DeepSeek Fallout, Meta Settles with Trump, and Guest Host Reid Hoffman

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Kara Swisher: Let me just say, Amanda loves this whole jam, Scott. She was like, "Scott's on fire! I love it!" She was vaguely attracted to you, I think.

Scott Galloway: Vaguely is doing a lot of work there.

[Podcast Intro]

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, we've got a very special guest today, someone I like very much in Silicon Valley, which is an unusual thing. Joining us today is Reid Hoffman. Good morning. So we're doing a new thing on Pivot. We're going to make people stay the whole show. And Reid is our very first guest to do this. We're having a really good friend of Pivot. It's not just a friend of Pivot. It's an extremely special friend of Pivot. Reid is the co-founder of LinkedIn, obviously the host of podcasts, Masters of Scale and Possible. He's also the author of a new book, Super Agency: What Could Possibly Go Right With Our AI Future? I feel like he's positive about the future. Not on everything. Welcome, Reid, again.

Reid Hoffman: It's great to be here. I love being on this podcast with you guys.

Kara Swisher: Good. So we're going to talk about a lot of stuff. Last time we talked was at your event right before the election, which you had participated in. We're going to talk a little bit about that. Before we start, we have to acknowledge this tragic crash at Reagan Airport in D.C. on Wednesday night, the worst air disaster in over 15 years. An American Airlines regional plane with 64 people on board collided in midair with a Black Hawk helicopter with three soldiers aboard. We're recording this on Thursday morning as the recovery operation is underway in the Potomac. There was a press conference a little while ago. Authorities confirmed there are no survivors. 28 bodies have been recovered so far. It was a flight coming in from Wichita and the Blackhawk. They don't know. I'm not going to speak about it because I don't know anything about this. I don't have any extra information. It's tragic and very, very sad. But the authorities here seem to be doing their best to figure out what happened and moving on. And we're not going to politicize it. We're not going to do everything that has already broken out online. Any reaction from either of you? You don't have to have any whatsoever, but Scott?

Scott Galloway: Well, look, these things, obviously, it's a tragedy. The only thing, there's such a spectacle that they attract a lot of media, and I believe about 1,000 people a week in the U.S. or about 800 people a week die in automobile accidents, but they're not nearly as dramatic or as much as a spectacle. When I hear this, it's a tragedy. But at the same time, when I look at the data, it's just sort of incredible that it doesn't happen more often. I mean, what you said at the very top of this, it's the worst disaster in over 15 years because it doesn't happen very often. So I'm not saying it doesn't warrant scrutiny. I'm not saying it's not a tragedy. I do think it's just a miracle, though, that this form of transportation is as safe as it is. So anyways, I look at it almost as a glass half full, if you will.

Kara Swisher: Yeah. What do you think? People who died, of course. Go ahead.

Reid Hoffman: 100%. Well, and plus one, Scott's comments. Obviously, hearts go out to the families and all the people. It's a huge tragedy and loss. On the other hand, there's this tendency to try to blame the FAA. And you look at the fact is that it's much safer to be flying than it is to be driving. So there's a credit to how the whole aeronautics and air transport system works. And there's going to be, I think, overly much of a witch hunt on the FAA camp where actually, in fact, I think the system should also be acknowledged.

Kara Swisher: I heard the air traffic controller was a lesbian. Your thoughts, Kara? Oh, anyway, I'm sure it was DEI. If they start with that, I'm not going to have any of it. It's ridiculous. There aren't enough air traffic controllers. And obviously, there's been a lot of uncertainty around the federal workforce right now, but it has nothing to do with this particular tragedy. But that said, it's a wonderful system that we have. And at the same time, just for anyone, I live in D.C., flying into DCA is terrifying. I find it terrifying. There's so much air traffic going on. You see helicopters. There's a weird twist that you have to do because of all the federal buildings, including the Washington Monument and the White House. So whenever you're coming in, I find it always makes me nervous to come in because it's such a highly trafficked area with military and everyone else. But we'll see what happened here because you're right, it never happens. But let's move on. And we're so sorry for the families of all the people that were killed. We're going to talk all about the deep sea craziness in a sec. But first, I want to, Reid, I want you to start this. Why are you so positive about our AI future? I know you've talked about things that could go wrong and stuff. Your position on A is somewhere between doomers, gloomers, and zoomers. You call yourself a bloomer, accelerating toward a bright future but managing risk. Can you just explain yourself so we can put you on the map here?

Reid Hoffman: Well, I think in both creating immense value for humanity and also navigating risks, I think our future will have a much stronger tool set. In the positive category, thinking about the fact that you can have a medical assistant that's better than today's average GP on every smartphone running for under $5 an hour for anyone who has access to a smartphone. A tutor on every subject for every age group. And then, of course, the fact that it's kind of the cognitive industrial revolution of increasing productivity in a lot of different vectors. I think all of that is extremely positive. Now, that doesn't mean there aren't risks to navigate and some questions to navigate in good ways. But that's why I think I'm fundamentally an optimist and fundamentally also an accelerationist in this direction.

Kara Swisher: But one of the things that a lot of people are talking about is cost to zero for lots of things. I mean, Mark Andreessen, I've heard it from Vinod, this idea that everything will cost pennies. Sometimes you all go over the top. So that's why people question your, not credibility for you, but some people's credibility.

Reid Hoffman: Well, that's the difference between bloomers and zoomers, right? The whole notion of everything created with technology is going to create an abundant Star Trek universe immediately. "Abundant" is their favorite word. You know, freely across this is exponential, an exponentialism hysteria that I think actually doesn't have particularly good thinking. I think the question about saying, though, that we can create so much better of a future with technology and with AI is very important, and just drive and navigate intelligently.

