--:-- Support for the show comes from Retool. Too many companies run critical operations on duct tape spreadsheets, Slack workflows, and whatever else they could cobble together. Not because they want to, because building internal tools means weeks of waiting on someone else's backlog. That's where Retool comes in. Build custom internal tools just by describing what you need. Prompt something like build me a revenue dashboard for our Salesforce data. And Retool actually built it on your company's data in your cloud with enterprise security built in. Go to retool.com slash pivot. We all need to retool how we build software. Support for this show comes from Wix. Imagine if building a website was as easy as brainstorming ideas for one. Well, with Wix Harmony, it can be. Wix Harmony offers the perfect blend of AI and precise drag and drop tools, meaning it's the next generation of website creation. You can generate anything with AI, while at the same time using manual design tools to adjust any detail or add your unique creative flair. Ready to create a website? See why 280 million businesses around the world rely on Wix for theirs and go to wix.com slash harmony. That's wix.com slash harmony. Support for the show comes from CoreWeave. Everywhere you look, AI is expanding what we thought was possible. And at the center of it all is CoreWeave. medical research and diagnosis, education, complex visual effects for movies, science and technology breakthroughs. CoreWeave powers AI pioneers around the world with purpose-built tech, building 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 slash ready for anything. What did you forget like a second ago? You literally said that a second ago. I'm getting old, Kara. it. Obviously. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. And I am a trad wife. What does that mean? I made bread and butter this morning, butter from scratch. And I made this delicious bread. You're really proud of it. You sent me a photo of it. I know. Well, I am. I made it. I know it sounds really stupid, but I get, I'm on, here's the whole bread. It's a loaf of, it's a baguette. This today is a baguette And I also made butter with a marble and a jar and some heavy cream last night at dinner fresh butter I going to make cultured butter next I get on Instagram and I obsessed with watching food videos and I save them and I'm starting to make all of them. What's the next thing you're going to make? I'm going to make different things. I'm just going to do it with Clara. We're going to probably make another bread. We're going for bread and butter. We like bread and butter because I'm a trad wife. So anyway. I like that white supremacist baking company. He said that his family had a long history of being in bread. I can't believe you have a bread joke. I have to say it takes me out of... Takes you out of your head. Out of my head. It was advice from doing this series that's coming out. So two muffins are in the oven when one turns to the other and says, man, it's so hot in here today. And the other muffin says, holy shit, it's a fucking talking muffin. I can't believe you have bakery jokes. Kara, my wife has been sleeping around with other men. Our church pastor is coming over tonight to offer advice. And my wife is baking cookies, but I'm embarrassed because the cookies are homemade. I could do this all night. Why do you have them? Did you suddenly get on the internet and said baking jokes? Is that what happened there? No, I have an incredible memory for 1970s Ram playoff losses and for dad jokes. Dad jokes. Well, those are some good baking jokes. That part of my brain is alive and well. Oh, all right. Well, I'm going to send you a loaf of my bread. I'm going to make butter. You and I are going to sit. I made it in 10 minutes. It was crazy. Speaking of good things to do, talk about where's Resistant Unsubscribe? You were on my podcast on Monday. People loved it. We did very well with that. We did well. So tell me where we are. Give us a brief update. So first off, you have been, all of these people are weighing in behind me, and I'm not exaggerating, senators, congresspeople, media, are all of a sudden calling and saying, I love this. You are first. Thank you. Not a fucking peep from anybody I know the first three or four days. Everyone's like, I don't know, it's a little crazy. I don't want to be associated with a failure. He's so arrogant. Yeah, blah, blah, blah, yeah. Yeah, no, or just like, I don't know about this. And now that it's got some traction. So, yeah, all of a sudden it's got a bit of a second wind. I was on with Nicole Wallace at MSNOW. And just the video on YouTube has a half a million views and 3 comments Representative Kinzinger talking about it Kinzinger yeah Kinzinger excuse me I just went on the Bulwark those guys that got 600 views and 4 comments Yeah, I told you, podcast is the way to go next. Yeah, that's what I've been doing. I took your advice and I got, the ultimate validation was someone I know sent me a screenshot who works at Microsoft and said, your site has been blocked internally. Oh, wow. Which I thought was pretty interesting. I see that as validation. You're resistant on subscribe? Yeah, my site is blocked, according to a Microsoft employee. We're not even that mean to Microsoft. Yeah, it's not. So, and I'm getting questions now from different people around how do you evolve this and continue it beyond February. I have a new idea. I have a new idea. I would love to hear it. And then most exciting, the most rewarding thing, I'm in Switzerland. And today, taking my kids to the ski lift, kind of that sounded like a total story of privilege. I'm in Switzerland. I'm not exaggerating, Cara. Four separate people came up to me and fist bumped me and said, resist and unsubscribe. Wow. God. Total strangers. The resistance has arrived in Zermatt. People are coming up to me, live long and prosper. Resist and unsubscribe. Zermatt is now. Tomato belongs to me. Oh, no, don't do that. Resistant on subscribe. Do not do that because that's not a good song. That's actually Germany, FYI. That was a cabaret for people to not understand that. But what's really interesting, this is my new idea. Okay, so the podcast, you got to go into the right wing sphere, whatever. Like, don't go on Katie Miller's show because she's a fucking idiot. But, like, you need to get on Rogan. You need to get, you know, some of the Theo Vons, those people. I did it when they hated me. that I'm un-American and this is desperate. But now they're anti-Trump, you know, now they're anti-Trump, just so you know, and they're anti-tech. So they've suddenly shifted. I should go, I can go on Theo, I can go on Theo Vons. We like each other. Me and Theo are not. Yeah, I'm just saying there's, and like take advantage of like some, maybe Smartless or something like that. I got another idea that involves Kara Swisher. I think we should do a live event called Resist and Unsubscribe. And I think it should be a live event hosted in Minneapolis. Oh, let's do it. Anytime. You know what? I'm there for you. Abso-fucking-lutely. Let's do it. We're going to do it. Minneapolis, I'm going to get in touch with people today. I know exactly who could help us with this A guy named Tane Danger Tane Danger Yes Isn that a comic book character No he this great guy that I Wasn he exposed to some sort of nuclear waste and now he's a superhero? We'll get Tina Smith. Can we get that Dreamy Mayer? That guy's good looking. I'll get Dreamy Mayer. I just interviewed Dreamy Mayer. That guy's good looking. Oh, he could be so good. Okay, we're going to talk about this. Anyway, guess what also? AOC was talking about you this week, sort of. She was in Germany and someone asked her about Scott Galloway. I thought she was sort of reaching out because she's sort of into me. You think it's a policy thing. I don't think she's into you in any way. Just so but here's what she said when someone asked her about your economic boycott. Let's listen to what she said. I think that sometimes people can be cynical about these things and say, oh, well, they don't work. They're highly individualistic. I think we have to try everything. And if it doesn't work, it doesn't work. But at least we try. They're highly I think she's saying you're a one man art, one man band, but that's fine. But you're not now. Well, let me just call on history here. The most famous one, Montgomery bus strike. Everyone's looking for the cinematic moment where someone refuses to give up their seat and everything changes. That's not how it played out, folks. It was an 11-month coordinated carpool campaign to pull people off of the municipal bus system. And only after 11 months and $2 million in lost revenue and thousands of carpools did the municipal system agree to desegregate. So my question to everyone