--:-- Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher, and it's very early here in California.
--:-- Scott Galloway: Thank you. And I'm Scott Galloway.
--:-- Kara Swisher: Why are you in San Francisco?
--:-- Scott Galloway: Well, I was in Los Angeles because I was interviewing Bill Maher for his new book. It's basically a compilation of all his real-time essays that he does at the end, his little truth-telling at the end. Then I was on his podcast, which is a video podcast, where there's a den. He has a den called Club Random at his compound. You're supposed to drink.
--:-- Kara Swisher: Did you drink?
--:-- Scott Galloway: I had tequila. It was delicious. 818 tequila. I think it's a Kardashian tequila. Then he smoked weed, which was something. It was like a lair. You would have loved the lair, Scott. I'm just telling you. It was like a man lair. He really triggers a lot of people. If you post a picture of him, he's a lot more polarizing than I would have anticipated. We talked about that in the podcast. His whole message is you can't be a patriot unless you believe in the United States of America. But I think him going after Biden feels like equalization between him and Trump, although he was a very early Trump critic compared to other people. He's obviously a smart person. When you read the columns, he has a lot of very cogent and funny things to say. So I often hesitate to compliment him because of some of the things he does, but he's a comic, so I give him wide berth. It was interesting.
--:-- Kara Swisher: How are you doing? You're going on another program. We're so media these days.
--:-- Scott Galloway: So how am I doing? 36 hours ago, I was in London. Now I'm in New York. Since then, I've also been in Las Vegas. The way I would describe how I'm doing is that my brain and I are classmates who've been randomly assigned to a lab project, and it's not going well.
--:-- Kara Swisher: You seem like a jet setter, though. You're a jet set guy.
--:-- Scott Galloway: Jet setter? Yeah.
--:-- Kara Swisher: That seems very jet setty.
--:-- Scott Galloway: Oh, yeah. What a thrill. I went to Vegas for 11 hours, caught two hours of sleep, spoke at a conference in a windowless conference room at Aria, then jumped on a plane back to New York, where I have no food here. I haven't eaten in two days.
--:-- Kara Swisher: You never have food at that apartment, Scott.
--:-- Scott Galloway: Yeah, but usually someone brings me food.
--:-- Kara Swisher: Oh, okay. It's called takeout.
--:-- Scott Galloway: Anyway, I'm not doing well. My shoulder hurts. I haven't worked out. I'm losing weight. I look like the alien from Close Encounters of the Third Kind right now.
--:-- Kara Swisher: But you're going on The View today. Are you ready? Are you rough and ready to do that?
--:-- Scott Galloway: I'm actually a little bit nervous.
--:-- Kara Swisher: You should be.
--:-- Scott Galloway: I haven't slept. They're smart. It's a table full of smart ladies. I'm very intimidated by Whoopi. I'm hoping that Alyssa Farah is number three. So I've got a lot riding on today. She has a really nice husband. I've met him. Anyway, you should have an interesting time. Let me just give you a tip. Bill Maher wore a pastel sort of purple puce jacket, which I thought was interesting on the show. He did pretty well. So he didn't trigger them.
--:-- Kara Swisher: Yeah, he was great on the show, by the way. I don't know if he has a clip that's gone viral from the show, but he has a great line in his book. Of all the things he wrote, the thing that moved me or stuck with me was something along the lines of: the stupidest thing I can imagine is people who only focus on what's wrong with their life. I think we all really do suffer from that. I know I suffer from it. On a scale of zero to 100, zero being someone whose life is full of tragedy and disappointment, and 100 being someone who is just the luckiest person in the world with a life full of love and achievement, I would bet you and I are somewhere between a 95 and a 99. I won't speak for you, but I focus on the four or five things that aren't right with my life, and it's really stupid.
--:-- Scott Galloway: I'm a pretty positive person.
--:-- Kara Swisher: Yeah. I'm trying to be. I'm getting better at it. But it is human nature to focus on the things that aren't right or the things that threaten you. He's been working his ass off for 30, 40 years. He still does open mic night. He still does comedy shows in smallish towns. I'll say it. I get shit for it. The guy's a role model of mine. He's a hero of mine. He's smart, funny, and fearless.
--:-- Scott Galloway: Yes, I did ask him a question from Louie, who used to be a fan who isn't, because Louie thinks he's too negative, which was interesting. He wasn't saying you can't have controversial opinions. He was more like, he just fucking hates everybody. And he got mad when I read Louie's quote to him. But people have to take it, and people can have opinions. Anyway, we have a lot to get to today, including Scarlett Johansson's beef with OpenAI.
--:-- Scott Galloway: Oh, my God.
--:-- Kara Swisher: And NVIDIA's earnings deliver yet again, as you thought they would. Plus, our friend at Pivot is Julia Angwin. Julia is a CEO and founder of Proof News and contributing opinion writer to The New York Times. She has a lot to say about AI, TikTok, and more. But first, the Justice Department is expected to sue Live Nation as we tape on Thursday. The antitrust suit will reportedly allege that Live Nation holds an illegal monopoly over the live entertainment industry. The DOJ could try to break up the entertainment company, which was formed by a merger of Ticketmaster and Live Nation in 2010. Back in 2022, the company's Ticketmaster unit took heat for botching the rollout of Taylor Swift's Eras Tour. Obviously, Live Nation responded, saying, "It is absurd to claim that Live Nation and Ticketmaster are wielding monopoly power. The defining feature of monopolists is monopoly profits derived from monopoly pricing. Live Nation in no way fits this profile." I haven't read it, so I'm going to hold out until I look at it and see what their allegations are. They're going to argue, I suspect, that there's much more competition, that they don't own any of the giant venue sites — they're owned by sports owners. Obviously, there was botching in the Taylor Swift Eras Tour, and I think that'll haunt them in the minds of people.
--:-- Scott Galloway: I actually think the government is probably going to be pretty expeditious and come to some sort of agreement with Live Nation. One of the reasons we haven't had any antitrust come to fruition in tech since Microsoft was decided that it should be broken up and then was overturned. But that ended up having a huge impact on the ecosystem. A lot of people say it's not the decision to break a company up, but the scrutiny that changes behavior. A lot of people would argue big tech is not making acquisitions right now because it doesn't want to raise any red flags. It's under scrutiny, so it does things like pretend not to own OpenAI when it actually does. But the traditional test in antitrust is consumer harm. The easiest way to determine consumer harm is if you've raised prices faster than inflation. I believe Live Nation has something like a market share of live events of two-thirds. They'll say, "Okay, this company has a dominant, scary amount of market share of live events." And they'll say, "Well, that's okay. You need scale, and all the consumers get wonderful attributes from our size." And they'll say, "Well, have you raised prices faster than inflation?" I don't think they're going to have a difficult time showing that for live event ticket purchases. This is anecdotal evidence, but I am absolutely blown away every time I buy tickets for anything live as to how much it costs.
