PivotWhat's Really Behind Elon Musk's $97 Billion Power Grab for OpenAI | Pivot
EVERY SPOKEN WORD
150 min read · 29,737 words- 0:00 – 12:05
Intro/Kara and Scott Respond to Elon
- KSKara Swisher
Oh, my God. I can't go to a sex movie with you. I just, that just flashed through my brain.
- SGScott Galloway
Well, that- that wasn't, that wasn't on my bingo card either, so... (laughs)
- KSKara Swisher
(laughs) Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I am the very cruel Kara Swisher.
- SGScott Galloway
And I'm the deceitful Scott Galloway.
- KSKara Swisher
Yeah, and we're both mean, right? We're both mean.
- SGScott Galloway
Yeah, I know we're all for real.
- KSKara Swisher
That one's accurate.
- SGScott Galloway
Yeah.
- KSKara Swisher
Don't you think?
- SGScott Galloway
Yeah, the- the-
- KSKara Swisher
That one's kinda accurate. We're gonna get into-
- SGScott Galloway
... the revolution-
- KSKara Swisher
We're gonna get into-
- SGScott Galloway
... the revolution begins with two podcasts. (laughs)
- KSKara Swisher
I know.
- SGScott Galloway
Yeah.
- KSKara Swisher
So, I don't know about you, uh, you know, but, uh, that was kind of something for Elon to attack us on the Twitter. We're, neither of us are over there, so we had to be told by people. We're like, "What? Huh?"
- SGScott Galloway
What?
- KSKara Swisher
"What huh?"
- SGScott Galloway
That's not nice.
- KSKara Swisher
Yeah.
- SGScott Galloway
Al- although I'm glad I didn't have to read, I guess, there's 11 or 12,000 comments.
- KSKara Swisher
The comments? Oh, no.
- SGScott Galloway
The same thing happens whenever this happens.
- KSKara Swisher
Do they hate us?
- SGScott Galloway
Pe- well, my guess is it wasn't talking about your grayed hair or my broad shoulders.
- KSKara Swisher
(laughs)
- SGScott Galloway
But they- I, my, when- whenever Elon tweets about me, the same thing happens. My phone starts blowing up.
- KSKara Swisher
Yeah.
- SGScott Galloway
I'm like, "Are you all right?" And I'm like, "Oh, shit did something bad happen?"
- 12:05 – 24:50
Elon's OpenAI Bid
- SGScott Galloway
- KSKara Swisher
But as always, everything goes back to Elon, who has continued to plague us, but he's now plaguing Sam Altman. The feud with this, uh, with the, uh, CEO of OpenAI took, took a new turn today when a consortium of investors led by Elon is offering $97 billion to buy the nonprofit that controls OpenAI. The bid was submitted on Monday, according to the Wall Street Journal. It's... and in a quote, Elon said, Elon Musk said, "It's time for OpenAI to return to open source safety-focused force for good it once was." Um, obviously, for people that don't know, Elon and Sam and others created OpenAI together as a nonprofit to battle, um... and I did an interview with them at the time about this, both of them... um, to battle the bigger companies and the, the pri- the privatization of AI. And so it was gonna be a nonprofit that was gonna focus on safety. At the time, Elon thought AI was going to kill all of us. He's changed his tune on that, obviously, over the years. Um, and, uh... and this is a really shocking news. What do you think, Scott? What's he up to? 'Cause he's not busy with other things, for goodness' sake.
- SGScott Galloway
I think this is a rich man's version of, "I'm invading Greenland." I, I think it's, um, a... uh, I think this is a distraction. So first off, if I... (sighs) and I gotta be clear, I, I gotta do more research here. But essentially, what they've done accidentally or unintentionally is by starting out as a nonprofit and then pretending that they would maintain some fidelity to the nonprofit once they smelled the hundreds of billions in potential shareholder value, they accidentally created a class shareholder company. And that is, they have essentially, uh, some shareholders, the nonprofit, that have a lot of governance rights. And the for-profit group, um, uh, is raising money at a $300 or $350 billion valuation, and Musk has found a way to try and create a cajun or, or according to him, essentially get control of, if you will, the voting shares by taking over the nonprofit side of OpenAI. Now what this really does is probably force them to pay more in their negotiations, I think since the last round, on what they're going to pay or what share of the equity the nonprofit gets and the for-profit. But be clear. This is based on the false premise... The statement that you just read that he's concerned and he want... Well, look at his investors. Uh, uh, WME and Baron Capital (laughs) aren't gonna put billions of dollars up to try and pre- you know, to try and protect the world from AI. That's not why they make investments. They would be, as soon as possible, their investors here of this $97.5 billion bid would be looking for a return on their capital. That's not... They're not doing this out of the goodness of their hearts. I think what this is, at the end of the day, is I think this is an attempt to slow him down. I think he sees this as a free call option. "I, I'm gonna fuck with a guy, slow him down. I want Grok or xAI to be, 'I don't like this guy. I've convinced a bunch of people to come in with me. And if for some reason we manage to get control of the voting class shares of the nonprofit, then good for me.'" What are your thoughts?
