Warner Bros. Discovery For Sale, OpenAI’s Browser, and Netflix Earnings

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Kara Swisher: Little do they know that you would put out. That's the thing. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher from Korea. Hello, Scott. So give me your impressions of Seoul. Tell me all about it.

Scott Galloway: Well, I'm drinking bubble tea, of course. I was in the Gangnam region today with all the lights and all the young people in all the plastic surgery area. It's great, actually. It's very clean. It's very vibrant. Young people wandering everywhere. It feels good. I mean, I think they feel very emboldened by pushing down the martial law thing because they're good at more not. And it feels very vibrant. It feels not a lot different from the last time I was here, I'll be honest with you. But I like Korea quite a bit.

Kara Swisher: How many times have you been here?

Scott Galloway: Well, you know, it's painful for me because I had a Korean friend who died. He was so young, so young.

Kara Swisher: Oh, no. I can't believe you took that joke. That's good. That's the only Korean joke I could find that was only mildly racist. Oh, my God. That is... Get it? So young. So young. Anyway, I went to a company that does robotics today. I was in this neighborhood, this gang neighborhood talking about, you know, they do... You would like it because they're very into preventive health care, but it includes a lot of facials. And like I said, and plastic surgery. And the person I was talking to says, "Oh, you go to lunch, you get your nose done, and then you go back to work." I was like, what? So it was kind of interesting. So I'm trying not to make it sort of like if you go to Times Square and that's New York, but it's not. But how would you, like, give me the analog. Seoul is a cross between X and Y city.

Scott Galloway: I haven't been there in 30 years. You know, it's a little like New York and Los Angeles because it's so vast. I mean, I've been driving in this car.

Kara Swisher: Oh, that sounds awesome.

Scott Galloway: Yeah, it's a little... I'm sorry, late night drinking spots and hot Uber drivers?

Kara Swisher: Yeah, and constant Korean fried chicken and the food is... Actually, the food is interesting. One of the reasons is because even though there is a lot of drinking and stuff like that, like everywhere in cities, it's a very healthful place. You don't see unhealthy looking people anywhere. Everybody looks really fit. And the food is pretty basic. It's the rice, the protein, lots of vegetables and stuff like that. And then one thing that I was talking about today is healthcare is so revered and everybody takes it. There was a word and I'm blanking on it. I'm not going to mangle it in Korean, but...

Scott Galloway: Decency? Humanity?

Kara Swisher: They just treat people like they can't... They're like, "How do you have your healthcare there? When we're sick, we have one pain, we go to the doctor and it takes five minutes."

Scott Galloway: You mean 40% of Korean households do not have medical or dental debt?

Kara Swisher: Correct. That's right. You know, they were sort of shocked. 70% of them are not obese or overweight.

Scott Galloway: Yes, exactly. That's exactly right.

Kara Swisher: And so they care a lot about their body. And when they say "How are you?" the word is "How is your body?" So it's a really interesting place. They've got lots of problems, obviously. There's this great wealth gap and everything else, as you know, depicted in movies like *Parasite* and others. But I have to say, around healthcare and longevity, they're quite dedicated, which is why I'm here. So I'll let you know at the end.

Scott Galloway: When I was in elementary school, I had a pen pal in North Korea, of all places.

Kara Swisher: North Korea?

Scott Galloway: In North Korea, yeah.

Kara Swisher: What?

Scott Galloway: Yeah, and I remember writing once, "How are things in North Korea?" And he wrote back, "I can't complain."

Kara Swisher: That's a joke. Why do I fall for it? Why do I fall for it?

Scott Galloway: It is weird. Let me just tell you one thing that's weird. They were also talking about the heist. It's a heist.

Kara Swisher: I'm going to ignore you completely with your Korean jokes.

Scott Galloway: Okay, I got it. I thought you'd start singing "Golden" or "Takedown" from K-pop Demon Hunters.

Kara Swisher: Isn't that K-pop Demon Hunters?

Scott Galloway: Yeah, but that's from the United States. Those are Korean-Americans and Korean-Canadians who did that production. But it's very popular here.

Kara Swisher: I'm sorry, Kara. I don't see race when it comes to anime.

Scott Galloway: Okay, anyway. It's become popular over here, but a lot of things go from here. You know, K-pop and that whole cultural Korean stuff has really moved global in a lot of ways. But what was I going to say? I can't remember before you told that terrible joke.

Kara Swisher: Oh, it's weird to think that I'm this close to North Korea. Like, it must be so stressful to be near a country that wants to bomb you out of existence and stuff. So that's a weird thing.

Scott Galloway: I don't know. Just go to a pro-Palestine rally at Columbia.

Kara Swisher: Oh, stop it. Don't even.

Scott Galloway: Sorry. Couldn't resist.

Kara Swisher: Trump is like ripping the White House down. I'm not even going to...

Scott Galloway: Oh, I agree. Have you ever seen a visual metaphor that's more apt than the East Wing being torn down? I mean, seriously.

Kara Swisher: I'm sorry. Everybody gets a pass except for Trump. Anyway, I think, I mean, like, release the Epstein files. That's all I have to say about this. Like, it's another thing. Has anyone heard from the first lady? I don't get it. If she doesn't have to put up with them, why do we? She doesn't even live there. Like, where is she? She's not there.