--:-- Kara Swisher: What they're saying is that because of the relationships they have with venues, they claim they are forcing these venues and events to use Ticketmaster, which they acquired in 2010. Part of their approval to buy them in 2010 was they signed a consent decree saying they wouldn't do that. And they're saying they've violated that. I think this is really bad news.
--:-- Scott Galloway: Well, okay. It's bad news for the combined Live Nation and Ticketmaster. I think they will be forced to divest. But as is typically the case with breakups, the shareholders will make money. I'm not sure it's good that these companies are together.
--:-- Kara Swisher: I'm going to hold up until I read it because something I didn't realize until recently is that Europe has much more stringent laws on scalping and everything else, and we don't. So what tickets cost — I want to see what they have to say here. I get the consumer anger toward this company. The Taylor Swift thing, some of which they should have taken heat for, some of which they shouldn't, looked really bad for them. It'll be interesting to see how much the Justice Department relies on that particular thing because everybody remembers it. There are all these stories of people going to Europe and flying to Paris and it being cheaper than seeing it in the U.S. I suspect they will come to an agreement before they fight this tooth and nail. It just depends on how aggressive John Cantor wants to be.
--:-- Scott Galloway: What you're referring to is an interesting point. There used to be a big business in scalping. A friend of mine from high school still does it. You pay high school kids to go wait in line for opening day tickets for the NBA game three of the finals. You can get a ticket for $200 and turn around and sell it for $1,200. Then the ticket folks got savvy and said, "Why are we leaving that surplus value on the table?" They massively increased their ticket prices for the best tickets so there wasn't any capture they weren't keeping to themselves. Then you saw ticket prices — the Broadway show producers started selling something called a super ticket. For the best tickets in the front row or the first eight rows, they were charging $400, and everyone swallowed their tongue. The ticketing company or the show said, "This is what you're paying anyway. We're just cutting out the middleman." They'll claim — they'll have a lot of sharp economists who say, "We do a really good job. We have variable pricing similar to the airlines." But I am — when you go to Disney, every time I go to Disney, it sounds weird, but I get a little bit depressed. I look at just how overweight America is. The fact that these middle-class families have to pay so much money to wait in line for three hours to go on the Avatar ride, you just think, "God, this is just brutal."
--:-- Kara Swisher: I think the difficulty for Ticketmaster here is proving that others sell tickets, that there's competition. In the Taylor Swift thing, she had a part in that. She had a part in that. So I think their problem is the complexity of their business — there are lots of different players dipping their beak in. The government can say, "Our ticket price is high." That's the issue. Anyway, we'll see what happens. We should read it. It's a great company. It's well run. We should definitely read it and find out what they're doing and read the government's argument, which will be, I think, a strong one.
--:-- Kara Swisher: OpenAI has struck a deal to use content from News Corp. Speaking of interesting deals, the owner of publications such as the Wall Street Journal and New York Post to train its chatbots. The Wall Street Journal reported the deal would be worth over $250 million over five years. It will allow OpenAI to use content from News Corp's major outlets. OpenAI has been sued by several newspapers, including The New York Times, for copyright infringement, alleging it used articles without authorization. News Corp's Class A shares jumped 7% at the news in after-hours trading.
--:-- Scott Galloway: This is either negotiation or lawsuit. I suspect The New York Times is negotiating with them, too. This sets a price, certainly, because they have similar businesses. This is a big deal. We're starting to see enough deals where there's a precedent. If you're a content company who can show your data is being crawled by these LLMs, there's now a natural precedent for being paid for it. This is important. Media companies are learning that we won't be fooled again. We won't let OpenAI do to us what Google has been doing to us. I believe you're going to see a lot of middle or sort of meddling content companies that have a lot of content strike deals that are going to lift their stock price because this is going to be very high margin revenue.
--:-- Kara Swisher: The jazz hands here is that they went out of the way to note that in addition to providing content, News Corp will share journalistic expertise with OpenAI. I don't think OpenAI really cares about their journalistic expertise. We'll get into that later. The thing about this revenue is the number's not that big.
--:-- Scott Galloway: But these are companies that have really terrible revenue mixes. What do I mean by that? They're low margin, difficult businesses because long-form journalism is expensive and hard.
--:-- Kara Swisher: That's $50 million, whatever, five years? $50 million.
--:-- Scott Galloway: And I think the prices will go up because now somebody's going to show up, one of these four, and say there's a way to differentiate. If we can get all of Condé Nast or all of Hearst or all NYT properties to go exclusive, there will be bidding wars. I think the number's going to go up. The thing about this revenue is the top line number isn't that big, but it's going to be at 90 or 95% gross margin.
--:-- Kara Swisher: Right to the bottom line.
--:-- Scott Galloway: Exactly. That's what I was thinking, right to the bottom line this goes.
--:-- Kara Swisher: It'll be interesting to see how they figure this. The journalistic expertise thing is laughable. I could see that meeting of Sam Altman sitting there going, "Hmm, interesting," and making his gross feelings. "We would value your journalistic expertise." We'll say in hushed tones. He plays people like a fiddle in that regard. "I'm doing ketamine and doing a 4G with Nicole Shanahan later with Jack Dorsey. Would you like to join me?"
--:-- Scott Galloway: By the way, we definitely need to go. We definitely need to get to know that woman. I'd like to party with her.
--:-- Kara Swisher: Stay at Hotel Dog as Kara does.
--:-- Scott Galloway: I mean, we want to roll with that young vice presidential candidate.
--:-- Kara Swisher: Yeah, that was quite a story. Seriously. Kirsten Grind — I actually had her on my show this week, before the story dropped, and she didn't mention it. But she's the one who wrote the stories about Elon's drug use, too. She just moved to The New York Times. It sort of lays out — Daily Beast started it and started writing about the sketchy behavior of this woman. And The New York Times was like, "Hold my beer." That was really what it was. Then the Post had a less good story about how RFK and her aren't getting along. Then some crazy person left the campaign saying it was a hateful and divisive environment. But the person who left is so terrible. I was like, I kind of think that's a good thing that this crazy person left. Anyway, we'll see what happens there. But it is a big deal. The prices are being set right now.
--:-- Kara Swisher: Lastly, very quickly, Nestle will launch a new frozen food brand aimed at customers taking GLP-1 drugs like Ozempic and Wegovy. The brand called Vital Pursuit will focus on meals with more essential nutrients such as protein and calcium. While packaging won't mention GLP-1 drugs, Nestle plans to connect the product to medications on social media. Around 6% of Americans are currently using GLP-1 drugs, and they fund almost all of cable late night. I was watching Stephanie Ruhle last night. It was all Ozempic commercials. It was crazy. Anyway, Scott, you've talked a lot about these drugs changing the food market. Is this the right approach? This is so people don't eat as much, so this would give them more — I guess it's processed food. Just eat real food, people. That's my feeling. Just eat real food and you'll be fine. But go ahead.