- KSKara Swisher
Well, I think that, you know, they've been trying to, to, to stop this, this move. And I believe the lawyer is the same lawyer, um, that's dueling with this, what made this offer. Um, but they've been trying to mess with the move to, to op-... and he's been suing OpenAI for a wide range of things, right? And it, it boils down to he wanted to take control of it. They said no. He huffed out, and they were like, "Goodbye," and didn't, you know, didn't chase him in any way. And so he had made a sort of bid to take over at, at the time, and they thought that they would be... he, he would be irresistible as a lover, I guess, of this company, and it didn't work. And so now he's been just furious ever since as it's become, uh, more profitable and that he has this sort of enmity towards, uh, Sam Altman that's really severe. I heard it myself. But at the s- at the time when they started it, it was s-... that was the idea of it. But of course, it was all for profits for all these people in the end. And so this will mess with their move to it. It'll cost them more. It'll be interesting to see, um, what, um, uh, what ha- what Microsoft has to say about this. Obviously, they're still negotiating over their equity stake in this thing. Um, it was $157 billion is the valuation they're looking at now, which is enormously high. Um, you know, when they started as a charity, maybe, uh, for a moment there, but the minute it got profitable, all of them were running for the for-profit subsidiary. And that's what... and they... and they... and, and OpenAI has emails from Musk talking about wanting to turn it into a for-profit. Um-
- SGScott Galloway
What if his entities, what if his entities aren't for profit? I mean-
- KSKara Swisher
That's correct.
- SGScott Galloway
(laughs)
- KSKara Swisher
He, he... they have emails saying it. Like, he's a liar. He's a liar about wanting this particular sentence or fabulist or whatever. He, he's just doing it for the for- performative nature of this. Um, but I think the, the question is what it will be valued at. And so he's just setting it higher, um, and, and, and who has the... uh, who would end up with this, this controlling stake in the new OpenAI? Now he could have waited to... until it did this and then tried to make a play for it publicly. But you're right. It's Joe, it's Joe Lonsdale from Palantir, Ari Emanuel, like literally the least, uh, charitable people I know, right? Like, uh-
- SGScott Galloway
Well let's, let's just say they're the most capitalist.
- KSKara Swisher
Capitalists.
- SGScott Galloway
They're not... They're probably charitable people, but no one's gonna put 100 ka- bill-
- KSKara Swisher
I mean, I mean, they don't want to do this-
- SGScott Galloway
... billion up for fun.
- KSKara Swisher
... for the good of humanity. That's all I'm saying.
- SGScott Galloway
Yeah, for humanity. 100%.
- KSKara Swisher
Yeah.
- SGScott Galloway
100%.
- KSKara Swisher
And, and so, you know, I think he is... he's filed all these legal complaints saying that they had betrayed their nonprofit mission at the same time, um, colluding with Microsoft. And this Dobrev was the one that tried to get the attorney generals, California to do this and do a fair market value. Um, uh, it's a, it's a, "Fuck you, Sam," kind of thing. And I think he was just... To come to the present, there was this announcement at the White House that Musk tried to shit all over this $500 billion on AI infrastructure in this joint venture called Stargate. Um, and, uh, he tried to, um-... you know, he tried to, he wasn't in on that, and this is something Trump announced at the White House with Sam Altman and, um, uh, Masayoshi Son. And so, he, he just doesn't want, he wants to block Sam Altman, at all, um, a- a- at all, and to say that they're doing it for the charity or fully compensated is just a ploy in order to get close to it, right? Um, and he said they didn't have the money. He's called Sam Altman a swindler. I mean, he called us deceitful and mean and cruel, but Sam Altman's a swindler. Um, so this is very typical of him, and it's l- largely 'cause Rock just hasn't caught up. As much as he's made these efforts to do so, um, you know, I think th- their, this, this group was on track to value this company at, which we think was too high too, um, at $157 billion. Anything else?
- SGScott Galloway
Well, first off, uh, let, let's, let's be fair. Sam Altman is not a swindler. The rest of that might be true, but the (laughs) , look, it, this is the same emotion as a really angry ex-spouse. You go through a contentious divorce. You give your half of the house to your spouse, and then the moment you leave, the house ends up going from a million in value to a billion. So you not only feel, you, you feel, you're so fucking angry that you left, you agreed to leave. He, (laughs) he gave up all of it. I mean, it just reeks of, you know, burn this village to save it-
- KSKara Swisher
Yeah.
- SGScott Galloway
... angry, angry ex-spouse.
- KSKara Swisher
Yeah.
- SGScott Galloway
I'm just so upset at the bad deal I agreed to.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
He left. They have those emails. He wanted out. He left, and now he's gonna-
- KSKara Swisher
He wanted to run it. He wanted it to become a for-profit. Yeah.
- SGScott Galloway
And it's, he's now a distant, distant player in the race, and he's got a bunch of people together who all wanna be around the, you know, the Elon magic of, and he does create a ton of shareholder value-
- KSKara Swisher
With, through chaos.