Scott Galloway: So Reid, I'm genuine with this question because I think you're one of the brightest blue flame thinkers in the world of technology. I'm sort of blown away by DeepSeek. And I want to posit a hypothesis with you and see if there's any merit. And that is, we were just talking about the airline disaster, the air crash, and I was thinking about the airline industry. I was thinking about PCs. We can skirt along the surface of the atmosphere at 0.8 the speed of sound. It's added remarkable value to the economy and to consumers, air travel, jet air travel. PCs have revolutionized the world. Yet neither of those industries were able to capture, or any specific companies were able to capture, a great deal of shareholder value. It was consumers and the general public that captured most of the value. And I'm wondering if DeepSeek is in fact a signal that AI may be one of those industries where there's not a small number of companies that are worth a couple trillion dollars, but there's so much competition and the barriers are so low that it might have unbelievable winners, but those winners will be further dispersed into the general public and the economy. And we might not have a small number of winners as we did in social or search. The big winners, similar to the airline or the PC industry, might be the public, but a lack of really big winners in tech. Your thoughts?

Reid Hoffman: Interesting thesis. I would tend to think it'll be more like software, Internet dynamics. But I actually don't think that's necessarily because there's only one or two. I think one of the things that the Internet brought about with it is, previously when it was hardware dynamics and PCs were dominant, it was part of the thing where everyone was like, "Microsoft's going to be competing with Disney and with airlines and everything else because it's the primary software OS." And the internet opened it up to allow Google and Amazon and so forth. So I think there's going to be multiple. And I think we're more, call it seven big tech companies heading to 15. But I don't think it's going – I think that the same kind of dynamics where you have a network effect for a social network or a LinkedIn or an enterprise integration or the way they add words and buying the search traffic works for Google – I think those dynamics probably will still be present in AI. But that doesn't mean that, like I'm a venture capitalist investor at Greylock, I invest in a number of different startups. And I think there will be a field of interesting companies. And I think that the public will benefit a lot from that, just like the way they benefit from Wikipedia, the Internet, free communications, and a bunch of other things. But I don't think it's completely broadly dispersed. You're not going to see it.

Kara Swisher: So why don't you just go into this? One of our listeners are like, "We didn't say enough about DeepSeek." Well, honestly, we don't know. Scott and I don't know, like you, for example. So it caused a frenzy in tech and markets. So we brought Reid in to explain listeners because we're idiots. Fine. So DeepSeek caused this frenzy in tech and the markets. I'd love your take on what we're seeing and what excites you about it and what worries you. And I will note that OpenAI, where you were an early investor, you're no longer on the board, and Microsoft, where you are on the board now, are investigating whether OpenAI's data was stolen to build DeepSeek's model. They were also relying on open source stuff like Llama from Meta, etc. So talk a little bit about, give your take on this and make it a hot take because that's the person you are.

Reid Hoffman: Yeah, happy to do it. By the way, one of the benefits of me being able to speculate is I have no internal information from either Microsoft or OpenAI. So I can speak entirely as an outside commentator just looking at this. So DeepSeek released a highly competent model from China. And part of the reason it took the market by storm is the thesis was that it was created for a lot less money and a lot less compute. And what I think is there's certainly some parts of the story that are incorrect. The thing that we're trying to figure out is which parts of it are incorrect. And I would speculate with some vigor that they actually had some version of access to larger models in helping training, because this is actually something we all knew already last year, year before, is that large models will help train small models. And so that means when you train a small model effectively, but you need a large model in order to do it, that's actually not disproving the need for these scale systems. Because when you have better and better large-scale models, you'll be able to train also really, really good.

Kara Swisher: So they were riding off of your rails, in other words.

Reid Hoffman: Exactly. Right. And so I would hazard strongly that there's something like that in the background. Now, it could be that they had some kind of access to ChatGPT. Certainly, some of the data and evidence suggests that in terms of the way that it answers and does certain things. It could be that they actually had access to a compute cluster of size because the so-called training run really makes sense. And I've cross-checked this across multiple groups, outside groups saying, "Hey, what is it? What makes sense here?" And they're like, "Yeah, for the final training run on a serious compute cluster, that could be the dollars that was spent on this in order to make it happen." It doesn't include talent, doesn't include all these other things.

Kara Swisher: Right. The stuff that was, so as they were saying, it was five to six million. No one thinks that because, again.

Reid Hoffman: And the talent that they hired, they put in place. It was a lot of younger people, correct? That's their story, that it wasn't highly paid.

Kara Swisher: Yeah, exactly.

Reid Hoffman: And I think it's nearly certain that it's dependent upon the large scale compute, the larger models in some way. The only question is we don't know in what ways and how. And I think that's one of the things that everyone's investigating. And so I think the market frenzy on, "Oh my God, AI can be here without large scale compute." And of course, by the way, AI can be here. I invest in startups that train small models and so forth. But the large models still bring certain critical elements to the table in terms of ability to train small models, ability to get to performance. Like if you say, "Hey, moving from 10,000 GPUs to 100,000 GPUs, we only get a 20% better coder, medical assistant, legal assistant, tutor." Well, in a wide variety of those areas, that really matters. That increase in cost, when you amortize it across people accessing it across the entire unit, the billions of people that could use it, that's actually completely worth it and makes total economic sense.

Kara Swisher: So the cheapness of it. So what excites you about it? And why did it have such a market impact from your perspective? You saw NVIDIA got crashed, it came back up, but this was the idea because the economic underpinnings of this, which everyone's worried about, this amount of money, $50 billion, $80 billion, etc. Microsoft is 80, I think.

