Apple Intelligence, The Texas Stock Exchange, and Guests Brody and Luke Mullins

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

Scott Galloway: And I'm Scott Galloway.

Kara Swisher: Scott, you know what I did this weekend?

Scott Galloway: What'd you do?

Kara Swisher: I moved.

Scott Galloway: Oh, how'd it go?

Kara Swisher: It was exhausting. I was up till four in the morning. I got to tell you, I have so much stuff. I have so much crap. It's very exhausting. But we're now in.

Scott Galloway: It is exhausting.

Kara Swisher: We're now in. It'll be about seven or eight months before we move back. I never want to move again.

Scott Galloway: I can't believe you're doing it again.

Kara Swisher: I know. Especially with kids. Are you back in D.C.?

Scott Galloway: Yes, I'm in D.C. temporarily. I'm going to New York this weekend. This week, excuse me. The Livingston Awards are on. I'm a judge.

Kara Swisher: Is this more awards? Really?

Scott Galloway: No, these are for young journalists. They're amazing reporting.

Kara Swisher: I know you don't love reporting, but these are great reporters.

Scott Galloway: You know.

Kara Swisher: Oh, let me put words in your mouth so I can shame you.

Scott Galloway: No, I've decided. I have a bone to pick with you about insulting things like the Washington Post. They do amazing work.

Kara Swisher: But nonetheless. Why do I insult the Washington Post?

Scott Galloway: You said they don't matter. These businesses don't matter. Washington Post? Any of them.

Kara Swisher: They don't. They're Paramount or anything else, but the Washington Post does matter. No, no, no, no, no, no.

Scott Galloway: Okay. Okay, come on. I said that Paramount's economic value, that it's an amusing story, but in terms of real impact, it doesn't mean a whole lot. I think the Washington Post, in terms of influence on the world, dramatically punches above its weight. I hope it survives.

Kara Swisher: Yeah.

Scott Galloway: You know?

Kara Swisher: Yeah. And by the way, I just want to point out that I'm recruiting an editor-in-chief. So anyone at the Washington Post wants out of that dysfunctional nightmare, just send me... I'm serious now. We're hiring an editor-in-chief. By the way, we're growing. They're shrinking. We pay well. I don't know if they pay well. And as dysfunctional as we are, we seem strikingly functional compared to the shit that's going on there.

Scott Galloway: But also, Scott as a boss.

Kara Swisher: It is run by a white male, so we have that in common.

Scott Galloway: No, well, your real boss is your longtime partner. The whole firm is run by women.

Kara Swisher: Yeah. But let me say, the Livingston Awards are given to young journalists under 35. And they're really astonishing stories. The nominees and everyone who won, everyone who applies, it's really heartening every year that I do it. It should be interesting. And then I'm going to Canada to get the Canadian of the Year Award.

Scott Galloway: I'm sorry, you're getting the Canadian of the Year Award?

Kara Swisher: The Canadian Journalists Federation or Foundation? I can't decide if that's the weakest flex in the world or going to be really fun. I'm going to Toronto. It'll be fun. They're giving it to me. It's another lifetime achievement. I got one in San Francisco last week. And so now I'm getting my Canadian one.

Scott Galloway: Well, you know how you get 100 drunk Canadian fraternity guys out of your pool. "Guys, could you please get out of the pool?"

Kara Swisher: Exactly. Yeah. We don't think about Canada enough.

Scott Galloway: Yeah.

Kara Swisher: I'm excited to go. I love Toronto, so that's easy.

Scott Galloway: It's a great city.

Kara Swisher: It's a great city. So I'm going to run up there and get that. They have a lot of the same problems we do, actually.

Scott Galloway: Oh, it's a beautiful city.

Kara Swisher: And then can I tell you one other thing I'm doing this week? There's this really cool movie coming out called War Games. It's all these high-level people, like Republicans and Democrats, who war-gamed out a situation, and they made a documentary of it. I'm going to see the documentary and then interview the cast. Well, not the cast. It's like senators and defense officials. I'm super weirdly excited for it because it's all about an insurrection where the military participates. So I'm excited to do that.

Scott Galloway: And it's a movie, right?

Kara Swisher: It's a doc. But they're going to show the doc and then we're going to talk to the participants, which I think will be very timely given Trump's talking about revenge.

Scott Galloway: That's very exciting.

Kara Swisher: Yeah.

Scott Galloway: You know what I discovered this weekend? I discovered an amazing hack. I spent a lot of time with the dogs this weekend. My little one, the big one's super friendly, but the little one occasionally snaps. So when someone comes near him, I just say "not friendly" and people avoid us. When we're on a walk, people always stop to see Leia because she's a big, beautiful dog.

Kara Swisher: Yeah, she really is.

Scott Galloway: And when I'm in a hurry, I'll just say "not friendly" so I can just keep moving. I've started saying that even when I'm not with the dogs and it works perfectly. Just anyone gets near me, I'm like, "Not friendly, not friendly."

Kara Swisher: You're Larry David. Not friendly.

Scott Galloway: Isn't that great?

Kara Swisher: You have to wear that MAGA hat. You got to wear the MAGA hat like Larry David. "Not friendly. Not friendly. Go away. Move along. Move along."

Scott Galloway: That is funny. Larry David would say that. You've become that guy.

Kara Swisher: There you go. You've become that guy. So anyway, we've got a lot to get today, including a big win for Sandy Hook families who deserve every win they get. And the proposed Texas Stock Exchange that wants to give New York a run for its money. Plus, our friends of Pivot are journalists and brothers, Wall Street Journal investigative reporter Brody Mullins and Politico contributing writer Luke Mullins. They've written a new book, *The Wolves of K Street: The Secret History of How Big Money Took Over Big Government*. But first, more conflict between AI companies and news publishers.

