Market Milestone, Alito Flag Fail, and OpenAI Drama

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: How was your weekend, Scott?

Scott Galloway: I did something I haven't done in probably 30 years, Kara. I saw two movies in the same weekend, in theaters.

Kara Swisher: In theaters? Which ones?

Scott Galloway: I saw the premiere of *Mad Max: Furiosa*.

Kara Swisher: And?

Scott Galloway: A friend of mine worked in movies, Warner Brothers, so I went to the premiere. They had all the actors on stage. They had Chris Hemsworth and everyone else. Next to Chris Hemsworth, everyone looks like a defect. Everyone looks like they were produced in a factory of lesser people.

Kara Swisher: Yeah, he's a handsome man.

Scott Galloway: It was so much action and so much visual stimulation. You feel like a piece of beaten flank steak by the time you leave.

Kara Swisher: Yeah, I'm not a fan of the *Mad Max* genre. I try not to watch those. I just am like, oh, that sounds like a terrible future. All those ones, *Waterworld*, remember all those?

Scott Galloway: Oh, *Waterworld*'s not bad. *Thunderdome*'s amazing.

Kara Swisher: Yeah, I know it is, but I just never felt good after watching them. *Fury Road*, Tom Hardy. You didn't like that?

Scott Galloway: I don't like any of those where it's the end times and everyone's dressed up looking like a goth and shooting each other with modified weapons. It's just such a dystopia. It's the most dystopian view of all those dystopian things. The only one I get into is *Terminator*.

Kara Swisher: And I don't love the future stuff, actually, which is interesting.

Scott Galloway: Yeah, Mel Gibson. Was it good, though?

Kara Swisher: It did. It didn't. You know, I think it kind of jumped the shark. I'm still processing it, but I don't think it held together. It's with the woman from *Queen's Gambit*.

Scott Galloway: Yeah. I forgot her name. She's very compelling.

Kara Swisher: Yeah. And then I saw *Fall Guy* with Ryan Gosling.

Scott Galloway: How was that?

Kara Swisher: Didn't do well.

Scott Galloway: Didn't do well. Interesting. Box office is not good.

Kara Swisher: Is that right?

Scott Galloway: Yeah. It reminded me more of a TV movie of the week. It just wasn't that. It was okay. They're both really nice to look at.

Kara Swisher: Right. And the thing I liked about it was it was a bit of an ode or a tribute to stunt people.

Scott Galloway: Yeah, it's from the Lee Majors show, *The Fall Guy*.

Kara Swisher: Yeah, it's from the TV show.

Scott Galloway: That's why it reminds you of a TV show.

Kara Swisher: Oh, I didn't know that.

Scott Galloway: Because that's where it's from. That was a TV show in the 70s, 80s, whatever.

Kara Swisher: What did you do? I went to a WNBA game, Liberty vs. Fever. I got to see Caitlin Clark. My friend has floor seats, so I got to sit on the floor.

Scott Galloway: How many people were in the stadium? I'm curious.

Kara Swisher: It was packed. Absolutely packed to the rafters.

Scott Galloway: Where did they play? Did they play at MSG?

Kara Swisher: At the Barclays Center.

Scott Galloway: At the Barclays. Barclays Center. It's packed to the rafters. And the stadium was sold out?

Kara Swisher: Sold out.

Scott Galloway: Wow.

Kara Swisher: Because it was Caitlin Clark that helped it, I think. But Liberty's super popular in New York. I've learned all sorts of things from the lesbians of my friends who are big basketball fans. There's super teams, and the Liberty is one of them. And there's one in Vegas, the Aces. But Caitlin Clark was something else, I have to say. She really is such a good player. She's phenomenal. It was really fun to watch. I don't really care for sports, but it was fun nonetheless. There were lots of little girls in the Barclays Center sitting all over the place, trying to get their thing. It was nice. It was really nice. And it would be really great if—the *New York Times* had a very good business piece about the financial challenges and yet all the things they're trying to do to get it. If it gets popular, it gets a better TV deal, you never know. People catch on. And they've got some stars now. If there was ever a pivotal moment, quote unquote, it's now.

Scott Galloway: Yes. Because she's got—and the fact that they sold out the Barclays Center is very impressive.

Kara Swisher: Yeah. But you're right. It all comes down to TV.

Scott Galloway: TV. And that's the thing. They've had a shitty TV deal, and we'll see if it works. If they have more stars like that, all these other stars like Brittney Griner don't have to go to Europe to do their stuff. And you create an ecosystem.

Kara Swisher: I think it was interesting. And then at night I went to a play called *Still* with Tim Daly, who loves Pivot. And it was great. It was about a man and a woman that reunite after a couple decades. They've been together and they have political differences. And it was really good. It was a little theater.

Scott Galloway: Let me think, let me guess. For a twist, he's a Democrat and she's a Republican?

Kara Swisher: No, no. He was running for office. It was great. It was actually really good. It should be seen. It was really well done. It's a short 75-minute play, and it was good. And I got to meet his lovely wife, Taya Leone, who was hysterically funny.

Scott Galloway: Yeah, she's very talented.

Kara Swisher: Yeah, but she's also funny. She's really funny. I was really surprised. It was fun. It was a good weekend in New York, and then we went to see my mother for late Mother's Day.

Scott Galloway: And?