Scott Galloway: Not the word for Melania. Because they have that weird patio now. They've got... Oh, my God, the next president, if it's a Democrat, is going to be like, "What the heck am I going to do?"

Kara Swisher: And we'll talk about that in a minute because we've got a lot to get to today, including Tesla and Netflix earnings, which are really interesting. And OpenAI taking aim at Google with its new browser. But first, Warner Brothers Discovery announced this week it's officially exploring a sale after getting takeover interest for some part of the company earlier this year. Warner Brothers announced a plan to split in two, separating its studio and streaming from its legacy cable networks. CNN is the most famous of those, but they have several. Now it's open to an alternative separation structure. I mean, David Zaslav's saying the obvious because it's rejected three takeover offers from Paramount's David Ellison. Other rumored suitors include Comcast, Amazon, Apple, and Netflix. Scott, we've been talking about this, but you predicted in 2023 that Warner Brothers could face an activist investor. Let's listen.

[Audio clip plays]

Scott Galloway: I think you're going to see an activist at Warner Brothers Discovery. The stock is now down to a point where I think there's a lot of upside. As Zaslav, to his credit, is reducing debt, and the assets here are trading at about, even including the debt, about half of what they paid AT&T for the asset. So I think that there's blood in the water. People see these assets have declined to a level where there's a decent amount of upside with not too much downside.

[End of audio clip]

Kara Swisher: So it's not an activist investor, but it is other companies.

Scott Galloway: It's the ultimate activist, isn't it? An acquisition?

Kara Swisher: True, true. But these are companies that want to, what we've also talked about, which is taking them, cutting costs and consolidating, which is a theme you and I have talked about quite a lot. The idea of sort of taking, moving, and why should there be ABC, NBC, CBS, CNN, etc. But that's not really the focus here. It's the studios and streaming, I think, probably. So talk a little bit about this, because one of the things, I've talked to a lot of people about this, and they feel like if the Ellisons get to $26 a share, I think they're in the $24 area, it's a done deal, essentially. And Zaslav is trying to make an auction happen, I guess. And he's already in the money. He's going to do really well himself. But he's trying to argue that split apart, it's $30 or whatever once you split the two together. So why should they take a cheap offer from the Ellisons? And the Ellisons are trying to get the studio and the streaming cheap because once you split them up, there are a lot of suitors, right? The only issue is that the others have, one, money problems comparatively to the Ellisons, and two, not a friend in Trump. Like Comcast, Brian Roberts is not a favorite of Trump. Amazon probably is more so. Apple probably is more so. Netflix probably not. And so there'll be difficulties in picking up any of these things except for the Ellisons, which is of course because we live in an autocracy, so friends of Trump get what they want. Antitrust concerns of course would be there, but not in this administration. And it does in a weird way make a lot of sense to consolidate some of these assets with other assets. It just depends if the gimmes are spread around. But what are your thoughts on this?

Scott Galloway: Well, so there are suitors that do it for economic reasons. And that is they see an opportunity to create scale or consolidate the back end or for growth. So they're buying it for financial reasons. There isn't a financial buyer here because this thing, the majority of its assets are in decline. And it never made any sense. Is it the studio and streaming or is it the CNN part? But if you look at top-line revenue here, this isn't a company, this is not a growth company. And also this stuff, I mean, the problem is you have a mix match of assets. The streaming company, the marketplace values growth, but that growth is expensive. And then the other stuff, the market does value EBITDA, but that stuff's declining. So what you have is the marketplace wants a clean story. And if it was just HBO and, say, Warner, the movie studio that created a vertical integration of content to the streaming platform, and HBO still has an amazing culture and still manages to punch above its weight class, it would trade at a much larger multiple. But at the same time, it has these other assets that would trade at a lower multiple with a strong EBITDA. And when you have a mix match of assets in terms of growth complexion and where they are in the business cycle, the marketplace finds the shittiest part of the business and assigns that multiple to the entire thing. So the merger never made any sense except for David Zaslav. And David Zaslav, so Mark Zuckerberg and Sheryl Sandberg, there are few people who have made more money while causing more harm to young people, right? But they have added tremendous shareholder value from a shareholder standpoint. They deserve their billions. The most overpaid CEOs relative to shareholder destruction were probably Marissa Mayer, who managed to fuck up everything at Yahoo and walk away with a quarter of a billion dollars. But she is about to lose the crown to David Zaslav, because David has taken out about, I think, a third of a billion dollars so far for taking the stock from $24 bucks where it was when he talked people into merging it and has still managed to take that much money out of the company. And my guess is, I mean, this is what's going on. I've been on these boards before. He's pretending there's other bidders. No sane, rational buyer can bid on this. This is who can bid on this: the children of people who made $90 billion in one day who want to go to the Academy Awards and have a big vision for AI and will overpay for this thing. And look what media has become. Media has become basically just a spa retreat for the nepo billionaires. Who are the players here? The Bronfmans, Shari Redstone, David Ellison. What do they all have in common? They're children of billionaires. Because any rational buyer, Comcast, any rational buyer looks at this thing and says, "It doesn't pencil out for shareholders."