- SGScott Galloway
... and he's like, "Look-"
- KSKara Swisher
Through chaos.
- 24:50 – 27:30
The Super Bowl
- KSKara Swisher
Eagles won the Super Bowl, yay. I'm from Philly, you know, I was born there. The president became the first president to attend the Super Bowl and had a totally normal reaction afterwards, posting on Truth Social, "The only one who had a tougher night than the Kansas City Chiefs was Taylor Swift, who got booed out of the stadium. MAGA is very unforgiving!" Actually, Donald, this was kind of a big, like, fuck you by, uh, many people at the, at the event. The ads were star-studded with appearances by Ben Affleck, David Beckham, Glen Powell, and Billy Crystal. B- Brad Pitt did a long... A big, long ad for the NFL, which was a little woke there. I mean, OpenAI made its Super Bowl debut with a 60-second, $14 million spot. Obviously, Kendrick Lamar ruled the fucking school, and he just... Eh, eh, someone said, you know, he should get the Nobel Hate Prize 'cause he did such a beautiful, artful job of saying fuck you to the Trump Administration. Uh, but I just thought it was beautiful. I thought this was amazing, and I thought it was artful and beautiful. Um, did you? What did you think?
- SGScott Galloway
Oh, I got none of that, so I, um, I wasn't gonna watch the Super Bowl. I mean, the idea of... I mean, it really is the ultimate expression-
- KSKara Swisher
I didn't watch it. I watched it in pieces, but go ahead. Go ahead.
- SGScott Galloway
It really... There couldn't be anything more American than a bunch of boner pill ads and opioid induced medication ads while we watch young, beautiful men get CTE. I mean, it really is America, but instead of, like, Roman Colosseum and lions, we have Taylor Swift. And I promised myself I wasn't gonna watch, and then my 14-year-old goes, "Dad, do you wanna watch the Super Bowl?" And I'm like, "Yeah, of course I do."
- KSKara Swisher
Yeah, of course, yeah.
- SGScott Galloway
I mean, so a chance to hang out-
- KSKara Swisher
So you- so you heated up the nachos and got to it, okay.
- SGScott Galloway
Yeah, but it started at 11:30 PM, so my son-
- KSKara Swisher
What did you eat?
- SGScott Galloway
... be clear-
- KSKara Swisher
Set the scene for me, what did you eat?
- SGScott Galloway
We- we had milk and oatmeal chocolate chip cookies.
- KSKara Swisher
Oh, all right, okay, that's kind of dull.
- SGScott Galloway
Um... I know, that is kinda dull, isn't it? And then... But, of course, it was... My 14-year-old didn't want to hang around with his dad and watch football, he wanted to stay up till 2:00 in the morning. I thought Kendrick Lamar was incredibly boring.
- KSKara Swisher
Really? I loved him.
- SGScott Galloway
I- I didn't think it was a good performance at all.
- KSKara Swisher
I loved him.
- SGScott Galloway
But I realize I've kinda aged out of that shit.
- KSKara Swisher
You have aged out.
- SGScott Galloway
I don't know.
- KSKara Swisher
Yeah, it was great.
- SGScott Galloway
But the... My favorite, though, hands down, though, there was... Uh, I- I mean, the ads that occasionally really move you, there was this wonderful ad, and I don't know if you saw this, but it was of a man sitting at the Super Bowl, and he had an empty seat next to him. And, uh, someone leans over and asks him, "Why is it there's an empty seat?" And he says that he bought two seats for him and his wife, but his wife, unfortunately, had recently passed. And then the guy goes, "Well, I'm so sorry, why... Why, uh, did you not bring someone else from your family?" And he responds, "They're all at the funeral." (laughs) I love that.
- KSKara Swisher
(laughs)
- SGScott Galloway
I love that.
- KSKara Swisher
All right, uh, moving
- 27:30 – 39:06
Amazon Earnings
- KSKara Swisher
on. Amazon shares are down 2.5% in the last five days after a mixed earnings report. The company reported better than expected earnings and revenue, but told investors to expect slowing growth ahead. Based on Amazon's estimates, g- uh, first quarter revenue growth could be the slowest growth on record for the company. On the upside, revenue rose 10% and net income almost doubled, thanks to a cost-cutting campaign. There's only so much you can cut, I guess. Um, he- it's set to pass Walmart in revenue the first time. What's up with this, S- Scott? This is an area you've... Is it- is it- is it the effect of Shein and Temu, or- or what's going on here?
- SGScott Galloway
I don't think so. I think investors now consider Amazon as essentially a cloud company with a retail unit. And their cloud division actually missed estimates by about $100 million, and even though, um, even though the growth was 19% to $29 billion. Keep in mind that while A- AWS represents just 15% of Amazon's revenue, it's responsible for the majority of its operating profit. So as- as AWS goes now-
- KSKara Swisher
Which CEO Andy Jassy used to run, let's just keep... Used to run before he was-
- SGScott Galloway
And- and is the reason he's the CEO.
- KSKara Swisher
Yeah.
