into SpaceX, which is, by the way, at $115 a share. That's heading down.
- SGScott Galloway
I don't know. Actually, I, I don't know if he's gonna be able to now, if it keeps going down.
- KSKara Swisher
Yeah.
- SGScott Galloway
But-
- KSKara Swisher
Yeah
- SGScott Galloway
... Tesla's doing exactly what it's supposed to be doing. It's an automobile company that's reaching scale, and it's no longer as differentiated 'cause other entrants have entered the market. And as a result, you see margin compression 'cause the only way they can maintain their share is to lower prices. And to their credit, they, they, their vehicle sales were up dramatically.
- KSKara Swisher
Yeah.
- SGScott Galloway
But in order to make-
- KSKara Swisher
Not for the Cybertruck. They sold 7,000, 3,000 of which were to-
- SGScott Galloway
Well, that, that product's a ... dead on arrival.
- KSKara Swisher
Yeah. Yeah. Yeah.
- SGScott Galloway
So, but they are, their volumes are way up, but their margins are being compressed, and that's where you're gonna see every quarter. What, I think the analog to the previous story we were talking about is the same thing's gonna happen in AI. There's gonna be more AI. The same thing, China did the same thing with EVs, did the same thing with batteries. It did the same thing with shipbuilding. And that is, what we forget about in business is we're so in love with the innovator, we think the key to shareholder value is to build the best model. It's not. It's to put the model in as many people's hands as possible. The fastest zero to a billion-dollar retailer was Old Navy. That did not have the coolest fashion. It offered 80% of Gap for 50% of the price, which is the entire strategy of China. And what, what Tesla's doing right now is they're being forced to lower their prices because BYD-
- KSKara Swisher
Yeah
- SGScott Galloway
... can come in with 80% of a Tesla for 50% of the price. B- and circling back, they're gonna do the same thing with AI. The majority of us, or a lot of us, especially in startups or with CFOs who are very, very disciplined, are gonna say-
- KSKara Swisher
That's enough
- SGScott Galloway
... if you, if you can get 80% of Anthropic with DeepSeek or Kimi or whatever it is, uh, for 10% of the price, folks, the, this is the AI we're using. And that, the same thing is happening, the same pressure is being put on Tesla.
- KSKara Swisher
So what happens, what happens to Tesla from your perspective? Where does it go?
- SGScott Galloway
I think it's, I think it's a great company. I think it's a great car. It's just it c- in no way-
- KSKara Swisher
They need more cars. They need new cars.
- SGScott Galloway
Sure, that, every, every automobile company has that problem. But, uh, the thing about Tesla, it's not that it's not a great car company. It's not that it's g- a great, not got a great product, but he's been trying to promise something like robots or... Did you realize, do you know what the total number of non-manned or non, I don't know what the politically correct term is, non-personified-
- KSKara Swisher
Manned is fine
- SGScott Galloway
... someone in the seat?
- KSKara Swisher
You can use man.
- SGScott Galloway
Non-personed. There's 24 Teslas on the road globally now that don't have a person.
- KSKara Swisher
A robotaxi, right.
- SGScott Galloway
Right. I think, I think Waymo's at 4,000 or 5,000.
- KSKara Swisher
Yes, they are.
- SGScott Galloway
But he will always say, "Here's the Robovan. Here's robots. I got a s- I got a card up my sleeve to justify a valuation, a software valuation, on a company that wraps steel around an axle that is typically a low margin mature business." So the, where does it go? It goes to the same place. Great company, lot of cars. They'll come up with new products, and it will trade, I think, at 70 to 80% less than it's trading now in the stock market.
- KSKara Swisher
Where it is right now. Yeah, and it doesn't get folded into SpaceX. He keeps-
- SGScott Galloway
If the stock keeps going down-
- 38:46 – 41:13
Elon’s “Odyssey” & Predictions
- KSKara Swisher
and fees apply. Uh, okay, Scott, we're gonna hear a prediction. My prediction is that his version, Elon right now is very upset at Chris Nolan and The Odyssey. I know you know that. It made $250 million this week. It turned out woke Odyssey was very much liked by the people. Um, Elon's still mad about it. He's still angry, so he's decided he's gonna do an AI version of The Odyssey that's historically accurate, despite the fact that The Odyssey is fiction. [laughing]
- SGScott Galloway
It's a myth.