is, you can pull up on a bike and just unsubscribe to ChatGP. You can pull up in a tractor trailer like Chelsea Handler did and get 110,000 likes on your Instagram post of what you're unsubscribing to. But all of us add up to something bigger. And also just psychologically and emotionally, I can tell you, it just feels great to be doing something and be doing something with other people. Yeah. And also it makes sense. It makes sense. It's easy. You can do what you want. You don't have to do it forever. This is what I tell people. Everyone's like, oh, now I really like it. I said, go back to it when they behave, when they behave the way you want them to behave. Yeah. Make up your own mind. What do you want to unsubscribe to? When do you want to resubscribe? Yeah. And you just might find you don't need Amazon Music. By the way, one thing is you have great discussions with your family too, because my kids really like Apple Music. I still haven't gotten rid of it, and I'm going to talk to them some more about it. But you don't have to make it like this, like, virtue signal thing. By the way, speaking of Chelsea Handler, I went to her show, which was great, here in D.C. I heard it's great, yeah. She's going to tons of places, but I thanked her on great here in D.C. I heard it's great. She's going to tons of places, but I thanked her on your behalf for doing that. She's great. We had a great time. Anyway, we've got to get some of our other celebrity people to get in on it. I'm going to work on that for you, too. Anyway, we've got a lot to get to today, so let's dig in. This is an astonishing development. Former Prince Andrew has been, we call him former Prince Andrew right now, used to be known as Prince, has been arrested on suspicion of misconduct in public office by British police. You know, he should be arrested for something else, but this is what they could get him on. The full details of the arrest are not clear at the time of the taping, but former Prince has been under increasing pressure after the latest release of the Epstein files. Andrew Mountbatten-Windsor, which is his name, was previously stripped of his royal title due to his involvement with Epstein. Finally, after many, many years of this. Meanwhile, Casey Wasserman has decided to put his talent agency in marketing for him up for sale amidst criticism of his past relationship with Jelaine Maxwell. There's a ton of people, Dean. So I sent you the list of people that are, you know, obviously Larry Summers stepped down. Dean Kamen is having trouble. He's the famous robotics guy. All manner of people. The former prime minister of Norway. Everyone but the guy who said, they let you do it, grab the pussy guy, is not being investigated. But this is really interesting. So you're not in England right now, but explain to people what this is like, what this is akin to, arresting a royal. I think the UK just demonstrated more institutional courage in one morning than the entire U.S. Department of Justice has managed in five years. And it's just ironic. You know, my attitude is, okay, now do Epstein's flight logs. I mean, some of it's probably pretty political. The crown is probably looking to try and renew their brand in an era where monarchies are fading. This really is the last monarchy. And also, the prime minister is feeling heat and potentially calls for his resignation. But I think that, I think the UK, quite frankly, is actually showing some fidelity to the notion that no one is above the law. Yep absolutely I agree One of the things that really that really important is the investigation should have gone on These investigations that should have happened how badly prosecutors over the entire period of time from down in Florida to now have fucked this up And in terms of, I think the moment with Pam Bonney and she had never talked to those people, like all of them are liars. Like, I don't know. Why don't you do an investigation? And so she's obviously not going to because she's bought and paid for. But the fact that they didn't do investigations here on, as you say, the people who are criminally liable and the other people who are getting, you know, Bill Gates had to pull out of something because of this. Look, that'll play itself out because that's about it. I don't think it's about shaming. It's about like bad judgment. People are going to have to pay for their actions eventually. But the criminal investigations that haven't gone on here, the ability. And I have to say we owe a debt of gratitude to Roe Kahn and Thomas Massey for pushing this through. And we need and the redactions that this Bondi Justice Department is doing are, you know, Ted Lieu, who is a trained lawyer, got up and said there's credible evidence that Donald Trump, this is what he is saying. I have not seen these things, that he has actually assaulted an underage girl. And for him to get up and say that, knowing that he's a lawyer, is really something. And of course, Trump is saying he's exonerated. He's not exonerated. He hasn't been investigated properly, right? And so, you know, when he said, let me just read this again, maybe, just maybe, as this fetid penny drops, maybe it wasn't locker room talk, right? Do you remember that? I mean, this is what he said. Let me read it. I don't even wait. And when you're a star, they let you do it. You can do anything. Grab them by the pussy. You can do anything. I don't know if he did anything, but I'd like to have investigators really. I don't know if they need an independent investigator or special counsel. I never like those things but in this case everybody dirty right And certainly Pam Bondi has no business being in the job she in They should have a special counsel release all the files especially the criminal stuff keep it as maybe not release those because they really need to And it might not lead to anything but to show that we have what the UK is doing And there may be a statute of limitations by the way Scott on this stuff I don know That what kind of interesting about this specific case with Prince Andrew is that or the person formerly known as Prince the I know it is kind of funny but he not funny he gross But when the feds come for you and say you've clearly committed, engaged in criminal activity here, they usually don't get you for what, you know, they didn't, they got Al Capone for money laundering or for- No, no, for tax, tax evasion. Yeah, for tax evasion. And Prince Andrew isn't being accused of sexual assault. He's being accused of passing state secrets to a convicted felon. But that's the point. The point is, if you commit crimes, our, you know, our reach as far in our memory is long. And now I have a different, to me, this is how you handle the Epstein files. And that is, I don't think the Epstein files should have been released. I think that the Department of Justice. Because it gets sullied. I know what you're thinking, right? I think the Department of Justice and a team of lawyers, including outside lawyers contracted for this very important case, should have gone through these things with a fine-toothed hair and comb and said, okay, we're going to communicate to the public what is in these files vis-a-vis grand jury indictments and prosecutions. because I think what has happened is, I think we have been so played here, Cara. If I was advising the Trump administration on how to dilute the depravity here and to get him out of this, I would be doing exactly what they're doing. And that is by dripping it out sclerotically, incorrectly, some stuff's redacted, some stuff isn't. And then we all chase, we're like a Tyrannosaurus Rex wherever we see movement and violence and ring light algorithm shaming, we start talking about fucking Deepak Chopra. Well, we should talk about him too, but go ahead. I disagree. I think it's, the Department of Justice is there for criminal indictments and to create incentives such that if you have a daughter and you're a single mother, and your daughter gets invited to some fucking island, that there's incentives that people who feel entitled to rape your daughter won't. Yes, I get it. someone is a creep or not is a distant, distant second. And all of this bullshit has diluted the criminal activity. I don't think it's bullshit. I think it's part of the same thing. And this is like, let me just say, who's the person that said Epstein had legs? This whole thing had legs a long time ago when everyone thought it was going to go away. This is one at the heart of the MAGA infrastructure as I noted It is also at the heart of a lot of it true right Some of it true some of it not But it is part of a whole movement around corruption of the elites And this is the worst version of it. And I think we do need to talk about people. Andrew did this because I'm on board. Andrew's being criminally prosecuted. But I'm