Reid Hoffman: Yes. Yeah. By the way, I think that all of these questions are in the classic short-termism versus long-termism. Because if you're saying, "Hey, I'm spending, I'm building this kind of CapEx thing of $50 to $80 billion." A, I can train much better intelligence. But B, I'm also building data centers that in terms of serving intelligence through various apps to the world. You could say, "Well, the payoff is longer than I'd like as a public market." But I think the payoff to be three years and maybe it'll be five years or seven years. That's the kind of range you're talking about. So I find the general discussion on the tens of billions of dollars to be short-sighted generally. Me as a private citizen, me as a venture investor, obviously making zero comment as a Microsoft board member. But I think it's an extremely important area to be investing in. And I actually am glad that we as an industry are doing this. I mean, one of the things that I thought about over December was that I want artificial intelligence not just to be amplification intelligence. I want it to be American intelligence.

Kara Swisher: The China thing. They're always bringing the Xi or me kind of argument. Go ahead.

Reid Hoffman: Yeah. And I think, by the way, part of the criticism I used to get last year and the year before when I was saying, "Hey, look, we are game on with China," was like, "Oh, you're just trying to get the excuse that we shouldn't be interfering with you and slowing you down and so forth." It's like, "No, no, no, I see the competition coming." And one of, I think, the huge virtues of DeepSeek is like, "Yes, there it is." That is serious and real competition. And I think that's the world we're in.

Scott Galloway: Yeah. Who would have thought that China would engage in IP theft to create a cheaper product? We've never seen that before.

Kara Swisher: I love that AI is taking the job of AI.

Scott Galloway: Yeah, that's the big joke. That's what Jon Stewart said.

Scott Galloway: So another thesis. Most consumer markets, if you think of this as not only B2B, but B2C, they bifurcate. It becomes Walmart or Tiffany. It becomes Android, which is essentially free and ad supported, or it's iOS. Isn't this potentially just the first shot across the bow where this market is going to become similar to every other consumer market, where we're going to have Walmart and Tiffany? And this is kind of the first entry into the Walmart, 80 percent, kind of Old Navy. Old Navy is 80 percent of GAAP for 50 percent of the price. And that hits a large market. But a lot of people want GAAP or Banana Republic. There's a market for both of these respective positionings.

Reid Hoffman: I think, yes. And actually, when we talk about what is our agentic future, most people tend to think there's going to be like one, like Lord of the Rings. There's one agent to rule them all. And actually, I think there's going to be, in a sense, more agents than people because every person is going to have multiple agents. Now, there may be a limited number of code bases. Call it a thousand powering all the different agents. Could be 10,000. But I think we're going to actually live in a very rich agent environment. And it's not just going to be the Walmart or Tiffany's. I think it's going to be, this agent's particularly good at travel. This agent's particularly good at interpersonal discussion. This agent's particularly good for people like Scott and this other agent's particularly good for people like Kara.

Scott Galloway: Right. So an agent that writes better dick jokes. Go ahead.

Reid Hoffman: Yes, exactly. No, no. But the point is, this one will be sardonic and a little sarcastic. And Scott's like, "Yeah, that's my agent." And this agent's going to be fiery and say, "No, we've got to hold you to a higher standard." And that'll be the Kara agent. And then you'll have the nuanced agent of the one Fareed saying, "Well, on one hand and on the other hand."

Kara Swisher: Yeah, yeah, that would be your agent, wouldn't it be? So let me, speaking of that, what he was talking about, you just raised $24, $25 million in funding for AI drug discovery startup focusing on cancer research. This is something that, you know, Sam did this at the White House event, for example. And your book is called Super Agency. So this is drug discovery. Super agency is what you're writing about. Of these many things, where do you think the quicker is and the more important for the economy? And explain what super agency is, what you were just saying, correct?

Reid Hoffman: Yes. Well, super agency is what happens – and we've seen this from everything from fire and agriculture to the printing press to the car and electricity – is what happens when millions of people all get access to the same superpowers of increasing their agency at the same time, and we collectively get super agency. For example, when I get a car, I don't just get a place to be able to get a broader geographic mobility. My friends can come visit me. A doctor can come do a home visit. Things can be delivered into the local neighborhood. And so that's the super agency. And the thesis is just like everything else with the Internet and mobile phone, that we will all get super agency through AI because the cognitive superpowers that you get, that I get, that Scott gets will actually be even more superpowers because we're all getting them at the same time. And that is, I think, the William Gibson line: the future is already here, but unevenly distributed. That's already present. There's already a whole bunch of different things you can do with AI that most people don't realize is a huge amplifier in both how they navigate their personal life and how they navigate their future life. Now, Manus is my thinking about what are the things that these AI things can greatly do to massively improve the human life and human condition that are in a different direction that most people are heading? So Manus, for example, is not building an agent. It's saying, actually, the biology of our human bodies is a complex language. And part of what's going on with cancer is misfires in that language. And we can take this great amplification that you get with AI and take the best of AI and take it with the best of science. And then you can tackle a problem that five-year-olds get cancer sometimes. It's not just, it's the entire everybody in the human race at all ages. Our system is naturally trying to regulate cancer and all of us are at risk for it. And it's something that we can potentially solve with AI.

Kara Swisher: Right. But that's not agency. That's the other things it's going to do, like climate and everything else. That's your focus. And so you're sort of, where is most of your money going? Agents, these agents that you just spoke of? Or is it these other things? Or is it just like electricity? We don't know where it's going to be applied. It can be applied to everything from light bulbs to electrocuting people. You just don't know what the application is.

Reid Hoffman: Well, I think there's a broad range. And as an investor and as a theorist and thinker, it's anything that could make a massive difference for the human condition. So I'm both very pro-agent, Agent Universe, but I'm also pro all the other applications, whether it's climate change, cancer. And I think that's part of the reason why this technology, like electricity, does an entire range of things. It's not just powering light bulbs. It's heating and now cars and the whole range. We can't live in anything like even approximately close to our modern condition without electricity. So I think that's the kind of technology that we're—

Kara Swisher: The comparative. Yes.