- SGScott Galloway
Because essentially, as AWS goes, so does Amazon now. And so the analysts and shareholders are essentially, "Yeah, yeah, yeah, retail, fine, fine, fine. Amazon Prime Video, yeah, whatever. What's happening with AWS?" I- I initially thought that the... I've said this in my predictions, like, two or three years ago, that Amazon would eventually spin AWS and AWS would be the most valuable company in the world-
- KSKara Swisher
They didn't.
- SGScott Galloway
... in five or seven years, and they didn't.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Another one wrong.
- KSKara Swisher
Well, you know-
- SGScott Galloway
Another one wrong.
- KSKara Swisher
... I asked Andy about that during an interview, and he said they absolutely are not going to, and I- I believed him at the time, but, you know.
- SGScott Galloway
Mm-hmm.
- KSKara Swisher
And I thought they should've.
- SGScott Galloway
They-
- KSKara Swisher
I thought they sh-
- SGScott Galloway
They never... They never... They're absolutely not until they do, but anyways.
- KSKara Swisher
I know, but I thought they should've.
- SGScott Galloway
You asked what-
- KSKara Swisher
I thought they should've, like you did.
- SGScott Galloway
But they... Essentially, Amazon's firing on all cylinders, but the fact that they- they say they were capacity constrained. Um, the miss was enough to scare investors though, because it's so important in terms of their margin. AWS's operating profit margin was 37% and the rest of Amazon, get this, is just 7%. So it- it is really... That's the tail wagging the dog here. Amazon is a cloud company with a retail division.
- KSKara Swisher
Yeah. So what happens? What- what does an investor do? Should they spin it off? Uh, it would really be a problem. You know- you know, you always talk about shitcos versus... This is not a shitco, but it's a version of that, right? If they take the higher growth one and spin it off, is it still too... Is it too late to do so? Would they ever do it?
- SGScott Galloway
Well, I... Look, I've advocated for a long time that if you took Amazon, Apple, and Alphabet, and Facebook, or Meta, and you turned them into 15 companies, you'd end up with an aggregate that within 24 months, these 15 companies would be worth much more than the original four. That breakup was a bad idea, said no one ever. Breakups are one of the few things in history where the government intervention always works. Its shareholders win, innovation wins. The reason... Do you think... Let me ask you this. Do you think...... uh, if, if Google had been a standalone unit-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... or if, if Google Cloud had been a standalone unit-
- KSKara Swisher
Or small.
- SGScott Galloway
... or Google AI had been a standalone unit-
- KSKara Swisher
Or small.
- SGScott Galloway
... do you think they would have stopped... Do you think they would have most likely had an AI application sooner?
- 39:06 – 51:48
DOGE's Game Plan
- KSKara Swisher
interesting.
- SGScott Galloway
Anyways.
- KSKara Swisher
So, um, speaking of which, um, Elon's power route continues, with Doge worming itself into at least 15 government agencies. Of course he's gonna do this. Trump says he's happy about things are going. He sang Elon's praises and talked about Doge's next targets in the Super Bowl interview with Fox News' Bret Baier. Let's listen.
- DTDonald Trump
And I've had a great help with Elon Musk, who's been terrific. Baier: Bottom line, you say you trust him. Trust Elon? Oh, he's not gaining anything. In fact, I wonder how he can devote the time to it. He's so into it. But I told him do that. Then I'm gonna tell him very soon, like maybe in 24 hours, to go check the Department of Education. He's gonna find the same thing. Then I'm gonna go, go to the military. Let's check the military. We're gonna find billions, hundreds of billions of dollars of fraud and abuse.
- KSKara Swisher
This is not new stuff this man is finding at all. Um, and it's very small in comparison to most stuff.
- SGScott Galloway
Well, to be fair, the-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... the condoms going to Gaza, until we found out-
- KSKara Swisher
Yes.
- SGScott Galloway
... it was condoms going to Gaza, Mozambique-
- KSKara Swisher
It-
- SGScott Galloway
... for AIDS prevention. (laughs) Not to-
- KSKara Swisher
Yeah. Yeah, I know. It's, it's fucking...
- SGScott Galloway
Not to Hamas.
- KSKara Swisher
They lie about every... Listen.
- SGScott Galloway
(laughs)
- KSKara Swisher
They open their mouths, and they lie. Um, the fe-... They, they're always trying to find, like, the, the gold toilet seat. That's what they're always... You know, like, "Oh, it's a $600 toilet seat." That's what they're looking for. But the federal judge temporarily blocked Doge's access to the Treasury Department payment system over the weekend, citing risk of irreparable harm, though it's unclear when or if Doge employees will comply with that order. Com-... We'll talk about compliance. We're gonna get into that strategy with the courts after the break. But thoughts on the latest Doge move is the Consumer Finance Protection Board, which has returned money to the Treasury, uh, by a lot, uh, temporarily closed its offices and suspended its services. And they're pushing to rapidly develop a custom AI chatbot to analyze government data, according to Wired. And Doge employees have also fed sensitive data from the Education Department into AI software to probe the agency's programs and spending, according to the Washington Post. This has all been done before. It's just very performative. Um, I think it's just to gain access to the data and who knows what. I mean, uh, you, you don't necessarily have to assume they're nefarious, but why not? Why not just go, start with nefarious and work your way down from there? Um, your thoughts?
