Elon, SBF, AI and What the Hell is Up in Tech? - On with Kara Swisher

Kara Swisher: [00:00] Not all journalism is the same. Take The Guardian. Our coverage has something unique: fierce independence. Nobody owns us or tells us what we can and can't say. So we're free to report the whole picture. We connect what's happening in Washington to the rest of the globe, expose corruption wherever we find it, and give fresh perspective on everything from wellness and soccer to culture, the climate and more. Read, watch and listen to The Guardian for free at theguardian.com.

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Kara Swisher: Scott and I are taking a little vacation, except I never take a vacation, and Scott takes a lot of vacation. Anyway, last week I was talking about all things tech, and especially about Elon Musk, Sam Bankman-Fried, and Mark Zuckerberg at Manny's, a bookstore and community space I love in San Francisco. I was joined by Casey Newton, the tech journalist who runs the Platformer Substack, and the conversation was moderated by my producer and partner in my own podcast, Nayeema Raza. Have a listen, and if you like it, you can catch me and Nayeema on Mondays and Thursdays. Just search for "On with Kara Swisher" wherever you get your podcasts and follow the show. It's on!

[00:00 - Show Intro]

Kara Swisher: Hi, everyone from New York Magazine and the Vox Media Podcast Network. This is Million Dollar Listing San Francisco with a lot fewer houses. Just kidding. This is On with Kara Swisher, and I'm Kara Swisher.

Nayeema Raza: And I'm Nayeema Raza. It's more like $44 billion listing these days.

Kara Swisher: Yes, that is the price Elon Musk paid for Twitter and overpaid for it. Imagine how many houses you could have bought in San Francisco. Maybe two, something like that. Anyway, we're ending the year with, of course, more Twitter drama. Will he, won't he quit being CEO?

Nayeema Raza: Will he or won't he, Kara?

Kara Swisher: Probably not. Who knows? We talked about that for our episode today, which we taped on Tuesday this week. I got to interview yourself and Casey Newton, the tech reporter who runs the Platformer Substack.

Nayeema Raza: Yeah, we did it at Manny's in San Francisco, where I've done a lot of events over the years, interviewing tons of people. It's a really great bookstore and community space, focusing on really civic stuff. I love it there. And Nayeema was moderating.

Kara Swisher: Yes, I was. The event title was, "What the Hell is Going on in Tech?"

Nayeema Raza: Yeah. Which was a big topic to take on. And yet, you guys did a great job. We talked about it all from Sam Bankman-Fried, scammery, or I should say alleged, right? Alleged scammery.

Kara Swisher: Okay, sure.

Nayeema Raza: To big tech layoffs and OpenAI that will soon replace us. But of course, we started with Elon, your favorite subject, Kara.

Kara Swisher: Yeah, Elon. I think we probably talked too much about him, but it's an interesting topic. Anyway, let's dive in.

[00:00 - Live Event at Manny's Begins]

Nayeema Raza: Thank you, everyone, for being here. And thanks to Manny for having us in this beautiful space, this great community. Let's start off with Twitter. Okay. It's been almost two months since Elon Musk walked in with his sink. So I guess my first question for you is, has it sunk in yet? And what is the most surprising thing that he has done?

Kara Swisher: I think it has sunk in and it has actually become a sinkhole. And now the company is now sort of in the center of the earth. Yeah. It has sunk all the way in. Yes. Yeah. Sunk in. Deep in. And what's the most surprising thing? Why don't you start, Casey?

Casey Newton: Oh, I mean, you know, I assume you are following this story. It's probably not worth me rehearsing the latest developments. You know, the journalists getting banned, posting a poll saying, "I'm going to step down." The people of Twitter sensibly saying, "Yes, absolutely step down." Him having nothing to say about that, but responding to random tweets from congressmen about defense bills. So we're fully all over the map. And look, this is extremely erratic behavior. Anybody who's telling you that they can draw a straight line through all of these dots is lying to you. But I will admit I'm curious to see what happens next.

Kara Swisher: So I'm just looking something up, but I don't know the exact price, but I'm going to look it up for you because I think the entire story of Twitter right now is the stock price of Tesla. And it is today. I think it's $137. $137.80. It was $150 across the $150 line. When it goes down another $10, activists will be attacking this company. And that's where the real story is, what's happening. The stock price for context was $400 almost at the beginning of this year. Yeah. So I think you have to watch that. And he sold a lot of the stock after he said he wasn't. So paying attention to Tesla, right now he's arguing with Tesla investors who literally would lick him up and down any day of the week and twice on Sunday. He's insulting them too now. And that's a real... these people would stand up on anything. So I would watch Tesla and what's happening there. I think the most surprising thing is if you had to pick one of the people who could fix this thing, Elon would have been one of them in terms of support of Silicon Valley, money, know-how, love of the product, et cetera. The fact that he has essentially lost his mind from a business point of view and a personal point of view is the most surprising thing because he really could have been capable of fixing what is a very bad business.

Casey Newton: The missing ingredient was humility, right? I think if you wander into any business that you have never been in before and you have 7,000 people who've been doing it for 17 years and you say to them, "I'm smarter than every single one of you and we're just going to start the company over from scratch," there's no way that goes well for you. So to me, that is the biggest surprise: that he was not humble for one moment at any point in the last six weeks.

Nayeema Raza: Have you experienced him as humble previously prior to this?

Kara Swisher: No.

Nayeema Raza: So it's not surprising, right?

Kara Swisher: No, no, not like this though. Because I did a really good interview with Yoel Roth who's hiding somewhere, I guess somewhere probably nice. And he was saying humility was what was missing and he's the one that stayed there. It is absolute chaos right now on Twitter. I mean there's like yellow checks and grey squares. I don't even know. There's so much going on right now.

Casey Newton: By the way, they have fewer than five designers at the company now and not all of them actually design things anymore. So I mean there's a non-zero chance that David Sacks is in Photoshop drawing up logos. That explains so much about the clip art that's happening right now on Twitter.

Nayeema Raza: But he's done so much. He started off with layoffs. He pissed off advertisers. He dismantled this content moderation. This whole idea verified. But is there anything that Elon has done that is a good idea?