Kara Swisher: Let me just interject. Bill Cohan, who's been very smart on this, I think, has noted that maybe daddy won't do this. Daddy Larry is a little too smart. Like, at the same time, why not? It's like a good... Well, the getting's good, and it would help Paramount to have the assets of Warner and HBO. And then they'll just spin off. And they don't care about news. I'm sorry. They just don't. All their choices tell me they don't care about news. But, you know, merge them together, cut costs, and then spin it off to some PE company. I mean, the cable networks, and then bleed them dry. Cable and news, essentially. Is that how you see it? Or will they keep it? Just because why not?

Scott Galloway: I don't know what is in Ellison. I mean, at the end of the day, Larry Ellison is to David Ellison what Peter Thiel is to JD Vance. And that is when Larry Ellison calls his son David, David can never say no. It's like, "Look, boss, you have one credit card and it has my name on it. And you're allowed to use it, but at any moment I can tell you no." And what I think is going to happen, I think the Ellisons are going to get this, and Zaslav is pretending there's another suitor, which there isn't at this price. And he's also, I'll bet, spending more time trying to figure out his exit package.

Kara Swisher: Or how to stay in here.

Scott Galloway: How to stay in here and have a fake role. Or pretend. And all I know is he's going to figure out a way to get another $10 million for selling the company at the price he talked other people into buying it for several years ago.

Kara Swisher: Or just slightly above, yeah.

Scott Galloway: And this guy's going to walk away with Marissa Mayer-like compensation for adding no value here. But what I think they would do is, quite frankly, I don't buy into this hair-on-fire that they're trying to control the media. I don't think Larry Ellison is that Machiavellian. I don't think they're going to try and take CNN and turn it right wing. I think they will probably sell it.

Kara Swisher: Yes, that's what I said.

Scott Galloway: Yeah, like a PE firm. So I agree with you. What I do think they'll do is say, "Okay, David, you get to go to the Academy Awards because we'll own Warner and HBO." And I think they're going to take AI and Oracle's newfound kind of like... Oracle is sort of a distant number two now to NVIDIA... and try and figure out a way to substantially reduce the cost of the production, the means of production, and create kind of a new, a true Quibi. Meg Whitman and Quibi said we're bringing together the best of Silicon Valley and Southern California, which I always thought that's In-N-Out on a sourdough bun. But these guys are going to try and take content and say, "All right, they have amazing franchises, amazing IP. The biggest problem here is we need to reduce costs across the board by 30%. And we can do that with AI and we understand AI." And you're just going to see millions of TikToks of creators in the Hollywood community crying into their camera about how they don't need 73 costume designers anymore.

Kara Swisher: Especially as I, that's the example I've used many times, is they don't need costume designers. They can do storyboards. They can do all manner of things much cheaper. And it takes the cost from, you know, someone was telling me you could take a cost from like $3 million to $330,000, right, versus something else. And I think one of the things that's hard here is people are very in love with the idea of a CNN or a CBS, but these are declining audiences. So where do they... I think it's smart to grab this before, because if there would be an auction for the studio and for Warner and HBO, there would be, I think. I think there'd be a lot of interested buyers for that asset, right? So if it gets away from the CNN part of it, that's a problem for the Ellisons. So they want to get it on the cheap, right, presumably, or without a lot of trouble, without a lot of bidding. That's my assumption.

Scott Galloway: None of these things are cheap. I mean, Warner Brothers Discovery now is in October of 25. Right now it's trading at a PE of 67. I think they want Warner and they want HBO. They want growth assets. The other stuff they can sell to a PE player for cash flow that's consolidating the backend. I don't think their desire is to control the world of news. I don't think they want to step into that thunderdome. But you could see them right away doing a second auction to pay down some of the debt if they're going to take out debt against this, and then try and, as I said again, bring together the peanut butter and chocolate of AI.

Kara Swisher: You are, I think what you've said, I think all these newsrooms, just for fun, I watch CBS, ABC, and NBC evening news. And they're, what, 24 minutes and six minutes commercials? 22 minutes is the same fucking thing. And then they all pick a different feel-good story. It's the same formula. You know, again, about a moose that keeps showing up because this old lady fed it once. And they're literally... Why on earth is there a difference? Their newsrooms are no different.

Scott Galloway: Yeah.

Kara Swisher: They're just no goddamn different.

Scott Galloway: Listen, every now and then, as does any news organization, they come up with a good one, right? So CBS *60 Minutes* still is quite good, for example.

Kara Swisher: I bet they sell that off.

Scott Galloway: I bet they sell that off. That's my prediction here. CBS Sunday Morning is good. I can't... You know what, I don't know what I would do if I wasn't able to watch Andrew Ross Sorkin explain the stock market to an 83-year-old Lesley Stahl. I just don't.

Kara Swisher: No, but watch it more. When there's more demand. Don't be mean to Andrew, and don't be mean to Lesley.

Scott Galloway: No, no. Here's the thing. It's a good brand. It's still a great... There are pieces of it that you could do. You could presume I could do something with it, Scott.

Kara Swisher: Oh, *Face the Nation* is an important thing. I had a couple of those assets. I would have lots of ideas of how to digitize it and make it more real.

Scott Galloway: Yeah, and you'd take something they spent a billion dollars on and make it worth $120 million. These things don't... Unfortunately, journalism is a shitty business.