Kara Swisher: It was fine. It was great. I brought Lou. He got back from Argentina. So I picked him up early Saturday morning. So I got to hang with him. So it was good. It was a very family, fun weekend. It was good. Lucky was good. We had a great dinner. But we've got a lot to do today, including the Dow's latest milestone and OpenAI's latest drama. Man, there's so much going on over there. That's like the most dramatic of AI companies. But first, Mickey and Minnie are unionizing. Disneyland character and parade performers voted to unionize with the Actors' Equity Association. The group of 7,900 amusement park workers focused on safety, scheduling, and demanding a living wage. The vote passed with almost 79% majority. I don't think anyone—that's a pretty high number. Most other Disney Resort staff are already unionized. This is interesting because I have a bunch of friends who are character and parade performers, and they've been disgruntled. They have said disgruntled things.

Scott Galloway: How did that happen? Just pause right there. You have a bunch of friends who are character actors?

Kara Swisher: I know. It's weird. I know a lot of them because they're kids of friends of mine and they work there. There's this whole system of princesses and who gets to be a princess and behind the scenes stuff. There's all kinds of things of how they're paid and how they're picked and how they're managed. I've heard a lot of griping from Disney and the ones that are in the outfits that are hot.

Scott Galloway: Oh, yeah.

Kara Swisher: I was like, wow, that sounds like a shitty job. Even though you kind of want to be the top, you want to be like Elsa or Anna or Ariel or something like that. And at the same time, my daughter just went to an event where there were Disney princesses signing cards and was thrilled with it. So I don't know. What do you think?

Scott Galloway: They should be unionized. In general, with corporate profits touching record highs every year, there's going to be a revolt on several different levels. Whether it's young people getting upset at a variety of things or people trying to unionize. The question I would have is, okay, so they unionized, but does that give them any real power? Is it difficult to say, all right, will it result in a collective bargaining agreement, or will it result in them just finding other people to put on the goofy costume?

Kara Swisher: That's right, because everybody wants to do that job, right?

Scott Galloway: It's sort of the way Hollywood used to be. But Hollywood then had a union, right? So they've got the control, Disney does, because lots of people want to do these jobs because it's cool dressing up like a princess. But there's a difference because if Meryl Streep and Julia Louis-Dreyfus and Jerry Seinfeld all join a union and they all agree to not show up if they don't collectively bargain with the union, those people are difficult to find substitutes for. I don't see how you enforce bargaining power when they're like, well, we're going to find someone else at $30 an hour to be Cinderella. I would just be very curious if—the media gives all these constant head fakes about all of these places unionizing and they never do any follow-up work. BMW didn't. Mercedes didn't work, right?

Kara Swisher: Well, no, the one I think is the right example is something like two or three hundred Starbucks locations have unionized. And it hasn't resulted in, my understanding is, one additional dollar in terms of a collective bargaining agreement.

Scott Galloway: So power is what you're talking about.

Kara Swisher: Power.

Scott Galloway: Well, what's the point of unionizing if it doesn't result in greater benefits or greater wages? So more power to them. There needs to be a transfer of wealth back from capital to labor. That's the bottom line. And the question is, what's the most efficient, equitable way of getting there? Or what's the most powerful way of getting there? I think Elsa on the strike line is kind of good. These people have a lot of—it's not a good look for Disney to be fighting with its princesses essentially. And again, someone who was in one of those outfits, maybe a Mickey outfit, was like, you had to work this many hours, it was not controlled, they were hot, the parks were hot.

Kara Swisher: You sort of are like, well, that seems unfair. Who gets to decide? I know that I get it, it's a job, but still, there should be some rules that are enforced in some fashion by a group of people who are working, right? And you shouldn't go for the lowest common denominator person who'll put up with it.

Scott Galloway: No joke, I was a Disney character in a costume.

Kara Swisher: What? Oh, no.

Scott Galloway: I was the Bruin Bear at UCLA my junior year in college.

Kara Swisher: And?

Scott Galloway: Well, that's a college thing, right?

Kara Swisher: Yeah.

Scott Galloway: We did that for the grasshoppers of his high school. He sweat a lot.

Kara Swisher: Did you like it?

Scott Galloway: Not really. I mean, I tried out for the football team. That's how I was hoping to travel with the football team, and that didn't work out.

Kara Swisher: Oh, no.

Scott Galloway: So I got to travel with the football team putting on a costume that was 170 degrees and having kids hit me in the head. That was fine. I had a college experience. We used to get really high in the fraternity, and everyone would try on the costume. Anyway, we'll see what happens. I don't think it's a good look for Disney to be warring with its princesses. Those people should have some strictures of how they work. I think that's fair.

Kara Swisher: I want to see Nelson Peltz on the union line with a princess.

Scott Galloway: I don't care. He's not going to be.

Kara Swisher: Are you kidding? He's like, get back to work. He's a get back to work kind of guy. Stop griping. You're at Disney. Anyway, let's go on to something else. Speaking of billionaires like Nelson Peltz, if he is one, I'm not sure if he is. Treasury Secretary Janet Yellen says that the U.S. opposes a global wealth tax on billionaires. The opposition comes as Brazil called on the G20 to come up with a way to tax the wealthy who can move their wealth to low-tax jurisdictions. Brazil, along with France, Spain, Germany, and South Africa, have discussed a plan to require billionaires to pay taxes worth 2% of their overall wealth every year. That's a lot of money. Yellen said that the U.S. will not support talks on this proposal. The U.S. taxes citizens on worldwide income, unlike most other countries, which is taxed based on a person's residence. This is a very—I've had lots of discussions with Mark Cuban and many others about it. And it's hard to decide who's correct, even though I kind of think the rich don't get taxed. And I do think the rich don't get taxed enough. But it's much more complex in how to do it because they can escape to all kinds of places because they're so rich.