Kara Swisher: A number of things. They needed to cut staff. They absolutely needed to cut costs. I think he was directionally correct in making a point of view. There was a lot of points of view at Twitter. So having a more singular editorial point of view is a strong idea. And focusing on subscriptions was something we always talked about for years. But the way he's doing it, it doesn't make any sense and isn't a very good value proposition. So there's a lot of... the idea of a super app, interesting, probably can't do it. They're all good ideas. What do you think?

Casey Newton: I'm starting to take the opposite side of it, though. Because at the end of the day, I will admit that, yes, had he implemented any of those successfully, maybe it could have been a good idea. But at the end of the day, this is a company that made $5 billion last year and was not in crisis, and he came in and he started a crisis.

Kara Swisher: That's right.

Casey Newton: And at the end of the year, we're now in this situation where one of the things that – and this is going to sound a bit self-aggrandizing for a journalist to say, but I will argue that – one of the reasons that Twitter is an important company is because it is like a real-time virtual water cooler for the entire Western press corps. And it sets the daily global news agenda.

Kara Swisher: Yeah.

Casey Newton: And we're now in a situation where the reporters have realized we're not safe here. Our accounts can be banned at any time for any reason. This is not going to be how we're distributing the news, certainly in five years, but maybe not in January. And so you're starting to see all of that leech out of the platform. Mastodon, a website that is almost impossible to use, is humming. It is humming. And it is the journalists who are making it hum. And so that's why it's just hard for me to be like, "Well, you know, Elon had a couple ideas." It doesn't work. It was like, no, he took a clear flight path to $5 billion and he messed it up.

Kara Swisher: But I think it's because fundamentally the people he also brought with him... he's always been wary of journalists, but the people he brought with him hate... there's an ethos among the Marc Andreessens and the David Sacks. There's a whole bunch of them that literally just think journalism and journalists suck. And because we're not sucking up to them at all times, they hate it. It's really weird. And you started to see it on Clubhouse, which I never went on because I'm like, "Why do I need to be yelled at by these idiot venture capitalists?" They're always like, "Come on!" I'm like, "No, why would I come to your idiotic party where you tell me I'm terrible?" So I think they have a fundamental belief they can do it better, and they talk about it a lot. And the persistent victimization that the richest and most powerful people on the planet display... and again, it's Elon's fault, but he's in that environment. He's in that stew of mentality about the press. That's not necessarily unfair, but he doesn't understand the relationship. He thinks you're friends, but he's been in that for a long time. He and I had a one-year-long beef over the stupidest thing I've ever experienced. Because somewhere there was a room of 150 people and some tech titans standing here saying how journalists are too powerful. But we're not. But that's their theory. They're trying to do... you saw Marc Andreessen try to do Future, yes. And I kept going, "Media is hard." He always says software is hard, and media is harder.

Casey Newton: And then it was terrible. It just was. They're terrible at media. They're terrible.

Kara Swisher: Yeah.

Casey Newton: I think it is... I've been thinking about this lately. It's like Andreessen Horowitz is a firm that hates the media and is constantly investing in media companies.

Kara Swisher: Yeah.

Casey Newton: And the media companies are not succeeding. And I think those two things are related.

Kara Swisher: Yes, I do too. Yeah, yeah, yeah.

Nayeema Raza: This banning journalists from Twitter, banning journalists that were covering the Elon Musk and the Elon Musk's debt story, that seemed like a low point between Silicon Valley and journalism.

Casey Newton: Well, and here's why. Elon Musk, in the lead up to him taking over Twitter, is outraged about some of the censorship that has gone on on this platform. And recently, he's given away a lot of internal communications from the pre-Elon era that talk about how there was a shadowy cabal that was making content moderation decisions. And this shadowy cabal, if you can believe this, and I'm glad most of you are sitting down, consisted of the CEO and the head of legal and the head of trust and safety. And they would all get in a room and they would make content moderation decisions. And there were reporters who were tweeting this out. And these are 150,000 retweets. Can you believe this? Can you believe what was going on? I'm somebody who looks at that and thinks that's how it's done at literally every company once in a scandal.

Kara Swisher: Yes, yes, yes.

Casey Newton: And then after all of that, in the aftermath of him being so outraged about the shadowy cabal making these decisions that are totally arbitrary and totally unfair, he's like, "These people are tweeting out public information about my jet and they're trying to join Mastodon on Instagram and I don't want to see them anymore. Get rid of them." You could not write it funnier. It was absurd.

Kara Swisher: It was. I had a... look, he did pay, overpay for it. So if he wants to kick journalists off, it's not the end of democracy. It's just not. And he's going to do what he feels like doing. And he does point out, as Casey said, that this is one of the things that I was struck by those Twitter files, which who knows if they're complete, by the way. The whole thing was done. The "secret cabal" was funny. It's a secret group of people. The management. I was like, "It's a public company. They do it with my stuff all the time." Here's Yoel Roth saying to Kara Swisher that he was worried about the previous Hillary thing and because he was primed to do it by the FBI. And I literally was like, "You idiot who's doing this, whoever it was. It was Michael Shellenberger or whatever that guy. I was like, that's not what was said. They can't even Google it and watch it." It's like complaining that there's a secret cabal at Starbucks that's setting the workers' schedules. They're deciding what shape the coffee should be. So I don't care if the journalists get... he put them right back on. It's his right to do it. That's the thing. If he had just come out and said, "I'm banning Taylor Lorenz because I don't like her," I would have more respect for that.

Nayeema Raza: Would you like to have access to that? Because it's going to, obviously.

Kara Swisher: I would like good journalists to have access because it's a great story. What I walked away from it is, boy, they tried really hard to do an impossible job, which Casey's written about a lot. I've written about a lot. And it was interesting to see the inner workings. It wasn't that interesting, but it was actually in the hands of very good journalists, you would have gotten a wonderful, interesting, complex, difficult story. And that would have been cool. I would have liked to see that.

Nayeema Raza: And what do you think he's trying to do? I mean, obviously this is feeding into conspiracy theories. Create a scandal. The FBI. It didn't work.

Kara Swisher: It didn't work.

Casey Newton: I mean, but I think, look, this is a political project for him. He is a reactionary conservative. The takeover of Twitter is a reactionary takeover. And the whole point is to punish the people who used to run it. And so this will actually probably be the most value that Elon gets out of his purchase. It's just the entertainment that he briefly felt watching people retweet him talking about the Twitter files.