saying he did it because he thought he didn't. As you say, he's not bound by the law. Right. Right now, breaking New Mexico, investigators open a probe into whether Epstein ordered the burial of bodies on his Zorro Ranch property. We need to investigate this fully and wherever it takes us. So for it to have to just get out and get everyone's attention, the normal people, not the QAnon people, I think this has so many drip, drip, drip legs that it's going to, it is absolutely going to reach Trump. This should have been dozens, if not hundreds of indictments and prosecutions from an institution we trust. That's right. But we don't trust this Justice Department. Or the appointment of a special counsel. Special counsel is the only one. Or saying a cabinet member didn't look to commit a crime, but when he went under oath in front of Congress and bragged that he had nothing to do with this person. No, he did that on a podcast, but go ahead. Oh, really? He hasn't done it under oath? No, no. Under oath, he told the truth. So I feel that all of the I feel all of the shaming feels really good. And it does say something about these individuals. I think it is diluting and weakening the case against the actual criminals here. Well, I don't know. I think you can do both. I can just walk and chew gum at the same time. I think John Ossoff, who's running for Senate, has come up with a brilliant term, and that is a lot of Democrats. How we lose is this stereotyping and keyboard virtue signaling that if you like all white people are racist, all billionaires are evil and all young men are sexist, fine, they're going to leave the party and you're going to have Vance as president. What Ossoff has done is really smart. He has started describing this group of people as, he doesn't say the billionaire class. He says the Epstein class. Ah, yes. Because the majority of Americans like the idea of being rich someday and believe that if they get richer, it doesn't necessarily mean they're going to become depraved weirdos. I agree. So I think that is a really powerful distinction that there is a class of people, most rich people I do not believe are like this, but there is a class of people who believe they are, again, as we talk about- Unaccountable. Protected by the law, but not bound by it. Well, I think it is. I do not believe are like this, but there is a class of people who believe they are, again, as we talk about, protected by the law but not bound by it. I do not believe are like this, but there is a class of people who believe they are, again, as we talk about, protected by the law but not bound by it. Well, I think, as I say, let me move to the next thing because it's part of this. Everyone's tired of these fucking rich people taking everything. Like, so right now, Mark Zuckerberg took the stand this week in this landmark social media addiction trial defending Meta against claims Instagram was designed to hook young users and damage mental health. Zuckerberg said in his testimony that Instagram was not a harmful product. It's a valuable service. Of course, he'd say that. He said that all along, he believes. He's navigated the safety of young users in a reasonable way. He has not. He also defended the company's decision to allow beauty filters, even after experts warned they could harm teen girls, including people internally. When pressed about old emails and growth targets, Zuckerberg repeatedly pushed back, saying the same answer more than a dozen times. You're mischaracterizing this. This is an old Mark Zuckerberg trick. We don't understand him. Neither of us are lawyers, and it's a really complex case. And two things. It's not just Facebook. It is also YouTube is involved in this one. Others settled. Other social media sites seem to have settled here. And it's not clear if YouTube is going to settle before this. But this idea of whether they're entertainment or they're actually addictive. The lawyers for the tech company sides are going to try to portray this young woman who got on Instagram when she was nine as troubled, had nothing to do with social media. She's alleging that social media dragged her down an addictive hole of shame and self-esteem. It's a jury trial. Putting Mark in front of a jury helps or hurts. He's not great at that. And he also, the judge, wasn't happy to see Meta's Ray-Ban AI glasses worn by several members of Zuckerberg's team, which I thought was super fucking obnoxious to do for Zuckerberg to use it as a marketing event. She warned anyone wearing smart glasses to be held in contempt, noting concern about facial recognition of it. So just thoughts on this case, because I think it's really fat. There's thousands of more behind it, by the way. There's smoking guns everywhere. But the real smoking gun I would focus on if I were advising the prosecution is their own internal research. So let's go through it. It's not a prosecution. It's a civil lawsuit. It's civil. But the people, the plaintiff's attorney or whatever you would call, Mm-hmm. Their own internal research regarding body image harm We make body image issues worse for one in three teen girls This is according to a 2019 internal Meta presentation 32 of teen girls said that when they felt bad about their bodies Instagram made them feel worse That was a March 2020 internal presentation. Meta's leaked internal research showed that 32% of teen girls, one-third, said Instagram made them feel worse about their bodies and the company knew it. Addiction by design. Meta employee internal message. I worry that driving session incentivizes us to make our products more addictive without providing much more value. How to keep someone returning over and over the same behavior each day? Intermittent rewards are most effective. Think slot machines. In focus groups, teens told us they didn't like the amount of time they spent on the app and they felt like they had to be present. They often felt addicted and know that what they're seeing is bad for their mental health, but they feel unable to stop themselves. on depression and anxiety. Teens blame Instagram for increases in the rate of anxiety and depression, said another slide in a 2019 presentation. This reaction was unprompted and consistent across all groups. This is their own research. Also, their own research showed they have 4 million kids between 10 and 12 on the platform when it's not supposed to be. 13 is when they're not. They didn't have age verification, which isn't very good anyway, on the platform until 2019. This is what kills me with these people. It's like, how did four million, it's like, oh, four million kids got into liquor stores somehow. Are you fucking kidding me? Four million kids? How did that happen without them knowing it? When they know everything that is happening on that platform, whenever they go into this, I don't, you know, kids can get into things. You know, my kid just got into the refrigerator and took a, you know, took a cookie the other day. That's what they act like. And in their own, let me tell you, I can't tell you how many times I have harangued Mark Zuckerberg on safety and people inside the company harangued him on safety. He just didn't agree. And because he cannot be fired, if the board decides to fire him, he can fire the board and appoint a new board that likes him. he can make decisions on his own. And we are all subject to decisions of one person who has no accountability on him in making bad decisions, whether it's about anti-Semitism, whether it's about anything And he did this again I sighed for free speech or not you know the filter thing Like well I decided not to act paternalistic Okay Mark don act paternalistic toward adult users We get it. But you absolutely have to act paternalistic towards young people. Like the safety issues about young, the fact that they still stick to their idiotic guns when it comes to young people. Let me mention another big tech suit that just broke. Apple just got sued by West Virginia for alleged failure to curb child sexual abuse materials on iOS devices and cloud services. They should sue Grok. They should sue all of them for these things. And this is the way these companies are going to go down, like the cigarette companies. And they still, to me, and I'll stop ranting, his testimony showed me once again he is absolutely intractable in his decision that everything he decides is correct. and it is simply not. It is simply not. And let me be fair, YouTube is bigger, but it's all the same to me. They're all enormous and deleterious to the impact on our kids, period. Just one more piece of data. Between 2010 and 2015, the number of eighth grade through 12th graders exhibiting high levels of depressive symptoms increased by 33%. In the same period, the suicide rate for girls in that age group increased by 65%. By 2015, 92% of teens