Scott Galloway: Yeah, I think in theory it makes sense. But practically, when you start talking about it, first off, how do you value someone's assets? And does it end up resulting in these non-economic or unnatural acts? The question is, what's the point if you don't end up collecting the revenue? It ends up being fraught with all sorts of workarounds and not getting to the point. What I think was a more effective way to tax the wealthy is an alternative minimum tax because the misdirect is where focus on—

Kara Swisher: Explain what that is for people who don't know.

Scott Galloway: The 25 wealthiest taxpayers in America paid somewhere between—and they don't know this because the IRS can't accurately audit them—paid somewhere between an effective tax rate of 8% and 16%. The myth is that rich people don't pay taxes. That's not true. Rich people pay a lot of taxes. So I'll use you as an example. You're a super earner. You make a lot of money, but it's all reported income. Super owners that own a lot of stock or own a lot of real estate, they're super wealthy. Art. Most of it is not reportable or doesn't need to be reported. It can grow tax deferred. Whereas a super earner, you get clipped 40% or probably in Washington, D.C., 47% each year. But as an owner of stocks, it can grow tax deferred. In addition, if you put it into a trust and borrow against it, it never gets taxed.

Kara Swisher: Right. That's the Peter Thiel thing. He did that, right? He did one of those.

Scott Galloway: And I've been transparent about this. My effective tax rate for the last 10 years has been 17%. And that's probably lower than the majority of the people I work with. So what would be a more effective means of getting wealthy people—not earners, but super owners—to pay their fair share would be an alternative minimum tax. That would be to say, we're not going to look at tax rates, it's what is the income that is taxed. So if you buy a plane, you get to write off 100% of it in the first year. There's all sorts of ways to lower your taxable income when you're wealthy. You can put $10 million aside into a donor advisory fund and say, I'm going to give this away at some point, and you get to lower your reported income that year. So the key would be you have one number at the end of the year. And if you make over a certain amount of money, you have to at least pay 20%. So rather than trying to revise the tax code, rather than this argument about wealth tax, which would not work, you pass an alternative minimum tax as we did with corporations. Also do the same thing for corporations. Corporate taxes haven't been this low since 1939. They used to be 2.5% of GDP. This year, they're 1% of GDP. We need an alternative minimum tax for super owners and corporations. And then you know what you could probably do, Kara? You could probably lower the taxes on super earners like yourself. Because here's the myth, where the argument falls down and you can't get any traction, is that the most innovative and important people in our society are super earners. Quite frankly, they work hard—the doctors, the lawyers, the entrepreneurs. Their taxes should be lowered. The super earners and the young who have to pay current income on their earned income and don't get tax write-offs because they rent, they don't buy. Who you need to go after is the super owners and the corporations. And the way you would do that is with an alternative minimum tax for corporations and super owners, the super wealthy.

Kara Swisher: Yeah, I just think when you say tax, people are sort of for it, but how to do it has really been the argument. And I think that's the argument that Mark was making, said they'll go elsewhere. You end up not wanting them. One of their arguments is they won't invest anymore if they have to, which I think is not—that one I'm not going with him. But the idea, I think it pushes them down. But you're right, it's the people in the middle that get screwed, who make a lot of money.

Scott Galloway: Upper middle.

Kara Swisher: Upper middle, yeah. The super earner.

Scott Galloway: Yeah. Look at what happened. Whenever I see my taxes, I'm like, are you freaking kidding me with this?

Kara Swisher: That's right.

Scott Galloway: And so it doesn't get—and those people are super important for innovation. You want to keep those people motivated. And quite frankly, they're paying too much. The bottom half of income earners pay almost nothing in federal income tax. Where they get screwed is in excise taxes, DMV taxes, property taxes. As a matter of fact, for the middle class, everyone talks about Florida being a low-tax state. Florida's not for middle-income earners because of all the other taxes, consumption taxes that they have to pay. But you could—people would be shocked how low the tax rates would and could be if you taxed everyone on their total income, including corporations, and the mega, mega wealthy. There's some reports saying that the wealthiest people, the 25 wealthiest people in America, paid single-digit tax rates. And of course, Trump bragged about that, right? Like, I got out of it. You don't want to have that attitude toward the government. I got out of it. I beat them. And that's the sort of attitude he has. And I think he represents a lot of people. But more broadly, there needs to be a really robust discussion around this. Because if America were a household, it makes $52,000 a year. It collects about $5.2 trillion in revenues through taxes. And it spends $73,000 or $74,000 a year. It's got about $2.2 trillion a year it's racking up in debt. All right? That is not a responsible household. And it owes $350,000—$35 trillion in debt. And because we've never missed a payment or a bill, we keep getting credit card offers and we keep accepting them so we can pretend to have the illusion of scarcity. And we're going to peace out when we die, but our kids are going to inherit our credit card bill. There needs to be a serious conversation around tax rates, around spending. But right now, it is so incredibly irresponsible the way we approach taxation and spending.