Kara Swisher: Yeah, yeah, yeah. He has moved to a very conservative... I think the problem is he has no impulse control and that is going to ruin the rest of his businesses where everyone thought he was brilliant. And it doesn't take away the fact that he is brilliant. It's that he is out of control. He is not as smart as you think he is. And so that is the damage.

Nayeema Raza: So recently he put up a poll and asked if he should step down as CEO. 17 million people voted, I believe. Raise your hand if you voted in this poll, by the way. I'm just curious. [Audience reaction] Okay, interesting. Okay, so like a quarter of the room voted. Did you vote?

Kara Swisher: Yeah, of course.

Nayeema Raza: He blocked me, but then I somehow got... didn't block. It doesn't work very well anymore, Twitter. So 57.5% of respondents said step down. I'm sure nobody in this room said that.

Kara Swisher: Yeah. I wanted to say no because I'm like, "Let's keep this going, sir. Let's go."

Nayeema Raza: You're really enjoying watching this high-speed train wreck.

Kara Swisher: I am enjoying it. No. It's sad, too.

Nayeema Raza: No, it's not. It's great.

Kara Swisher: It's great.

Nayeema Raza: He's followed up, by the way, an hour ago saying he will resign as CEO as soon as he finds... he says, "I will resign as CEO as soon as I find someone foolish enough to take the job. And after that I will just run the software and servers team," which is the business he will not be running. The Twitter hardware team... it's a promotion masked as a demotion. So I guess three questions: will he step down, who will he pick, and who should he pick?

Kara Swisher: No. I think he will not in real terms. No, he will not. He's paid too much for this muffler. He's not leaving this thing. And I don't know if I would if I put that much money at stake. I think he may try to do something where he buys the loans so that he fully owns it. He pays half for the loans. The banks are about to put them out on the market, and so either he's going to buy them or Apollo's going to buy them.

Nayeema Raza: A lot more Tesla stock.

Kara Swisher: I know, but if Apollo buys it, he can get money from the Saudis. He can get money. I think if Apollo buys it, he's in a world of trouble because they're another not-nice group of mostly men who are going to beat him senseless. And they don't care that he's Elon Musk. They don't care at all. They don't care to have dinner with him or hang out with him or go to Mars with him or anything. So I think that's one of the things. So no, I don't think he's going to give up power. That means he can't get anyone he should get for that business. I mean, I named a couple. Bret Taylor I thought would be good. He was the chairman of Twitter. He handled that beautifully. Boy, did he do well for the shareholders of Twitter. Public shareholders of Twitter. I mean, Twitter is almost dead. The shareholders made out okay. They made out great. $54.20 is a great price for a company worth $10 a share. So the other person I said was Stewart Butterfield would be interesting. He ran Slack. He understands it. I don't know if he wants to work. And Susan Wojcicki, who has looked around at other jobs before. She's certainly capable. These are people that would understand advertisers, understand large systems. That's who I would pick. Not one of those people would put up with any nonsense from Elon.

Nayeema Raza: Would they take the job? Do you think Susan would take the job?

Kara Swisher: No, because you have to talk to him. No, he'll be running. He'll be reporting to you as your head of software. There's no way any of those highly qualified people would take that job. No way. So it will be his minions. It'll be David Sacks and Jason Calacanis. Casey?

Casey Newton: Yeah, okay. So I think that he will step down as CEO, and I think he's going to name some white male Tesla engineer who was canceled for a blog post in 2008 as the new CEO. And he's going to be like, "This is the only person who doesn't have the woke mind virus and can be..." and no one is ever going to have heard of this person. But while that's all happening, Elon will continue to just meddle behind the scenes and demand that the check marks turn pink and all of that.

Kara Swisher: Oh, I can't wait for that day. Yeah, he's not going anywhere. He's not going anywhere.

Nayeema Raza: And who do you think he should pick? You like the three that Kara mentioned? You can't say yourself, Casey.

Casey Newton: I don't know that I would... I would do great at that. He needs to sell this company. He cannot be involved in this company. It needs to be a new group of investors. And I think there are a lot of people who worked at the old Twitter who would do a perfectly good job with this company. And I think that if it were on its own, you probably could attract someone of the caliber of a Stewart or a Bret Taylor to do something. And that's what I hope is that he just gets out of this company. Or sells it to someone for less or the banks will come in. One of those things will happen.

Kara Swisher: And you could see, oddly enough, I was thinking the other day of Microsoft picking it up. If they don't get the Activision deal, it might be an interesting purchase for them at the right price. Because they have LinkedIn, they've got some other things. And he sort of detoxified it in a weird way by making such a mess of it. Like it's so toxic, it's reached bottom value.

Casey Newton: Right, exactly.

Kara Swisher: Yeah, it would be a good buy. It's a great buy.

Casey Newton: I mean, yes, but like my favorite... and it might never happen, but it could literally any day, is like Apple could just look up porn terms on Twitter and realize that it violates every single one of their terms of service. So we could say it's less toxic, but it's like, well, it depends on what you're looking for.

Kara Swisher: Yeah, Apple could kill it in a second if they wanted to.

Nayeema Raza: Right after he had tweeted that poll, someone had suggested that only Twitter Blue users should be voting in the direct democracy that has become Twitter. Only the landed gentry can participate in this democracy. It's very confusing. Eight dollar landed gentry. The lords and the plebs are everyone switching places. But Elon responded, "Twitter will make that change," suggesting that over time this weird voting... election in 2022. Exactly. But is it becoming more closed? Is he pushing towards a more closed version of Twitter?

Casey Newton: There was a viral tweet yesterday or the day before. Somebody was like, "Being on Twitter right now is like when a kid in elementary school is losing a game, so they just keep changing all the rules." That is what Twitter is right now.

Kara Swisher: Yeah, I have been that elementary school kid. I think it's... he can't hold on. He cannot be controlling it much longer. He will end up owning a toxic version of MySpace at some point.

Casey Newton: That sounds so terrible.

Kara Swisher: I love MySpace. Tom responded to him. Did anybody see this?

Nayeema Raza: What was it?