- KSKara Swisher
It's, exactly. That's correct. It's fiction. It's fiction, okay? But he's real mad about it, so I predict this movie is not gonna be very good.
- SGScott Galloway
Look it, it... [sighs] So he just put on display on the network a movie called, I think, The Vigilante, which is-
- KSKara Swisher
Yeah
- SGScott Galloway
...Armie Hammer, the guy who played the Winklevi.
- KSKara Swisher
Yeah.
- SGScott Galloway
And it's about a guy who seeks revenge on behalf of victims that were killed by immigrant families, and a lot of people felt like it was very Islamophobic. And my view is, I love what you said. You don't like Chick-fil-A, don't eat at Chick-fil-A.
- KSKara Swisher
Right.
- SGScott Galloway
You think that's true? Don't watch it. You don't want a non-white woman playing Helen? All I care about personally is that she's hot. That's all I want. That's the only criteria.
- KSKara Swisher
Yeah.
- SGScott Galloway
You don't want a, you don't want a transgender man playing a warrior? Fine, then don't see it. But is it any more fake than Tom Cruise as a straight leading man?
- KSKara Swisher
Yeah. [laughs] [laughing] On that note, what is your prediction? And then we'll get to a question.
- SGScott Galloway
Uh, I got a couple of predictions. One, well, I made the prediction. You're seeing the market in AI bifurcate into German automobile, high, high price, high margin companies that won't be as relevant as the Japanese or the low-cost manufacturers, which will be Chinese AI. I think China, quite frankly, I hate to say it, on, at a certain level, has one AI.
- KSKara Swisher
Yep.
- SGScott Galloway
We just haven't w- woken up to that yet.
- KSKara Swisher
I would agree.
- SGScott Galloway
And then two, you're about to see the clip economy take over our TVs. I think the biggest show on television, uh, from Netflix or someone else, is going to be a 60-minute compilation of two and three-minute videos, similar to what you see on Reels or TikTok.
- KSKara Swisher
Right.
- SGScott Galloway
I think that's about to wash over the traditional streamers. You're gonna see-
- KSKara Swisher
You know, that was a big show many, back in the day. Do you remember Kids Say the Craziest Things or Bloopers or...
- SGScott Galloway
Or America's Funniest Home Videos.
- KSKara Swisher
America's Funniest Home Videos.
- SGScott Galloway
Yeah, yeah, that's fine.
- KSKara Swisher
It's the same thing.
- SGScott Galloway
I just thought of that.
- KSKara Swisher
Yeah. Those were that all
- 41:13 – 50:56
Q&A
- KSKara Swisher
linked together. So, okay. All right. So with that, we'll open the floor up for two audience questions.
- SPSpeaker
I'm just curious, for both of you, who is sort of an under the radar creator right now, whether it's a Substack writer or a YouTuber or a podcaster, that you love, you forward to your friends, that, but no one, we don't know, and that y- people are gonna hear about it from a year from now, that we'll all kinda know about in a year from now?
- KSKara Swisher
Huh. What do you, what do you watch?
- SGScott Galloway
Mine are weird. I like the Gio Houssar, who talks about military weaponry and strategy. Um, uh, I like Gary's Economics. He's a total populist economist. And I fo- I follow boring, weird stuff. I don't... You know, I'm, I'm the guy who watches World War II in color. My favorite actor's Hitler. I'll watch anything about war. Um, so my creators are probably not ever gonna be that big. [laughs]
- KSKara Swisher
Right. [laughs] That's really depressing. Um, I, I watch a lot of the food ones. There's a guy, and I don't know his name, and he's, he's, he screams a lot, and he grows ginger. Um, but he's this food, uh, food guy, um, who does... He's very... My son put me onto him, and I actually listen to what my kids listen to, 'cause my y- my second son was very into the guy who ended up doing backrooms, and had, had tagged him for me on YouTube to watch, um, and was very familiar. People should not be surprised that was so popular. All the kids knew about it on YouTube. Um, so I tend to listen to what my kids listen to. Like, I, I tend to watch what they, what they look at. Um, but I think there's just, I, I... All over the place, there are so many amazing ones, and I think, I, I happen to look at food ones, um, and that's, and this young, young guy does this most astonishing about growing things. And again, my son put me onto him, 'cause he, he does a lot of gardens and stuff like that. Um, I'm trying to think of anybody else.