Kara Swisher: Yep. Well, people don't like them since the beginning of our country. They were pushing against all kinds of taxes. Anyways, I think it's in the DNA of our country. Speaking of DNA of our country, Supreme Court Justice Samuel Alito said he had no involvement in the inverted American flag that was flown, quote, briefly at his house in January 2021. The photo of the inverted flag, a symbol for Trump supporters who believe there was a stolen election, was published in *The New York Times* last week by Jody Cantor, who's a friend of mine, a fantastic reporter. After facing criticism, Alito blamed his wife, saying she'd placed the flags in response to anti-Trump signs from neighbors. I have a little more detail on this. I've heard a number of Democratic lawmakers now calling for Alito to recuse himself from cases involving the 2020 presidential election and January 6th. I think basically Martha Ann Alito said, hold my beer, or Ginny Thomas, I guess. From what I understand, and there was a little more in the *Times* and the *Washington Post*, was that there was a beef on the cul-de-sac. Someone had left a sign, a "Fuck Trump" sign, I think that's what it said, had been at a rally, left it there. It bothered Martha Ann. She came over, had words with—it was a daughter of someone who lived there. And the daughter called her the C-word. And then she marched back to her house and put that up. I don't know why that was her response to it. That's kind of a big response. That he didn't know it is—I think he's throwing his wife under the bus. The whole thing is really icky, whatever it is. And obviously his wife overreacted if it was her, and then him blaming her. The whole thing just makes the Supreme Court brand look even worse than ever. I don't know. What do you think?

Scott Galloway: That's exactly right. First off, the lesson here is whenever you really fuck up, just go to the blame the wife strategy. Does that story ring true to you?

Kara Swisher: No, I think there's other things I've heard about them and that block. I think it's just this beef on the block. And I called it the cunt de sac.

Scott Galloway: It's a cool—so it just was—

Kara Swisher: I know, thank you.

Scott Galloway: It feels like—I can't believe he blamed his wife and didn't, or wasn't aware of her proclivities, right? Like if your wife did something like that, you think they wouldn't tell you? Like, hey, honey, oh, did you find out? They're a household. When someone takes your name and you take theirs, you have collective responsibility. And one of those collective responsibilities is when you're part of the most—what used to be one of the most respected institutions in the world—you don't hang the fucking American flag upside down. And they're both guilty. And what you said is exactly right. There are few institutions whose brand has fallen further faster than the Supreme Court. It was arguably the most trusted institution in the world. All of these institutions are just getting trashed. You got Clarence Thomas giving a lap dance to billionaires with cases before the court. And then you have the Alito household turning the flag upside down?

Kara Swisher: Yeah, and the wife, Ginny Thomas, was actually directly involved. I mean, it's crazy. She was directly involved. This woman just seems like she's had a—she got mad, drank a bottle of wine, and decided to put up—that is exactly what I think happened. Like there was some—wine was involved here.

Scott Galloway: Wine was involved here.

Kara Swisher: It just feels like. I don't know. I think the best punishment for these guys, I think all justices should have to live together. I want to see Sotomayor and who's the—who's the "God as I serve the kingdom of God" lady? The new one?

Scott Galloway: Yeah. Oh, Amy. Amy Coney Barrett?

Kara Swisher: I would just like them to have to hang out. Apparently the women all get along pretty okay. Like that's what I understand. Although I want—yes, they've been appearing together, Sotomayor and her. So I think they're trying to tamp down the idiot men, the two idiot older men whose wives are batshit crazy, essentially. Roberts has got to do—he sounds like he doesn't have any control over—oh, he's lost control. And one of the things—I had dinner next to Elena Kagan, and she was telling me all the things they go to in order not to have conflicts of interest. It was a really interesting discussion. And she took her job seriously. You don't see her like—but I get it, if you're the wife of someone like a Supreme Court justice, you don't get to be who you are. You don't get to fly your flag upside down.

Scott Galloway: Well, too fucking bad. Don't marry them then. That's my feeling. You have to toe the line with your spouse and rise to a different level. You don't get to just do any—like create an insurrection or fly a flag upside down. I mean, again, but he blamed his wife. What a loser. What a loser. I'm sorry.

Kara Swisher: Yeah, I don't—the whole thing's not—it's like you said, it's yet another thing that just makes you roll your eyes about the Supreme Court. I don't know. I like the idea of wine being involved, though.

Scott Galloway: I don't know about that. Wine was totally involved. She called me a cunt. But what's the thinking, though? I want to meet the woman who called her that name. I just want to meet. But go through the thought process. What's the thinking of, I'm really pissed off at my neighbor, so I'm going to hang the flag upside down and I'm married to a Supreme Court justice?

Kara Swisher: That's why I'm telling you wine was involved, because it's like, I'll show him.

Scott Galloway: Oh, no, no, I can't do that. It sounds more like crystal meth was involved. It just makes no sense.

Kara Swisher: Who knows? There's a young woman who had a "Fuck Trump" sign that I want to meet and buy a bottle of wine for. Anyway, let's get to our first big story. The Dow is marking a major milestone, passing 40,000 points last week for the first time ever. And that's not just the Dow, the S&P 500 and the Nasdaq also hit all-time highs last Wednesday. The good news from the markets was triggered by new data showing annual inflation easing after three consecutive months of higher-than-expected reports. But is this a big deal? Still, people do pay attention to the stock market. Certainly, the business press does. Is it a psychological? Is it frothiness? You mentioned and I've mentioned the meme stocks in the last few weeks. GameStop and AMC were two meme stocks that had a comeback, closing last Monday up 74% and 78%. They took a tumble by the end of the week. It was a very short-lived meme situation compared to before. So give us your—what advice would you give an investor right now? Because it's confusing and a lot of people feel badly about the economy, but a lot of people are making money in the stock market, at least 60% of the people who own stocks.