Kara Swisher: I just remember seeing it. Oh, it was great. Sorry.

Nayeema Raza: Facebook actually... we can go into Facebook because they did a good job responding to the... you can't... they did. Yes, they did. But first I want to ask you. So a year ago, Elon Musk is Time's 2021 Person of the Year. He's on the cover. He's stepped up into... Kara, you've talked about this like this kind of imperfect Steve Jobs vacuum that was last visionary.

Kara Swisher: Yeah, yeah. I wish Steve Jobs had made a vacuum. By the way, that thing would have been great. I was so sad. It would have been the best vacuum ever. See you, Dyson.

Nayeema Raza: But he's facing real problems at Tesla. Is he now the anti-hero and is there any coming back for him?

Kara Swisher: Always. Yeah, I don't know. I sort of veer between, is he Howard Hughes? And I think Howard Hughes made great strides in aviation and ended up in a hotel room with long fingernails and Kleenex tissues naked. You could see that. You could see it. No, but a lot of our great inventors end up in a place of mental instability. And so I think that's a little bit of what you're seeing there. And again, interestingly, the person who has the best seat is Walter Isaacson, who's been with him the whole time. He wrote many biographies, but the Steve Jobs one, and he's been with him for the past year. So that should be some book. It'll be interesting to see what Walter does. Will he write a nice book? Because his last books have been a little nice. I'm guessing not. But ultimately, Elon turns on all journalists. And so I think that that should be interesting. And just the little I've spoken to him about it, there's focus on his early life. His father is particularly terrible. A lot of people have bad parents, but this guy is really quite a piece of work. I think he was quite bullied as a kid. There's going to be a lot about his origins, which, again, it doesn't excuse his misogyny and rudeness and everything else, but it certainly should be interesting to see how that happened.

Nayeema Raza: He was booed out of Chappelle, but is anyone still rooting for him?

Casey Newton: Oh, well, okay. Well, so this is a great question because it lets me tell the story of Paul Graham. Do you all know Paul Graham? [Audience reaction] Okay, so Paul Graham was a founder of Y Combinator, this very famous Silicon Valley incubator, and was one of the sort of Elon cheerleaders. And when Elon first took over, he was tweeting things like, "Wow, a lot of you think you could run a company better than Elon Musk, and y'all are about to find out." Neener, neener, neener. So there are all these people like Paul Graham who watched over the past 10 years as tech workers gained all this power because they were in demand, because they were creating massive value. They use that value to ask for more things, like more diverse workplaces and like being properly compensated. And it is driving the managers crazy. It's driving them crazy because they think, "We're paying you so much and yet you're still unhappy." And so they saw Elon coming in as, "We're going to be able to claw all of that back." So when Elon wiped out 75% of the workforce, oh, they've never been happier than watching that happen. But what happened to Paul Graham? His ass got banned for tweeting a Mastodon link. There could be no funnier outcome than Paul Graham. So you have the Y Combinator Mafia all on Twitter aghast because Elon, one of their gods, has now turned against him.

Kara Swisher: And then that's where he turned it back, which is interesting. That was... let me just tell you, Reed Hastings did it. I had a back and forth with Marc Benioff about it. I sent him all the really anti-gay stuff around Paul Pelosi. I was like, "Really?" And he's like, "Oh," and I'm like, "Really?" And I think they do still go, "Don't bet against him, Kara." And I'm like, "I'm not betting. I'm not in your stupid game." And what I get to say to a lot of them when they do this, and I write to all of them after they do something like that without the context of the other stuff going on, I write and I text them and I go, "You're so poor, all you have is money. So how dare you do this? How dare you continue to do this?" But they love it. They do. They're like, "Oh, stick it to the journalist. Stick it to the employees. We're the geniuses and we're not being treated with the great love we deserve." And so it's this wealthy, and it is mostly white guys, grievance. It's grievance at the world that is undeserved. And it's personified by Paul. And when he got suspended, I'm like, "Yay, good."

Casey Newton: And it's just so beautiful though, because these CEOs, they really think that they could run their companies and have them be just as successful with 25% of the workforce. And they're getting a lesson in reality.

Nayeema Raza: So do you think it's going to change? I mean, there's been this clash between libertarianism and woke, quote, "wokeism" in Silicon Valley. Looking forward, is this story going to change how CEOs look at companies? Are they going to go back to the same hubris? "We could run this with 80% less people."

Kara Swisher: No, I think they're going to get their heads handed to them because their businesses are successful because of the employees. And if they don't like all the lunches and they don't like the kombucha stands... I don't like them much either, but you know, they don't like all this stuff. Guess who built them? They did. And so this is the kids they've raised and this is the kids they have to deal with.

Casey Newton: Say that by the way, the kombucha stand at Facebook is quite nice.

Kara Swisher: I know you do. I know you do. I know you get up onto the roof of Facebook. It's really good on the roof of Facebook. It's a free kombucha. Delicious. They change it every day too.

Nayeema Raza: We're going to move on from Twitter. There's been a lot of critique that there's been too much coverage of Twitter because particularly for the reason you said, journalists, it's our haven, et cetera. What were we not paying attention to because we were sidetracked by Twitter?

Kara Swisher: It's not sidetracked. It's about a lot of things.

Nayeema Raza: What have we not covered? Let's look at what tech journalism has failed to cover because we've been obsessed and caught in the whirlwind that is the high-speed train wreck.

Kara Swisher: I don't think that's the case. I think it's a very important story. I think these people are the richest, most powerful people. He's setting the tone. I don't think it's an unimportant story. I think it's a great story, and it's personally been very profitable to me, so I'm grateful for it. Thank you, Jeff Zuckerberg.

Nayeema Raza: Did Jeff Zucker say that about Trump and live to regret it?

Nayeema Raza: That's true. That's true. But what I would also say is that I think there's a decent chance, like five years from now, we will go back and read what we were writing about Elon in like October, November of this year, and I will say, we should have been writing way more about the AI stuff.

Casey Newton: Yeah. The AI stuff is going to be transformational in a way that might make the Elon drama look pretty small by comparison.

Kara Swisher: Yes, that's absolutely true. Although he was a big funder of OpenAI, which was... All roads lead back to this guy, I'm telling you. We'll take a quick break and we'll be back in a minute.