- SGScott Galloway
I think it's war, and I think that unfortunately we're on the wrong side of it. And we thought we built these impenetrable institutions, these Maginot Lines, and they just dropped, the Nazis just dropped paratroopers behind this impenetrable border called the Maginot Line. And I think we're on the Democrats, the Panzer tanks have rolled in, and we're trying to fight them on horseback. We shouldn't be talking about what's outrageous about this or what's wrong about it. We should be saying the following. If a group of talented engineers can come in and cut off payments to veterans, cut off payments to children in low-income areas, then once we're in power, I wonder if we could find some really intelligent young people to cut off payments to Starlink. Overnight. Overnight. We think, we think, by the way, we're wondering if space is sovereign territory and that you're trespassing and we should take control of your 51 satellites. And we have some really talented people, uh, from Google and from different tech companies that we think could go in and shut down Starlink and start asking questions the next day. And find it... And let's find out if it... Maybe it's not legal. Let's find out. So, i- instead of, like, screaming into fucking TikTok or on MSNBC...... you, if you can do this, well, we're gonna come up with some creative ideas about maybe we could do the same thing.
- KSKara Swisher
Right.
- SGScott Galloway
Maybe-
- KSKara Swisher
Unfortunately, that's where it leads, right? It leads to this idea of... Now, now, listen, presidents have been trying to expand their power, uh, for, for a long, long time, right? This is not a new trend, and it's bipartisan, by the way. Um, but this is, this is sort of... What's interesting to me is how performative it is, and then when you call him out on it, they're like, "How dare you call us out?" But I'm like, they're literally going jazz hands all over the place and, and then making these ridiculous statements about cost savings when they're saving very little. It's not strategic. It's not legal. They're not doing it with Congress. And I understand the need to a little shock and awe in that regard. I'm not against that. I do think the way they're doing it is just so deleterious to what they're trying to accomplish, which is, you know, they put a tiny little bit, "We wanna s- make the government more, more efficient." No shit, Sherlock. So do the rest of us, right? We wanna make the government more efficient. But to, to like, to do it in this way is purposely creating havoc and purposely against what you're supposed to do to actually save money. And they're gonna find very little savings by doing this. The fact that he mentioned military was my, I was like, "Oh, dear, you're gonna go over that, over in that rail?" Because they're, the only thing... You know, I w- I was just interviewing these economists today, and Paul Krugman correctly said the United States is an insurance company with a military, um, 'cause most of the spending is Medicare, Medicaid, um, and things like that or the military. So, if you're going for the Medicare, medi- where the real money is, good fucking luck on that one. And if you notice, they're not. So, the fact that he mentioned military was really interesting to me, and again, probably full of fraud and full of problems, but not in the, in the way that they're talking about in any way, I don't think.
- SGScott Galloway
Okay. So, something I've struggled with my entire career is the difference between, um, being right and being effective, and I think the majority of the Democratic Party and the majority of the media talking about some of the points you've just referenced I th- are right. I wanna move to the effective part of the conversation, and, and this is how I think we become effective. If you wanna hurt Trump or stop him, you gotta stop Musk. And if you wanna stop Musk, you need to go after the surface area of attack, and it's one thing. It's money. It's already happening in Europe, right? EV sales, EV sales were, you know, are, are down-
- KSKara Swisher
No, they were up a little bit. His were down, right?
- SGScott Galloway
N- No, EV sales in Europe are down-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... um, 6%, but they're down, like, 20 to 40% across France and different nations in, uh, Europe.
- KSKara Swisher
It was like 69% in Germany, or that's what you were saying.
- SGScott Galloway
E- e- they're off, they're off dramatically. Um, should you be signing up for T-Mobile right now? Should veterans be communicating to their colleagues or institutions or people in areas affected by this, should they be saying, "T-Mobile, I'm not down with you partnering with Elon Musk at Starlink?" Should you be flying United Airlines, which just announced a big deal with Starlink? Should you... Uh, and I, I, I'm just speaking for a friend here, but what if every time you get an Uber... Every time I get an Uber, if it pulls up, if it says Tesla Model S, I cancel and I put in the notes, "I will not ride in a Tesla."
- KSKara Swisher
Yeah. They should have-
- SGScott Galloway
At some point-
- 51:48 – 1:03:38
Trump, Vance, and Elon Target Judges
- KSKara Swisher
Scott, we're back. As Donald Trump and others continue to push their agenda, the only thing standing in their way appears to be the courts for now. Federal judges have halted parts of Trump's executive order blitz, including, uh, the federal spending freeze, worker buyouts, and DOJ's access to the payment system, as we mentioned earlier. But, uh, everyone's... they're attacking the judiciary. Um, first, uh, Musk, uh, called for the impeachment of a judge who ruled against DOJ. He's also proposing that the worst 1% of appointed judges be fired every year. Sorry, Aileen Cannon, you're going. Um, uh, what are you... this undermined the strategy was, was especially by J.D. Vance. He, he put one out that got enormous attention, um, and I think it's a coordinated effort. He posted over the weekend that judges aren't allowed to control the executive's legitimate power, which of course everyone was like, "Did you go to Yale Law School?" 'Cause it doesn't sound like it was.