Kara Swisher: Well, I wouldn't have to pay $120 billion. So one of the things, you know, it's really interesting here is that the media gets all, like, "Oh, no, CBS." And I was like, you know, they're declining businesses, really, by an audience point of view. And that's the problem. And when you talked about ABC, CBS, they are all the same. Many years ago, I'll tell a very brief story. I was with, I'm not going to say who it was. I was on this network thing, and they showed a package. You know when they do those packages where the anchor sits there and interviews people on a graduated stage where people are sitting? It was a big news event that happened 10 years before, and they interviewed people from the day, right? And I was sitting next to Ken Burns, who had just done this really wonderful documentary on the Gettysburg Address, which just happens to be one of my favorite pieces of writing in American history. And so I was talking to him during the package, and the host turned to me and he said, "Why don't you watch my package?" And I don't know why I said this, and I said it without thinking, because I was very interested in talking to Ken about this documentary, because it was so good. I said, "Well, if it was interesting, I'd watch it." And he looked at me, he goes, "Well, that's harsh." I go, "It's not interesting. It's the same shit. You're always doing the same exact setup." And this was five, 10 years ago. And I just was like, you have to make stuff people want to watch, right? And I just couldn't look at it. And that's what, they all are the same in some ways. And there's little points of difference sometimes that are really promising. I still think *60 Minutes* is an amazing brand. I think you could do a lot with that brand. And it does rather well online once they get it up there.

Scott Galloway: Look, these things are being picked apart limb by limb because you have something like *The Atlantic*, which does an amazing job and brings together, I think, some of the most talented writers in the world. But I think a guy like Derek Thompson is prolific and has tapped into like, you know, he's under the age of 40, so he feels like their grandchildren walking around these places. He goes to Substack, and he's making more money on Substack now. I think a lot of the truly great individual contributors are going to use the platform for prestige and then veer off and do their own thing.

Kara Swisher: Hi, nice to meet you. What do you think I've been doing all this time at the *New York Times* and everything? But there is more to it. Let me just say, *The Atlantic* under Jeff Goldberg, and also *Wired* under Tati Drummond, they found invigoration in terms of higher subscriptions. They're doing pretty good with those. Only the editors that are invigorating are doing okay, comparatively to the individual players. But go ahead.

Scott Galloway: Yeah, but you're the perfect example. And that is you at the *Washington Post*. You could be the premier tech reporter. You were the premier tech reporter at the *Washington Post*, *New York Times*.

Kara Swisher: *Wall Street Journal*.

Scott Galloway: You make half a million.

Kara Swisher: Okay, sorry. And the *Wall Street Journal*. Excuse me. Off with his head.

Scott Galloway: Anyways, let's be generous and assume with comp and everything you make half a million bucks a year.

Kara Swisher: Not the salary, no. That's because I created the conference. I made more than that.

Scott Galloway: Okay, 150, 200. My point is, you make 10 or 20 times more than that finding a guy who tells dick jokes and doing your own thing.

Kara Swisher: And now racist.

Scott Galloway: So young, so young is racist. I'm making fun of you.

Kara Swisher: I understand.

Scott Galloway: I love Korean baseball players. They often hit it out of the park.

Kara Swisher: Oh my God. Oh, Jesus. Is that racist? Anyway, finish up with this. So what happens?

Scott Galloway: So the news goes to PE. The studio stuff, the cable, the ad-supported cable stuff gets sold off to just get rid of that shit. It's more trouble than it's worth for them. And no, but they're getting this. I think the deal is probably done, Kara, because no rational buyer. They're going on record and they're creating... I doubt Comcast is anywhere. Comcast is like, "Well, call us if you take $11 bucks a share." Because that's what we would need to pay for this thing to be able to explain to our shareholders in an earnings call why we paid. We can't justify anything above that. David Ellison's criteria are different because he is the son of a guy making $90 billion in a day when he announces a contract with OpenAI. So, and that's what media has become. It's become a series of irrational buyers whose parents are worth hundreds of billions of dollars. This thing goes to the Ellisons. They will spin off the news. It's not a Machiavellian attempt to control thought. They'll get as much as they can. And then I think they're going to use Warner and HBO and some of the content or some of the studios as their playground to do really interesting shit with AI.

Kara Swisher: And on TikTok, yeah, which they also have control over. That's a real... You know what, I hadn't thought of that. That's the most important thing here. TikTok is the most important thing here. That is really an interesting, taking that content and slicing it up and putting it on TikTok. But it all comes back...

Scott Galloway: Occasionally I have one of those mind-blown moments. When I was in *Fantastic Four*, the credits took seven minutes. I know I just did that the other day. As many people worked on *Fantastic Four* as work at Palantir or Reddit. And it's a risk. They don't know how this thing's going to do. That business, other than healthcare, I think big-budget content production is the most vulnerable thing to AI right now.

Kara Swisher: Very much so.

Scott Galloway: They're just going to go line by line and go, "Do we really need 22 costume designers for our shoot in Sweden? Do we really need Sweden?" Every single thing will be... And all the existing guys, Iger and Zaslav, they are still very empathetic. And also because they're all 100 years old, they don't want to rattle the unions and SAG-AFTRA's cages like this. But Ellison, honey bear, don't give a shit. He's going to be like, "Put out 10 block, but put out a new Superman." Although he is known as talent friendly. He was involved very deeply in the *Mission: Impossible* movies, the new *Star Trek* movies, and of course in *Top Gun*.