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Nayeema Raza: One story that has gotten a lot of coverage is crypto.

Casey Newton: Crypto, yeah.

Nayeema Raza: So this is probably the second biggest tech story that's been covered recently. As we are taping this, Sam Bankman-Fried is enjoying, I believe, his last evening in the Bahamas. It's balmy. The weather's balmy. He's enjoying a pina colada. Apparently the president is not that nice.

Kara Swisher: Who would have thought? I thought a president in the Bahamas would have been nicer than most. I don't think I'll ever find myself there, but go ahead. Hopefully not.

Nayeema Raza: He will be extradited back to the United States. Is the fall of FTX an SBF problem or is it a broader crypto problem?

Casey Newton: It's absolutely a crypto problem. Don't listen to the people who are telling you this is not a crypto problem. When you look at the balance sheet of this company, half of it was like nonsense coins. It was a little FTT. It was a little XYZ. Who knows? The reason they were able to grow as big as they were and look as strong as they were is because their balance sheet was full of nonsense crypto. If they had just opened up a bank, like the SBF Limited, whatever, it would never have grown that fast. People would not have poured money into it. So this was a crypto story from start to finish. In a way, it was the perfect story to cap off an absolutely disastrous year for the crypto folks. I'm somebody who really tried to have an open mind with this stuff because I saw how much money and talent was going into it. I just thought statistically, there's no way that all of these people are wrong and what they're building is useless. And at the end of 2022, it basically all looks useless.

Kara Swisher: Yeah, most of it. I think it is a crypto problem. One of the reasons was not lack of regulation, because I think it was just getting started. It was very early. But the way it was a classic fraud scheme, it was sort of like... what's that musical with Zero Mostel? *The Producers*. That's what it felt like. People were bringing money in and he was goosing it with his donations, and his partner was goosing it with Republican donations to hold off just enough. He was trying to virtue signal everybody. It was the perfect fraud. So in that way, it was like lots of things that have happened. It's hard to disappear $8 billion.

Casey Newton: No, it's not.

Kara Swisher: The other part is everybody was sort of like, am I left out of this? One of the things you have to realize about Silicon Valley is if they're not in on the next thing, no matter how rich they are, they have so much FOMO. And so does everybody else. We had covered it super early. But one of the problems is that there are bits and pieces that make a lot of sense. So it's got enough realness to it that with everyone piling in with FOMO and greed, they wanted to be part of it. I may tell this story all the time, but I did an early Bitcoin story when Wences Casares, who was at Zappos, was doing it. I bought 10 Bitcoin and they were $50 each at the time. I put them on a stupid drive and lost it. It's somewhere. We could have been in the Bahamas.

Nayeema Raza: There went Louie's college education.

Kara Swisher: College education, right. It was really interesting at the time because the people who started it actually did make a lot of sense for people in other countries and currency to rethink currency. So that's the problem. It was greed meeting something that really did need to be reformed, meeting someone who was very good at manipulating people's idea of... in the world of craziness, here was this unmade bed guy who seemed rather harmless. He looked like he dressed like a toddler and he seemed simple. We never brought him on stage at Code. We thought about asking him several times.

Nayeema Raza: Why didn't you?

Kara Swisher: It reminded me of Elizabeth Holmes at the time.

Nayeema Raza: That was grifty?

Kara Swisher: I didn't think grifty. I was like, I don't get it. With her, the reason I never had her on stage is because...

Nayeema Raza: You were threatened by her.

Kara Swisher: I was threatened by her? No. Definitely not. It was because she told a lot of little lies that I knew about socially in Silicon Valley. I thought it was weird that she lied about little things. My brother actually called me. He said, "We have a better chance of aliens landing in the United States tomorrow than this thing working." My brother's a doctor. A lot of people who are smart about it were like, this is stupid. I didn't understand it. That's why we didn't. Same thing with Fried. I didn't understand it. I was like, explain it to me like I'm stupid. So I never wanted to sit with him because I thought maybe he's a grifter. Even though he doesn't... and he's giving an awful lot of money to people. That was kind of weird to me, the naming of stadiums, stuff like that. But this is how they suck people in. Some things are very complex. They're hard to understand. And yet they're so appealing. People want to have that snake oil. And you get celebrities like Eva Longoria from *Desperate Housewives* into crypto. Who knew? But those people can never be bought by money. Brian from *The OC* is testifying at the Senate floor. He somehow made his way out of *The OC*.

Nayeema Raza: Do we think there's going to be a sea change in regulation that we see in crypto beyond everything else? Because Gary Gensler is...

Kara Swisher: The United States Congress is taking a pass on this one.

Nayeema Raza: Pass on this one.

Kara Swisher: For five years, they said, "We're really thinking about doing something." They did do something. And now the Republicans are going to take the House. They were going to do a lot of positive stuff for the crypto industry. I'm not going to say what senator, but there were a couple people pushing a couple senators to do something very pro-Sam Bankman-Fried, and they pushed back. A lot of senators did push back because they were like, this feels grifty. When they had anything strong, they were nervous about it. I think a lot of senators were pretty aware of it.

Nayeema Raza: So you think something's going to happen? Or you think nothing?

Kara Swisher: No, I don't think anything's going to happen.

Nayeema Raza: Nothing's going to happen.

Kara Swisher: No, nothing's going to happen.

Nayeema Raza: Do you think there's going to be multiple streaming documentaries? Do you think any of those will actually be entertaining to watch? Like, can you get a good eight or ten episodes out of this?

Casey Newton: I gotta say, my favorite thing this year was *The Dropout*. I thought it was so good. She was amazing. And by the way, she does a good Elizabeth Holmes. But blood is easier to understand than crypto. I think that's what you're getting at. The Silk Road documentaries were pretty... obviously if you get Jonah Hill and you put him in the Bahamas in a sexy house, then I'm like, okay, you may have me for four episodes. But then I'm like, I don't know, it was a crypto exchange.

Kara Swisher: You know what's gonna happen? There's gonna be a series called *The Unmade Bed* on Hulu in 2027. It's very disturbing. Can I just point out, he did interviews with literally everybody.

Nayeema Raza: Except for you.

Kara Swisher: Who did he turn down? Did he really turn you down?