- SGScott Galloway
Of course they are.
- KSKara Swisher
Yeah. Um, Trump administration lawyers also filed a motion saying DOJ's ruling impinges, uh, on the president's absolute powers of the executive branch, w- which, uh, of course they're gonna do. But their move to the, uh, undermine the judiciary portion of the show, I think. Um, and the cases will likely get appealed. Some will go to the Supreme Court. Um, we'll see where that goes. But remember, after the immunity decision last year, Justice Sotomayor wrote, "The president is now king above the law." So, um, and even if the courts do rule against Trump, I'm gonna give you the whole package, enforcement will be up to the DOJ, which he controls. The DOJ, through the U.S. Marshals Service, controls that. So, a lot of my, um, uh, legal people say there's no enforcement mechanism for any of this stuff, and if he resists, it's... he can just resist. He can resist it legally, too. Um, so, and, and it takes a while for things to, to shake out in that regard, because the judiciary does not have enforcement powers.
- SGScott Galloway
I think it's Ruth, Ruth Ben-Ghiat, is that her name?
- KSKara Swisher
Ben-Ghiat, mm-hmm.
- SGScott Galloway
Uh, she summarized it. I, I think it was her. If it was another historian, I'm sure I'll hear about it. But she said most democracies are ins- you know, are, are driven institutionally, that at the end of the day, the courts rule. And then kind of the slow burn to fascism or a dictatorship is you move to a paternalistic model, and that's the right term. It's, it's f- uh, this fi- where you decide this guy knows better than everybody else. And I... we kind of... you get the government you deserve, and that is, this guy was, was freely and fairly elected by a country that decided it's okay to be a convicted felon. And so, he now believes, and he has the incentive structure and the results to show it...... that he can be elected president, despite being a convicted felon, so why on earth would he not believe, and others who support him not believe that he's above the law? That's, America basically said, "Okay, he's above the law, and he gets to make these decisions now."
- KSKara Swisher
Well, the Supreme Court said that, but go ahead.
- SGScott Galloway
Well, eh, but, but-
- KSKara Swisher
Yeah.
- SGScott Galloway
... h- h- haven't we given him all these green lights to say-
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
... "Yeah, just break the law. Just, it's okay."
- KSKara Swisher
Yeah.
- SGScott Galloway
"Just move, move it. Don't go around institutions. Don't, you know, the law no longer applies to you." We're moving to this paternalistic, uh, government structure that is kind of, you know, m- more, more tightly associated with dictatorships than democracies.
- KSKara Swisher
Yeah, I think it's problematic. I think the issue that they don't have enforcement of it... If a, if a group of people is willing to break laws and then break rulings against their activities, there is nowhere to go, right? And then if, I, I mean the, the place to go is people protest, right? That's the next step. A- and of course, he could declare martial law, which is a ne- you know what I mean? If we protest even slightly, maybe he'll say it's martial law. So it really does, it really does, you know, put it into stark relief how fragile our systems are in ways that I think we don't think about. I, let me just read something someone who, who I really respect wrote me, it was pretty w- well done. "This is an impending Constitutional crisis. Courts and Congress become subordinate to the Executive Branch, and then our system crumbles at its foundation. We are nearing that moment, if not there already. Our system is far more fragile than most people appreciate. It depends on people in power respecting the Constitutional framework. At bottom, it's an honor system. Most people in power get to the... get this at a gut level, and will not touch the third rail, but here we are in uncharted territory. Never have we seen this happen at such a scale and depth." And I said, "Oh, well, that's happy." And, and he said, "It's gonna get worse before it gets better." And I said, "What does better look like?" And it, and he responded, "They're gonna break too many things. Markets will eventually crash, and people will lose basic services. The problem is it will take time for the public to really feel it." He di- he brought it back to the market itself too, is when the market goes, that's when they stop, right? And that's, you know, that's, there's a lot of damage in the interim, wh- this guy's not a... Trust me, he's not a, like, hi- hi- hyperbolic person in any way, and he's usually like, "Eh, whatever," for a lot of Donald Trump's things, but in this case, concerned, especially when it has to lead to market meltdown, essentially, or violence, presumably.
- SGScott Galloway
Makes sense. I don't, I mean, I'm so sort of overwhelmed and having, uh, I mean, I'm just, I- I'm having a difficult time processing every sort of destruction (laughs) of our institutions, and what felt like, what feels like everything, the pillars of what we thought we could rely on and sort of default to, that, that judges matter, that laws matter, that institutions matter, that there's a level of mutual respect, that you don't hack the government and stop payments to people in need, and I, I, it, it definitely feels like the opera- we've pressed the reset button, and we're not entirely sure what's gonna happen when it reboots back up.