Scott Galloway: What?

Kara Swisher: Perplexity AI, which some people think is really great, is in some hot water after being called out for not attributing sources. The AI-powered search engine company recently released a new feature, Perplexity Pages, which is essentially a news summary feature. Then a Forbes reporter pointed out similarities between a Perplexity news summary and a Forbes article, saying the company had scraped and repurposed investigative reporting without acknowledging it. Forbes pointed to several cases of Perplexity using exclusive reporting from paywalled sites, with only a small footnoted link to sources. In response, the company's CEO said the feature is still new. The company is working to address the issue. He also said everything on the Internet is free. He has said that in the past. And I used to have this problem, but it was more like websites from all kinds of sketchy areas that used to just suck up all our stuff and spit it out again. But this is them doing it as a business. So what do you think about this? This has happened in a different way. This is just faster and more efficient.

Scott Galloway: I'm actually more optimistic that this time, the Washington Post, despite all the dysfunction, or other media companies, are going to find an actual revenue source here. I think the more articles that come out like this, the more discovery that they're essentially just repurposing other people's IP, is going to give them more power in court and more mojo to say, "Okay, Anthropic or Llama or OpenAI." You know, what Adobe did that was really interesting around generative AI for design was they said from the get-go, it's going to be either ours or we're going to have the licenses for it. So when you use Firefly, you don't have to worry. It's all, they own it. They've created a walled ecosystem of things they own or that they have come to a licensing agreement with.

Kara Swisher: Yeah, just like with photos or songs.

Scott Galloway: Yeah. That's right. So I think this is actually a good thing for these media companies.

Kara Swisher: The Washington Post is dysfunctional, given that it seems like we want to talk about it. This is Forbes, yeah.

Scott Galloway: Yeah. Well, but I'm just using Washington Post as an example. I mean, Forbes has kind of been left for dead, isn't it?

Kara Swisher: No, actually, interestingly, the editor in the tech section used to work for me, John Pachkowski, and they do some very strong articles. And he texted me over the weekend because I had always complained of people ripping off our stuff many years ago, both the internet and other media organizations that wouldn't attribute our stories to us and that we would break. And I said, "Welcome to my world. Now you can be annoying." And they were always like, "Why are you so mad at these people?" I'm like, "Because you guys worked hard and they just ripped it off." But I agree. I didn't have any recourse in that case at all whatsoever. Anyway, one of the stories Perplexity allegedly ripped off was about Eric Schmidt. This is the one where the former Google CEO is arming his AI-powered military drone venture with top tech talent. The endeavor, named Project Eagle, has been poaching talent from tech giants like Apple, SpaceX, and Google. Project Eagle has been testing drones in Silicon Valley and Ukraine. After leaving Google, Schmidt serves as chair of both the Department of Defense's Innovation Board. He was very early to this. And the National Security Commission on AI. He's probably looking at Anduril and Palantir and saying, "Give me some of this sweet defense money," I guess. So these are military drones, which are being heavily used in Ukraine. I can't believe they're testing in Silicon Valley, although I'd like to see that happen in a lot of ways. I'd like to see that going on, Eric.

Scott Galloway: You like the drones for people?

Kara Swisher: Yeah.

Scott Galloway: I think, one, I think Eric is, the few times I've had conversations with Eric or I've seen him speak, I do think he is strikingly intelligent. And also, if you look at the economy or the innovation that's going to come out of the Ukraine-Russia war, it is drone technology. This is innovation. And this is the notion that a country that doesn't have nearly the capital or the ferocious kinetic power of Russia can strike back using this cheap and cheerful technology where they have independent AI that's not dependent upon GPS, that actually surveys the landscape and can make its own way. And potentially, supposedly, I think 20 or 30 percent of Russia's Navy, the Black Fleet, has been taken out. But drones are the new front on military technology. There was one, they showed a drone show. They showed it going through woods with lots of trees, moving through by themselves, autonomously avoiding trees. It was like Star Wars where they had those riders through the forest. That's exactly what it looked like. It was crazy.

Kara Swisher: I think there's got to be regulatory things on the use of military drones, especially autonomous military drones. I mean, this is cheap and easy to use, so crazy people will employ it. So there should be, just like there is with cloning or things like that, even if people violate it, there should be a global decision-making on the application of these things, which I think is not any time coming. So we'll see. Eric is an interesting guy. He's been at this for a while. I covered him since he was way over at Novell and at Google and et cetera. He's a funny guy.

Scott Galloway: He's a funny guy.

Kara Swisher: We used to have a ball gag at All Things D every time he said something dopey at Google that would get them into trouble. So we had a picture of him with a red ball gag on.

Scott Galloway: I'm sorry. I heard nothing after you said "we used to have a ball gag."

Kara Swisher: So he would say dumb things sometimes, a lot more than most people. He just likes to talk. So we had a ball gag with a picture of him with a ball gag. John Pachkowski made it. Every time he said it, the picture would be Eric and a ball gag. And he said, "Eric today once again needs the ball gag." Anyway, that's neither here nor there. Let's move on. Apple is expected to unveil all things AI at its Worldwide Developers Conference as we tape on Monday. I'm going to be talking to them afterwards. Apple Intelligence will be available for new versions of iPhones, iPads, and Macs and will be powered by Apple's own technology and tools from OpenAI. Some of the features Apple is expected to announce are AI summarization of articles and web pages, a Siri revamp, thank God, the ability to make custom AI emojis on the fly, and AI-enhanced photo editing. This is important for Apple, even if they're not running the AI themselves, which I assume they will do eventually. This is a real good application of AI, and they'll probably do it well in terms of not ripping people off, making it useful, making Siri, whatever. I hope they rename it. They probably hired Scarlett Johansson for this. So I think it's probably a good thing. It'll make the iPhones much more useful for sure, or any different technology you have. What do you think?