Nayeema Raza: Yes, all the nice men he gave interviews to. He gave one or two women, but he turned me down.

Kara Swisher: We can do the prison interview. That's what we're always going to do for podcasts. I was like, comb your fucking hair, you grifter.

Nayeema Raza: It's funny, if you were asked a year ago who was the anti-hero of tech, you might have said Mark Zuckerberg. Now it's a runoff between Elon or Sam Bankman-Fried, maybe. Where is Mark Zuckerberg these days?

Casey Newton: I think he's probably delighted to be off most people's radar.

Kara Swisher: Yeah, dancing on the grave.

Casey Newton: They had this really weird year where he announced last year they were going to do this pivot to the metaverse, and I think it caught on beyond their wildest imagination. Facebook has tried many marketing campaigns over the years, and most people just ignore them. This was like, for whatever reason, people really did spend a year talking about the metaverse.

Nayeema Raza: But not positively.

Casey Newton: Yes. Yes. But also I was getting emails that are like, "Here are the top 15 firms that are building the metaverse of tomorrow." So many outside people got in on it. They got the topic out there.

Kara Swisher: Yeah, they really got the topic out there.

Casey Newton: And then they have a technological problem. The technology is not ready. They have to invent and miniaturize a bunch of things, and they're not there yet. It might take five years, it might take ten. But that's kind of what they have their heads down doing. They had a really hard year at Meta. They lost over half the stock's value. But in a weird way, this has been the best year for Meta's brand since 2015. So I think they're probably feeling pretty good about that.

Kara Swisher: They are. Facebook recently tweeted... Can I tell you how I know they're feeling good? Guess who invited Kara Swisher to lunch?

Nayeema Raza: Oh.

Kara Swisher: Not Mark. Not Mark. He's too scared. But Facebook is suddenly like, "Hey girl, want to talk?" And I'm like, "What? Don't you hate me?" They're like, "No. We love what you're doing." And you will go to lunch, Kara. I went to lunch. Are you kidding? We like text all the time now, me and the Facebook people. It's great. That's how bad it is.

Nayeema Raza: Still not coming for an interview.

Kara Swisher: They will. Facebook recently tweeted an emoji. It's called the face with peeking eye emoji. The peekaboo. Let me just say, Facebook's still got a lot of problems.

Nayeema Raza: Oh, name one.

Kara Swisher: Name 15. I think their advertising business is super challenged in lots of different ways with competitors and regulatory issues. It just isn't working. They've got a lot of problems in their main business all over the place. I think they are moving into the sort of part where they're not getting the best people. I don't think the metaverse is catching on. I think there's a sort of resting investing culture there a little bit more than it should be. Mark's not excited them with his new thing. I think their executives continue to be suck-ups a little bit to Mark. I think he needs a more challenging team. And they've got a lot of challenges. And Apple, hello. Apple has just handed them their lunch. And they haven't been able to compete in hardware yet. Oculus is very nice, but a small business.

Nayeema Raza: But Kirsten Sinema is selling all of her stuff on Facebook Marketplace.

Casey Newton: Yes. I don't know if you read that story, but there are bright spots. There's still Instagram and TikTok.

Kara Swisher: TikTok, that's the biggest one.

Casey Newton: I'm sorry, sure, yes.

Kara Swisher: TikTok. The only thing that they have going for them is they are able to lobby Congress about TikTok very effectively, I think. And you shared a story with us, which is they've invested heavily in Reels to take out TikTok, and the Reels have cost them a lot in ad sales because they can't monetize.

Casey Newton: Yeah. 500 million. I mean, I think there's a chance that Reels is doing better for them than you think, if only because it has stopped TikTok from growing quite as fast as it did. I think Reels and YouTube have sort of neutralized some of that TikTok growth. And by the way, if you open up TikTok, you'll see that it's starting to look a lot more like Facebook. There's a tab for your friends now. So all these social apps sort of wind up morphing into each other over time.

Kara Swisher: My thing, though, is just that no culture is made on Reels. Nothing is happening on Reels that feels like it has a pulse. Whereas you open up TikTok, you're just like, okay, yeah, clearly this is what the 17-year-olds care about. Can I ask a question? I spent an hour and a half watching everything with my son the other night. He's watching a lot of Reddit and YouTube because it's more real. He said TikTok's too polished and he really likes the mess that YouTube is in that regard. He kind of likes it even if it's bad and it never listens to what he says. He says no and then he gets more of it, and he kind of likes that. He also loves Reddit.

Casey Newton: I also had a conversation with Lou yesterday and he brought up Reddit. It struck me because I thought it's interesting that as we're talking about this very unsettled social media landscape that we live in now, why aren't more people talking about Reddit as the natural inheritor to some portion of the Twitter audience? I think Reddit has a really big opportunity and I hope they seize on it because I think they've figured out a lot of stuff and it doesn't get talked about very much.

Kara Swisher: Yep, I would agree. I was surprised. They've made a lot of strides in content moderation, etc., that now you could build upon.

Nayeema Raza: Kara, you gave a compliment to Facebook this year.

Kara Swisher: What did I say?

Nayeema Raza: Just how I knew they took you to lunch.

Kara Swisher: What? No, I'm kidding.

Nayeema Raza: You said that he did a decent job of the layoffs.

Kara Swisher: I thought he did a great job. Look, they have to do layoffs. A lot of these companies were overstuffed with people. I thought he handled it. He took responsibility. He dealt with the visa issues. He didn't talk down to people. He said, "I'm laying you off. It's my responsibility. It's on me." He gave them four months. He gave them a lot of severance. I thought two people handled it well. John Collison from Stripe handled it well. And previous to that, Brian Chesky handled it pretty well. It's not a great thing to lay people off, but if you have to, this is how you do it. I thought he did a good job. Mark is a nice person. He's a nice person. He's not an asshole.

Nayeema Raza: Those are big words for you.

Kara Swisher: I know. He's not an asshole.

Casey Newton: There's an interesting empirical illustration of that. You look at how many people worked with him for 10 plus years, and then look at how many people worked for Elon Musk for 10 plus years. It's like zero people.

Kara Swisher: Yeah.