Kara Swisher: Yeah, he's a rich kid. I just had dinner with a friend of mine who's an amazing producer and does these incredible films.

Scott Galloway: Kara, whenever I meet someone at an event and they say, "Oh, I'm like, what are you doing? I produce documentaries." I'm like, "Oh, how did your husband get rich?" I mean, the people in this business, it's like meeting a kid who's working in an okay job, not a great job in New York, and living in SoHo. It's like, "Oh, your parents are rich." No young person can live in Manhattan now unless they're working for J.P. Morgan or got transferred by Meta or their parents are rich. And every player now in film production, in Hollywood, effectively, is someone who is so frighteningly talented they managed to break through. They're literally the... and they're there, but they're in the 0.1%. They're the Michael Jordans of content. Or their parents are putting them through Hollywood. Or they're in the system.

Kara Swisher: So you don't think Netflix is going to try to wade in here in any way?

Scott Galloway: Netflix. That's the wire that you had, Netflix. I don't... I think Netflix is becoming like Apple in the sense that we'll just do it ourselves. I think Ted Sarandos realized our culture is so strong and so powerful. That's what the CEO said. Buy shit and then try and integrate it and deal with whoever's running fucking Warner Brothers. We have a way of doing things. We're outstanding at it.

Kara Swisher: Yeah, maybe Amazon.

Scott Galloway: And if he was going to buy anything, if Sarandos was going to buy anything, he should buy Disney because he would just... He would that would be... They have a succession problem. The content, they could have Disney as the Netflix family. They would just own streaming. It would just sort of be game over. But I don't even think, if I'm Ted Sarandos, it's like, we're so good at doing what we do. The existential threat, the only reason Netflix would potentially weigh in here is that they want to get a ton of content to compete with YouTube. So, for example, 20% of television viewing time last month is 12.6% of YouTube, 8.3% of Netflix. Netflix has squarely figured out YouTube is their competitor. And if you look at what Netflix does need, though, and the only reason they might weigh in here and buy some of this content or buy pieces of it post-acquisition by the big price they can't compete with with the Ellisons, is Netflix's content library is roughly 36,000 hours long, right?

Scott Galloway: That's their entire library, 36,000 hours. That's the same amount of content that YouTube users upload to the site every 70 minutes. So every hour, YouTube has uploaded content equal to the entire Netflix library. And what you have is the two are going to come together. YouTube content is going to get much better. The only thing moving podcasts in and out of the top 100 is the quality of their video game. And then you're going to see Netflix start to look more like YouTube, and that is they will figure out ways to have, quote unquote, a deal with a podcast. The deal with podcasts they just did is essentially them dipping their toe not into podcasts, but into a form of user-generated content that costs much less. So you've got to see the means of production and the content come down on the one end, and the quality is going to go up on the bottom end.

Two things on the news, because I agree with you that they're, like, this week, it's all like the Taranawas, we'll talk about the Taranawas because it's really kind of grotesque. But what you said about why don't they take my two interviews a week on On and make them into a show. I was like, I have Bernie Sanders and Kamala Harris. You could have done a great like.

Kara Swisher: By the way, it was great. I don't like to watch your stuff, but I did break down the interview with Bernie. It was great. He's great.

Scott Galloway: Yeah, he was great.

Kara Swisher: He's really. I could take a billionaire. I don't hate them all. A good billionaire. It's fine.

Scott Galloway: Yeah.

Kara Swisher: Some of them believe in democracy. Did you like his little Democratic voice? That was my favorite thing.

Scott Galloway: Oh, I think he had a tiny little voice for the Democratic establishment that made me laugh hysterically. If, like, literally, if that guy was 70 years younger, I'd vote for him for president.

Kara Swisher: Yeah, a lot of people would. That's why he was, all the Trump voters went to him. Anyway, let's move on. Let me ask you one more quick question here, one more very quick and answerably. So if you had, would something like Versant want to buy a CNN and then merge their newsrooms and then have two good brands, two decent brands to try to work with or not at all? Like, why bother? They get the, because they lost all the news stuff. They lost all their news stuff to NBC. So they're building their own news organization. So why want to take a shortcut and get, because CNN has a very good news organization around the world.

Scott Galloway: I think it's all about price. There's a bunch of these upstarts and who's backing them. CNN would probably, it would go for above market because it's such a powerful brand. But CNN, it has really stumbled the last 12 months. I think its viewership is down something like 30%.

Kara Swisher: Yeah, it is. It really is.

Scott Galloway: Collins, Dana Bash, Jake Tapper, they consistently, Michael Smirconish, they consistently, Fareed Zakaria, they have some of the finest journalists in the world.

Kara Swisher: Right. And across the globe, by the way, which people don't pay attention to.

Scott Galloway: Yeah. And backed by, what, a 1,200 or 2,000 person newsroom. Like these guys, they're great at what they do. It's the distribution and the business model that's fucked. And that is nobody's turning on the screen that is their primary distribution channel and they haven't figured out a way to monetize it on a very small screen.