owned a smartphone. And today, here and now, let's talk a little bit about young men. Young men between the ages of 20 and 30 are spending less time outdoors than prison inmates. The data here, there are hundreds, if not thousands of families whose kids have killed themselves. There are millions of families struggling with anxiety and depression. and there's a lot of different factors here, but this definitively has made things worse. The good news is that I do think finally, and I've said this before and I've been wrong, but I'm going to say it again, I think the worm has turned. And that is typically it takes 20 to 30 years before the public moves in on a well-funded addictive substance that is creating harm across our society. It took us 30 years with tobacco. It took us 20 years with opiates. It looks like it's going to take us about 20 years here. But what you're seeing is it's getting tied up in politics in a good way, and that is, I think the tariffs, I think the ultimate reciprocal tariff from different nations is going to be they going to start banning US tech companies And they going to use this as a valid excuse They going to say you out We're age gating. We're banning this. Or they're going to ban an entire platform. But it does feel like we are at a turning point. Well, the only thing, this is a jury trial. This is what's really interesting because what I think is going to be the problem for them is, and by the way, sometimes like when some of the FTC stuff, I see why Facebook or whatever company won in certain ones of them, right? But jury members, either they have kids and get it, know it in their bones, or they themselves are addicted. And to call it problematic usage, when it's everybody who you, I'm addicted to food videos on your, on Threads, Mark. I can't stop watching them. And I am not an addict. I don't drink. I don't take drugs. I am absolutely addicted. There is no question in my mind. And same with you, right? Some of it's good. Some of it's good. And I use, most of the time I use, I was looking at the time spent. I use it for texting, like bothering you, for example. But a lot of it is addiction. And this jury is going to hand you your head if you keep insisting it's problematic usage. We don't think you're totally at fault. I'm sure this poor girl had problems in her family life. But this is a contributing factor. Just like people can have bad families and smoke cigarettes, it is part of a thing that is making us worse as a country. And the same thing with Apple. They should get sued. They should all get sued, and then we can have it out in court. Same thing with the Epstein victims and the perpetrators. Let's have it all out in court. Let's do it. Like, if we lose, we lose. But if we win, we win. And that, to me, is the fairest thing. I think it'll start with the kids. What I'm curious is if it starts to melt upwards and that is- Like cigarettes. Well, the kids are the biggest problem, right? That's the one we're most sensitive to. That's where cigarettes started. I also think there's a real issue around the coarsening of our discourse. I think it's making us all more anxious and making us all hate each other more. I think if you type in OpenAI how to ruin youth or how to undermine the power of the United States, Both times it'll come back with something that resembles social media. There's a reason in a lot of its economic that young people feel worse and worse about America. But social media is basically, it's like when you're in the third grade and two Well, there's a reason in a lot of its economic that young people feel worse and worse about America. Well, there's a reason in a lot of its economic that young people feel worse and worse about America. But social media is basically it's like when you're in the third grade and two kids start having words and everyone surrounds them and shoves them and says, fight, fight, encourages them to fight. That's happening a trillion times a day on these platforms. It's turning even amongst I'm spending a lot. I'm thinking a lot about how ways the left might fuck it up and lose in 26 and 28. Okay. All right. Japanese began with a grousy credo to change the world, but they have done that in ways they did not imagine by weaponizing pretty much everything that could be weaponized. They have mutated human connections so that connecting people has often to become about pitting them against one another and turbocharged that discord to an unprecedented and damaging volume. They have weaponized social media. They have weaponized the First Amendment. They have weaponized civil discourse. And they have weaponized most of all politics. I wrote that in 2018. I got screamed at by Facebook and the tech people for saying that they were digital arms dealers. That's what they are. You have your time. I'm just telling you, it's just like enough, enough. And it begins, the cigarette companies began with Joel Camel, them using cartoons. They were that cynical that they use cartoons to attract kids to smoke. It's the same thing. And they need to stop. And same thing. And by the way, let me not just pick on Mark Zuckerberg. Apple, you need to do something about CSAM. Grok, you should be taken to court. Google, YouTube needs to be fixed in ways that people, kids don't become incredibly addicted to what you're doing. And to pretend otherwise, just because you have money and you can run over all these senators and congressmen, you're not going to run over all of us. That's my feeling. Anyway, that's enough. I'm going to stop. All right, we're going to go on a quick break. When we get back, Cole Baer takes on Paramount and the FCC. 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Colbert revealed this week that CBS lawyers told him he could not air an interview with Texas Democratic Senate candidate James Tallarico. There were concerns about running afoul of FCC Chairman Brandon Carr, the moron, as I like to call him, and the FCC's equal time rule. Colbert ended up posting the interview on YouTube, whereas of this recording, it has nearly 7.5 million views. The broadcast typically gets around 2.5 million viewers. This is just one single interview. Colbert summed up the irony on his Tuesday episode. Let's listen. So we obeyed our network and put the interview on YouTube where it's gotten millions of views. And I can see why. Tallarico is an interesting guy. I don't know if he should be the senator, but it was a good discussion. I wish we could have put it on the show where no one would have watched it. CBS initially, they've been very quiet lately, has been pushing back on Colbert's version of events, saying the show was not prohibited from airing the Tallarico on UNTV, but was given legal guidance and options. I've been in that sphere. Colbert took issue with that statement calling it crap, and it indeed is crap. All of this has been a major boost for Tallarica who raised more than million in the first 24 hours after the interview went on YouTube Brandon Carr the moron is calling it a hoax by the way saying Tallarica did this for the purpose of raising money and getting clicks Except he then on this interview he did I think it was on Fox said, oh, I would have enforced it. So he said he would have done what Colbert said he would have done. And then also noted that the way he's trying to thinking about enforcing this equal time rule has not been done in forever. So he just admitted, calling it a hoax, and then admitted he was going to do exactly what they said he was going to do. Again, a moron. And he thought, this is like some story. And I love Colbert, I think, is handling it beautifully. I don't think he's being too virtue signally, but it is definitely a nail in the coffin for broadcast television. Yeah, but just to step back and try and understand the real dynamics and the shape of power here, because we've moved from a democracy and capitalism to an autocracy and kleptocracy. This is what's going on. The president has made it clear he will exercise his authority unilaterally and illegally, in my view, to decide who gets to acquire which companies. And essentially, he has decided that, okay, if the Ellisons who own Paramount and CBS fly their partisan pro-Trump flag, I will figure out a way to get them Time Warner. And so they are very sensitive to trying to not offend him, placate him, do whatever he wants, regardless of the First Amendment. And the excuse they're using is the following. The FCC's equal time rule is a federal law that requires broadcast stations to provide equivalent airtime to all legally qualified candidates for the same political office. that theoretically makes sense, right? Historically, though, the FCC has exempted many entertainment talk shows. And now they've decided to update this and they're selectively enforcing it. And by the