--:-- Scott Galloway: It's a great idea because this is a niche market. People will think — when people go on these things, they want to feel as if they're kind of — there's a term called "off the mat." When I first got to New York, I was bored and lonely and very stressed. I started doing a lot of yoga. There's this great term in yoga, "off the mat," meaning typically when you start doing yoga, the other 23 hours a day that you're not practicing, you're a little kinder to yourself, you're a little bit more focused on your health, your food. I would imagine when people take Ozempic, they think a lot about their activity off the mat, specifically their food intake. If a company says this is exactly the right food to take when you're on Ozempic — it needs to be high in protein because one of the downsides, and there's no free lunch on anything of Ozempic, is the ratio of muscle to fat loss is greater than Dr. Peter Attia likes. It's probably a real issue. This is going to be a high protein meal. In addition, it gives them the chance — you know how everyone is putting out press releases that say "AI, AI, AI"? This is a chance for Nestle to go "GLP, GLP."
--:-- Kara Swisher: So the problem is that a lot of these stocks aren't as much — and Nestle not as much — but a company like Coca-Cola, PepsiCo, McDonald's, Kraft Foods, General Foods. These companies aren't companies. They're obesity indices. When you talk about a company like Diageo, really well-run company, really fantastic brands. But here's the problem, and this is the dirty secret of these industries: 10% of their customer base, in the drinks industry, is responsible for 70 or 80% of the volume. People don't realize how much some people drink. Those are the people who are going to be on these drugs first. So you're not only going to see the customer base go down, but you're going to see volume dramatically decline. I don't think these processed, manufactured food companies that produce — let me be blunt — shitty food that people have to eat because it's good value, they're good brands, and it's very expensive to eat well now.
--:-- Kara Swisher: All right. Let me just say, I think people should just eat regular foods, as you were saying. I think this is just the packaged food industry, the processed food industry trying very hard to spin its wheels. But some of them are just not going to win here as these drugs take precedence.
--:-- Kara Swisher: Anyway, let's get to our first big story. The latest in news in Scarlett Johansson's fight with OpenAI. Apparently it wasn't her voice after all. They have said it wasn't, according to new reporting from The Washington Post by Natasha Tiku, who's an excellent reporter and has been very critical of tech. So I tend to believe her reporting more than others. That digs into the voice casting process, revealing an actress was hired months before Sam Altman reached out to Johansson. Johansson threatened legal action against OpenAI, alleging the company copied her voice after she twice refused Sam Altman's request to license it. It seems like he was freelance rogueing it here because there was a process in place that he went around. OpenAI did pull the voice in question, though Sam Altman said it was never intended to resemble Johansson. That said, he did tweet "her" when they came out with their product and had been reaching out to her just days before. So his behavior is the problem here. It sounds like they were going through the process pretty normally under, I think, CTO Mira Murati, who I'm interviewing very soon. So I will ask her. I want to compare the two voices, starting with Johansson as the virtual assistant in her talking to Joaquin Phoenix's character. Let's listen.
--:-- [Audio clip plays: "It's really nice to meet you." / "Yeah, it's nice to meet you, too." / "Oh, what do I call you? Do you have a name?" / "Yes, Samantha." / "Lady, where'd you get that name from?" / "I gave it to myself, actually."]
--:-- Kara Swisher: Okay, let's now hear ChatGPT's voice.
--:-- [Audio clip plays: "Me? The announcement is about me? Well, color me intrigued. Are you about to reveal something about AI? Or more specifically about me as a part of OpenAI?"]
--:-- Kara Swisher: Yeah, it sounds a lot alike.
--:-- Scott Galloway: It does. That's funny. I was thinking it didn't.
--:-- Kara Swisher: Oh, it did. Interesting. I think these voices sound — Scarlett Johansson was acting, and she was trying to sound like what she imagined a robot lady would sound like. A lot of these robot ladies do sound the same. They have this kind of uplifted voice, like a "Hey, how you doing?" A little warm, slightly flirty, but not too flirty. They're similar. I can see why Scarlett Johansson thought it was her, for sure. I don't know. But it's time we acknowledge that there's something weird going on because naked Colin Jost looks a lot like me. And someone needs to pay me.
--:-- Scott Galloway: Someone needs to pay me.
--:-- Kara Swisher: Well, how big of a mess is this? You thought they were different.
--:-- Scott Galloway: I think they're similar. From the reporting Natasha did, I think it's clear they were already working with this voice actress who said — it sounds like a great process, actually, that was conducted in terms of making sure people weren't weirded out. This actor said it was something she considered, but "this is the future, so why not?" Obviously, she's getting a paycheck. They had a non-union actor. That's the other thing they wanted. They didn't want the union involved. But social media is having a field day. Casey Newton re-shared Sam Altman's tweet with just the word "her" and said, "This is really looking like one for the Never Tweet Hall of Fame." Someone else posted on Twitter, "The only smart thing Sam Altman did about this Scarlett Johansson situation is barely wait until the SNL season was over." And as a Threads user succinctly put it, "When will people learn you don't fuck with Scarlett Johansson?" Let me just do a very quick take on this. People were like — Amanda pointed this out — LLM stealing my copyright is hard for most regular people to grok. Sam Altman stole Scarlett Johansson's voice in a method similar to Ursula in The Little Mermaid. They get that. This is something everyone can grok and either make fun of or be a little worried about. It puts a little meat on the bones of "tech is stealing everything from us."
--:-- Kara Swisher: Well, AI is going to create a lot of strange bedfellows and raise a lot of really interesting questions. This is not an original question. I remember a Jamaican singer sued the Rolling Stones and said that one of their most popular songs was basically inspired and ripped off by one of his songs. They played the songs for a jury and the jury said, "No, they're not that close." I think where we end up here is with the DOJ or whoever looking into it. They'll have their own LLM that says — and they'll figure out a way to calibrate it — "Does this violate? Is this too close?" Because something like voice type — that's pretty close.
--:-- Scott Galloway: Voice type, right.
--:-- Kara Swisher: Now, look, there's apparently no documentation that they ever were using the word "her." The only person who's done this is Altman, stupidly. Let me just say it's boneheaded on his behalf. But just so people remember, Scarlett Johansson sued Disney in 2021, accusing them of breaching her contract when Black Widow was put on streaming instead of theaters. This is a woman who does not back down. This case is not necessarily around copyright, but it's called right of publicity, which protects individuals' likenesses from being stolen or misused. Bette Midler used the argument. She sued Ford in the 80s, accusing them of impersonating her sound. They'd have to find the smoking gun of them saying "This is what we want it to be — her." And the only one is after the fact of Sam Altman. But it's still damage control, right? She could possibly go for it and try to prove that's what they were doing here, given that's what the — I think a lot of tech people are enamored with the movie Her, even though it ends badly for the humans in that movie. But what should they do in terms of damage control? The worst story was this equity situation. There were more documents about how he did sign on for these things Altman did. Then he's now pulled them back and they've done a better job of saying we're not going to have these stringent equity conditions around departing employees and disclosure. But what should they do in terms of damage control? It's been a tough week. People left, this equity thing, Scarlett Johansson's on their ass. They look kind of cloddish. Thoughts? What should they do?