Kara Swisher: Yeah, it's tough. That's all I was saying. Someone could consolidate these two and be the news organization and invigorate it. Comcast could buy it. Comcast could buy it, but so could Versant. Anyway, we'll see. We'll see if that happens. I think it's going to be a PE company and then, you know, Hasta luego for Kara Swisher. Anyway, in any case, Hasta luego for Kara Swisher. Anyway.

Scott Galloway: That's it. You're going to North Korea and you're not coming back?

Kara Swisher: So young. So young. He died so young. Oh my God. I'm not going to let you do this anymore. Okay. I'll start making Scottish jokes in a second. So let's go move on. You oatmeal savage.

Scott Galloway: Oh there you did it. You did it. I knew you would. You not even drinking. What do the brightest people in Scotland have in common? What? They left.

Kara Swisher: Carol. Okay. All right. Very good. Okay. That actually true. OpenAI. Some of the finest minds in the history of science and economics. I'm trying to move on. I'm getting exclamation points from the producers. OpenAI has launched a web browser, Atlas. Sam Altman called it a once in a decade opportunity to rethink what a browser can be. The launch comes a few months after the company said it would be interested in buying Google's Chrome had it been forced into a sale. Chrome has 3 billion users worldwide. Talk a little bit about this. And also, Reddit has sued Perplexity, a legend company, scraped the comments of millions of Reddit users on an industrial scale. Again, I'm going to comment on the last one. These wars are going to break out all over the place until the numbers get right, when they start paying. Perplexity has been the one that usually gets into the most trouble here. But talk a little about this browser, because this browser knows, will remember everything you read, not just where your search was. They're going to be like super browsers, essentially.

Scott Galloway: I love this. I love competition. I think it's good. There's been none. The biggest tax cut in the history, in modern economic history, would be if the Chinese and American leadership decided to kiss and make up and stop cyber attacking each other and take their tariffs to zero. The second biggest tax cut in history would be the breakup or more competition in big tech. I mean, people don't realize you are paying a huge toll. You don't realize it because it's paid vis-a-vis advertisers trying to reach you. But probably the biggest corporate tax in America other than federal income tax is the tax of alphabet to reach consumers online. In terms of advertising. You have to be on Google. If you want to acquire customers online, which is where all customers are now, you have to start increasingly buying search keywords and boost your videos on YouTube. These are the biggest toll boosts in the history of mankind for corporations. They don't have competition, so every year they raise their prices or the taxes they charge consumer and B2B brands greater than inflation. So these companies need competition.

There's some more existential things going on here. One, Sam has to figure out a way to become kind of Google before Google becomes open AI. So him launching-

Kara Swisher: That's exactly well said.

Scott Galloway: Him launching a browser makes a lot of sense. I like that it tracks your searches. I understand all the concern that was in your voice around privacy, but anyone talking about privacy is usually over the age of 50 and lives in Brussels or DC. Young people will tell Uber everything about where they... A thin layer of AI on top of your Uber records, which by the way, you cannot delete. You cannot delete your Uber record, your Uber driver history, and that people will be able to figure out if you just terminated a pregnancy. If your sexual orientation, I mean, they'll be able to figure out everything based on where you're going and when. They don't need AI to do it. They could do it now. So as long as there's a coupon and utility and I can see that my QX60 is parked around the corner, violate my privacy. That is what America has said. It's listening to our phone conversations. And by the way, I'm down with that. As long as we have judges who are going to say, no, ICE can't use this information to start rounding up people. I'm all about violating my privacy in exchange for utility as long as we have thoughtful judges who err on the side of civil liberties.

Kara Swisher: Uh-oh. Uh-oh, Scott, but go ahead.

Scott Galloway: Yeah, yeah. That's the operative term there is "if," right? So what I think is the more interesting thing here is, first off, keep in mind, consumers are pretty lazy in terms of getting used to a certain UI. And even with all the existential threat that open AI supposedly poses to Google search, they get, I think, roughly 96 times the traffic of chat GPT still. And Google search impressions were up 49% year over year. Alphabet was my stock pick of 2025 because I think people overestimate the threat, if you will. Chrome has roughly a market share of 70%, making it the most dominant web browser. Apple's web browser Safari, even with that unbelievable access.

Kara Swisher: Except Microsoft's.

Scott Galloway: It's, Safari's at 14%.

Kara Swisher: Not Safari, that's Apple. Chrome is.

Scott Galloway: Yeah, Chrome. No, no, no. Chrome is, you're thinking of Internet Explorer. Chrome is Alphabet. 70%, 70% share.

Kara Swisher: And what is, what is, what is Explorer's?

Scott Galloway: Well, remember, Microsoft attempted to get into the game with Internet Explorer. Remember, put Netscape out of business.

Kara Swisher: Yeah. No, I know, but what is their, what is their market share?

Scott Galloway: I don't think it registers.

Kara Swisher: Okay. I mean, basically between Chrome and Safari, I mean, and then you have the weird ones like DuckDuckGo and shit like that. But basically what Sam has said is I want to bring AI into search or into browsing. So let's look at some of the facts. Google has an extremely strong competitor to ChatGPT in Gemini. Gemini has actually gained more share than any other company in AI. They have 400 million monthly users. It's now the fourth most popular free app on the Apple App Store. Just two months ago in August, it didn't even crack the top 50. And according to multiple benchmarks and betters on both Calci and Polymarket, Google currently has the best performing AI model. Either way, I think, in my opinion, Alphabet still at 29 times earnings is a steal. For roughly the multiple of S&P, you're getting a search business with 90 plus percent market share, the largest ever streaming service in the world, a dominant AI effort, a digital ad network, Google Chrome, Waymo.