way, folks, curiously, FCC Chairman Carr has not yet attempted to apply these rules to any conservative talk shows. He's sued, he's investigating The View just on ABC for having television. The View and Colbert. By the way, Colbert has had Jasmine Crockett on and has probably asked right-wing people. This is so ridiculous, but this is what has happened. There's a decent chance that FCC Chair Carr has given Representative Tallarico a decent shot at being a senator in Texas now. This has done nothing but bolster. Tallarico raised two and a half million dollars in the subsequent 48 hours. But this is what has happened. There's a decent chance that FCC Chair Carr has given Representative Tallarico a decent shot at being a senator in Texas now. This has done nothing but bolster. Tallarico raised two and a half million dollars in the subsequent 48 hours. The big loser here is the FCC and Trump. This has backfired. This has blown up in their face. The Ellisons are now sitting on top of a collapsing asset. And in addition, the other loser here, just quite frankly, is Jasmine Crockett, because she came out. Unfortunately, this has elevated Tallarico and Colbert to hero status. And Crockett wishes she was the one that got, you know, that got sort of blacklisted, right? Because they were running neck and neck. And the likelihood, according to the prediction markets, that... Well, it wasn't quite neck and neck. It was like 60, 40, and now it's 70. It was pretty close, I think. No, no. The prediction markets, he was winning quite substantively, but not as much as now. He went from 63 to 77. Yeah, right. That's what I mean. 63 is a lot. Right. That's, I mean, that's basically, when you're at 77, it's kind of said, or it's getting to the point where it looks like the race may be over. There's also early voting going on and Democratic voting is all time high. It's crazy high and it's surpassing Republicans. I'm going to link it. Speaking of the Ellison's, two things. Warner Brothers Discovery. Let me just tell you, David, maybe this media thing isn't your best look. Warner Brothers Discovery is reopening negotiations with Paramount for the best and final offer. But the clock is ticking. Netflix has granted Warner a seven day waiver for these Paramount talks. The deadline is February 23rd. Zaslav wrote to Paramount's board that David Zaslav, who's the CEO of Warner, welcomes the opportunity to see whether the company can expeditiously deliver a proposal that provides superior value, meaning he's not calling it superior value. Paramount has indicated it will raise its bid to $31 a share and has agreed to cover Warner's $2.5 billion breakup fee owed to Netflix, which it should have done in the first fucking place. A lot of these things they've just agreed to they should have done months ago. So, Netflix co-CEO Ted Sarandos explained why he agreed to this in an interview with CNBC. Let's listen. those shareholders exactly what they deserve, which is complete clarity and certainty about what the value of these deals are. And what we're certain is, is that the Netflix deal to acquire these assets is the best deal, generates the best value for their shareholders. And they think so too. That's why they recommend the deal and why they reiterated recommending that deal post this. So give them seven days to put their money where their mouth is. He's so smart. I gotta say, the other part before you go in, they have to, they have to, basically they have to give more money. Really, if they give more money, they'll probably get it. That said, there's been really, you know, even though most of the narrative has been anti-Netflix, with Paramount has done quite a bit of the making that happen. This idea that they will have to cut, Paramount will be disastrous because they're going to have to cut because of the finances here. They will decimate employment in Hollywood and Netflix will not. Both of them face different challenges, both regulatory and what's going to happen. Warner Brothers has scheduled a shareholder vote on the Netflix deal from March 20th. We'll see what happens. David Ellison was at the White House last week, by the way. This after Trump said in an interview he wasn't involved in the deal. Who knows? And let me link this to Anderson Cooper. He's leaving 60 Minutes, which is a CBS property, after 20 years. He's still at CNN, of course. He signed a big deal, an $18 million deal with them recently. So if this deal works out, Repairment, they could take Warner's cable properties and find himself back. The reason he did so was he said he was to spend time with his family. He didn't want to work with Barry Weiss. I know this to be true. He didn't like where 60 Minutes was going. And he also didn't like what was happening to his colleagues. He's a great journalist. And he just didn't want to work with these people. So because he thinks, I would assume he thinks they're lesser than and And they are compared to him. So another high-profile exit, not just Anderson. Taylor Sheridan left, who does Yellowstone. A lot of messes there, both in the news division and obviously with Colbert. He'll be leaving in May. Your thoughts on these two things with the Ellisons? They seem to be really—they may still win it, but boy, they look like idiots. Well, first off, the way this is supposed to work in a capitalist society is the person who shows up with the biggest bag of money gets preliminary approval by the shareholders, and then it goes under regulatory review to make sure that there's not too great a concentration of power. In my view, neither of these companies should be able to acquire Warner Brothers because it's too much concentration of power. Having said that this is the world we live in One of them is going to get it What interesting is that it clearly now such a kleptocracy that on CalSheet the likelihood that Paramount takes over WBD because it has become obvious that the president is doing the Ellison bidding is now 53 percent, and Netflix's odds have fallen to just 36 percent. So, Paramount— It's neck and neck on the potluck market, Justina. Paramount has sweetened the deal. They agreed to pay a $2.8 billion fee that WBD would owe Netflix if the merger agreement falls apart. They also added a ticking fee of 25 cents per share paid to Warner shareholders for every quarter that the deal isn't closed starting next year. And the total cash bid was raised to $78 billion back in December. Here's what I don't understand. The union, SAG-AFTRA and the Writers Guild, decide to strike at exactly the wrong moment a couple years ago and basically took everyone's – had everyone not work for seven months in order to get nothing in exchange when they decided to strike at a weak point. And yet now, you just referenced this, if the Ellison's own, they've already overpaid for Paramount, which looks to be through a series of – Leaky yacht. I call it a leaky yacht. Which looks to be just one after the other, creating self-inflicted wounds that they just unforced errors, ungoals, whatever you want to call it, that are substantially reducing the equity value and showing how much they did, in fact, overpay. Whether it's CBS News going from 5 million viewers to 4 million in one week after the anchor transition, 60 minutes might go away. I mean, these things literally. Why would you poke that in the eye? That actually was successful. So they've overpaid for Paramount. They're probably going to have to overpay, and I understand why, the rationale for Warner, such that they can get something resembling consolidation. But hey, hey, Writers Guild, hey, SAG-AFTRA, what the fuck do you think? Ellison, one of the largest providers of inference and compute for AI, what do you think their idea is going to be to rationalize costs and somehow get a return on investment here? What do you think it's going to have? Say what you want about Ted Sarandos. He's a discipline operator. He likes the old Hollywood model He likes Well some of it Some of it he likes some of it he doesn Yeah but he not Oh my God They got the theater owners in there Compared to Larry Ellison Agreed He is in love with those makeup artists and those actors Larry Ellison is going to leave you Hollywood people naked without clothes. He's going to say, I have an idea. He's going to. I know him. He will. Let's take the 40 movie release with an average budget of $140 million. and let's do 60 movies at 14 million each using AI. That's right. And where do those cost efficiencies come from? That's correct. Instead of having 18 costume designers on the Fantastic Five, they're going to have one in an agentic layer. Yep. And by the way, it'll probably be AI slop. I don't think it'll work, but you don't think they're going to go through and say, okay, Warner Brothers film unit, You are now, you need to lay off 40% of your