--:-- Scott Galloway: Crisis management comes down to the same three things all the time. Acknowledge the issue, the top guy or gal takes responsibility, and then overcorrect. I actually think the fact pattern here is really bad. Specifically, Sam reached out to Scarlett nine months ago asking her to be the voice of the model, but she declined. That's a really ugly fact if it ever goes to court.
--:-- Kara Swisher: Except they were working on it before that he reached out. But go ahead.
--:-- Scott Galloway: I think a jury is going to say, "Wait, you asked her for it? She said no. And this sounds —" to your point, if they find it very similar, I just think humans are going to go — generally speaking, jury members are going to say, "These companies have just gotten too fucking powerful."
--:-- Kara Swisher: Yeah, that's their problem. Same thing as Ticketmaster. It's too much. It sounds sketchy.
--:-- Scott Galloway: On a meta level, it's very straightforward. The transfer of power and money from labor, from workers to corporations has been extraordinary. The jury is probably going to have more workers than shareholders. So he doesn't want this to go to a jury trial. My guess is he's probably going to do the following. He's going to come out with a series of standards that says we're going to — anyone whose voice is similar or we imitate, we're going to give a royalty to. And then most importantly, the person this is going to have the most impact on a day-to-day level is Colin Jost is never going to cross his wife. I would be so scared of this woman right now. She is not afraid to lawyer up.
--:-- Kara Swisher: She is not. She's like, "I'm sorry. You left the dishes in the sink. Meet my lawyer. Meet my lawyer. Meet my lawyer."
--:-- Scott Galloway: I think this has been a bad thing for OpenAI. Sam had this image of niceness and reasonableness. And to an extent, he is nicer and more reasonable than the others, right?
--:-- Scott Galloway: Oh, he's going to make a better world. He cares about people. He's worried.
--:-- Kara Swisher: Yeah, I know that. I know. He talks in a voice. They should do a Sam Altman voice. Sam Altman voice is similar.
--:-- Scott Galloway: He's proud of their progress, but they need to do better.
--:-- Kara Swisher: Yeah, exactly. But this stuff around safety, people leaving and saying it's unsafe, this thing about the equity conditions, which are stringent and somewhat greedy, this Scarlett Johansson thing. My thing with the Scarlett Johansson thing that I think is critical is what I think happened here is they did hire this actress. They didn't like it as much and they wanted her. And that's why her, speaking of her, and that's what happened. I don't know. I feel like something occurred if they were, unless he just wasn't paying attention and he was world-trotting and he wasn't paying attention to what his staff was doing. Anyway, not a good look for Sam Altman.
--:-- Scott Galloway: And particularly, OpenAI will be just fine. There's striking deals all over the place. And I think they'll be just fine. But startups, this is what happens. I jumped the shark as a writer last night. I promised myself I'm not going to use ChatGPT or any LLM in my writing because I'm worried that I won't go back. I plan to do a lot of heroin later in life because my assumption is you can't go back. Once you use it, it's that good. You think you'll not write again.
--:-- Kara Swisher: Yeah.
--:-- Scott Galloway: I'm writing my post this week on what I think is a bubble inflating in AI stocks. And I had this one paragraph and I kept rewriting it and I didn't like it and it felt obtuse and clumsy. And I stuck the paragraph into ChatGPT-4o and also Anthropic's Claude, which I actually prefer. And I said, "Can you make this crisper, tighter, and in the voice of Scott Galloway?" I gave it a pretty thoughtful prompt. And it came back with something better. And it sent chills down my spine.
--:-- Kara Swisher: Yeah.
--:-- Scott Galloway: I'm like, "Oh, fuck." Chills.
--:-- Kara Swisher: Now, granted, you wrote the original paragraph.
--:-- Scott Galloway: Yeah, I know.
--:-- Kara Swisher: But we don't need you anymore, Scott. We don't need you anymore. Anyway, we do need Scarlett Johansson, though. Said every woman ever.
--:-- Scott Galloway: The View needs me.
--:-- Kara Swisher: The View needs you. And you're going to go on soon. Is that her name? Joey?
--:-- Scott Galloway: Joey Pahar. She was sick yesterday. If I call her Joey, shit. Don't call her Joey. I almost was going to call her Joey.
--:-- Kara Swisher: Okay. You watch. At some point, I'm going to refer to someone as Ellen on the show today.
--:-- Scott Galloway: You should do that.
--:-- Kara Swisher: Oh, no, they'll kill you. They'll eat you a lot. All right, Scott, let's go on a quick break. When we come back, we'll talk about NVIDIA's latest incredible earnings. And we'll speak with friend of Pivot, Julia Angwin, about AI hype. Perfectly, just what you're talking about. The TikTok ban and more.
--:-- Kara Swisher: Scott, we're back with our second big story. NVIDIA's latest earnings are out and it's been another blockbuster quarter. Revenue was up $26 billion, up 18% from the previous quarter and 262% from a year ago. Net income grew sevenfold to $5.98 billion. The company also raised its quarterly dividend and announced a 10-for-1 stock split. That's a good sign. You thought these numbers would be good. I think it's, you know, you and others have thought. Everyone's their customer. They have huge demand. There's going to be competition, but it's going to be slow in coming because it's hard to do what they do. They were already jacked up to do what they were doing. What would you tell an investor now who wants to get in on NVIDIA now, given the stock split? This has happened at Google many years ago, but it kept going up. What do you think?
--:-- Scott Galloway: Well, I track all of my questions. I get approximately 130 emails from strangers a day and I like to categorize them. I attempt to use AI to sort them and categorize them. The number one question I get is usually about young men or someone's son or from a young man. The number two most common query I get is, "Is it too late to buy NVIDIA?" Everybody wants to know, is it too late? And what I tell them is buy an index fund because the answer is I don't know. I can see these stocks going up 50 or 100% in the hysteria and the momentum. But at the same time, you want to diversify away from these companies. This company could get cut by 60% and it still wouldn't look cheap. But having said that, NVIDIA right now has added more value in the last 12 months than any company in history. Do you realize in the last 12 months, it's grown its market capitalization by the value of Amazon? It has added the value of Amazon in the last 12 months. It is now worth more than the economy of Canada. I mean, it's just what this company has been able to achieve and how the market has responded is crazy. And what Aswath Damodaran said that really struck me, he said, he's convinced me and I believe him that fundamentals, the underlying fundamentals, your ability to grow and produce cash flow, is gravity. Like when Michael Jordan jumps, you think he's never coming down. Gravity always wins. He always comes down. Fundamentals always rear their ugly head. And in his analysis, he said that to grow into their stock price, NVIDIA is going to have to find another sector and dominate it the way it dominates AI. Right now, it's 80%.