Scott Galloway: You love you some Google.

Kara Swisher: You love you some Google. Two other businesses that do over 30 billion annual revenue and four other products that have 2 billion users. The most interesting thing about all of this, in my view, is that, and the presages what might happen geopolitically, and it'll be my prediction at the end of the show, is that technically the new browser is open weight or open source. And it's actually built on the same technology that Chrome is built on, which Google spends or Alphabet spends like $100 million upkeeping. And essentially, I think this says a lot about the future of AI, and I'll come back to this. But Sam has to justify a half a trillion dollar market cap. So what he says is, okay, I'm going to be the next browser. And I'm going to be Alphabet. And Alphabet's trading at a trillion and a half or two trillion dollars. I don't know what it's at right now. But why can't I be a better version of Alphabet? And by the way, when you look at Google searches, what is the first thing you see? You see that AI summary at the top.

Scott Galloway: Yeah, you do.

Kara Swisher: Let me introduce, I've covered these companies for so long. But, you know, Chrome really came in and lapped, you know, Explorer and Safari and all of them very quickly, you know, in terms of how they in terms of market share. But it is moving away from the browser. So the more Chrome moves into an AI, a chat GPT like environment, the better for it. Right. I remember interviewing Ben Horowitz once and he goes, there's never going to be a funding of a search engine. There's never going to be a funding of a social network and there's never going to be a funding of a big commerce platform because of Amazon, Google and Facebook at the time. He goes, why should we? And so why should we? Because you haven't seen a lot of innovation in Chrome. You haven't seen a lot. And it took OpenAI to get Chrome to innovate. Right. It wasn't it didn't happen. And they came in through a side door.

Scott Galloway: Yep, exactly.

Kara Swisher: And so... Sam Altman's vision wasn't to have a browser or a search engine.

Scott Galloway: Right, but, you know, it always changes things.

Kara Swisher: So it's nice to have it. Honestly, I feel... I don't use browsers. I browse... I'm trying to think of where I search. I guess I search within Maps, within Amazon, within, like, the search. Search has dissipated all over the place, but it's still owned by the same groups of people, which is interesting. Any thoughts on... We'll get to your prediction at the end, but any thoughts on the Reddit suing Perplexity? Some people don't like this lawsuit. Others think it's... Why is that? You know more about this than I do. You know, Mike Masnick was like, this is a stupid lawsuit. But, you know, that some of this stuff is available, and so they can do it. Other people, you know, I think what it is is another indication of who gets to own the information and who gets to scrape it and what people do with it. But it's open season on everybody's content. That's just, that's my feeling. And so everyone's going to try to defend the content they have, no matter what it is. You know, Reddit certainly has created a really valuable property full of information that they should take advantage of by themselves that others will take advantage of. Okay, Scott, let's go on a quick break. When we come back, Trump's White House demolition.

[Ad Break]

Kara Swisher: Scott, we're back with more news. The White House is demolishing the entire East Wing to make way for President Trump's 90,000 square foot ballroom. The teardown should be finished by the weekend. Trump initially claimed his privately funded ballroom wouldn't interfere with the existing White House structure, which was a lie. He's also now saying the ballroom will cost 300 million dollars, $100 million more than originally estimated. The White House is dismissing the shock and criticism around the deposition as manufactured outrage. No, mostly he's a liar. Release the Epstein files. That's what I have to say about this. The pictures are still very upsetting in some weird way, although the White House has been renovated before. There is a need for a bigger room for some of the functions there. It is, if you've been to the White House, they're quite small, actually. They're shockingly small. And they should have a lot of functions, but there's plenty of other land around the White House they could have built these things on. Instead, he just did this because he felt like it. Probably it is safer. I'm going to try to understand, but he did it without asking anybody, essentially. And of course, it's the people's house, not his house, but it's his house, as it turns out. Thoughts?

Scott Galloway: So, okay, there's the clutching your pearls. This is a desecration. It's not your house. What this means is the following. He is normalizing federal troops in cities. He's creating data on the election process, and he has no intention of leaving. Because if I'm renting a place, I won't put in a new refrigerator, much less tear down an entire wing. So let's be honest, folks. You really think he'd go through this if he was planning to leave in 36 months?

Kara Swisher: Yeah. It's his new Mar-a-Lago. He's building Mar-a-Lago.

Scott Galloway: Yeah. And so to me, I mean, like, okay, when do we wake up and realize the guy's not planning to leave? He's making long-term renovations. I mean, how long is it going to take to even do this, to build this thing? It's not so, but he's planning to leave, but he's going to. So, look, I don't, I find the whole thing, yet again, everything's adding up to the following. He wants to normalize sending troops into cities during the election process to make sure, whether it's to discourage people from voting or to lie or to show up. Bill Maher said it perfectly. It's like what happens when two people show up to inauguration. And he's basically saying, okay, if the second person tries to show up who legitimately wins, I'm going to show up with troops and masked agents that are basically my secret police. That's where I see this going. And this is just more evidence that he's not planning to leave. You don't initiate an enormous construction project when you know you constitutionally have to leave in three years.