staff. That's right. Or cut production costs by 40%. And it's all going to come out of there. And where the fuck, I can't believe the unions aren't like, it's Netflix or we are not working with these folks. I think you're finally right about these unions. I mean, I think it's not great. Listen, listen, the theater issue is a big one. But you know what? Consumers don't like the theaters as much. Listen to consumers. It's not because that tech did something. They did. They gave them an alternative that consumers liked. Who cares about theater? We all have our own theater now. It's at home. What they should be caring about is the economic livelihood of the people actually producing the content. But the issue is the expenses. Like, as I said, I did this heated rivalry interview. I mean, they made that show, which is an enormous hit, which is, by the way, on HBO Max, for $2 million to $3.5 million an episode. Stranger Things, $50 to $60 million an episode. I mean, and the government helped pay for it. There's no way our government's going to help pay for a gay hockey love story. But that said, the economics are changing so drastically. You don't even have to use AI to understand you need to change the economics. And let me tell you, in no uncertain terms, having covered Larry Ellison for 30 years, he is going to do what it takes. He has no sentimentality toward anything except making more money. And so he will do whatever it takes, and that includes squeezing all of you. And for his, for his benefit. And I know David loves movies, et cetera, et cetera. But at some point, uh, this is not a romantic fantasy of saving Hollywood. It's not, that's what kills me. And here's the, here's the thing I don't think the, I think the et cetera. But at some point, this is not a romantic fantasy of saving Hollywood. It's not. et cetera. But at some point, this is not a romantic fantasy of saving Hollywood. It's not. That's what kills me. And here's the thing. I don't think the, I think the Elzens have misplayed this so badly. They've taken too long. They should have done all those things they just agreed to months ago to make it better. They should have increased the price if they really wanted it. They're being very cute here. And all they do is attack Netflix. They are very prime for a tech. And then meanwhile, over at CBS, we're getting a preview of their shitty management and their shitty decisions, whether it's Taylor Sheridan, which I thought was in massive miss. Anderson Cooper, who you may end up buying, the Ellison's man buying and being his boss, he cares so little for them. He's willing to quit 60 Minutes and he's going to, whatever happens, if they get, if they become his boss, that's how much he doesn't like them. He knows they could, they could end up being his boss in 15 minutes. That should tell you everything about it, is quality people don't want to be affiliated with it. So listen, I agree, probably this consolidation is a problem, and there probably was a better, I don't know what the better deal here, I thought the spinoff was the best idea for now, and then later they could sell the film studio. That was my feeling. That was my feeling on the whole thing. But this is where it's headed, and the Ellison's are showing you exactly how they manage a property and you should pay attention to it. For the life of me, I can't figure out why the unions haven't come out and said, if Paramount gets this, we're out. We're out. Good luck managing this thing. Day one, day one after this closes, we're shutting the whole fucking thing down. No TV production, no movie production. I'm just saying, pay attention to people. You know they offered and Anderson Cooper a fortune to run, to be the head of, to be the face of 60 Minutes. And he, even he couldn't do business with them. So I'm just saying a lot of money, you know, and by the way, he should spend more time with his kids, but that's not what happened here. Anyway, let's go on a quick break. When we come back, we'll talk about the Pentagon's fight with Anthropic. This is something else. Support for today's show comes from SelectQuote. It's time to talk about life insurance. If you have a policy right now, do you know how much you're paying for it and for how much you being covered Odds are you pay too much for too little And sure it not the easiest thing to think about but it simple to get right thanks to SelectQuote For over 40 years SelectQuote has been one of the most trusted brokers in insurance helping more than 2 million Americans secure over $700 billion in coverage. Their mission is simple, to find you the right insurance policy for your unique needs. They shop, you save. No medical exam? No problem. 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That's psychiatry.com slash pivot to get matched in minutes. by giving you fast access to specialized talent across 125 plus categories So you can fill skill gaps launch projects faster and scale support up or down without committing to a full headcount You can browse profiles review past work and get help scoping the roles so you can hire with confidence and get started quickly And with Business Plus, you can access the top 1% of talent on Upwork. And with AI-powered shortlisting, you'll get matched to the right freelancer in under six hours. No endless searching required. You can visit Upwork.com right now to post your job for free or connect to top talent ready to help your business grow. That's U-P-W-O-R-K dot com, Upwork dot com. Scott, we're back with more news. There's so much news, it's all different. The Pentagon is considering cutting ties with Anthropic amid a dispute over how clod can be used by the military. Anthropic wants limits on uses, like for weaponry that fires without human input, and mass domestic surveillance seems reasonable, but the Pentagon wants access for all lawful purposes. OpenAI, Google, and XAI have agreed to have models deployed in lawful use cases in principle. Pete Hegseth is reportedly also considering labeling Anthropic a supply chain risk, which could force contractors seeking to work with the U.S. military to stop using CLAUD. Senior Pentagon officials said the change would be a pain in the ass, and the Pentagon would make sure Anthropic pays a price. T-Tactas is a fucking idiot. He just actually let go of someone who was an incredible, he forced out this colonel who had this incredible record just because he's competent. Really interesting. There was just a picture from, I think it was India, where the Anthropic CEO and Sam Altman wouldn't hold hands for a second together, which was funny. They're in a big beef, but that's a separate beef. This is really interesting. I'd love to know what you think about this because they're standing firm. It looks like Anthropic is like, we're not going to be used to attack humans without a human intervention or domestic surveillance, et cetera. Yeah. So the Pentagon, they're threatening to sever its $200 million relationship with Anthropic. Yeah, not good. It's not too big. Because the AI firm insists on maintaining limitations on how the military uses their LLM. Anthropic's red lines are no mass surveillance of Americans and no fully autonomous weaponry, Right? So, but this is a yet another example of a loss of capitalism. This is technically a very severe form of socialism. And that is the state has decided they control the means of production Private companies are allowed to have their own guidelines And if those guidelines mean they can work with a military contractor they get to make that decision So this is, and them trying to shame them and threaten them economically is the worst type of socialism. So all of these, quote, unquote, free market people claiming this is private companies, Vox gets to decide if it doesn't want to work with the Pentagon. And so if they sign a contract, fine, they have to live up to their contract. But the fact that Anthropic has these guidelines, I, again, think this is a bit of a Colbert moment for Anthropic. And that is Anthropic, it starts their hat white. in an environment where the majority of Americans feel really uneasy about AI. So Anthropic has sort of positioned itself as the clean, well-lit corner of the bookstore here. Like Apple and privacy or Apple and not Big Brother. A hundred percent. Same thing. We're the good guys. And so as we sit here today, I actually think that Anthropic, or in the next 12 months from this one of our predictions, is going to be worth more than OpenAI. but this is a win for Anthropic and another example of the government deciding they get to dictate. They're not breaking the law. The government gets to dictate vis-a-vis laws that, okay, you can't discriminate based on someone's sexual orientation, race, ethnicity, gender, whatever. They can enforce that. There's no law saying that