--:-- Kara Swisher: But see, people don't think like that. People like all these meme stocks. Something else has happened, and I agree with Aswath. I agree with Aswath. This is Cisco in 98 or 99, where everyone goes, "AI is the future, I buy that, but I don't know where to invest, so I'll invest in the steel in the ground and the infrastructure." Oh, Cisco's the internet. Oh, NVIDIA is AI. Cisco's a very good proxy.
--:-- Scott Galloway: Cisco's a very good proxy.
--:-- Kara Swisher: Anyway, it's going up. We are not going to tell you what to do, people, because psychology is at work here. We like Aswath, but you'd leave a lot on the table if you didn't play, I guess. And speaking of what on the other end of things, we also learned about Trump Media's latest earnings. The company disclosed a net loss of million in its first quarter as a publicly traded company with a total revenue — and I think this is the corker, not the loss necessarily — which is shares were down 10% when those numbers came out. I mean, the revenue is staggeringly bad. Like, I don't even know what to say. It's worth billions, this company.
--:-- Scott Galloway: You said it. It's a meme stock. NVIDIA has real risk. There's four companies — Amazon, Alphabet, Meta, and Microsoft — they account for 40% of its sales. And all four of those companies are madly trying to develop their own chips. They do not like how dependent they have become on this company that is now worth more than them. You know, it goes Microsoft, Apple, and NVIDIA in terms of the most valuable companies in the world. And the only negotiation when you show up and try to buy GPUs from NVIDIA is, "Oh, we've raised our prices 30%." And they're like, "Well, how about 28%?" And they're like, "No, call us if you want them because there's a line out the door of everyone that will take these chips if you don't want them."
--:-- Kara Swisher: Right, right. You just have no power.
--:-- Scott Galloway: Yeah, it'll be interesting to come down. And there will be a come down, no question. But the Trump thing, it's just insane that the revenue is just like —
--:-- Kara Swisher: The issue here all comes down to the same thing. When is there a filing that shows Trump is able to sell? Because even his biggest fans know that President Trump tends to look after number one and number two through a million are him. And the moment he can sell his shares, he's not dumb. He's crazy, but he's not dumb. And he's mean, but he's not dumb. He's going to go sell everything. And they go, "Well, I'll crash the stock." I'm like, "I don't care. Sell everything. I need the money." And this is stupid. And I've gotten to know Devin Nunes and he clearly has no idea what he's doing. No one is on this thing. When I post, I get a bunch of weirdos, but there's clearly nothing going on on this platform. It's going to be a really interesting trivia question in about 10 years. I don't think this company will be around. These poor people that are invested in it, even though I'm like, you know, you kind of deserve it because you know.
--:-- Scott Galloway: It's a campaign donation.
--:-- Kara Swisher: Yeah, exactly. You don't get your money back. I mean, I'll say this, when I donate, every once in a while, I get all hopped up and I donate money to a politician. And I got to be honest, three, six months later, I'm kind of like, it was sort of literally like taking money into the street and just burning it. It just doesn't feel like it happened.
--:-- Scott Galloway: Well, also you get pilloried. You get so much more emails when you do that.
--:-- Kara Swisher: Anyway, we'll see what happens. Okay, Scott, let's bring in our friend of Pivot. Julia Angwin is the CEO and founder of Proof News and contributing opinion writer to the New York Times. Welcome, Julia. How you doing?
--:-- Julia Angwin: It's great to be here.
--:-- Kara Swisher: Good. So you have so many links. You and I went to journalism school together and also Scott and you just debated just recently, which is interesting.
--:-- Scott Galloway: Yeah, and you trounced me. It was actually quite embarrassing.
--:-- Julia Angwin: Oh, wow. Okay. We'll talk about that. That is not true. But go on.
--:-- Kara Swisher: But go on. So let's be — we know each other a long time. So you've done a lot of things over the course of your career, worked at lots of places. We've worked at similar places, too. But you launched Proof News earlier this year, which you described as a nonprofit journalism studio. Explain what that is, because you've had past startups. Talk a little bit about what you're doing here.
--:-- Julia Angwin: Yeah, basically, the reason I'm calling it a journalism studio is I think, as you guys actually perfectly prove here on this podcast, the audience is not necessarily always wanting to read text on a screen, and that there's a lot more interest in video. And I, as a person who's done a lot of data-driven reporting, realized that the things that I do could be better shown visually because I have data, charts, graphs. So I'm basically going to be producing videos in collaboration, at start with some existing YouTube and TikTok creators, and really trying to see if there's a way to bring more serious journalism to those platforms where serious journalism has not really played a big role.
--:-- Kara Swisher: So, but you had done this before, right? You had worked at a lot. You worked for the Chronicle. I remember you being there when I was a tech reporter. You worked for the Journal. We were both at the Journal at the same time when I was in San Francisco. And then you started, you joined ProPublica and did a lot of reporting in that regard. And then you did the Markup, which was trying to do this as a nonpartisan, nonprofit newsroom with data-centered journalism. Talk a little bit about that journey, because you've been trying to focus on bringing data to the people in a way that's understandable. And then there was a big mess at the Markup.
--:-- Julia Angwin: But yeah, there was. I know. But I do want to say I always appreciate you interviewing me the day after I was fired from the Markup. And that really helped me. But, you know, I grew up, I was a math major, and I really was a programmer and then sort of found my way into journalism.
--:-- Kara Swisher: But I think I've always got an accounting degree, if I recall correctly?
--:-- Julia Angwin: I do have an MBA with a focus in accounting. So basically, let's just be clear, I'm a super nerd. So I have always wanted to bring more data and rigor to journalism because I think partly because I enjoy it, but also because I think the audience, the data shows very clearly that the audience just mistrusts journalism. And so one of my thoughts is if we could show them more evidence instead of just three anecdotes, that would help build trust. So I have done that in a lot of newsrooms, like you said, at the Wall Street Journal, at ProPublica, a lot of them where they do have a big focus on data. But I have always been struggling to make data and data collection the centerpiece of the work. And that has never fit really into the model of traditional newsrooms because...
--:-- Kara Swisher: Meaning you're a sidelight.
--:-- Julia Angwin: Meaning you're a sidelight. Yeah. And also basically the way that data teams work in those newsrooms is it's sort of like a service desk. Like you go to the data desk and you order up your data like a hamburger and then they deliver it to you. And I have always been looking to integrate it more into the newsroom. So at the Markup, which I founded in 2018, the data journalists worked and reported to the investigative editor, not to a data desk editor. And so I have been wanting to bring it more and more central. And I think Proof is sort of my next step of like, "Oh, let's make the data journalists — let's forget it. Forget those word people."