Reid Hoffman: So any amount of money spent is good money spent from your perspective.

Kara Swisher: Well, yes. It doesn't mean that some of it won't be seriously wasted by a bad approach. And by the way, that's classic, as you know, for the venture industry. So there will be hundreds of foolish investments. But the overall industry will create a massively good surplus for humanity and society.

Kara Swisher: In any case, we've got a lot to get to today. We're going to take a quick break. Then we'll talk through some of this week's big headlines with Reid.

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[Podcast resumes]

Kara Swisher: Scott and Reid, we're back. We've got a lot to get to today. Let's get into some headlines now. Meta will pay Trump $25 million settlement for shutting down his accounts after January 6th. Most of the payment will go towards Trump's presidential library again, much as Disney's payment of $15 million is going to do that. X, who also kicked Trump off the platform after January 6th, says it's negotiating its own settlement with Trump. Apparently, the Trump people said Mark wasn't going to get into the tent unless he did this. You don't seem to be paying anybody millions of dollars to get in the tent. So what do you think, Reid? That was a long fly that you just had there.

Reid Hoffman: Well, look, I obviously think that the notion of this sort of payoff is, to put it charitably, suboptimal. And I think that the question is, the fact is when people are removed from services for violations of terms of service, they're removed for violations of terms of service. And I think that's a perfectly good thing. And I myself am a massive advocate for the rule of law and how these contracts work. But I understand expediency in navigation.

Kara Swisher: Okay. What does that mean?

Reid Hoffman: It's a vig.

Scott Galloway: That's my... Sounds like a mob move to me.

Reid Hoffman: Yeah. You know, "I wouldn't want a nice company you got there. I wouldn't want anything to happen to it." Yeah, yeah. Well, let's hope that we see very little of that in the coming years, although obviously we have deep worries in the other direction.

Kara Swisher: Couldn't he keep doing this, suing people and getting these things?

Reid Hoffman: Well, I guess the question will be, how much do people respond to this sort of excess pressure on these kinds of things? And I think that, frankly, we shouldn't want it as a society. And I think probably there will at some point be a bridge too far on it. And seeing what that bridge looks like, I think, is still something where we're looking for that bridge too far.

Scott Galloway: Well, there's two dimensions to this. The first is from a pure shareholder standpoint, it probably makes sense when the president's coming after you to say, and you make $20 million a year in operating profit to say, "Yeah, just make it go away. Just give them $25 million to the presidential library and make it go away." The problem is, and I wouldn't expect based on pattern behavior, Mark Zuckerberg to think anything about this, is that this has real societal implications. And that is, despite the fact Bob Iger made $45 million last year, I would argue he's becoming more and more impoverished in terms of his citizenship. And that is when a media company says things that are a fraction of the misinformation, slander, disparaging statements that the president has made himself that happens every day online and they agree to set precedent by bending a knee and bowing to this intimidation, it sends a chill across the entire fucking nation. I'm on Morning Joe and I call the president an insurrectionist and a rapist, and Mika stops the show to clarify he was found guilty of sexual abuse. Liable. Excuse me, sexual liable. He was found liable of sexual abuse. Is that the right terminology?

Kara Swisher: Yes.

Scott Galloway: Call me Mika Brzezinski, but go ahead. But look at what we're doing, all right? And by the way, the judge then went on in his sentencing to say the street term for that is rape. So what do you have? You have a group of people. This is straight out of the fascist handbook. Intimidate anyone who says anything negative about you. And if these companies, in my opinion, had more fidelity to American values and the very important role media plays in checking power, they wouldn't be bending the fucking knee like this. So is it a practical thing to do? Yes. You can't argue with that. Has it sent a chill across the entire country in what is an incredible double standard that the critics of President Trump are now feel that they're being held to? Look at the shit he has said about people that's been incorrect. So, you know, yeah, Bob and Mark, I expected this from Mark. I was disappointed to see it from Bob. Where are the men?

Scott Galloway: Where are the Americans who are going to stand up and say, no, if you're not guilty, if we're not, if the entire ecosystem has never been held liable for things much more slanderous or disparaging than these statements, I'll see you in court. In this case, it wasn't statements. He broke the rules of Facebook and they kicked him off. That's all.

Kara Swisher: Which they're allowed to do.

Scott Galloway: Yeah, exactly.

Kara Swisher: So when we talked in October, I asked if you were concerned about Trump and retribution and your own well-being. And you said yes. Talk about now. How are you feeling? Because obviously you were one of the more prominent supporters of Kamala Harris, obviously a big Democratic donor. You do give to Republicans also, for which for some reason you get endless shit. I'm not sure why. I think that's probably fine to do that. How do you feel now? Do you feel in that crosshairs that we had discussed?

Reid Hoffman: Well, it's unclear. I'm hopeful that a bunch of my friends who are around the administration say, look, that's just kind of all rhetoric and isn't actually going to be.

Kara Swisher: That's what they say to you.

Reid Hoffman: Yes, that's what they say to me. And so that obviously is hopeful. But obviously, it's one of the things that I think, both me personally and we as Americans, need to watch carefully because we do want to continue to be the home of the brave and land of the free. And I think that it's very important to be resolutely against abuses of state power for individual interests. So, like I said, I went and talked to a whole bunch of people who are in and around the current administration and said, look, I have this worry. They said, look, we've talked to a bunch of people. They say this is not something we're going to do. I was like, OK, then let's wait and see.

Scott Galloway: Are these the same people that said he wasn't going to let out everybody at January 6th? He was only going to let out the criminals, but then he did.

Reid Hoffman: It wasn't the same people as those.

Scott Galloway: He's done that several times.