Scott Galloway: Apple is the quintessential case study in the second mouse. People overuse the word innovation. Innovation is actually a really true innovation. Being first, pioneering, doing things at the cutting edge is actually a terrible strategy for shareholder value. When you're out at the frontier, you get mud on your face, arrows on your back. It's too expensive to figure shit out. Apple wasn't the first in MP3. They weren't the first in graphic user interface. They weren't the first in laptops. Smartphones, they were not first. What they do is they wait. They come in, they commercialize it. They make it more friendly. They use their brand. So I'm very excited to see what they do. I hope they do something in healthcare. I hope the front end for it will be Siri. But I hope they do something in healthcare. And I hope they do something around... We talk a lot about generative AI. I think the real opportunity is what I call integrated or integrative AI. That just makes my life easier by saying, "Scott, we see you're watching all these videos on your shoulder hurting. Here are some physical therapists that are also Siri enabled. Do you want us to send you free times or schedule a point?" It's the ultra assistant we're talking about. Like from the movie *Her* or anything like that. Of all the companies that can do this, Apple's already very helpful when I'm walking. It goes, "Are you walking for exercise? Would you like us to record it?" I give them the permit. But it's all permission based, which means they ask me first if they want me to do it, which I like.

Kara Swisher: And often Apple is telling me things like, "Oh, your car is parked here, Kara, just so you remember." And I'd like it to talk to me, too, at the same time.

Scott Galloway: Yeah, I think the place that AI is going to add the most value is around really boring stuff. I just want everyone to go, "OK Scott, we see on Thursdays you like to do the following things, or you're in this city." I mean, there's just so much information they have on that handset. And all they have to do to respect your privacy is go, "Can we have access? And we won't sell it to anybody else, but we'll use it." The privacy is so overrated in terms of actual consumer behavior, especially among young people. We exchange privacy for utility at the drop of a hat. And I think with the interface they have with the billion wealthiest people in the world, whether it's travel, opportunities, logistics, services, and how friendly the brand is, I think it's one of two things. Make your life easier. Do something about healthcare. Maybe something about media. I don't know. I'm excited to see it.

Kara Swisher: I am, too. I'm excited. I'm going to get a briefing from them afterwards because I can't go to the event.

Scott Galloway: I bet you are.

Kara Swisher: Oh, I am. Are you going to get a briefing like you did on the mixed reality headset? I used it the other day for watching a movie. It was great.

Scott Galloway: I bet you did.

Kara Swisher: I'm going to wear it on that show. I did. I watch movies on it all the time.

Scott Galloway: You really watch movies on that thing?

Kara Swisher: I do. I like them better. They're very immersive. I have very noisy children. So it's lovely.

Scott Galloway: You sit there with a headset on watching a movie?

Kara Swisher: Well, they talk a lot in the morning. Not in the morning, but they talk a lot. Yes, I do. I watch the headset with the movie at night.

Scott Galloway: Okay, let me get this. The kids are running crazy. Amanda's trying to keep a lid on the household, and you're in the corner with that fucking headset on.

Kara Swisher: No, I do it. I do it.

Scott Galloway: All I got to say is you better make more money because number three is coming your way, baby.

Kara Swisher: No.

Scott Galloway: Two words, prenup, hopeful, question mark.

Kara Swisher: Yeah. Anyway, Apple stock, what's going to happen? Listen, here's what happened to it over the last year. It's back up again to 194. It had a real dip in April, end of April or mid-April. Then it went up and up and up. And then it had a little dip because of cautious outlook on the iPhone sales. So where do you see it? The stock is on a momentum now. It's just ran right up over the last, since about May, let's go down since April 22nd, it's been on a run. So what do you think?

Scott Galloway: It's been an unbelievable performer. It's quadrupled over the last five years. I'm an Apple shareholder. I'm actually thinking about selling it because I think that there's going to be rotation out of some of these high flyers that have done really well. But they have some really big issues. One, they seem a little bit late to some stuff. And also China is a big specter. At some point, we're wondering what's the next thing beyond the iPhone. And also, see above number one, when 20% of your business and the majority of your supply chain is out of a country where we keep making threats against each other.

Kara Swisher: Which they've been diversifying, moving to Vietnam and other places. But yeah, here's the deal. I think if this stuff with AI works really well, it's a lock-in. I was using a Windows computer when I was getting a storage space. That's another thing I did this weekend, went to my storage space. And they were having me fill out the form on a Windows computer, and I didn't use one in years. And it was so dumb. I was like, "Oh my God, I forgot." It was like a bad feeling. I just think if it locks you into Apple, and the guy goes, "You use Apple, right?" And I go, "Yes, I do. Yes, I do." Well, you should too. So anyway, we'll see what happens. I'm really eager to hear and see their examples of what they're going to do and how they're going to introduce it. Because they have been behind, but they have strictures around privacy compared to other companies that they have to stick to because it's a brand attribute. Anyway, let's go on a quick break. When we come back, Alex Jones gets ready to liquidate his assets. I'd like Alex Jones to liquidate himself. Anyway, we'll speak with friends of Pivot, Brody and Luke Mullins, about how big tech became a huge lobbying force in Washington.