if you're a company that doesn't want to engage in mass surveillance of citizens, that you have to work with the government. This is this is socialism gone awry. This is market intervention where there shouldn't be any. And when it comes from on Pentagon stationary, I mean, they might as well just have had Donald Trump sign this. I think this is actually going to be... It's a Texas, you do what I say. It's a Colbert moment. Dario Amodi is being like Colbert and sticking up the middle finger. And a lot of enterprises and a lot of consumers are going to go, you know, I like a company that refuses to engage in mass surveillance of its own citizens. Yeah, I think this is a good anyway. We'll see. Pete Hague says you're also a moron. Anyway, one more quick break. We'll be back for predictions. Support for the show comes from Shopify. Every worthwhile journey starts with predictions. Support for the show comes from Shopify. Every worthwhile journey starts with a handful of what-ifs, but one day you'll be able to look back and realize that all those what-ifs were small steps towards turning your dream into a thriving business. Shopify can help you get there. Shopify is the commerce platform behind millions of businesses around the world and 10% of all e-commerce in the U.S. Join them and turn those what-ifs into with Shopify today. Sign up for your $1 per month trial today at shopify.com slash voxbusiness. Go to shopify.com slash voxbusiness. That's shopify.com slash voxbusiness. It's true that some things change as we get older. But if you're a woman over 40 and you're dealing with insomnia, brain fog, moodiness, and weight gain, You don't have to accept it as just another part of aging. And with Midi Health, you can get help and stop pushing through it alone. The experts at Midi understand that all these symptoms can be connected to the hormonal changes that happen around menopause. And Midi can help you feel more like yourself again. Many health care providers aren't trained to treat or even recognize menopause symptoms. Midi clinicians are menopause experts. They're dedicated to providing safe, effective, FDA-approved solutions for dozens of hormonal symptoms, not just hot flashes. Most importantly, they're covered by insurance. 91% of MIDI patients get relief from symptoms within just two months. You deserve to feel great. Book your virtual visit today at joinmidi.com. That's joinmidi.com. It's time to level the f*** up. I'm Robin Arzon, and I light fires. I'm an executive, founder, best-selling author, ultra-marathoner, mother, proud Latina, and I'm not done yet. Announcing Project Swagger, my new weekly podcast, Your Transformation Toolkit. I'm gonna cut through the noise and give you actionable takeaways each week in under 30 minutes. Elevate your hustle with routines, strategies, and mindset shifts that I have pressure tested. I have burnt down this Beyonce candle, like, all the way to the bottom. We have been trying to manifest. Carves are not the enemy I probably have a piece of bread or a bagel with me at all times and I am not exaggerating Tune in on February 24th for episode one Building the Skill of Self This is the foundation Follow Project Swagger wherever you get your podcasts. Let's go. Okay, Scott, we're going to talk about predictions. But first, I have one prediction I'm going to make, but I want to do this first. The U.S. military is moving into place for a possible Iran strike, probably because this Epstein stuff is getting hot again for Trump as early as this weekend. Scott, let's hear what you said in January. Bottom line is my prediction is that I think we're about to see the U.S. conduct a military strike on Iran. Now, you thought it was pretty quickly, but it's happening possibly this weekend. They've amassed an enormous amount of military might in the region, probably, I think, more than when they were doing the last war they were over there. So, the things are in place. The battleships are in place. Do you want to talk about that, or do you have a different prediction? Oh, no, I think it's on. And let me be clear, I like this. I would like to see, I think the Islamic Republic is one of the most misogynistic, brutal regimes in the world right now. And I think Iran has the potential to be an outstanding ally. And I think if, and there's a lot of unknowns here, regime change, you know, brings its own risk. And why he's doing it at this moment, but go ahead. But he can be doing it for the wrong reasons and can still have a good outcome. I'm absolutely 100% in favor of this. And I think that Iran being, quote unquote, just less oppressive, less brutal, will be really good for the region and really especially good for the women of Iran. If they can complete what they need to complete. If they just don't and they just beat them up again and then leave, it's a different issue. I think the regime is hobbled, and I think this could tip it over. Not to get into too much into Jesus, I think they need to coordinate with the Mossad and have agents on the ground and do a series of targeted executions, quite frankly, or assassinations. Executions is the wrong word, assassinations. But I'm a huge proponent of this. If you look at troop movements, whether it's refueling planes, supply chain cargo, aircraft carriers, specialized operations troops, they are either playing serious poker or they are about to do this imminently They kind of have to right And Trump probably in the mood I think the other factor here is he has a State of the Union on Tuesday I think he can complete a State of the Union Well, he also wanted to distract from the Epstein files. Epstein files. He loves the macho flex of what happened in Venezuela. This he thinks is going to be part two, right? And also Rubio positions himself for president with these types of actions. And Rubio is probably whispering in his ear this would be a great move for us. I'd be very curious how our allies in the region, what they think of this, but I think it's on. And I have thought, if you just look, if you just track troop movements, ship movements, supply chain movements, I mean, we are moving a lot of stuff to the region and we are sort of, we are ready to go. We are at the starting line. Yeah. He'll cancel the State of the Union, would be my guess, if this is happening. It's interesting I hadn't thought of that. And I don't think he can complete one. I don't. I think he is quite losing it, you know, in some fashion. I'm not so sure he's, I think, I know he seems vibrant, but I suspect that there's problems around that. That's just me. The only prediction I would say is today Wired published a story about the gay mafia in Silicon Valley. They had written me about it and I was like, there's no such thing. There just isn't. Sorry. Gay mafia. Yeah, I know. It's a story that they wanted to work on. They contacted me years ago about it. And they're like, let's talk about you and the game. I'm like, there is no, I don't have friends with Kim Cook. There's no gay mafia. I mean, sorry. But I thought it was a silly idea. And I still think it is. And I have to say, I think they're going to get a lot of pushback for the illustration, which shows two hands coming out of two crotches, one with a rainbow, you know, Apple watch on, but the penises are hands and they're shaking. So I thought that was so fucking insulting to gay people. I'm sorry, guys. That was a terrible illustration. Like, I don't usually, I usually laugh at most, like, jokes about gays, but, oh, my God, you don't have to have, you know, penis hands. Well, there's definitely no gay mafia, but it's obvious that Jews run the world. Right. What the fuck? But why do you have penis hands? We don't need penis hands. Yeah, just speaking along those lines, George Hahn pointed out something that really struck me as very insightful. I think they're going to get in trouble for it. That's my prediction because it's stupid and it's really offensive and I don't usually get offended, so that's my meter, but go ahead. We referenced heated rivalry before and he said the thing he loved about heated rivalry and it just struck me as so true is that he felt it was the first time that not one but both gay men were depicted as just incredibly high performance good functional like impressive men one wasn't one wasn't neurotic or quote-unquote very flamboyant or one wasn't struggling with some they're just both really impressive men and i i literally tick through every depiction of gay romance. And he's right. There's usually one person that feels- Lesbians have gotten a better shake recently. Cagney and Lacey? No, Elward and things like that. But yes, I agree with you. I agree. There's a great book that I recommend, Vito Russo, The Celluloid Closet, is a history of how gays were depicted. And it continues to this day. And for gay