Nayeema Raza: Earlier we were talking about how these CEOs would not possibly get away with thinking that employees don't give them anything because they can't survive without them. But there are real economic headwinds coming. So are the employees going to lose out in this battle between employer and employee?

Kara Swisher: Eventually no, because the economy will rebound. Every day the value walks out of the building. So I think they have to figure out how to manage these workforces in a different way, whether they're remote or not remote. I know Marc Benioff was just like, "Come back to Salesforce Tower. We're going to do a sacrifice. We're having another luau on the roof." Casey, what do you think?

Casey Newton: I think this is a scary moment for the tech workforce. Their jobs are at risk. Some of the things that they've fought for are at risk. I think we're seeing a lot more collective action in the tech industry than we're used to seeing. I think that's a good thing. One of my favorite stats you can look at, it's not always public, but sometimes you can work it out, is the revenue generated per employee. The people who were working at YouTube and Facebook and even Twitter, they're making so much money for these people. They're getting a tiny fraction of it. So close that gap.

Kara Swisher: Employers would say, "Oh, that's revenue generated per software or whatever." They would look at that. I've been through three of these. They always were like, "Finally, we're getting control from the employees." The first one in 2001 or 2002, and then the one in 2008. They never do. The employees are fully the most important element.

Nayeema Raza: Does working remotely curb the power of employees to organize and have relationships and build together?

Kara Swisher: I think whole movements are happening on Signal right now. I think the group chats are popping. Things are happening. I think they're still the most important part of any tech company, the employees. I do. They are. We'll be back in a minute to talk about how ChatGPT and AI will be taking your job.

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Nayeema Raza: So let's end by talking about climate change and also another big area, AI. These are big investments, big leapfrog tech investments that we're seeing. How do you know when you're seeing movement in these new industries, when to be skeptical because it feels grifty or too soon or too much, and when to be excited and optimistic about it?

Casey Newton: Well, you talk about chat... I mean, it's inevitable. It seems inevitable. I love that question. For me, the answer is when I can touch it. For the last three years, I go to these Google keynotes and Sundar gets up there and he's just like, "This language model we've had, you've never seen a language model like this. You won't believe the things it can do. Just look at this recording of a thing that it did. Amazing." And I'm like, "Yeah, Sundar, that looks great, but when can I touch it?" This year, OpenAI comes out. It's like, you can touch it now. You can do things with it. It really does the things. So I am skeptical about it, but getting to that point... earlier we were saying about trying to understand what was Theranos, what was FTX. We never really got it. You use ChatGPT, you get it. So that to me is the story of 2022.

Nayeema Raza: Explain what ChatGPT is. Has everyone here used ChatGPT? Is it writing your papers and talking to your girlfriends? Clap if ChatGPT is doing your job. Okay, there are two people in this room of a couple hundred. You should try it.

Casey Newton: It's a large language model. You use it, it's not a search engine, but you can use it for similar things. You can use it to write song lyrics. You can use it to tell you how to put together an outfit. Sort of like anything that a blog might tell you how to do. Because ChatGPT has ingested the entire internet, it can sort of tell you what to do. It's amazing the things it can do. And it's not even the state-of-the-art technology. OpenAI, which makes it, has a new version of ChatGPT coming next year. And oh, boy. This is all we're going to be talking about in 2023.

Kara Swisher: What it's able to do is also negotiate down your Verizon bill or an unnecessary bill. So Don't Pay made a deal with ChatGPT to use it. It'll be bots talking to the customer service bots. And you won't have to be involved until you're working for them.

Casey Newton: I can't wait till we can turn that on on Tinder, by the way. That's going to be great.

Kara Swisher: It's already happening. People are using ChatGPT.

Nayeema Raza: And when you say people, Kara, are those people in the room with us right now?

Casey Newton: Don't even think I can organize the scale of dates I have, Kara.

Nayeema Raza: Kara, should Google be worried because Microsoft has invested in OpenAI?

Kara Swisher: No, I think it's very competitive. That's what's exciting about it. Google's way ahead. They've got DeepMind. They've got all kinds of things. But you've got really interesting stuff probably from Facebook. There's going to be stuff from Microsoft, Apple, Amazon.

Casey Newton: They have LaMDA, which hasn't come out.

Kara Swisher: Should Google be worried? They'll figure it out. I'm not worried about that. But can you imagine a more hilarious story, besides everything we already talked about with Twitter, than the revenge of Bing?

Casey Newton: I know. Bing is like... I'm telling you, seriously, you should buy that website. I'm just picturing school children being like, "Why is the default search engine set to Google? We're a Bing household."

Kara Swisher: I'm telling you, I think this is Bing's moment. I have been waiting for it for 20 years. Do you remember when he debuted Bing at Code?

Nayeema Raza: Were you there?

Kara Swisher: No, I wasn't. When was this? Steve Ballmer came to debut two things. The giant Surface table. We called it the big ass table. Nobody ever bought one. Not one of them. It was a big table. It was stupid. It was a big computer, essentially. And then he debuted Bing at Code the first time. He'd get on stage and we'd go, "Do you have something to say?" He goes, "Bing!" And then he kept going, "Bing, Bing, Bing!" And we were like, "Oh, God."

Casey Newton: I think no one created more memes per sentence than Steve Ballmer until Jennifer Coolidge.

Kara Swisher: Oh, yes. They kind of look alike. I miss him. I'll say it. I miss him.

Nayeema Raza: We'll close out here. I tried to outsource my job today. I went to ChatGPT after it sent all my dating app messages. And I said, "What are the questions that we should ask Kara Swisher and Casey Newton?" The questions that got back were pretty lackluster. I just want to set your expectations. But two out of the five questions it sent back were about the ethics of tech and what tech could do, which I thought was kind of interesting. I thought it would be about how do you deal with the sexual tension between the two.

Kara Swisher: First of all, move out, Casey. It's negative sexual tension.

Nayeema Raza: So this is what ChatGPT asked: "As an AI, I do not have personal preferences or the ability to interact with individuals in the same way a human would. Therefore, I am unable to suggest a specific question to ask Kara Swisher or Casey Newton. However, here are a few general suggestions for questions that might be relevant to her work and expertise."

Kara Swisher: Yes, it merged her pronouns. I'm sorry.