[Ad Break]

Kara Swisher: Scott, we're back with the latest on conspiracy theorist Alex Jones, an all-around terrible person. Jones may finally pay the Sandy Hook families the $1.5 billion in damages he owes them as he moves to liquidate his personal assets. I'm always thinking he's up to something. So the judge is set to rule this week on whether Free Speech Systems, a parent company of Jones's InfoWars, will be liquidated. The Sandy Hook families won their defamation suits against Jones in 2021, but have not received any money since Jones and his company filed for bankruptcy in 2022. Jones's personal and company financial assets combined are worth between $10 and $12 million. He said on the show that even if Free Speech Systems and InfoWars are sold, he could still find a way to broadcast. He's going to keep going. I mean, honestly. He won't have InfoWars, which means he could start something else. I've started a million things. So he's still popular with the conspiracy theorists. And of course, if Trump wins, he's back in gravy again. What do you think about this?

Scott Galloway: I think it's wonderful. I think that when you bring that sort of misery to people, knowing that you're going to create that sort of misery against people who have already incurred the ultimate tragedy, I love that he's going to be near bankrupt. And I hope they chase him to the four corners of the earth for the rest of his life. And I hope it sets... Look, everything comes down to incentives. There needs to be incentives in place that say, "Look, if you trade and traffic in people's misery, it's going to cost you a lot." And he has made a conscious decision to bring not only shame on him and his family, but his kids and his entire family are going to struggle because he's going to be forced to liquidate assets. I would imagine there's some very smart people representing the families and investigators, and they're going to make sure that wherever he pops up, whatever assets he manages to aggregate, it's Chapter 7 versus Chapter 11, which means he can't restructure. I was even thinking about trying to find... I wonder if the media company is going to be sold. I'd like to see it go to a liberal news outlet. I was even thinking of looking at it.

Kara Swisher: Oh, let's buy it. There you go. We have to buy a media company. Let's buy it.

Scott Galloway: You don't want to do a business with me, do you?

Kara Swisher: I'm in business with you, Scott. I'm in business with you.

Scott Galloway: I understand, but a real business.

Kara Swisher: If we bought InfoWars and made it real liberal and had trans people on all the time, drag queens. First guest, AOC. That's it. Brought to you by Mother Jones. Stuff like that. That's some kombucha. Today we have Ben and Jerry on as our guest.

Scott Galloway: Yeah, I think that would be hilarious. I think we should do that. It would be really fun.

Kara Swisher: If I was really rich, I would do stuff like that.

Scott Galloway: If I was really rich, I'd fuck with people like him.

Kara Swisher: Sure, sure. Why not, right? Enjoy it.

Scott Galloway: Why not? Enjoy it.

Kara Swisher: All right, moving on. Alex Jones, fuck you. You're a mendacious fuck. You are the mendacious of mendacious fucks going. Amazon self-driving unit Zoox is going to start testing robo-taxis in Austin and Miami. The unit has been testing its vehicles in San Francisco, Las Vegas, and Seattle over the last few years. I have ridden in them. The announcement comes as Zoox is investigated by the National Highway Traffic Safety Administration after two sudden braking accidents led to crashes. Federal authorities also opened a probe into Alphabet's Waymo vehicles last month following reports of unexpected behavior. Can companies get these robo-taxis past safety concerns and go mainstream?

Scott Galloway: I think they can. This is part of the process. Zoox, for people who don't know, go both ways. It's like a box. It's like a Dyson. I don't know what else to say. They go forward and backward, and you get in, and there's compartments, and you sit in your compartment, so a couple people can be picked up by the robo-taxi, and you don't have to touch anybody. So you just get in, and it takes you to your spot.

Kara Swisher: Like *Total Recall*.

Scott Galloway: Yes, yes, exactly.

Kara Swisher: But you can put four people in it. I think four or more people in it. It's been around in San Francisco. The woman who runs it is really interesting. It's owned by Amazon. I think these things are inevitable. I know that people are like, "Oh, they don't work." But I just rode a bunch in San Francisco with the Waymos and I love them. I get the problems with them, but the problems are people. I'm sorry, the problems are people usually in these cases. Every now and then it has an issue. But there are so many human accidents happening. I'm still very bullish on these things. They're very expensive getting them out there. But eventually, I think everyone will be riding them.

Scott Galloway: Do you think? It's going to happen. I always thought it was going to happen in long-haul trucking before it happened with taxis. I'm in favor of it. I can't imagine that's a great job. I use something here called Wheelie in London that I absolutely adore. I think they do a fantastic job.

Kara Swisher: Is that autonomous?

Scott Galloway: Oh, no. No. It's actually a company owned, I think it's a Russian company. It's essentially a high-end Uber. And I find they just do a better job. I left my keys there and the guy came. I mean, they're just so good. I find there's not a great deal of training or professional standards around Uber. And I think these guys do a great job. But I love the idea. For the first time in my life, the last couple of years, I haven't owned a car and I absolutely love it.

Kara Swisher: So would you get in a Waymo?

Scott Galloway: I ride them all the time.

Kara Swisher: Yeah. I don't know who's driving the subway when I get on that thing. I don't, who cares? But I get the safety concerns and cities being concerned, and it's appropriate that federal authorities and others look into that, the National Highway Safety. I think the problem will always be Elon Musk, because he always over-promises and under-delivers on these things. And he's been saying full self-driving was around the corner. And I think it's set expectations far too far. This is something that'll work out over time in cities. I used to go every... My friend Orlando Mochon had a home in Montauk and every year I used to go out there for a week and just hang out with him. We'd have the best time. And I remember I was taking a taxi from East Hampton airport and this guy had printed out and put, like pasted tape to the dash, a printed sign that said, "$100 surcharge if you vomit in car." And I just sat there going, "What can I do for $150? What would you let me do in here for like $200?" Anyway, we'll see where these go. We're bullish on this eventually. And I think it's probably safer for people over time. I visited Aurora, which is one of the truck startups. They're very expensive to get started. It just is. It's going to be a big investment and eventually someone will benefit from them. But they're testing them in Texas because of these straight roads. Speaking of Texas, the New York Stock Exchange and NASDAQ may be facing some new competition from Texas. The proposed Texas Stock Exchange, which was backed by BlackRock and Citadel Securities, has raised approximately $120 million from individuals and large investment firms. The exchange, known as TXSE, plans to register with the SEC later this year, begin facilitating trades next year, and launch by 2026. The TXSE, just flips off the tongue, could be fully electronic and would allow dual listings with companies also on the New York Stock Exchange. Texas Governor Greg Abbott told CNBC the new exchange is for companies whose only agenda is capitalism. Oh, shut the fuck up, Greg Abbott. Anyway, what do you think about this?