men, they do not get as much complexity as these two. I'd agree with you. Yep, absolutely. Well, to a certain extent, The Epstein class has sort of diminished the comfortable notion that gay people are more inclined to be pedophiles. No, it's rich white dudes that seem to be more inclined. Rich, straight white dudes. Yeah, and let me tell you, go straight to hell for doing that. Anyone who did that should go straight to hell. Anyway, on that note, no more penis handshakes. Anyway, we want Wired. I love you, Katie. I don't get a prediction? You're just rolling right over me? No, no, go ahead. No, now you have another one. Go ahead. What was my prediction? I have. Military, Iran. Well, I made that one a month ago. All right. Okay. What's your new, I want to see you just reiterate. No, I feel hurt. I feel shamed. Okay, go ahead. Okay, fine. We're bombing around. Nevermind. No, go ahead. No, what's your prediction? Well, I don't know if you've noticed, but about $1 trillion in value has been destroyed amongst the biggest AI players since the beginning of the year. As you were noting, they would. And what's interesting about it is, I mean, a few things needed to happen. Either revenues needed to like even jump more to justify the massive capex, and that didn't happen. So their stocks have come down. What's really interesting in my opinion is that what also happened though, is that people still think these technologies, I mean, just an example, Amazon's off 14%, Microsoft's off 17%, Apple has dropped. Amazon's had its worst couple of weeks in several years. Yeah, they've lost 500 billion. They've lost a lot. But what's also interesting is there's been a trillion dollar wipe out at SaaS companies, and that was when Anthropic unveiled its Claude Cowork legal automation tool. It triggered what traders at Jefferies immediately christened the SaaS apocalypse, erasing approximately $285 billion in market cap in a single trading day. It's SaaS companies. And that was when Anthropic unveiled its Claude Cowork legal automation tool. It triggered what traders at Jefferies immediately christened the SaaS apocalypse, erasing approximately $285 billion in market cap in a single trading day. The software companies, yeah. The general notion is that people aren't going to need, that basically you're going to be able to write a prompt and you'll be able to replace Adobe, Salesforce, ServiceNow, and that these companies have been fat and happy for 30 or 40 years. And these companies, so- This one I agree with. Well, it's interesting because Salesforce is off 25%. Adobe is off 25% to 30% this year. Intuit is now down 34%. four percent. It's lost a third of its value year to date. Now, my view, and this is my prediction, is that these companies are much more deeply integrated into their corporate customers than people believe. And even if you can write the code really efficiently and quickly without their technical staff at these companies, their technical staff is only 10 to 20 percent of their employees. So they have really powerful UI. They have client service. They have client management. They have integrated billing. They are so deep into these companies that I think rumors of the death of these companies has been vastly exaggerated. And as a multiple of free cash flow, these companies have never traded at a lower multiple. In addition, if you actually look at the- Opportunity is what you're saying. 100%. If you actually look at their revenues and their margins, there is absolutely no evidence whatsoever that AI is hurting them. None whatsoever. So my prediction is that a basket of stocks Adobe Figma ServiceNow Salesforce that they going to have great returns from here on out Especially if they integrate the AI features in a way that's helpful to people. What's interesting is, and I think we should talk about this Monday, this fight between Open. Open and I just hired a very significant person from Instagram, Charles Porch, who's really talented, Talent Relations. Figma did a deal with Claude. OpenAI got a hold of OpenClaw, right? It's really interesting what's happening. It starts to become what's actually useful and who takes advantage of the utility, correct? And some Adobe could do it, right? They could easily make their product 100 times better. Well, just looking at it operationally, say they spend 10 or 20 percent on programming and that's no longer a moat because AI can come in and write the code just as easily. These companies themselves could reduce their cost by 10 or 20 percent, shed that technical staff, quite frankly, and then pass on those savings to their end consumer while not giving up any EBITDA or margin. In other words, 80% of their CapEx goes into things that, or their expenditures goes into things that AI is not challenging. AI is challenging their technical mode, but AI is not challenging the fact that even my shitty small companies were all on Salesforce. The idea of someone coming in and saying, we'll give you 50%, we'll charge you 50% less. I'm like, are you kidding? I just spent the last fucking year training everyone how to use Salesforce. We're all on it. And I get invited to cool Salesforce events, and they give me research, and the nice attractive dude who used to play football at Cornell shows up and he's our Salesforce representative. These companies are much more deeply integrated into their client base even if there a widget on Anthropic that helps you build the code that they offer It just not that There has to be an alternative stack is what you talking about that matches. Well, Atlassian did that. What it'll do though, these companies are smart. What it'll do, first off, I think these companies are really fat and happy and there's a lot of expense cutting that they could all endure. So anyways, my prediction is the following. I think the sale or the decline on these companies, Adobe, Salesforce, ServiceNow, I think it's been overdone. And that a basket of the companies that have endured this SaaS apocalypse are going to do really well. I think it's a great investment because if you look at their multiple on free cash flow, they've never been lower. They've never been cheaper. And I see absolutely no evidence whatsoever that AI is reducing their top line or their bottom line. Reports of their death are greatly exaggerated. That's exactly right. risks. Oh no. After the Second World War, we put together an economic order centered around the US and the US dollar, and that's coming apart. And the market seems to essentially be blowing by, saying, it doesn't matter. We're going to figure out a way. And just like we did on COVID, and maybe that's part of what's going on here, is people are saying markets are resilient enough. They're going to find a way even through this dramatic change in how the global economy is run to find the other side. There seems to be too much of an acceptance that we figure a way through this without serious pain Oh that what they like whistling past the grave That great He so smart Athwaj He so smart We obviously didn talk about RFK Jr and Kid Rock's exercise video. I don't know how to feel about that. We don't. I just don't know how to feel about that. I feel like if I watch that and then watch Heated Rivalry, I might just explode into an orgy of like something. The worst season of Heated Rivalry was those two. Oh my God. Oh God. Rage against the vaccine. Every time I see Kid Rock, I immediately think, how much Sudafed can I buy to CVS? There's so much good stuff on the internet about it. But remember, it's your taxpayer dollars at work. Oh, my God. Drinking milk in a hot tub. That's all I have to say. That's the workout video for single dads who fight for child custody and then never see their kids. Thank you. Let's end on that. Okay, that's the show. Thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We'll be back next week. Today's show was produced by Lara Naiman, Zoe Marcus, and Taylor Griffin. Ernie Andertad engineered this episode. Manola Moreno edited the video. Thanks also to Drew Burrows, Mio Saverio, and Dan Chalon, the Chakroaz Vox Media's executive producer of podcasts. Make sure to follow Pivot on your favorite podcast platform. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back next week for another breakdown of all things tech and business. Cara, have a great rest of the week. Rinse knows that greatness takes time, but so does laundry. So Rinse will take your laundry and hand deliver it to your door expertly cleaned, and you can take the time pursuing your passions. Time once spent sorting and weighting, folding and queuing, now spent challenging and innovating and pushing your way to greatness. So pick up the Irish flute or those calligraphy pens or that daunting Beef Wellington recipe card and leave the laundry to us. Rinse. It's time to be great.