--:-- Kara Swisher: Right. Yeah.
--:-- Julia Angwin: Yeah. I don't think anyone reads anymore.
--:-- Kara Swisher: Yeah. That's a fair point. Your first investigation was in folks in the presidential election in general of AI. Explain what you did there.
--:-- Julia Angwin: Yeah. So what we did was basically I wanted to understand — everybody was freaking out about AI in the election. And there's lots of reasons to freak out about that. But basically, I was like, "Well, what can I test?" Because that's what I'm always looking for. What is the testable hypothesis that I can look at? And so I was like, what we could do is actually look at how these AI models answer questions, really simple questions about voting and about voter access. So we brought in more than two dozen election officials from across the U.S. and actually put them in a room and had them do a hackathon where they put questions that are common questions that they get from voters, like some of them pretty dumb. Like, "Can I vote by text?" or "Can I wear a MAGA hat to the polls?" and asked the AI models for responses. And what we were able to see was that they were really inaccurate. More than 50% of the time they were wrong. And one of my favorites was Meta's Llama model said there's a service called "vote by text" and it made up a whole set of instructions for how to do that. That is absolutely not true. There's nowhere you can vote by text.
--:-- Kara Swisher: So they just suck at their job, right?
--:-- Julia Angwin: Yeah, they suck at their job. And I think even when I did that testing, which was in late January, we've gotten so much more increasing evidence of how much they suck at their job.
--:-- Kara Swisher: So, but one of the things I was noticing, people are putting up those inaccuracies all over. I'm trying to find one, but a lot of people are putting up those inaccuracies, like "Andrew Johnson went to Bard" or something like that. Here's one: "Thirteen U.S. presidents have attended the University of Wisconsin-Madison and earned 559 degrees. Andrew Jackson graduated in 2005. William Harrison graduated in 1953 and 1974. Harry Truman graduated in 1933." It just goes on. And apparently John Kennedy's still living because he graduated in '71, '92, and '93. So it's really, people are putting them up all the time how wrong these things are because of where they're dragging them from.
--:-- Julia Angwin: Well, I think Google really did itself a disservice by putting the AI at the top of the search results because the search results are actually often accurate. And then right above it, they have their inaccurate thing, allowing everyone to basically see in real time how bad the tool is.
--:-- Kara Swisher: How bad the tool is, except they take it at face value. Scott, question?
--:-- Scott Galloway: Yeah, I'm fascinated by the concept of Proof News. I'm in all of these working groups on WhatsApp, mostly around the Middle East, and we're trying to create a repository of data because we find that when we read these articles, a lot of times there's an absence of data or if they just had some data, the entire article would be framed differently. What is the business model? Are you bringing production values, data that should inspire a story, or are you helping fact check? Give me an example. Walk me through the customer journey of a client, how they pay you, and what value you're adding and how that value is differentiated from the other resources out there.
--:-- Julia Angwin: Yeah. So first of all, we're a nonprofit. So I'm right now funded almost entirely by philanthropy, but I think we will have an opportunity for earned revenue because there is actually quite a decent revenue share model on YouTube and on TikTok. And so we will have that. And I think also those audiences are used to the idea of trying to support creators that they find value in. So I think there's a different relationship there with the audience. So that's our model right now. We don't have a real commercial value paywall type model because I think what's happening that's upsetting to me in the information ecosystem is that high quality content is going behind paywalls. And so the rest of the world that can't afford it is awash in this sea of misinformation, AI-generated dreck.
--:-- Kara Swisher: So one of the things you also talked about in your Times column last week saying it's not living up to the hype in your opinion. You wrote, "We should reckon with the possibility that we're investing in an ideal future that may not materialize." Talk about this. And of course, you're getting pushed back. I guess Steve Levy said that you'll regret this take, although he's had some takes he might regret too.
--:-- Julia Angwin: I know, I'd like to have a regret showdown, Steve.
--:-- Kara Swisher: Yeah, exactly. Regret off. Yes. But talk about this because it was an interesting take. And I think Scott also has a point of view about the overhype happening too financially.
--:-- Julia Angwin: Well, so I'm curious to know, Scott, how my take compares with yours. But I basically feel that the companies sort of did themselves a disservice by coming out with this technology and saying, "It's so good that the main concern here is that it's actually going to take over the world and kill humans." So when you start with that level of hype, it's actually really hard to walk your way back to "barely answer a question." Where do we go from there? It's like, I'm sure it seemed like a great marketing strategy at the time because it did make it seem so sexy and dangerous and like, "Oh my gosh, you've got to try it because it's going to be so incredible." But I think that now, I honestly think that OpenAI disbanding their super alignment team is a little bit of an acknowledgement that that isn't actually the issue we're facing here right now. We are actually facing the fact that it's unreliable. It's not consistently accurate. And we have to solve those problems. I think Yann LeCun actually had a really great tweet about this. He's the head of AI at Meta. He said, "It's not as smart as a house cat. It's going to take years before it's smart as a house cat." And we need to start talking about it in terms of just engineering and iteration and what it's going to take to get there. And he's still an optimist.
--:-- Kara Swisher: Right, right, right. You said the question isn't really whether AI is too smart or will take over the world. It's whether AI is too stupid and unreliable to be useful. Scott, your take is more around the money being thrown into this thing and the hype around the numbers.
--:-- Scott Galloway: I love Julia's framing here that the threat isn't that it's smarter than us. The threat is that we think it's smarter than it is. And it gives you one answer. And there is a power to singularity that any technology gives you the confidence that it knows. At least Google says, "Well, here's 55,000 answers because we're not sure." But AI is basically saying, "This is the answer." It gives you back an actual answer. You said something that inspired a question that my guess is you have insight into. And that is when you think about the dominance of TikTok and YouTube between the two of them, that's the frame through which I would argue young people are seeing the world. And you talked about monetization maybe being better on YouTube. I'm just curious to get your take comparing and contrasting the monetization for a creator across these platforms. What is your general take on where the money is and how they approach creators? We were talking about the relationship between the debacle of OpenAI and Scarlett Johansson. What's your take on monetization? Even the News Corp deal they just signed, for example.
--:-- Julia Angwin: The monetization of AI or the monetization of—
--:-- Scott Galloway: Well, if I'm a creator, if you were advising — my guess is a lot of people come to you and say, "Help me figure out this approach to creating content." Or what are your thoughts? Okay, I have content I can focus on creating content for YouTube or TikTok. And I'm a capitalist. I'm driven by economics. I got to be self-sustaining. What is your view on the approach to monetization of creator content from the creator standpoint between TikTok and YouTube?