Kara Swisher: I like a new stock exchange, but they're going to say, "We're the not woke stock exchange," or some stupid marketing thing like that. I think it's great. I don't like the politicization of everything, that now we're politicizing stock exchanges. They'll try and position NYSE and NASDAQ as blue.

Scott Galloway: NASDAQ and NYSE do, I think, get out in front of their skis and start getting into social engineering, deciding what the composition of boards should be. I'm just not sure that's their job. But I think you need more competition. And Texas, there's no getting around it, has done an amazing job. The economy in Texas now is larger than Russia, Canada, and Italy. It has more Fortune 500 companies now than anyone but California. It's tied with New York. Their value proposition here will be more business-friendly, lower filing fees, probably less disclosure requirements. I feel like I'm curious if you agree with this. I smell Elon Musk here. I would bet he's going to be their first customer and move all of his companies onto this exchange.

And if you look at these exchanges, the flip side of having these additional standards is that the average P.E. of stocks trading on the London or Shanghai exchanges is 13. The average P.E. of companies trading on the NASDAQ or the NYSE is 26. It's why people get a higher salary coming out of Princeton or NYU or Stanford. It's the screening. The ability to get into these schools is so great that people assume you're better. It's the same when you manage to get listed on the NASDAQ or the NYSE. People assume that the vetting and the screening means you're a real company and you should trade at a higher multiple.

Kara Swisher: Why dual listings? Will you explain it? I didn't quite understand. If you allow dual listings, what's the difference? Why would you be on one exchange if you can dual list on both? You might as well, right?

Scott Galloway: Well, yeah, but on an exchange, you're essentially charging the exchange with pairing shares. And I don't know which shares get allocated to one exchange. I just don't think logistically it makes sense to be trading on multiple exchanges, although some companies do trade an ADR on a foreign exchange. But look, this is another case study. I think competition is good. It'll bring down fees. It'll put pressure. Texas has done a great job putting pressure on other states and other companies. And I think that's a good thing. I just hate the politicization of it.

Kara Swisher: I don't know. It's just their electric grid sucks. Remember the energy crisis there?

Scott Galloway: Yeah, but that's a different ball of wax. That's a lack of infrastructure payments or lack of infrastructure investing. Not no taxes, no. We should have more than two big exchanges. We used to have the OTC in the U.S. So I think it's a cool thing. But my gut is Elon Musk, they called him and said, "Would you move?" And he said, "I'm down with it. I want the following things. And I don't want you to ever ask me for my financials or ask me what my CEO compensation is or disclosure requirements about X, Y, and Z." They'll position themselves as more business-friendly and less woke. For example, I think the NASDAQ requires that you have at least one female board member. And I think, OK, that makes sense. But should the NASDAQ be dictating that? Aren't investors smart enough to demand that? Why is the NASDAQ in the business of figuring out board composition? There are good arguments on both ends. They'll exploit that and take advantage of it and say, "That's not the business we're in. We're an exchange."

Kara Swisher: Yeah. I get it. It'll be interesting to see what happens. We like competition. At the same time, if you go on and on about woke, you're going to exhaust us with your stupidity. You're just a money exchange. So just hush up and see if you can give good services to companies. I don't know if people are that annoyed by that one rule necessarily. We'll see. I think the big companies are going to stick with New York and NASDAQ.

Scott Galloway: I don't know. I just feel like...

Kara Swisher: The big ones.

Scott Galloway: Yeah. But you know, I would just be shocked if they haven't already said to Elon Musk, "When SpaceX goes public, have you thought about moving Tesla?" And he's like, "Right on." You're 100% right. They're going to come out of the gates. And not only that, the CFO or the treasurer of Texas will start putting pressure on Texas companies to list on the Texas exchange. They'll create some regional, like my team versus their team, Red State versus Texas versus New York. You can just see how this is going to shape up.

Kara Swisher: We're bigger in Texas. They're going to do all that bigger. Texas has a ton of great companies. It'll force the NASDAQ and NYSE to bring their fees down. On the whole, I like it. I wonder what the oil and gas companies will do.

Scott Galloway: I don't think they care. They just want to make money.

Kara Swisher: Anyway, let's bring in our friends of Pivot. Brody Mullins is an investigative reporter for The Wall Street Journal. Luke Mullins is a contributing writer for Politico. They are authors of a new book, *The Wolves of K Street: The Secret History of How Big Money Took Over Big Government*. And they also happen to be brothers. How sweet. Brody and Luke, welcome.

Brody Mullins: Thank you.

Luke Mullins: Thanks for having us.

Kara Swisher: So the book traces the history of lobbying in Washington through several dynasties. Tell us the story. We're focused on tech and media, but we'd love you to give us an overall look at them and the generations of lobbyists, from regular people like Paul, people we know of Paul Manafort and Roger Stone, those lovely guys, and the shifts. And then I'd love to start talking about tech.