- KSKara Swisher
Right, right. That's a really good way to put it.
- SGScott Galloway
Yeah.
- KSKara Swisher
It is sort of, you know, for people who don't under- it is the Silicon Valley ethos of, do we really need judges? Do we really... They question everything, and in some cases, that is a great thing. In other cases, it's deeply dangerous, right, the idea of things that probably we, not we shouldn't be questioning, but maybe we could do it better, they don't ever wanna do it better, they just wanna wreck it and then clean it up afterwards, and that's a, that's a very Musk-like characteristic. It's not just him, it's a lot of Silicon Valley, um, and so it's that thinking that, like, "What could go wrong? Is it so bad if we break it?" And I think you have to really understand their personality, and when it will matter was when, for at least Trump, from my, from what you just noted, will be when the economy tanks, when the market tanks, when there's, when rich people get, get made discomforted by this, right, versus just the moral argument that you should make that this, this system has worked for centuries and pretty well, even if it has all kinds of hair on it, right, that this, this is actually... We've never had a stronger economy. We've never been more productive. Uh, we've never been more everything, and yet here we are, starting to take apart the pieces that actually quietly hold it together.
- SGScott Galloway
Yeah, but there's... Uh, I agree with you, and that was my narrative kinda coming in, you know, when I was told to understand the assignment and support Biden and Harris, which I, I agreed to and signed up for, for a lot of reasons. But what, what a lot of America has said is, the, the narrative that, that you throw a bunch of numbers at me about the market and our prosperity, and all I know is there's... This all reverse-engineers, in my opinion, to income inequality and people being reminded every day that they're, seem to be the only people that aren't succeeding, and that no one, you know, that they're left behind, that their kids, they can't afford them. 40% of Americans now have some form of medical or dental debt. I think, I think there needs to be a new crop of leadership that comes out with really dramatic bold- So I'd like to, you know, let's lower Medicaid two years every year for the next 25 years until we have nationalized medicines. There, there just needs to be some really big, bold ideas from the left as opposed to burn everything down. And these discussions, I don't even wanna entertain these discussions with the right right now, because as far as I'm concerned, no, I- I- I'm not going to engage in a conversation with you. You- you're, you're, you're trying to foment an illegitimate forum around this discussion. Uh, you have, in my opinion, you're trespassing, and you're illegally hacking our government systems without government oversight.... and I'm, I, I just don't think we should be, you know-
- KSKara Swisher
Yeah, I, I-
- SGScott Galloway
Sure, talk about how outrageous it is.
- KSKara Swisher
But it... No, I'm not talking about how outrageous it is. It's an explanation of what their mentality is, and I think these people do not care about disruption and... or the effect. And I think downstream, away from all this huffin' and puffin' by everybody, and it's very serious stuff, Scott, it really is, is, is this is going to affect... This has nothing to do with the price of fucking eggs, right? Any of this. And it's n-... And attacking the court system, which is... People who run businesses like laws. Laws are good. Laws is good. If everyone, you know, runs stop signs and runs red lights and decides to murder people, this is not good for the economy. This is not good for stability. And so what- what's interesting is this, like, thoughtless idea of, of breaking without thinking of the implications of it, and I'm not exercised about it. I'm sort of like, "This is the stupidest thing I've ever seen." Like, "Are you crazy? This works pretty fucking well." And so to me, it all does boil down to people who like disruption and don't mind breaking, and because they're in a position to be fine with it, and maybe they'll benefit in the new order, and regular people who are gonna see enormous economic stress from all of this if, if they keep going at the rate they're going. I mean, basically that if the rule of law feels at risk, if judges feel nervous, if, if, if when they call the US Marshals Service and they decide not to come 'cause Pam Bondi i- is a, is a suck up, that's a problem. That's a real... People don't believe in the law, really, pretty much. I don't know.
- SGScott Galloway
Well, w- when I moved to London, within the kind of six months, I just gained a new appreciation for America in terms of the viscosity, the risk aggressiveness. In general, people start from a position of yes. They're optimistic. There's a, just a shit ton of opportunity. Our universities are just incredible. Our entrepreneurs are incredible. I generally think that in the wild in America, people are, are generous, really decent people. I'm so impressed with our... I'm, you know... It sounds weird. I, I miss my students. I miss the, the service. Uh, we used to have this wonderful program that... like a GI Bill. All these incredibly talented young people who went to work in government. America works... (laughs) America works less bad than any other nation in the world, and I think a lot of citizens in the United States are about to find out that government isn't as bad as they think, and they're really gonna miss it when it gets shut down, when they stop... You know, the FAA does an amazing job. Your Veterans Affairs Department, sure there's a lot of waste, but the reason why, one of the reasons we are, you know, respected around the world and get the best treaties and have 700 military bases is because we have all these people who are willing to sign up and put themselves in harm's way, and then when they come back, we attempt to reasonably honor them and take care of them. It just... People are about to find out just how well actually American government does work. And if you have to move to London or if you have to have your benefits taken away and find out what happens when these institutions collapse, okay, so be it. I hope the collateral damage isn't as enormous as it likely will be, but I just feel like we're dealing with a series that Americans have become... Everybody has a tendency to say all Americans are... I think they're fucking spoiled children at this point. I don't think they realize how fortunate they are at the largess and inefficiency of government.