--:-- Julia Angwin: Yeah, I mean, so YouTube has, I think, of all the platforms, invested the most in building a healthy relationship with the creators that it supports. And so they have this 50-50 revenue split with ads, and they are responsive to the YouTube community, not maybe always as quickly as YouTubers would like, but they do sort of address issues when the YouTube community comes to them and says things aren't working with the way you're doing these ad splits or the way you do the creator fund isn't quite right. And so they have over the years developed a good relationship. And I do think that comes from a Silicon Valley tradition of understanding that you have to have a good relationship with your developer community. And so they have treated it a little bit like a developer community. And I think that has been really healthy. And what it has allowed is for a YouTuber who has a couple million subscribers, maybe three or four, to have a staff of like 10 people and be like a mini production studio. So that is actually a pretty healthy economy. It's a small business economy. What has been disappointing, I think, for venture capitalists is they were hoping to go in and they made a bunch of big bets on how to make studios to go into that space. And the thing is, it's not really a place with huge margins and huge growth. It's really a small business place. So I think there's been some disappointment from the venture capitalist community there.
--:-- Kara Swisher: So speaking of that, I'm going to move on to TikTok on your argument. But you wrote something that I think was really important in that, "AI models are relegated to producing mediocre work. They may have to compete on price rather than quality, which is never good for profit margins. And that scenario, skeptics such as Jeremy Grantham, an investor known for correctly predicting market crashes, could be right that the AI investment bubble is very likely to deflate soon." I'd love both your takes on it. You know, this is the biggest question raised by the future. This is a great column, by the way. "Populated by unexceptional AI is existential." Should we as a society be investing tens of billions of dollars, trillions really, Julia, our precious electricity that could be used moving away from fossil fuels, and a generation of the brightest math and science minds on incremental improvements in mediocre email writing? I know why Steven got mad.
--:-- Scott Galloway: What?
--:-- Kara Swisher: The future! The future. Although I do think it will get better. I think this is a lot of what people said about the early internet. It sounded similar. But I do think you're right. This money, I'd love you both to talk about that really briefly and then we'll get to TikTok.
--:-- Julia Angwin: Yeah, I mean, I think that I do say in there that we shouldn't stop working on AI. I think it's a tool and it's going to get better. I agree with you on that. But I think that the thing I was trying to get to here is that the myth we've been sold that we're on this march towards artificial general intelligence, which is essentially this utopian vision where there'll be one machine that's as smart as the best doctor and the best fighter pilot and the best lawyer and the best email writer. They will have all of those skills. That is the myth that we were sold. And that is what is being used to justify those trillions of dollars in investment and all the energy usage, etc. I think once you acknowledge and admit that that isn't the right goal — and my belief, although I could be wrong and Stephen Levy could have the last laugh — I think the history of machines shows us that specialized machines tend to work better. So it's very likely that we'll have an AI that's good at medical stuff and trained only on peer-reviewed medical data, but won't actually be also a drone fighter and all the other things. And so I think if you look at it that way, which is something that the venture capitalists don't want because that's not a huge hyperscaling, massive exit, but if you look at it in terms of that, then you make different choices about what resources you put in. And that's what I really think is a little bit of rationality in this. It's going to be useful, but it's probably going to be domain-specific useful. And investing in those would probably be more wise, in my opinion.
--:-- Scott Galloway: Julia, it's a dessert topping and a floor wax. [This is an old SNL reference]
--:-- Kara Swisher: Scott, just very briefly, your thoughts.
--:-- Scott Galloway: I think Julia is exactly right. The thing I've been focused on, we talked about this show, is that if we could go back — these are energy companies. Compute is now the new oil. And I think if we could go back and recognize anytime you convert one substance into another for economic gain, you're going to have externalities. If we could go back, I think we would have levied bigger taxes on pulling oil out of the ground and then invested in a movement to renewables or invested in carbon recapture. I think this is a unique moment to place pretty serious taxes on compute to fight, including giving money to Julia's organization to ensure that AI doesn't get out in front of us and we reinvest in some of the harm. So I'm focused on the externalities and how we early on decided to put a tax on compute.
--:-- Kara Swisher: Let's talk about the TikTok ban, which you think is a mistake. You and Scott are actually participating in a debate last month before the law passed. Latest: TikTok's parent company, ByteDance, asked an appeals court to speed up its lawsuit challenging the new law in a filing Friday. Eight TikTok creators have also sued the government last week, claiming the law violates their First Amendment rights. TikTok is also reportedly planning global layoffs of its operating and marketing workforce. There's some downturn in the usage, by the way, or flattening at least. So give your last best shot here, Julia, of why this should not have passed because it has.
--:-- Julia Angwin: Well, first of all, I do want to say, Scott and I did this one-hour debate on the TikTok ban, and then the audience voted, and it was 80-20 for Scott.
--:-- Kara Swisher: For Scott, okay.
--:-- Julia Angwin: So I was fully trounced.
--:-- Kara Swisher: Yeah, that's okay.
--:-- Scott Galloway: First off, that's not true. It's changed dramatically. That was like when, I think that's when five people voted in the first four, whatever, like me.
--:-- Julia Angwin: Has it changed?
--:-- Julia Angwin: Yeah, it's come way down. It's come way down.
--:-- Kara Swisher: All right. OK.
--:-- Julia Angwin: But basically, my feeling is that we should regulate algorithms and privacy. Those are our concerns about TikTok. And we're failing to do those. And I am concerned. We are in a situation where there's probably two outcomes. There's maybe three if the constitutional lawsuits win, which I feel like is probably shaky. So I feel like there's two outcomes: one, it shuts down because China's basically threatening to walk away, or it gets bought. And the list of buyers is just a bunch of billionaires with political agendas. So I don't feel like we win. We have Steven Mnuchin or Bobby Kotick. There are people who want to buy it and they are going to use it to push what they want. So I don't think we get to a slightly better place where maybe it's not China's agenda, but it's still going to be someone's political agenda. And that is the problem with all of these platforms — they have such a power to control speech. And that's the issue I think we should be focusing on.
--:-- Scott Galloway: Well said. The vote was 59 percent Scott, 41 percent Julia, just so you know. This is among debates.
--:-- Kara Swisher: What do you think if you were advising the White House and it did get to the point where it wasn't overturned by the courts and you wanted to ensure that we don't continue to march down this road of a few billionaires or a few very wealthy people imposing their own political views on the populace? How would you advise them?
--:-- Scott Galloway: Well, that's Julia's point, right? That it keeps happening, but this time it could happen at a dangerous scale. This is more than Bloomberg News, which nobody, quite frankly, very few people watch. So what guardrails, if any, do you think we could put in? They're going to have input into who, if this holds up in court — and a lot of people say it won't — but assuming it does hold up and they are forced to divest it, what guardrails would you advise Biden to put in place in terms of the ultimate new owner?