Brody Mullins: Yeah, so we start by looking at— Say who you are. Say which one you are. This is Brody Mullins, the older brother in the relationship here, which is important. So we look at lobbying over the last 40 or 50 years. What we found out, which is really remarkable, is that companies right now are dominant in Washington. Big companies have all the power over consumer groups and environmental groups and labor unions. But it wasn't always the case. For most of the last century, companies had very little influence in Washington. We found that sort of remarkable. We dive into how companies got that power, how they wield it, and how they bend rules and regulations to favor the wealthy and corporate elites and not the rest of us.

Luke Mullins: So how? This is Luke here. We basically start the book in the 1970s, which is this pivotal period where corporations come to power in Washington. Essentially, corporations were on the defensive for the 60s and the early 70s. There was a lot of power in consumer groups, guys like Ralph Nader and public interest groups. There was this sense at that time that corporations really just hadn't invested in Washington. So there's this sort of revolution of corporate power in Washington where they start investing a lot of money in direct lobbying, start to fund a lot of these ideological think tanks. And then they develop these sort of more novel techniques, which we think of as "outside influence." These are newer tactics designed to reach out specifically to voters, to put pressure on their members of Congress.

Kara Swisher: And the characters who did this were Manafort and Stone, or who?

Brody Mullins: We trace four or five lobbies over time who help tell this story. We're talking about complicated, deep issues, so we try to write them as lightly as possible by following some great characters. The first one is Tommy Boggs, who we consider the first modern lobbyist. Then we go to Paul Manafort and Roger Stone, and then to Tony Podesta and some other folks. We trace the evolution through the decades. They become more aggressive.

Kara Swisher: One of the companies you read about is Google. It began its lobbying efforts, and they were determined not to repeat the mistakes made by Bill Gates and Microsoft. I was in a meeting with Bill Gates before the monopoly case, and he was at the Washington Post, and he said, "What do I need lobbyists for?" And he had some guy up in Rockville— what was his name? He became their main lobbyist for years. Jack Krumholtz. But he's like, "I don't really care about Jack." He said this in this meeting. I put my hand up. I was a very young reporter. I said, "Well, they care about you. And there's a bunch of ex-student body vice presidents with subpoena power. So I think you should be worried about it." But tech wasn't that way. And Microsoft has gotten very good since, obviously. Talk a little bit about the evolution of tech.

Brody Mullins: Well, you're exactly right. We should have pulled you in as a third byline for this book. Sounds like you know exactly how everything happened. Microsoft basically thumbed its nose at Washington. They didn't care about Washington. Bill Gates thought that he was the smartest person in the world, and his company knew exactly what they needed to do in the marketplace and didn't care about these bureaucrats in Washington. Unfortunately, these bureaucrats in Washington for Microsoft have a lot of power. They filed a series of cases, lawsuits, accusing Microsoft of being a monopoly. The whole point in our book about Bill Gates and Microsoft is that they did it the wrong way. They ultimately prevailed in the case, but it took them a decade, billions and billions of dollars of distractions focusing on Washington and paying for lawyers instead of battling it out in the marketplace. When Google came along, they looked at what Microsoft did and said, "We don't want to repeat that mistake." So instead of thumbing their nose at Washington, they embraced Washington. They invested in lobbyists, they invested in campaign donations. To this day, they've continued to invest in Washington. And so far, they've held off any antitrust decision against them.

Kara Swisher: Well, initially, they didn't. Initially, Larry and Sergey were like, "What the fuck do we need these people for?" There was a real disconnect. I think Susan Molinari was there initially. That was their first big hire. And the Googleplex ran everything. And the complaints were on that side. Scott?

Scott Galloway: Sure. Nice to meet you guys. I'll just put forward a thesis and I want you to respond to it. My sense is that the greatest ROI any tech company can make is not in human capital or AI, but in lobbying. Because, and this is the thesis, after looking into this a little bit, what I found is it's not disappointing or surprising that our politicians are whores. What really struck me is what cheap whores they are, how much you can get for so little money. Your thoughts?

Brody Mullins: Yeah, I think you're right on the money there. Especially when you look at something like antitrust, which for a lot of these companies is really the only way that they can expand. They need to expand through Washington.

Luke Mullins: We read a lot about Tony Podesta. One of the things he was doing during this period where Google was buying up all these companies— we had this antitrust tradition then that was pretty lax to begin with in terms of waving a lot of these through. A lot of what Tony Podesta was doing was getting up on the Hill and framing these mergers, showing that they would be beneficial to the market, that they would drive down prices. That ends up being very influential in terms of Google's growth and how it is essentially able to accumulate so much power. Now, that is changing now. Things are changing at the moment, but for many years...

Kara Swisher: Why did they do that? I had a lot of back and forth with the Google guys when they tried to take over Yahoo Search, if you remember. I was calling every federal regulator to stop you. Like, this is fucking ridiculous. They did pull back from that. But now, as you noted, a federal judge just ruled that the DOJ's antitrust case against Google and its advertising technologies will be decided by a judge, not a jury. So what's changed? They did nothing. Eric Schmidt was in the Lincoln bedroom every five minutes with Obama. Not together, not to insinuate anything, although not that there's anything wrong with that. But what changed in the shift from your perspective?

Brody Mullins: I think there's been a long shift, long coming shifts, mainly in the Republican Party among the American people. More and more Republicans have gotten rid of their views that bigger is better when it comes to corporate mergers and to tech. Republicans out in the country are turning against big corporations, kind of following Donald Trump's populism. There are more and more bills on Capitol Hill to try to regulate tech or to give more power, more money to the FTC and DOJ to break up big tech. I think it's coming from the people. The people are saying these companies are too big, they're too influential, they have too much control over my life. And this is crazy for Republicans to say, but the federal government needs to do something to rein them in.