- KSKara Swisher
All right, Scott. Just remember, you're mean, cruel, and deceitful.
- SGScott Galloway
That's right.
- KSKara Swisher
Um, one more quick break. We'll be back for wins and fails. Okay, Scott,
- 1:03:38 – 1:11:27
Wins and Fails
- KSKara Swisher
let's hear some wins and fails. Uh, would you like to go first, or would you like me to go first?
- SGScott Galloway
You go first.
- KSKara Swisher
Um, I, I'm, I'm gonna do two wins today. One is, uh, I gotta say, Wired's coverage of all things Elon and Doge has become essential reading, uh, scoop after scoop about all the craziness.
- SGScott Galloway
Who would've thought? Wired?
- KSKara Swisher
Well, they've got a new editor, Katie Drummond, who's, um, uh-
- SGScott Galloway
Great writer.
- KSKara Swisher
... they call the digital thorn in Elon Musk's side is, is Wired. But I gotta say, the final... This is s-... You know, Wired has gone in and out of relevance over the many years, but, um, I gotta say, this is just great reporting, and their, their, their subscriptions are up. Amanda came home. She goes, "I just got a subscription to Wired." Like-
- SGScott Galloway
Yeah.
- KSKara Swisher
... you know, it's just, uh-
- SGScott Galloway
I should do that. Yeah.
- KSKara Swisher
Uh, it's, uh, doing a great job on basic news, and it's been very fair. It hasn't been snarky. It hasn't been... It's just been, "Here's who they are. This is what they're doing. Here's what's happening." I have to say, it's essential reading, and I have to... I, I give them, uh, great credit for that, and I like to call out institutions that have really, um, im- just really improved our lives, and they're doing a great job. They're doing a great job and doing it with real, like, steadiness, uh, which is really hard to do. Uh, my other win, I hate to say this, but the penny thing, that Trump is-... wants to end the production of pennies. I hate pennies, so I'm happy with that. I wanted to say one positive thing about (laughs) the Trump administration. I don't know if it'll happen, but lots of countries are eliminating pennies, just so you know, all courts-... all sorts of countries. Canada phased out the p- penny in 2012. Um, so it just costs a lot of money. It's... I, I know I used to collect pennies as a kid and wrap them and shit like that, but I don't, I don't like a penny. I don't like a penny. (laughs) That's my whole thing. Okay, uh, moving on.
- SGScott Galloway
There you go. Uh, I have two wins. I don't know what platform it's on, but I'm fascinated with this woman. She's a historian and staff writer at The Atlantic named Anne Applebaum.
- KSKara Swisher
Yeah, I love her. She was just on the podcast. Yeah.
- SGScott Galloway
And I've just... I'm learning a lot from her, and I, I think she has a very measured and thoughtful way of looking at history and relating it to what's going on now, so I would recommend everyone tune in or do a search for Anne Applebaum on, on, um... What's it called, that Meta platform? Instagram. And then I'm gonna have another win 'cause I'm, I'm, I'm too freaked out to have too many fails. I've been watching The Penguin, and it's, it's actually just okay. It's not what you expect. It's good.
- KSKara Swisher
They don't won all those awards.
- SGScott Galloway
It's not great.
- KSKara Swisher
Yeah.
- SGScott Galloway
But, uh, Colin Farrell?
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Is that his name? Is it Colin Farrell?
- KSKara Swisher
Colin Farrell, mm-hmm.
- SGScott Galloway
He's... I mean, my God. He's a-
- KSKara Swisher
Transformed.
- SGScott Galloway
... Jesus. He'll, I think, he'll win a lot, 'cause you know what they like. They want you to play someone who's mentally disabled or overweight or, you know, they want you to transform into someone else to win the Academy Award. Supposedly it took four hours every time, but he is, I mean, it's just fascinating to kinda watch him and how-
- KSKara Swisher
Yeah.
- SGScott Galloway
... good he is. Uh, it's really a- an amazing-
- KSKara Swisher
Do you like it?
- SGScott Galloway
Pardon?
- KSKara Swisher
Seems dirty to me. Like, I feel like, ugh, Gotham City. Like, ugh, I don't wanna any more Gotham fucking City. I feel like I live in Gotham City now. What, tell me, is it good? You said it's only okay.
- SGScott Galloway
I think it's good, not great. I, I think his perform- I mean, i- it's hard to ta- it's hard not to take your eyes off his performance, so it, that, I think it's just, I think his performance is just incredible. Um, I think occasionally, you know, W- Walter White in Breaking Bad, I forget, uh, the actor's name, um, you know, occasionally there's a performance by, uh-
Episode duration: 1:11:27
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