Reid Hoffman: He's done that several times. So there are worries. For example, letting out the people who assaulted police officers is a terrible signal. It basically says, hey, if you do violence in a cause that I am supportive of, you have this thing of a presidential pardon. And that is frankly terrifying and concerning.

Kara Swisher: Right. But you didn't want a presidential pardon, correct?

Reid Hoffman: No. No, of course not.

Kara Swisher: Yeah. You didn't do anything.

Scott Galloway: But here's the problem. If I'm a thoughtful guy who's high profile, with a lot of business interests, with a family, I would be inclined to keep a very low profile over the next 12 months. Whereas the people on the right are emboldened to be aggressive and pollute and flood the zone with misinformation and bullshit and attacks. And the people on the other side of the aisle feel like, well, maybe I should just keep quiet for a while because they are removing security details of people, which is nothing but repackaged violence. When you took out the head of the Iranian security forces and you ordered that strike as a general, and the president, for whatever reason, doesn't like you, removing your security detail is repackaged violence against that person. So what we have is a group, this is the road to fascism. Keep them quiet. Put a chill across people. I'm going to keep a low profile. Maybe I'm just not going to be quite as aggressive.

Kara Swisher: Let me be clear. One of the roads to fascism, and I want you both to respond to this, is littered with calls or accusations that people are overreacting. Call me overreacting. Let me just say, Amanda loves this whole jam, Scott. She was like, Scott's on fire. I love it. She was vaguely attracted to you, I think.

Scott Galloway: "Vaguely" is doing a lot of work there.

Kara Swisher: "Vaguely" is doing a lot of work. She wanted me to tell you. I think you're right. But people that are very high profile like Reid aren't backing down. They don't seem to be disappearing. He's right here. He's talking about it. So I think the question is when Mark does these deals, when he just doesn't have to and it doesn't help them from a shareholder point of view, I really think that's nonsense. But I again, we expected Mark to do this.

Reid Hoffman: Sorry, I know Reid was early at Facebook and had been a mentor to Mark. I don't think he's listening to someone like you anymore. But that said, you and Bill Gates had been and probably are no longer, I would guess, but I don't know.

Reid Hoffman: Look, I think that the American people should pay a lot of attention to the removing of the security detail from a person who spent their entire life serving the American people, putting himself in harm's way, helping secure the safety of America both locally and Americans abroad. And saying, hey, for petty reasons, I am putting that person directly in the harm's way of violence. I think that is an unpatriotic, personal thing that is extremely important that everyone should pay attention to. And I think it's exactly what Scott is saying. That is the kind of thing that is deeply un-American, and I think people need to speak up about it.

Kara Swisher: Yeah, 100 percent.

Scott Galloway: So another thing that people are talking about a lot here in Washington, at least, is the Trump administration offering two million government employees the option to resign by February 6th if they're not willing to return to the office full time. It's being called a deferred resignation. Employees that resign will continue to be paid and get benefits for eight months. This move has Elon Musk's fingerprints all over it. The subject line of the email sent to those employees was "A fork in the road," which was an email Elon sent to Twitter staff in 2022. I have been stopped by so many government employees saying, what should I do? I said, hold, do not leave, because they won't pay you. Elon still has severance issues with those people that were supposed to be paid at Twitter. It's one of these ploys to get people out the door. Federal employees have more rights than private employees in California and New York especially, but here they have more. What do you two make of this plan? It's unclear whether Trump can even offer this buyout package without budget authorization or if he has the money for it. They're hoping that 5% to 10% of federal employees accept the offer, which could mean hundreds of thousands of people. You've been involved in companies that do things like this. And obviously you end up paying them, unlike what Elon did at Twitter. It looks like he went around everybody. This plan was sort of foisted upon people without even Trump officials knowing it was happening. That was the story in The Washington Post today. So thoughts?

Reid Hoffman: Yeah. So it is a technique that when deployed with honor is actually something that has some strength in the private ecosystem. Because in the private ecosystem, the way it works is if you're not committed to the future of this, then now is a good time to exit. And it works in the private ecosystem in part because part of it is not only am I committed to the mission of this, but there's also an economic reason to keep going. You believe in the stock options, the bonus plan, all these kinds of things. Now, I worry in the public circumstance applied here that a lot of the folks who go, okay, I could get jobs in 10 different places, I'm going to go do one of those, will do this. And this will be depriving the American people of some really great talent.

Kara Swisher: So the good people will leave, in other words, which is always a worry when you're doing this.

Reid Hoffman: Right. And that's unlike in the private ecosystem where you actually have a rich incentive plan for staying. Here, it's an incentive plan for leaving versus an incentive plan for staying.

Kara Swisher: So the best people leave, and in the case of private companies, they try to retain, or they specifically target certain employees, correct? This is too broad in that regard.

Reid Hoffman: So the best people will go with the experience and the worst people will stay, or the less good people will stay.

Scott Galloway: Yeah, there's a worry about a selection effect.

Kara Swisher: Right. Did you notice the echoes of what Elon had done here?

Reid Hoffman: Yeah, of course.

Kara Swisher: And?

Reid Hoffman: Well, I think we will see many things that are parallel to how Elon thinks an organization should be turned around, from Twitter to the federal government. The fact that you're looking now at leaked emails saying, wait, we're not doing very well, whatever X years on it is for Twitter, it's like, well, we should be learning from that. And that's within the standard understood commercial ecosystem.

Kara Swisher: Just today, you're not going to talk about financial results, but Tesla's results were terrible, even though the stock is going up because they aren't selling as many cars. In any case, Scott?

Scott Galloway: You guys have said it. I don't like buyouts. Because the people with the most options, the most talented people, are the ones that exercise them. I don't think there's anything wrong with the thesis that there are too many federal employees and we need to trim it and they should be subject to the same standards and insecurities and anxieties and work week that private employees are subject to. I don't have a problem with that. I think it should be based on what departments are least efficient or performance. But your most talented people leave. The people with the most options leave. It is a degradation in the quality of the workforce. It's not the way to go about this.