Kara Swisher: I'm just curious, who do you think— if you were to give an award for who has best weaponized Washington, created more regulatory capture, who wins the award for best lobbying that has done the best job of managing and executing lobbying effort, potentially to the benefit or the detriment of the commonwealth, consumers, investors— who does the best job manipulating Washington?

Brody Mullins: I think at this point, the word goes to Google. The American people in Congress have come after Google for 10, 15 years. The FTC had an antitrust case against Google 15 years ago that failed. Going back to Microsoft, they saw the mistakes that Microsoft made. They invested in Washington. There was a point where almost all the top tech advisors at Obama's White House had either worked at Google or went to go work for Google after. So they have really done a great job in terms of blocking any attacks against the company.

Kara Swisher: Give us two, three, and four.

Brody Mullins: Ditto for Amazon, Facebook. They have also pushed back on attempts to rein in the entire industry. If you take a list of Joe Biden's top donors or top sources of cash, it's those three companies plus Microsoft. If you look at the top spending lobbyists, lobbying firms in D.C., it's those three plus Microsoft.

Kara Swisher: Luke, talk about Amazon. It's facing an antitrust suit brought by the FTC last fall. The trial is set to get underway in 2026, which is 100 years away. What's it doing now as the run-up to the trial, besides Jeff Bezos buying a handsome home in D.C. and throwing parties? What do you think is going to happen with their case?

Luke Mullins: Well, I assume that they're doing a lot of what Google did when they were facing the same issue. One, you have your own direct lobbyists that are out there talking to members of Congress directly. But a lot of the action these days is on what's known as "shadow lobbying." There you have people that aren't necessarily registered lobbyists, but public relations strategists, grassroots strategists. What I imagine they're doing, because it's what Google is doing, is trying to reach out to ordinary voters, trying to get them whipped up against this, showing that this is some intrusion of federal power into the marketplace.

Brody Mullins: Luke is exactly right. Amazon has learned from Google. Amazon has actually hired a bunch of the people who used to work for Google running these outside campaigns. They've hired the people who organized their academic opposition research campaign. We've seen the ads they've run. A few months ago, when Schumer was deciding whether to bring those bills up for a vote, the companies went out into the states and ran a huge advertising campaign, basically saying, "If you vote for this bill, we're going to come after you with everything we have." And the bill never got brought up.

Kara Swisher: Because Schumer has almost zero backbone when it comes to tech companies. It's almost less than zero. He's been terrible. I have to say, he ran right over Amy Klobuchar. Let me ask you, what happens with companies with the ascendance of right-wing companies like Elon's companies and things like that? How much lobbying do they do? Or is it Twitter, or what?

Brody Mullins: Interestingly, Elon Musk doesn't do much in terms of the lobbying game in Washington. They could be making the mistake of Microsoft. We're saying the other companies have learned from it. Elon Musk sounds a lot like Gates. He's saying, "Stay away from me, Washington. I'm bigger than you. I'm smarter than you. I'm faster than you." All those things are true. But he's ignoring Washington. He has a small team of lobbyists at SpaceX, a small team at Twitter, a very small team at Twitter. They don't have any public relations team in D.C. So far he's winning, but he's left himself exposed. The question to me is, is there a scandal? Did something happen in China? Is there some bigger issue that could blow up in Elon's face? At that point, you want to already have friends. He has not made the connections personally in Washington. The exception, of course, is that lots of Republicans and members of Congress just love Elon Musk. But those are not personal friendships. They like Musk because he goes after Biden and Democrats.

Scott Galloway: My students will ask me, "What are the best industries to go into, assuming you're just an economic animal?" I say, first and foremost, anything to do with software. Two, anything to do with finance. And if you look at the fact we're spending $7 trillion a year on $5 trillion in receipts, and every year our government spending increases faster than GDP, isn't one of the most lucrative jobs in the world to be part of the lobbying industrial complex? Isn't this a great career? And it's easy. You come to D.C., put in a couple years on Capitol Hill, literally a couple, three, four, and go triple your salary. It's not hard.

Luke Mullins: No, I would absolutely agree. We've seen that for many years now. A lot of these counties have been increasing in wealth. A lot of that is coming from not just traditional lobbyists, but also this much larger industry of shadow lobbyists.

Kara Swisher: Influence peddlers.

Luke Mullins: Exactly.

Kara Swisher: So last question I have. You wrote in the book, "No matter what new obstacles have emerged, K Street has always managed to invent new ways to exercise its power over Washington." K Street is the street in Washington where they all had their offices. I think they're dispersed now. Give us each one thing they're doing new and fresh now. What's their newest way?

Brody Mullins: The new thing is moving outside of Washington. Lobbyists and the influence peddlers for companies aren't going to members of Congress to ask them for favors. They're going out into the states and trying to gin up support or opposition to bills using actual constituents. Because if 51% of a member of Congress's constituents want a trade bill or don't want tech regulation, the member of Congress is going to follow. So go to the member, or go to the voters.

Luke Mullins: One of the ways that they do that is by this technique known as "intercepts." You essentially get someone in a congressional district to run into a member of Congress and have some supposedly organic conversation. Run into them at the grocery store or in the parking lot. You get them to bring up whatever issue they're hired for, to say, "I'm really upset about this. This is something you should be paying attention to." The whole idea is to get around these members of Congress outside of Washington, in their home districts, where it looks like a real groundswell of public support, when in fact it's just being ginned up by lobbyists.

Kara Swisher: I hate these people. Anyway, Brody and Luke Mullins again. The book is *The Wolves of K Street: The Secret History of How Big Money Took Over Big Government*. Thank you.

Brody Mullins: Thanks, guys.

Luke Mullins: Thank you so much.

Kara Swisher: All right. Thank you.

Scott Galloway: All right.

Kara Swisher: All right, Scott, one more quick break. We'll be back for wins and fails.