Scott Galloway: In general, I think these indices are really damaging for society because they create a false flag and a misdirect that the economy and people are doing really well. Because 10% of America—some people think it's closer to 1%—own 80 to 90% of the stocks. So the Dow isn't a statement on the health of the economy. It's a statement. It's basically an index for how well the rich are doing. And spoiler alert, the rich are killing it. So what's happened here? Essentially, when that yield curve goes inverted, or the 10-year is below the one year, it always predicts a recession. So people thought there was going to be a recession. In 2023, it didn't happen. And then what they were also not expecting is that earnings have—there's been earning surprises to the upside like crazy across corporations. They've been cutting costs. They've been using AI to go Ozempic and lay off people. The consumer's strong. And you've had a series of earnings beats and everyone has thrown in the towel. And this not only carries a U.S. thing. Markets in Brazil, India, Canada, Japan are all touching new highs. This is a global phenomenon. But it gives people the impression that the real economy, or real people—whatever you call it, Main Street—is doing really well. And the myth that's fomented around with young people that everyone has fallen into the trap of is the following. You have two stages in your life. You have the investment stage. So everyone on this podcast right now is in the investment stage. We're all working hard to try and make money and then spend less than we can make such that we're in the investment stage of our life. When you turn 65 and you slow down, you start harvesting. You start selling your assets. You're either an investor or a harvester. When the markets are high, the incumbents and old people in corporations like to convince young people that this is good for everybody. No, it's not. When you're an investor, when you're from the age of 22 to 65, you want the markets to crash. The reason I get to live the life I live is because in 2008, we let the markets crash. And I got to buy, as I was coming into my prime income earning years, I got to buy Netflix, Apple, and Amazon for $12, $10, and $8. And now Netflix is at $620 a share. But where does Zoe and Taylor in their 20s and early 30s on this call? These are producers of ours.

Kara Swisher: Yeah.

Scott Galloway: Lara just wrote, did he just call me old? No, Lara. You've missed all the books. Lara's in the investor stage.

Kara Swisher: Investor stage.

Scott Galloway: Where do they find value?

Scott Galloway: ...because we've decided rather than letting prices go down by convincing everyone, "Oh, new highs are good," we're going to use their credit card to juice the markets and keep prices high. Markets hitting new highs every day off of absolutely irresponsible, debt-inspired stimulus and frothiness does nothing but transfer wealth from the investors—young people—to the old people, yours truly, the harvester. So in a weird way—

Kara Swisher: Yeah, this is a big theme for you, this idea of taking from the young to feed the old.

Scott Galloway: We, as an owner, I'm in the club with champagne and cocaine. And when young people say, "Scott, we want into the club," I say, "I tell you what, give me your credit card. I'll charge it up inside the club, and maybe I'll tell you what it's like." That is literally what is happening in America. If you don't stop this bullshit of living off of future people's earnings, work, time, and prosperity to keep the markets high—which is exactly what we're doing by cutting taxes on the rich and the super wealthy—all we have done is said to young people, "Sorry, I'm going to pull your prosperity forward to me."

Kara Swisher: I think this theme is a really important one because we don't—everybody sort of celebrates the stock market, and it gets this sort of performative nature. It's almost like the basketball game I went to. It's like, "Woohoo!" Most of it is indeed nonsense. Everyone is not equally benefiting from this phenomenon. Including not just young people, but people who aren't in stocks, who have to pay higher prices, who will be working longer later in their lives because of all kinds of reasons. It's a real conundrum because politically it's very hard. Old people vote. Old people control the voting booth, essentially.

And then young people—it was interesting when I picked Louis up at the airport. We had a really great discussion about all kinds of stuff because we haven't been able to talk about random things as much. We got caught in a traffic jam, and we were talking about this idea. He's very angry at a lot of young people who say, "I'm not going to vote at all." He goes, "A lot of my friends..." And he's always like, "What are you talking about? You're giving up the one power you actually have." And so I'm just not going to vote. He said it's a real trend among younger people that he hears, and he finds it really terrible. Like, "I'm just going to give up on it." Well, you don't get to, because we get to die and you get to stay here for the rest of the show, essentially. Anyway, it's a very important trend because politically it's very hard to push up against any of this.

Scott Galloway: The demo in democracy isn't working. We have old people who vote—really old people who keep voting. Old people have more money. It would have cost somewhere between $13 and $30 billion to restore the tax credit for children, which helps young mothers and the children. That got stripped out of the infrastructure bill. But you know what flies right through? The $135 billion annual increase in cost of living adjustment for Social Security. On an inflation-adjusted basis, a 25-year-old 40 years ago made $85,000. 20 years ago, $75,000. Now they're making $50,000. But guess what? Housing and education are up four and sevenfold respectively. So they're making less money. Everything's more expensive. And then 210 times a day, they get a notification showing them how everyone is killing it but them. And they're enraged. We have declared war on young people. And this is what's so insulting—it's in the face of unprecedented prosperity where one company, NVIDIA, adds a quarter of a trillion dollars in five minutes post their earnings call. We could fix all of these problems.

Kara Swisher: NVIDIA earnings are coming out this week. Any predictions?

Scott Galloway: Oh, champagne and cocaine. Because every company, whether it's Chipotle or General Motors, is buying up every GPU in sight, thinking that AI is going to make everything easier, better, lay off people.

Kara Swisher: Yeah. But what I would say is that a bubble is inflating here. I have never seen so many people so universally barking up the same tree since they went into Cisco in 1999 as people going into NVIDIA.

Scott Galloway: Right now, the mushrooms, the ketamine is still full force because every company in the world is thinking, "How do I get more GPUs?" Because AI is going to revolutionize my business. And there's a fear factor here. You don't want to be the head of PepsiCo and not assign a big team and a bunch of people to try and figure out how AI is going to change the world of drinks.