Nayeema Raza: "How do you balance the need for innovation with the need to address social and ethical concerns surrounding technology?"

Kara Swisher: Well, that's the question, isn't it? That's the only question. We don't have an answer for that. I mean, really. Think about it from the start. When it comes to the content moderation stuff, you talk to the people who started doing this stuff at Snapchat, YouTube. It's all the same. It's a bunch of men in a room. The first bad thing happens on the platform and it's, "Oh no, we need a policy for that." And then it just sort of grows from there. More recently, platforms have started with the idea of, "Well, we know these things are gonna hurt people. How can we not hurt people?" That's what to do. The industry is actually established enough that particularly if you're running a social platform, we have best practices for reducing harm. So start there. When I first saw Facebook Live, I asked all kinds of questions. I was like, "What if someone murders someone? What if someone bullies someone? What if someone..." And they looked at me like... one of them literally said, "You're a bummer." And I'm like, the fucking human race is a bummer. Are you kidding me with the things they could do with it? One of the things when I go see groups of young technologists, I always say, "Imagine your product is an episode of *Black Mirror*. What episode of *Black Mirror*? And then don't fucking make it that way. Make it in a way that..." They talk about cancel culture. It's consequence. It's understanding. And they have had no ability to understand consequence for the longest time. I think that has to do with a group of people who've never felt unsafe a day in their lives. They don't think about safety. They don't think about color. They don't think about women. And that's not good for them as people, even if they're wildly creative. It's not good for us. It's not good for anybody. So that's my biggest problem. And OpenAI has its own problems, potentially. This can be used to put up websites and misinformation at a level we've never seen before. It will be completely hard, like deepfakes, etc., to deduce what's real, what's human, what's auto-generated. So it's scary.

Nayeema Raza: To conclude, I did ask the chatbot who is the best sourced reporter in tech today. The response says, "There are many talented and well-respected..."

Kara Swisher: I have a very nice voice for her.

Nayeema Raza: Yeah, you do. I feel like I'm talking to Data from *Star Trek*.

Kara Swisher: They can hire me to be like the Scarlett Johansson in her.

Nayeema Raza: "There are many talented and well-respected reporters in the tech industry who are known for their strong sources and thorough reporting. Some of the reporters who are frequently cited as being amongst the best in the field include Kara Swisher and Casey Newton." And they named also Ben Thompson, John Gruber. How does that feel to be validated by AI?

Kara Swisher: That was funded in part by Elon Musk.

Casey Newton: Well, again, this is why I'm so bullish on Bing. I think Bing will be the number one search result with all your Bing advertisements.

Kara Swisher: Yeah, I'm very thrilled. Thank you, Elon, so much for being right about one thing in the past couple of months. Thank you very much. Casey, thank you. Thank you to everyone here.

Casey Newton: Love that Casey and love Manny's. I'd never been there before.

Kara Swisher: Yeah, it was a great crowd, wasn't it?

Nayeema Raza: Was I surprised by how famous you are, Kara? Is that what you're going to ask me?

Kara Swisher: No, besides that, that's obvious for everyone. As I keep pointing out to you and you keep ignoring. But it just is a really lovely space. It's a great addition to the neighborhood, which the Mission goes up and down. I lived nearby in Potrero Hill for a couple of years.

Nayeema Raza: You did?

Kara Swisher: Oh, and?

Nayeema Raza: I didn't know about me.

Kara Swisher: Did you feel good getting back?

Nayeema Raza: Well, it was probably after you left.

Kara Swisher: Yeah, I left in 2016. I would go in search of culture in San Francisco. I would go for miles searching for culture and find myself in the East Bay.

Casey Newton: The crowd did not want to hear any of it from anybody. We love San Francisco.

Kara Swisher: I like New York, but San Francisco is fine. Fine. And I have to say, the *New York Times* said it was a ghost town. It didn't feel like a ghost town. It does not. I know you're going to be Mayor of Kara one day.

Nayeema Raza: I know. They requested it and I think I shall.

Kara Swisher: We're going to have to delete these tapes when I'm your chief of staff there.

Nayeema Raza: That's all right. It doesn't matter. It's San Francisco. I could marry a goat. They'd be fine with it.

Kara Swisher: Anyway. Is talking to me the equivalent of marrying a goat?

Kara Swisher: Excellent. Okay. No, I'm just saying a real goat. A real goat.

Nayeema Raza: Oh, an actual goat. Not the greatest of all time. I was confused. I thought you were paying me a compliment.

Kara Swisher: No. Alas, no. No, not at all. Not even slightly.

Nayeema Raza: Okay. So, by the way, after our conversation yesterday, I stumbled across a quote, which is relevant, and I wonder if you can place it. The quote is, "It does know a lot, but the danger is that it is confident and wrong a significant fraction of the time." Who or what is it?

Kara Swisher: I don't know. Is it about ChatGPT?

Nayeema Raza: Yes, it's ChatGPT. And it's Sam Altman talking about ChatGPT. He's still working it through, but everyone's excited about it.

Kara Swisher: I thought you could say the same thing about Elon. It does know a lot, but the danger is that it is confident and wrong a significant fraction of the time. You know how I have a phrase like that? It's an old time phrase, which is "frequently wrong, but never in doubt." And who does it apply to?

Nayeema Raza: Everybody.

Kara Swisher: Except for?

Nayeema Raza: Kara Swisher.

Kara Swisher: Okay. Happy New Year. Want to read us out on that?

Nayeema Raza: Yes. Yes. Go famous lady. Read us out with the credit.

Kara Swisher: I shall. I shall. Today's show was produced by ChatGPT. Just kidding. It was made by Nayeema Raza, Blake Nishik, Christian Castor-Rosell, and Rafaela Seward. Special thanks to Haley Milliken, Fred Runner, and the team at Manny's. And Manny himself. What a guy. Our engineers are Fernando Arruda and Rick Kwan. Our theme music is by Trackademics. If you're already following the show, you get to be the head of software and servers. If not, it's a foolish CEO job for you. Go wherever you listen to podcasts, search for *On with Kara Swisher* and hit follow. And also vote for me for CEO of Twitter. Thanks for listening to *On with Kara Swisher* from New York Magazine, the Vox Media Podcast Network and us. We'll be back on Monday with more.