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Kara Swisher: Okay, Scott, let's hear some wins and fails. Would you like to go first? Do you want to go first?

Scott Galloway: I'm up to you. You go first.

Kara Swisher: Okay, so my fail is that, according to an article in Business Insider, it reported that 11% of men— 1 in 10 men aged 25 to 54— don't have a job and aren't looking for one. That's more than triple the percentage recorded about 50 years ago. Supposedly, two to three million able-bodied working-age men between the age of 25 and 54 are not even looking for work. This is in an economy that's pretty much at full employment. I wouldn't even call them discouraged workers. These men who drop out of the workforce are more likely to suffer from opioid addiction. 44% of the men who were out of the workforce said that they had to take pain meds, more than double the portion recorded in employment. Whereas work used to be physically really demanding and work was bad for your health, I think there's a lot of evidence now that work is actually good for your health. It's just sort of strange to see an entire cohort of young men who've decided essentially just to drop out. They're kind of sequestering from society. These are men that don't date. They're not taking care of their parents. They've just kind of decided— it's like we're evolving to a different species. I wonder if we're becoming, as a species, or at least a component of our species, asexual, asocial, and much more prone to conspiracy theory. We'll die much sooner. Work and usefulness are key to health. It's just a different wing, a different vestige of our society that's really unhealthy. I read this and I thought that would just be unthinkable. When I got out of business school, only one in three of us had jobs. But in a full employment economy, to decide not to make money, which is a lot of fun when you start making money, to decide just to opt out— it was just very discouraging.

Scott Galloway: Yep, that is.

Kara Swisher: All right. What's your positive thing?

Scott Galloway: You could probably guess this one. My win is the heroic hostage rescue operation in the heart of the Gaza Strip, essentially under tremendous risk. This Israeli operation Saturday involved hundreds of troops and heavy air support that freed captives Noah Argamani, Almag Mayr Jan, 21, Andrei Kozlov, 27, and Shlomi Ziv, 40. They were in good health. Casualties from the operation, according to Israeli defense forces, were less than 100. The Gaza Ministry of Health has announced 274 deaths. I want to just shout out my win: the heroic IDF operation that freed these four hostages.

Kara Swisher: Okay. All right. I have some different ones. I think the European elections have been really disturbing for a lot of people in Europe. It's really upset the EU's political establishment, which is a shift to the far right. They don't control everything. But Macron in France called for snap elections because he's betting that they won't— he thinks they're angry at him, but not letting a far-right prime minister head the new French government. The indications are very clear that a lot of voters have had it with the established political class there and voted with their feet. I think it's something we should pay attention to here in this country. I don't think we're in the same place. They certainly have a more established establishment than we have. I think we have a much more dynamic political establishment in that regard. It's something to pay attention to. Biden particularly should be paying attention to those trends.

And in a positive thing, I would say there's a show on Netflix called *Hitman*, by Richard Linklater. Wonderful. Glen Powell, he's a very handsome man, but he's very delightful in this movie. To me, he looked like a himbo, essentially, but he's actually been in a couple of— *Anybody But You*, a bunch of movies. He was in *Top Gun*. He was the Val Kilmer character in the new *Top Gun*, essentially against the other guy. Handsome man. Anyway, I really liked it. I really enjoyed it.

Scott Galloway: Which one? What's it called?

Kara Swisher: *Hitman*.

Scott Galloway: *Hitman*. Oh, yeah. I saw it. It looks really good.

Kara Swisher: Yeah. It's that guy. He's dreaming.

Scott Galloway: But I'm not sure I understood your fail. You believe— my understanding of what's happening in Europe is there's been a lurch to the far right. I think you will probably see a certain amount of Islamophobia as people are going to have a pretty negative reaction to some of the things that have gone on in this country. We can never kind of figure out a middle speed. We kind of lurch from one extreme to the other. I think that's happening in Europe. But explain again what you're worried about.

Kara Swisher: I think our country is a little different than Europe. I think they have a real heavy political establishment that have been running things for a long, long time. So this is an expression of that. But I think we've had a much more dynamic— whether you like it or not, Trump— we've had years and years of all kinds of different things happening in the elections. Here, this is the first time you've seen a shakeup of this group. Especially in Italy, the party there has stuck to power. So it's just a rightward shift they have to be paying attention to, because of all kinds of reasons, including immigration and all kinds of issues. I think we have had a more dynamic political environment than they do there. It's much more static. This is interesting that Macron called for these snap elections. So we'll see if they gain power. Do they really mean?

Kara Swisher: And he doesn't think they really want a right wing, a far right prime minister. They can have if the right does well here, there can be a president and a prime minister who are very different parties who are different parties. So that could be interesting. That could be an interesting. So it's kind of a split government. We'll see. We'll see. It's something to pay attention to.

All right. We want to hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT.

On our other pods this week, my interview with former Planned Parenthood president Cecile Richards is out. We're talking about the legal threats to women's health care and how Cecile is using technology to broaden abortion access in red states. Just as Donald Trump is meeting with some figures who want a group that wants to completely get rid of abortion. He's meeting with them or he's going in front of them, like completely get rid of abortions. He's really working everybody's last nerve on this topic. So we'll see.

It was really great. Cecile also has brain cancer and she's been battling it. Just a really wonderful. And she talked about that quite a bit, too, which you found out about maybe just late last year.

Anyway, Scott, that's the show. We'll be back on Friday with more. Please read us out.

[Production credits]

Kara Swisher: Today's show was produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie and her Todd engineered this episode. Thanks also to Drew Burrows and Bill Severo. Nishat Kuroa is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks 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 later this week for another breakdown of all things tech and business and pivot. Have a good rest of the week, Sarah.

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