--:-- Julia Angwin: I'm not a policy expert, so there are probably people with better ideas than me. But my idea is that we, the users, should have control of our algorithms. We should have a dial where we can turn it — you want all pro-Israel, you want all pro-Palestine, you turn the knob. Because that takes it out of the company and it takes it out of government, since we don't feel comfortable with government controlling those knobs because we believe in free speech. But I don't really love companies doing that either. The reality is the companies can provide us those dials and they refuse to. Europe has actually passed a law giving slight control, basically saying there has to be at least one alternative algorithm. But essentially, all they give you is the chronological feed. I think that if we took the control back of those algorithms, a lot of our problems with social media would be solved. Not all of them, but it would be a very good start.
--:-- Scott Galloway: I understand the rationale there, but that kind of scares me because I think the point of good media is that it moves my dial. That it says, Scott, you have a bias here and your bias is leading you to false or hollow conclusions. It's bad for you and bad for the world. Do you think there's an opportunity for organizations like yours to come up with some sort of index that these companies use or don't use? Like, there's mandatory labeling or disclosure now on food. Do you think we could ever get to a point where maybe a company like yours issues a — I don't want to call it a truth index, but a fact-checking index?
--:-- Julia Angwin: Yeah, I do think labeling is a really important intervention. Some of the Facebook files that were released by Frances Haugen, the whistleblower, actually were about labeling. And they were pretty interesting internal studies showing how effective they are. So I think it is an underused intervention. I get worried about the government doing the labeling. So I think you're right — it would have to be independent, and then we'd have to figure out how to do that. But that is also a great additional piece. I think you do need it. But I actually think having to set your dial — if my parents had to set the dial to be like, "OK, I want pro-MAGA" — it would actually be something in their heads, they have to acknowledge it. Externalizing it does give you that. I'm in a bubble, but it's my bubble.
--:-- Kara Swisher: My bubble, yeah. I wonder what Scott's dial would look like.
--:-- Scott Galloway: I don't even want to think about it.
--:-- Kara Swisher: Emily Ratajkowski?
--:-- Scott Galloway: That's my bubble. That's all I want. That's my bubble.
--:-- Kara Swisher: Julia, this is really interesting. We have to go, though. But I just want to read one more mistake from — I think this is Google. Yes. "The Yakuza have a presence in the United States with around 80,000 members, mainly on the West Coast and Hawaii. They're known for smuggling methamphetamine and weapons, white collar crimes and connections with the Colorado higher education system." And then someone writes, "Sorry, run that last part by me." Yes. Go Google. Go Google. Take your great product search that everyone has loved and just put some garbage right atop.
--:-- Scott Galloway: Garbage in, garbage out.
--:-- Kara Swisher: Anyway, I really appreciate it. Julia, you're a wonderful reporter. Thank you so much for having me.
--:-- Julia Angwin: Check out her work at proofnews.org and in the opinion section in the New York Times where she's angering internet people everywhere.
--:-- Kara Swisher: Good to see you, Julia. Congrats on your thing.
--:-- Julia Angwin: Just trying to follow your footsteps, Kara.
--:-- Kara Swisher: Well, you're doing a better job. Great. Thank you so much. Take care.
--:-- Kara Swisher: All right. That was great. Julia's so smart.
--:-- Scott Galloway: Oh, she's always the smartest person. It's nice. It's inspiring that people like that give up economic opportunity and influence and status and vanity to do that kind of work. She's just very tough, but not tsk-tsk. You know what I mean? She just lays it out and she's sunny about it.
--:-- Kara Swisher: Yeah, she kind of reeks of integrity. It's just sort of like, you get this — sure, she might be wrong every once in a while, but her heart's in the right place, and she's trying to pursue the truth. Which is what good journalists try to do. Anyways, I like that she's doing that. I would love to see — think about the labeling disclosure requirements. Some people think it's over-regulated around food, the calorie intake. Just read the back of any food product and how much information they have to disclose. And I think you could now argue that the data you're getting on your diet is 16 hours a day of digital. The fact that it has absolutely no labeling — it doesn't tell you that it was altered by AI. It doesn't tell you that this is just not accurate, that there is no proof that mRNA vaccines alter your DNA. That is very suspect. So it would be really interesting if you could find a basket of companies that issue — and you can choose which ones you want labeled, or you could hide the label. But I love the idea of some sort of FDA-like labeling on the information that people are consuming all day long.
--:-- Scott Galloway: Yeah.
--:-- Kara Swisher: All right, Scott, one more — I agree with you — one more quick break. We'll be back for predictions.
--:-- Kara Swisher: Okay, Scott, let's hear a prediction.
--:-- Scott Galloway: Well, I do think this OpenAI deal with News Corp is setting a precedent. I do think you're going to see media companies that have a lot of rich data to be crawled are going to feel their mojo and get serious. Maybe they'll be able to say, "No, I'll see what Meta says or I'll see what Anthropic says." The result will be — I think there's an investing opportunity. This is not financial advice, I'm just thinking out loud. But companies such as Gannett — they produce a massive amount of content every day in local markets and it's a shitty business. Disclosure: I was an investor in the debt, I'm no longer an investor there. But I think companies like Gannett, and also a company that I am an investor in, Yahoo — I think companies that generate a tremendous amount of relatively good content are going to find they have access to new cashless streams. A bidding war might break out for the few remnant companies. There'll be different models — you can either lease it for an exclusive, you're going to have to pay up. But I think you're going to see a mini boom in some smaller media companies, such as Gannett or Yahoo or scale companies, when the marketplace recognizes they're now in a position to command a new source of revenue that's very, very high margin. I think there's an investment opportunity here.
--:-- Kara Swisher: I agree with you. I think it's really interesting. And we'll see who else settles. It'll be interesting to see what Barry Diller does at Scripps and some other ones who have been more hostile. I don't think hostility is just a negotiating ploy. But what about Simon and Schuster?
--:-- Scott Galloway: Yeah, this is where it gets weird. And then how much of that do we get? Penguin probably has 20% of the written word out there right now in terms of sales, maybe 30%. What happens when Penguin Random House does a deal for $200 million or $500 million with Anthropic? How much do their authors get? It's going to be very interesting. They can do deals with everybody. It doesn't necessarily have to be exclusive because it could be more like the way songwriters get paid. There'll be a clearing house.
--:-- Kara Swisher: I'm guessing we've given away our rights probably. I mean, it's probably somewhere.
--:-- Scott Galloway: Yeah, but we do get rights on the back end.
--:-- Kara Swisher: Yeah, it's true. When it goes above a certain sales, does this qualify as back end sales? Right, exactly. It should be for creators. We should be consulting our lawyers right now.
--:-- Scott Galloway: Let's call ScarJo's lawyer.
--:-- Kara Swisher: Let's call ScarJo's lawyer. Anyway, great prediction. That's a really good one. We want to hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Okay, Scott, that's the show. We'll be back on Tuesday with more Pivot and Stories of the View if you come back alive. Today's show is produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie Andretot engineered this episode. Thanks also to Drew Burrows and Emil Seberio. Nishat 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 slash pod. We'll be back next week for another breakdown of all things tech and business.