Kara Swisher: Is there a good way to do this, Reid? Elon's using all his playbook. What is the playbook that would work here to do what Scott was talking about, if you had to think of it off the top of your head?

Reid Hoffman: Well, the parallel on the commercial side is that you actually also have incentives for keeping the good people to stay, whether they're stock bonuses or other kinds of things. So it's not just the stick, it's the carrot for going long in your long-term commitment to the organization and its mission. So this would probably be harder and maybe not within the presidential remit, but bonuses... Like, you could imagine saying, hey, if you figure out how to cut 10% of your budget, we'll give you a 1% bonus on these kinds of things. That would be the kind of thing I would potentially look at. But I think it's all very tricky and difficult.

Kara Swisher: And difficult in a public environment versus a private one, right? Because what is results? Sometimes results are people being less poor. It's not a stock. You can see it in the stock market versus something else.

Reid Hoffman: Exactly. Right, which is difficult.

Kara Swisher: Is the concept of cutting people a good idea from your perspective?

Reid Hoffman: Fundamentally, yes. Just because it's part of what makes... What are the things we should learn from the commercial side? Part of it is that refactoring organizations is essential for keeping them healthy. And so that refactoring is extremely important. I'm quite certain if one looked through the federal government, one would find... I'm sure I'm using this as a hypothetical example, but you've got maybe still a weather balloon department. And it's like, well, we should have one of those. We've got satellites and a bunch of other stuff. I'm not sure we need one of those. So I think that refactoring is good. And figuring out how to do it in good, intelligent ways is one of the things that I think we could be hopeful for. Maybe some good will come of this.

Kara Swisher: Right. So a blunt force approach is a way to get it started.

Scott Galloway: Look, I think one of the things we have to pay attention to is that the default will be to massively increase the deficit. And I think the problem should be that we should try to reduce the deficit. If you look at the actual budget and you want to get a lot of money out of what we're spending, debt service is one of the massive line items. So increasing that is just mortgaging our children's future more. It's already somewhat mortgaged. Let's try to pay off the mortgage versus add to it.

Kara Swisher: Right. Well, we'll see what happens. Anyway, one of the other things that Elon is doing, and this is an area you obviously came together with PayPal when he had X.com, but they're partnering with Visa to allow real-time payments through its upcoming X Money service. CEO Linda Yaccarino announced the deal saying it would enable instant funding to an X wallet via Visa Direct. It will also allow users to make peer-to-peer payments. They were going to do this, but I'm just curious where this is going, these ideas of the everything app. This was a concept that not just X has, it's been going around forever. Everyone talks about this. But where is the payment space right now? Away from this, I would never trust anything Linda Yaccarino is working on with my money, but that's different. Where is it right now, the payment space? It seems like Apple dominates this whole space right now and PayPal?

Reid Hoffman: Well, payments is an area that has scale effect, if not sometimes network effects. And one of the things is you have to get to a certain scale before you even have a viable payments network. So getting that scale really matters. I think that we want to see a bunch of good innovation on this. It is a very common pattern to go, oh, the way I'm going to verticalize and extend my service is by adding in payments and banking. And we see it in a number of different contexts. I mean, Google has one. There's a stack of these. And having my own background in the payment space, it's actually one of the areas that I look at because it adds to the flexibility. One of the things I really loved about what we did at PayPal was trying to make every individual able to be a merchant. Now that's much more true in the whole world, which wasn't true before, which allows individual entrepreneurship inside. So I think it's a good area to improve. Lots and lots of people are doing it.

Scott Galloway: Yeah, a platform built on rage, porn, and crypto scams handling your money. What could go wrong? The FDIC has banks. Twitter has dog memes. Our financial institution is based on trust, that you hit a button, that they have figured out a way to get it there safely, that along the way it doesn't get sequestered, that money knows your customer. There are all sorts of things. FDIC insurance. There are so many protocols. Twitter to me does not reek of security or safety when it comes to people's money. It might actually, the underlying technology and its ubiquity, it might be a good use case for it. But the entire financial system is a case study in trust. And I don't feel this organization has created a great deal of trust.

Kara Swisher: All right. So where is the most innovative thing you're seeing in funding right now? I mean, obviously, I haven't dealt with money for a year now. I found a $20 in my wallet and I was like, oh, look at that. I use Apple almost entirely for all payments, everywhere I go, obviously, because I have an iPhone. But what is the most innovative thing you're seeing in this area?

Reid Hoffman: Well, since I'm so focused on AI stuff, I haven't actually been looking at this particular area closely. Obviously, there are a whole bunch of things being developed within the crypto arena to try to have ledgers and identity and all the rest of that. The promise of that is to try to create something that has, to elaborate on Scott's excellent comments, how do we have trustless trust? A trust in the system that doesn't require trust in a centralized authority whose ability to hold that trust may be limited. So I think that's one area that continues to burble along. None of it has any of the in-depth traction that Apple or others have, because the key thing with payments tends to be ease of use and integration into your environment. So I think that part of what Stripe is doing that is great is making it very easy to incorporate Delaware corporations from anywhere or from many areas in the world and then provide an economic powering structure underneath that to power entrepreneurship. But like I said, I've been so focused on AI that in this area, someone may call me after this and say, this is really good, and I go, oh, yeah, that's the thing I should have said. But I just didn't know at the time.

Kara Swisher: All right. Scott and Reid, let's go on a quick break. When we come back, we'll talk about RFK Jr.'s contentious confirmation hearing.