- SGScott Galloway
I've got one more, and I guess he's technically a creator, but I think we have, I think that George Carlin... Ge- George, no one knew George Carlin was the George Carlin of his generation till after he died. It's like right now, I think we're, you never know you're in a golden age until 20 years later. I think we're in a golden age in New York. I think New York's incredible right now, and we won't recognize it until 20 or 30 years when it's shitty again, and everyone will go, "Remember in 2026?" I think the George Carlin of our age right now is this British comedian named Jimmy Carr, and I find him just so insightful and funny and brutally honest. Uh, he's one of my favorite creators. He comes up in my feed.
- KSKara Swisher
Yeah, and any of the comedy ones I watch a lot.
- SGScott Galloway
Yeah.
- KSKara Swisher
That's who I watch.
- SGScott Galloway
I also like Rita Fayaz. She's basically a porn star.
- KSKara Swisher
Yeah, I li- I listen to all... Who? Who? Who?
- SGScott Galloway
Rita Fiaz, is that her name?
- KSKara Swisher
Yeah.
- SGScott Galloway
I don't... She's just my feed a lot. I don't know why. I don't-
- KSKara Swisher
Yeah. Yeah. So sorry we're not too, we're, sorry we're not so good on that stuff.
- SGScott Galloway
He knows her.
- KSKara Swisher
All right, one more.
- SGScott Galloway
That guy's like, I said that, he's like, "Uh-huh."
- KSKara Swisher
One more. Right-
- SGScott Galloway
Uh-huh
- KSKara Swisher
... right here? Right here. Right here. One more. I'm sorry to cut it off. I gotta go back to DC unfortunately, and see what's going on with the Reflecting Pool. It's still broken.
- SPSpeaker
Hey, uh, Scott. Hey, uh, Karis. Jason Adelman from Brand Innovators. How are you?
- KSKara Swisher
Hi.
- SGScott Galloway
Hi.
- SPSpeaker
Hi. Uh, so my question is, is h- not a funny question, 'cause I'm usually a funny guy.
- KSKara Swisher
Oh.
- SPSpeaker
But, which is, who's the next tech mogul no one's talking about? But you guys seem to always know who's who.
- KSKara Swisher
Ha. That's a good question. There's a couple of really interesting, um... Oh, God, this, I'm, I'm supposed to meet a couple. Like I've been asking people for some really innovative people doing, uh, AI. Um, but I'm, I'm suddenly interested, I just happened to be, as I said, with, uh, J- JB Pritzker about their new quantum computing. Uh, they're putting a quantum computing campus in Chicago on the site of U.S. Steel, where U.S. Steel had its factory, which is kind of ironic and wonderful. I'm super interested in quantum computing right now for some reason. Um, you know, quantum computing, people don't think, they think AI, AI, AI is everything. Quantum computing is AI's, um, well-behaved and more important brother. Uh, you know, they're, they're siblings in some ways, and there's quantum AI and things like that. But I think the ability to create these quantum computers is really where the real innovation is gonna happen. And so I'm spending a lot of time trying to figure out who's the big, who are the big names in that. Um, and, uh, that's where I'm focused completely, almost, like trying to figure it out right now of, of who that is. And the other thing I'm looking at a lot is, uh, I've been doing a lot on crypto, uh, crypto security. Um, and that is a big worry of mine. I just had an interview with Nicole Perlroth from The New York Times, who she was a former New York Times reporter, but she now is a consulting firm, at the sort of the dangers we face with these, uh, AI models, and, uh, the offense/defense happening right now with all, all kind, whether it's finance or pharmaceuticals or your personal information. Uh, I think a lot of really smart people I know are very worried about it, so I'm looking for those companies that are sort of the white hats in that area. 'Cause there's a whole lot of black hats in cybersecurity right now, in cyber, uh, attacks, uh, so. But...
- SGScott Galloway
I forgot in California when the sun goes down, it gets pretty cold here. [laughs] Um, I'm shivering. Uh, so, so tech means technology. Mogul, I think means rich. So I'm not talking about who should be, who's gonna be good for the world or not good for the world, but when I think of someone who's gonna make, create potentially trillions of dollars in shareholder value, uh, I think probably, is it Palmer Luckey, Anduril?
- KSKara Swisher
Yeah.
Episode duration: 50:57
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