Kara Swisher: Yep, that's true. It's not probably, but maybe a little bit. Anyway, a really interesting topic is a theme we're going to come back to again and again, because even though we love a good stock market, we don't like a fake stock market. All right, Scott, let's go on a quick break. When we come back, drama at OpenAI again.

[Break for advertisements]

Kara Swisher: Scott, we're back, and things are getting messy at OpenAI again.

Scott Galloway: Oh, man. Is this the most telenovela of a company?

Kara Swisher: The company had another high-profile departure this week with the resignation of Jan Leike, the head of Superalignment, which is the team focused on AI safety. That's the words—we're going to be all super aligned. Leike explained his departure in a series of social media posts, saying in part that OpenAI's safety culture and processes have taken a backseat to shiny products. And there's been a bunch of shiny products they showed off last week. Things are not unrelated. OpenAI has dissolved that Superalignment team. The company told Bloomberg the group will be integrated across research efforts to help achieve safety goals. Sam Altman put out a statement, and OpenAI co-founder Greg Brockman shared their view of the future. They said the company has "raised awareness of the risks and opportunities of AGI so the world can better prepare for it." Whether they're preparing for it or not is a big question. There's been at least 11 high-profile exits in the last few months. This is an issue of speed versus safety. They have been rolling out the products because they're deathly terrified of getting rolled over by the big companies. I can feel such a Netscape moment for them. We'll see what will happen here. But it's definitely a company still dealing with these issues.

One thing that got a lot of reporting was OpenAI's off-boarding agreements that have non-disclosure and non-disparagement provisions. Not uncommon, but theirs were particularly stringent. If a departing employee violated these provisions, they were in danger of losing all their vested equity. According to Vox, Sam Altman confirmed in a tweet there was a provision about potential equity cancellation for departing employees, but it was never enforced. The company is currently changing that language. It sounds like they're just tough customers on that thing. It is further than other people do. It's usually more talent-friendly in general in Silicon Valley. Scott, what are your thoughts on all this?

Scott Galloway: When Ilya was part of the board that fired Sam Altman—if you're going to stab the prince, you better kill him. When Sam came back, Ilya became the information age equivalent of Prigozhin. He was a dead man walking. He just wasn't going to survive. "Oh, no hard feelings for firing me?" Come on. Water under the bridge? That just wasn't going to happen. This is similar to Meta. The fastest way to get a severance check is to go to work for the trust and safety team. Because every once in a while, in response to real heat, they'll pretend to give a damn and they'll create a trust and safety team. I doubt Mark listens to them or cares about them. And then under the cover of dark, he fires most of them.

I like the fact that OpenAI is becoming more like what they really are. They are a for-profit company. Tough mothers. And they're not pretending to be anything. I'd rather them be like New Yorkers. That's one of the reasons I love New York versus doing business in California—they don't pretend to be something they aren't. This is a for-profit company, and AI is going to be so good at making profit, they shouldn't be trusted to do anything else.

Kara Swisher: Except they were founded with a slightly different idea, but go ahead.

Scott Galloway: Yeah. And then when they took $11 billion, those people wanted their money back.

Kara Swisher: Yes, that's right. So they should have never taken that money.

Scott Galloway: But the one compensatory thing here is that any group of people that decides to call themselves "Superalignment" should be fired.

Kara Swisher: I thought you'd like that.

Scott Galloway: Those people should endure a certain amount of ridicule and pain.

Kara Swisher: Well, AI is going to kill us, Scott. I mean, it's a really interesting thing because these people—there's a group over at Anthropic that are much more concerned in that regard. And I think they have a right to be.

Scott Galloway: Absolutely. I think, listen, I've always been a safety person. Why are you not paying attention to any bit of safety from the very get-go? So I would naturally be affiliated with the Superalignment people. At the same time, for them to think this is anything other than a for-profit institution is kind of—well, then go on a board, go to Stanford and become a high-profile naysayer of these things, or write a book like *Burn Book*, right? Because they're inside these companies. With the amount of money here, there's just no way people aren't going to be aligned around the money-making.

Kara Swisher: Some people are like, "Oh, you like Sam Altman?" I said, "Yes, but he's a tough motherfucker." He's so aggressive. He's so much like all the people he—he's not like Elon because Elon's a toxic piece of shit sometimes and most of the time. And I don't consider Sam like that, but he is interested in not having this company die. He is interested in making it the most dominant. I have no question he's hyper-aggressive and just as feral as the rest of them. So they're going to have these things because what they want to do is pretend that they care about the safety stuff, which they do peripherally, more than other people, I guess. They bring it up more, but they just don't care about that issue. And they're not going to be around to see the machines eating us alive or something like that. It's not their job.

Scott Galloway: Well, this is the problem. Its birth was like a hippie parent and a non-hippie parent, right? And they're fighting forever. These groups of people are fighting forever. So this whole company isn't going to be in alignment. It started out of alignment, and they're never going to—I know I'm using a term about the idea of making sure it's safe—but this company will never be. It might be what kills them. It's like Google saying "Don't be evil." That was his one big mistake. Why did they do that? Because they're evil. Not evil, that's too far. But that whole cosplaying about being heroic has always been a problem for these technologies.

Kara Swisher: Yeah, these companies always figure out—unless we're Ben and Jerry's, let's be honest, folks. We all want our own big home. We all want to take care of our kids. We all want a broader selection set of mates than we deserve. So let's stop pretending.