[Ad Break]

Kara Swisher: Scott and Reid, we're back as we tape this. HHS Secretary nominee Robert F. Kennedy Jr. is in the hot seat for the second day of his confirmation hearing. Things got a little heated on day one with Kennedy rejecting claims that he is anti-abortion, flip-flopping, and struggling with questions about Medicare and Medicaid. He was also asked about some of his previous controversial comments. Let's listen to an exchange with Democratic Senator Michael Bennett, who is a favorite of Scott and mine.

[Audio Clip - Senator Michael Bennett]: Did you say that COVID-19 was a genetically engineered bioweapon that targets black and white people, but spared Ashkenazi Jews and Chinese people?

[Audio Clip - Robert F. Kennedy Jr.]: I didn't say it was deliberately targeted. I just quoted an NIH-funded, an NIH-published study.

[Audio Clip - Senator Michael Bennett]: Did you say that it targets black and white people but spared Ashkenazi Jews?

[Audio Clip - Robert F. Kennedy Jr.]: I quoted a study, Your Honor. I quoted an NIH study that showed that certain races are just...

[Audio Clip - Senator Michael Bennett]: I have to move on.

Kara Swisher: Kennedy's own family is also expressing concerns. JFK's daughter, Carolyn Kennedy, sent a letter to senators ahead of the hearing. She called her cousin a predator and accused him of exploiting their family's tragic history. Let's listen.

[Audio Clip - Carolyn Kennedy]: Bobby continues to grandstand off my father's assassination and that of his own father. It's incomprehensible to me that someone who is willing to exploit their own painful family tragedies for publicity would be put in charge of America's life and death situations. Unlike Bobby, I try not to speak for my father, but I am certain that he and my uncle Bobby, who gave their lives in public service to our country, and my uncle Teddy, who devoted his long Senate career to the cause of improving health care, would be disgusted.

Kara Swisher: Okay, that was the nice part, just so you know, for everybody, which wasn't very nice. All these things seem to be going through Pete Hegseth and everybody else. Any of them you'd like to comment on? The Kennedy one is particularly... It looks like he will probably get through. Same thing with Tulsi Gabbard and so on down the line. What is happening here?

Scott Galloway: I do believe a president should have pretty wide berth in terms of bringing in their own people. And for all of the weirdness and incompetence parade of some of these nominees, I think this is the most dangerous. You have an individual here who is not only anti-vaccine. If you were to list the greatest innovations in history, I think most thoughtful scientists from both sides of the political spectrum would put vaccines near the top of the list. The fact that we have now politicized it and have an individual with no science background spewing misinformation who seems to be committed to reducing or creating skepticism around vaccines... And then something that came out yesterday from Senator Warren, that he is being paid to find people to sue Gardasil, an HPV vaccine that so far has shown to reduce cervical cancer in women by 90%. I don't know if either of you have known anyone with cervical cancer. I have. My God, we have something that can prevent nine out of 10 times this vicious, awful disease. And we have the head of HHS being paid to try and discourage and financially damage that miracle. This guy has no business at HHS. He is probably the most dangerous of the nominees in terms of what it could mean long-term. In 10 years we wake up and go, oh, cervical cancer is back, and reverse engineer it to this individual who has blatantly and repeatedly admitted to being anti-vaccine. I think this is awful. I made my sons get it immediately when it happened.

Kara Swisher: Reid, how are you looking at these? Obviously, you're making AI investments in cancer research. This guy will be right there at the head of all these organizations that are very related to some of these things.

Reid Hoffman: Look, I think the unfortunate prediction for RFK's probable confirmation is that it will probably be measured in thousands of American lives lost. I think the question around the fact that he's saying, I'm just following science... No, he's not. Not only is he anti-vaccine in many, many statements over decades, he is essentially anti-science. I've heard of meetings where he is meeting with scientists, and the scientists try to tell him something, and he's like, no, no, you're supposed to listen to me. It's like, no, the whole point is to listen to good scientists. And I think if this confirmation goes through, the senators who vote on it should track how many thousands of American lives they're willing to spend in this calculus. Because if he implements any of the things that he has thought of, articulated, and talked about, the cost is going to be measured in lives.

Kara Swisher: Have you been surprised by how many tech people have been attracted to him? I'm not going to leave out Nicole Shanahan. She was not a tech person. She's just a rich person who married a tech person and got money that way. Have you been surprised by that? Because there is a whole strain of people who really back him in the tech area, even as they make these big investments in AI and cancer where he will have an impact.

Reid Hoffman: I think that one of the strengths and weaknesses tend to go together. A lot of tech people tend to think, well, I've met him and it was a perfectly reasonable conversation. And so therefore, oh, that's just all media stuff. It's media stuff that he said and did in other rooms that you weren't in. But there tends to be this really strong, no, no, I met him and I got the cut of his jib. Actually, Gates did this the other day with Trump, which was disappointing. And I think one of the things that's very important is to have a little bit of, look, just how a person talks to you is not necessarily how they actually operate in the world. And you have to apply that. So I've had a number of tech people try to say, OK, he's great. I'm like, just look... For example, in an alternative hiring context, I prefer references to interviewing. I prefer to have both. But reference checking is much better. And I've seen the references on RFK. That's part of the reason why it's like, okay, this appointment will be measured in thousands of American lives lost.

Kara Swisher: Well, let's leave it at that then. All right, Scott and Reid, one more quick break. We'll be back for predictions.

[Ad Break - Mint Mobile] [Ad Break - Shopify]

Kara Swisher: Okay, Scott and Reid, let's hear a prediction. I'm going to go first, actually. I'll be at the White House soon with Tracy Flick, the new press secretary. The White House is welcoming podcasters to the briefing room. Carolyn is running it right now. So she has decided that new media, which I agree with, including independent journalists, podcasters, and influencers, will be able to ask questions at briefings. I welcome this. The Biden administration should have done it, should have had different people and not just the traditional ones. So I'm super excited to go to the White House, and I will be there this year. That's my prediction: that Carolyn is going to let me in, Tracy, or whatever the heck she is. Thank you.