Scott Galloway: Where it's dangerous is that we keep thinking that Sam Altman is actually a better generation of leader. And we don't need to be as worried about AI because Sam's in charge. And he'll speak in hushed tones and say how concerned he is. And what it does is it dampens the urgency and the need to elect people who can craft legislation to regulate these guys. It's not Sam's job to do this.

Kara Swisher: That's exactly right. Sam is doing his job. He's firing people who get in the way of him being the—no, if Sam were to lose to Gemini or to Llama or whatever, or xAI, they wouldn't say, "Yeah, but he was more ethical and more concerned, and we love him for that." He's not going to get a statue for that. If you're working for this, it's like working for Palantir—you're going to make defense department stuff. Don't work there like that. Or the Google employees. That's different because Google sort of gave them an in to complain because they were like, "We're better than this," but they're really not better than this. So when you have a performative nature of being heroic, you're going to be slapped later because you're going to let people down, period. And it's going to be very clear.

Scott Galloway: The reason my first line of my book was "And so it was capitalism after all" sticks. That's what it is. That's what's happening here. And I think you all should go off and form a group of people that scares the bejesus out of the potential. And you go up to Congress and you march in those offices and you explain to them why they need to make legislation. That's what you need to do.

Kara Swisher: I think when people all backed Sam, a lot of people were like, "Oh, they love him." I like, "No, they love the money." They want to make money here. And they want to be at the coolest company making this shit because it's cool. They want to be at the winning company that makes them rich.

Scott Galloway: Yeah, and also is the coolest company, right?

Kara Swisher: That more than that. Anyway, we'll see what happens. I thought Jan's series of tweets was interesting, but it doesn't really—I'm sorry, Jan. Okay, Scott, one more quick break. We'll be back for Wins and Fails.

[Break for advertisements]

Kara Swisher: Okay, Scott, let's hear some wins and fails. You go first.

Scott Galloway: My win is *The Simpsons*, which I think is in its 35th or 36th season. There's a wonderful article in CNN, the write-up—I want to get the writer's name. His name is Scottie Andrew. I'll just read from his overview: "Viewers have followed the buffoonish Homer, devoted Marge, mischievous Bart, socially conscious Lisa, observant Maggie, and hundreds of eccentric neighbors for more than 30 years. There have been hundreds of couch gags, celebrity guest stars, strangling incidents that have inspired a cultish obsession among the protective fans. It birthed the 2007 film that made over half a billion dollars worldwide, and rides at two Universal theme parks. Oh, and it popularized the now booming subgenre of adult animated comedy."

But the trick to keeping *The Simpsons* relevant and exciting all these years later, someone said, is to keep the show's tremendous legacy out of the mind as much as possible. I thought this was fascinating. In addition to just being a wonderful show that's been iconic, they now have writers who were five when they saw their first episode, or weren't even born when they saw their first *Simpsons*. I thought it was an interesting case study in innovation. They try to always have a first-season mindset, and they try to do new stuff and not play too much on their legacy. When you think about how courageous the show was or irreverent the show was, and now other shows like *Family Guy* or *Rick and Morty* take everything to a new level. They really inspired a genre. I like how unafraid they are, how talented they are. I think they've created a ton of economic value for a lot of people in the industry. I watched with my son—we literally spent two years watching every episode of *The Simpsons*. Anyway, my win is *The Simpsons*. I think it's just an incredible piece of media over years and years of quality. They always reinvent themselves. They just did an episode about a guy in the bar who was a side character, about his funeral. The guys get together and decide that they like each other even when they're not drunk in a bar, and they find out more about this guy. They do occasionally touch on very meaningful things.

And then my fail is something I've just been thinking about. I'm curious if you see the same thing. I saw that Reddit just struck its second deal to sell its data. It popped 12% yesterday because they announced they're going to sell—they've struck their second deal to use their data to be crawled by OpenAI, in addition to a deal with Gemini. Everyone's very excited about the prospect of them using their data as input for these LLMs. I started thinking about it. I'm worried that if we're going to end up with four or five essentially mega sources of information that inform everything we do—all our media, all our history papers in high school, the way we interact with each other that helps us write our memos—I thought, generally speaking, when I meet people out in the wild, they're 98% lovely. "What kind of dog is that?" "Oh, I love your podcast." "Can I hold the door for you?" People are just lovely. But these LLMs aren't crawling that. These LLMs are crawling the way people speak to each other on Reddit. These LLMs are crawling the way people respond in the comment section on your Twitter feed.

When I saw those two House of Representatives go after each other and start insulting each other's looks, I thought to myself, that wouldn't have happened before social media.

Kara Swisher: I agree.

Scott Galloway: What's happened in social media is it has normalized a level of vile, uncivil, misanthropic treatment of each other that then jumps the shark to our real life. I was really put off. Some people might find this sexist, but men are disproportionately evaluated based on their economic well-being or their economic vitality. I've said this before. If you were to say to a man, "You are such a fucking idiot that I don't think you're going to be able to provide for your children," that would cut to his core. You would never say that. Women are unfairly evaluated based on their aesthetics. I'm not talking about what should be. I'm talking about what is. So when two women in the greatest deliberative body in history start insulting each other's looks, we have jumped the shark. I don't think it would have happened before social media.

So my fear and my loss is if the centers of truth or what we believe is truth, or the centers for what dictates the tone globally for how we communicate with each other—whether it's emails or media or memos, whatever it is, which people see ultimately AI doing—and its inputs are the way we speak to each other on Reddit. That's really smart. And the input is the way we talk to each other, the tone, the inflection, the approach on Twitter and Reddit. I just wish there was a way we could crawl the way people treat each other in the real world, because I find the two are starkly different.