Reid Hoffman: I love that prediction. And by the way, I think it's a good thing to begin to broaden the set of different folks in the briefing room. I think it's critical. This is the office of the president for all Americans, to have a diversity of access to it. For example, you have a Democratic president, you still have Fox News in the room. You need to have that breadth of perspective to be representative of the American people. So I love that prediction.

Scott Galloway: Yeah, I know she wants me there. She wants me on that wall.

Kara Swisher: Well, first off, on your prediction, I immediately read that and I sent Jim Acosta an email saying, I need you to start a podcast. I want you back at those press briefings.

Scott Galloway: Yeah.

Kara Swisher: This is the CNN person for people who don't know, who left when they tried to put him on at midnight. He started his own stuff, and he's a great guy. We love him. That's a great journalist.

Scott Galloway: So I'm fascinated by what I think is a tectonic shift with DeepSeek. Just the notion that there might be a reasonable facsimile of the best AI models at a much lower price. I think that this, regardless of what we find out, it was probably exaggerated. There is now a much greater likelihood we might be able to see cheap and cheerful, Old Navy-like models. So my prediction is there's an entire layer of companies in pharmaceuticals and the consumer sector that had allocated $100, $200, $500 million for CapEx or OpEx for the cost of AI that they were going to have to spend to rent these models to develop new drugs or come up with a better itinerary for your Airbnb stay. All of a sudden, they are going to decide, wow, we're going to be able to get all of the great taste of AI with a lot less calories, a lot less OPEX. And you're going to see a bunch of companies that were setting aside a ton of reserves because they thought this was going to be a lot more expensive than it's going to be, recognize those reserves back, and it'll juice their bottom line. So I'm in the midst of trying to identify those. I don't know if it's Airbnb. I don't know if it's Johnson & Johnson or GlaxoSmithKline. But I think there's an entire layer of companies that just got great news that their capex on AI could be 30, 50, 80% less than they'd originally anticipated.

Kara Swisher: Well, I think that actually we will see a variety of those. I don't think it's necessarily because of DeepSeek. I think we were already heading towards that. I think part of the future, commenting on Scott's point, will be compositions of smaller models that deliver really effective services across a wide range for individuals and organizations. So I agree with his prediction, but not necessarily just as a DeepSeek response.

Kara Swisher: Okay, Reid, your prediction.

Reid Hoffman: So, I was thinking about this a little bit. I think one thing that would be an interesting and unexpected outcome is that AI agents will trend towards being massively positive for human mental health. I think the natural market dynamics will push in that direction because as people interact with these agents—and I've already seen this from what my startup Inflection did with Pi—it has helped a bunch of other agents follow this path of high EQ, kindness, and other things. I think these agents will actually help people feel more heard and more seen, creating a dynamic of interaction that is who we aspire to be. Through people simply choosing the agents they want to interact with, we'll see a natural increase in mental health and well-being.

Kara Swisher: Well, unless—as you know, I interviewed the mother of the Character.AI victim. There's the lawsuit there. They can take that turn where they shouldn't be around young people. They shouldn't.

Reid Hoffman: I'm talking about adults here, correct?

Kara Swisher: I'm talking about adults, although I think we also can and should be much more careful about how we engage with children in various ways. That's one of the important things for the technology industry to get much better at. But I tend to think the natural dynamics will mean we prefer agents that have this characteristic.

Reid Hoffman: Now, I think part of the thing is that having agents trained to be very good in mental health will also be beneficial. So there will be good agents.

Kara Swisher: My only issue is the potential for abuse is so massive, and you're seeing it. The lack of care—you know what I mean? Like, why didn't that company alert anyone when the kid said "suicide"? For stuff like that, where was that? Why was it never there? That's the problem. And their argument now is that it's free speech. It was going to be Section 230, but now it's these agents. In that case, should bots have free speech? That's the kind of stuff we're going to have to deal with as a society. Is it free speech when it's bot-generated?

Reid Hoffman: I think at the moment, it's definitely not free speech when it's bot-generated.

Kara Swisher: Yeah. Well, that's one of the issues we're going to talk about because it will come up. I prefer kind agents to mean ones, but I suspect—this is why I love Reid, he's such a sunny character—but I expect really mean agents because people like that. Abusive agents and that kind of stuff.

Reid Hoffman: It may be that they prefer agents to be abusive to other people, but I think most people prefer them to be kind to them.

Kara Swisher: I don't know. As usual, I take a darker turn on things. We'll see which future brings us.

[Clip begins: Scott Galloway speaking on Prof G Markets]

Scott Galloway: Elsewhere in the Scott and Kara universe, this week on Prof G Markets, Scott spoke with Robert Armstrong, U.S. financial commentator for the Financial Times. Let's listen.

Scott Galloway [in clip]: In the world we lived in last Friday, having a great AI model behind your applications either involved building your own or going to ask OpenAI, "Can I run my application on top of your brilliantly good AI model?" Now, maybe this is great for Google, right? Maybe this is great for Microsoft, who were shoveling money on the assumption that they had to build it themselves at great expense. Interesting.

[Clip ends]

Kara Swisher: Interesting. Okay, Scott and Reid, that's the show. Thank you for joining us, Reid. And again, your new book is *Superagency: What Could Possibly Go Right With Our AI Future*. Thank you, Reid, again.

Kara Swisher: And Scott, read us out.

Scott Galloway: 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, Ms. Saverio, and Dan Shalon. Nishat Kirwa 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. We'll be back next week for another breakdown of all things tech and business. Have a great weekend.