Kara Swisher: They can be, but you're right. It is shifting over. One of the sad parts is, some parts of Reddit are wonderful and so full of great information. And some parts of Twitter are hysterical. You're sort of like, "Oh, why can't we take the good parts?" All the shitty parts are what feels—I agree. People were laughing about the whole Marjorie Taylor Greene and Crockett thing. I was like, "No, no, ladies." I expect nothing from Marjorie Taylor Greene, but Crockett, I was like, "Okay, shouldn't have done it. Shouldn't have bit." This woman is a constant troll, and to bite to her level—and what she said was rude. Maybe they should have just had it stricken from the record or something like that, but to engage and continue. And then the guy in the middle, the Comer, was like, "I don't know what all you're talking about." For one moment, I felt sorry for him because he was like, "What is happening here?" Although he himself has created more strife than anyone else up there. But I agree. That's a really good one.

All right. My fail is indeed. I think, Scott, you really are onto something with this young versus old thing. I had that moment this weekend. Louis came back from Argentina. We had this amazing discussion, and his worries about the future. He's just 22. He's going to graduate next year. So he's thinking about where he's going and what he's doing. He's always been a very hopeful person, but there was a lot of stuff. He's like, "This sucks. Some of this sucks." He often veers into that. "What's happening here? It sucks." And he's not like that. So I was sort of like—and he was looking for hope in the future, the future he's going to build. And then I was talking to my mom, and she was going on about politics again. She watches too much Fox News, 100%. But one of the things I said to her, I said, "The future is not about you anymore at all. So why are you paying attention to this? Why do you have an opinion about this? Why are you going to decide all this stuff?" And she goes, "Well, I can have a right to it." I said, "Yeah, but you don't. You're not going to be here. Louis should decide the future." And she goes, "Should you?" I said, "I'm going to be here 30 more years. I kind of—yeah, I should." So it was a really interesting thing that made me think about that quite a bit. I don't think my mom or older people shouldn't have an opinion. But this isn't about you anymore. For all intents and purposes, you're not here for what's coming. So you should cede the power to young people and let them deal with many of the messes you've made. I think it's a really powerful message that older people have just got to get the fuck out of the way in a lot of ways. It makes me sad to see that they just refuse to give up on that.

Speaking of older people on the other side, my win is Jean Smart. Oh my God. Now there's an older person. This season—sometimes it takes through—I've loved every season, but this season is perfection. All the reviews agree. It's because it's about an older person who had a fail in her youth. This is the theme of this show. She wants to be the late-night show host that she lost. She's sort of the Joan Rivers character, and she got dinged out. It's about the sexism in that industry and comedy. She's reached the peak, and she wants one more fucking shot on goal, and she's got to do it. That's about an older person not giving up on a dream they had. That one I fully back because she has what it takes to do it. What an interesting thing to give. The season's not over yet, so I don't know what's going to happen. But I got to say, Jean Smart—someone who was just a really good base hitter for years. She was in a lot of stuff over the years, *Designing Women*. She's had a very solid career, but just hitting it out of the park in the last part of her career is a delight to see. And she's doing it with a younger woman, Hannah Einbinder, who is just kick. She's the daughter of Laraine Newman. People don't realize that. I just love to see it. That is a show about young and old making something beautiful together. It's worth every bit of your time. It's a really great show. That's my win. So they match together, Scott.

Scott Galloway: They do match together. Just around what you were saying about Louis—when I was 27, me and my girlfriend borrowed $11,000. This isn't ages ago. This is 1993. We borrowed $11,000 from her parents. I got a bonus where I was working. She got a bonus. You know what we did? We bought a home in San Francisco. Can anyone 27 or 20 do that now? No. Not without family money. We need to be much more creative around solutions. One creative solution is that the mom gets to vote. If she has two kids, she gets three votes. You want to see a transfer of wealth back to children? You need to give kids and you need to give parents, specifically the mothers, because the bottom line is when you give moms money, kids get taller and fatter. When you give dad money, the whorehouse and the bar do better. That's a bit of a reductive statement, but it's largely true. If you gave the caregivers votes on behalf of their children, it would totally change society. But something needs to happen.

Kara Swisher: That's why I mentioned *Hacks*, because there's a young and old person working together. That really has to happen. They have got to stop grabbing their shit and holding it tight. And young people have to figure out a way to work with the older people, too. It's also on them to do so. Anyway, old and young.

Scott Galloway: Old and young. We used to have an apprentice and a mentor culture. We don't seem to want to mentor or pass it on.

Kara Swisher: Anyway. Yeah. *Hacks*. Young and old. Young and old. We want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com/pivot to submit a question for the show, or call 855-51-PIVOT. Coming up on our other podcast this week, *On with Kara Swisher*, I'm talking to *New York Times* columnist Nicholas Kristof. It's a great conversation. I also have a panel later this week all about Elon. And shout out for the Cybertruck costumes at San Francisco's Bay to Breakers race. They were so good. And *Prof G Markets* is out now in its very own feed with an episode about GameStop market manipulation and whether AI is becoming a bubble—some stuff Scott talked about on the show today, but it's even more in depth.

Okay, Scott, that's the show. We'll be back on Friday for more. Today's show was produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie Dertout engineered this episode. Thanks also to Drew Burrows and Mille Severio. Nishak Kurwa 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/pod. We'll be back later this week for another breakdown of all things tech and business. Something new: *Hacks*. Something old: *The Simpsons*.