Kara Swisher: Yeah, I would agree. I think, you know, I think a lot of people think this, right? Or put whoever in place that he wants to, because as you say, which is my favorite expression these days, biology is undefeated. He seems more addled than ever, missing words and everything else.

Scott Galloway: The only reason I'm not worried.

Kara Swisher: Yeah, right. Biology is going to take care of it.

Scott Galloway: Right. Except then, then what?

Kara Swisher: Right. And what would be interesting, let me just posit that that doesn't happen. And a Democrat becomes president. What do you do? He's going to gold this thing up, right? All over the place. It's going to be so ridiculous and grotesque. What do you do when you walk in there? You have this ridiculous, oversized ballroom next to it. East Wing was quite, it's not really lovely. I don't love the White House, I'll be honest with you, but it was to scale, right? And so this looks like a weird, mutated tumor onto the White House. That's my architectural determination is a tumor. It's a tumor. But what do you do the next day with this weird patio and then the thing, this behemoth, this grotesque golden behemoth? What do you do? Nothing, right?

Scott Galloway: I don't know. I just, I know what happened here. He sat down with some crazy right-wing, probably hot blonde decorator. And what decorators do is they say, all right, I want mood boards. Like, tell me what they, you know, they try and make you feel special, like you're involved in the process. And they say, I redid my place in Manhattan. And they said, what do you want it to look like? I'm like, I want it to look like what it is, a professor who's done fairly well. That's what I want it to look like. And what he did was he said, I want this place to look like you walked into the best Iraqi whorehouse, and they have delivered against it. The decorator, this feels like you are in Baghdad at a brothel, but it's a high-end brothel.

Kara Swisher: But it's a high-end brothel.

Scott Galloway: I mean, it's absolutely perfect. It's, anyways. It's not enough marble. We need more marble.

Kara Swisher: High-end brothel.

Scott Galloway: High-end brothel. Yeah, really. I mean, it's absolutely perfect. It's, anyways. It's not enough marble. We need more marble. And as Forrest Gump said, and that's all I have to say about that.

Kara Swisher: But what do you do the next day if you're the Democrat? You're like, oh my fucking God. What do you do? Let everyone come in and tear it down. By the way, I've only been to the White House once, you know, when that was.

Scott Galloway: With me?

Kara Swisher: Yes, that's right. Yes, you've been to these two. And I didn't want to go. I was intimidated. I had to bring a suit. I met you in the lobby. I was worried. I don't, I don't, the idea of seeing all those people and having them kiss your ass like I knew they were going to.

Scott Galloway: Yeah, you definitely. Like the vice president. Cass, where should someone hug you and kiss you? Secretary Blinken. Cara! Cara! And all the, and the other thing is.

Kara Swisher: Some of the Trump people like me, oddly enough.

Scott Galloway: So strange. So strange.

Kara Swisher: Yeah.

Scott Galloway: Keyword there is "some."

Kara Swisher: Well, no, more than you'd think. More than you'd think. I don't know why.

Scott Galloway: Well, you're exceptionally, you're exceptionally likable. I guess.

Kara Swisher: I don't know. I literally say I dislike you and think you're a bunch of fascists. They're like, yeah, come to our party. The other thing that struck me about my one tour of the White House was I could not relax living there. There were two things. One, the situation room where you're deciding whether to have nuclear war or not, you can hear the microwave in the kitchen. And I'm like, can they smell popcorn when they're popping it out here?

Scott Galloway: Yeah, they can. It's actually really poorly designed in my viewpoint.

Kara Swisher: It is. Like the West Wing, the offices are like weirdly a warren of very uncomfortable. It's a very, he is right that it's kind of a mess in terms of as a building, like as an office building. And then I thought, how does anyone relax here? There are 140 people here who look like they're about to invade Fallujah. It is, that place is armed to the teeth. And I'm like, you get up at night to grab some milk. I guess the residence is different and you're going to run into someone with an AR-15 and militaries. Like, there's no taking the dog for a walk. Anyway, we'll see. It's just grotesque. And release the Epstein files. Thank you. Just release the Epstein. I don't know what they're going to do tomorrow. I'm waiting to see. What are they going to paint the Washington Monument so it looks like the penis that it is? Anyway, Trump is demanding $230 million, by the way, from the Justice Department, saying he deserves compensation for federal investigations. And Tim McCourty of The New York Times says the compensation is tied to two claims Trump filed against the DOJ before his second term. One is tied to the investigation of Russian interference in his 2016 campaign. The other, the FBI 2022 Mar-a-Lago search. Payment would likely come from taxpayer money and would have to be approved by the DOJ, potentially by Deputy AG Todd Blanche, Trump's former personal attorney. Trump commented on the unprecedented nature of all this, to put it mildly, when asked about his claims. Let's listen.

[Audio Clip: Trump: "It's interesting because I'm the one that makes the decision, right? And, you know, that decision would have to go across my desk. And it's awfully strange to make a decision where I'm paying myself. In other words, did you ever have one of those cases where you have to decide how much you're paying yourself in damages? But I was damaged very greatly. And any money that I would get, I would give to charity."]

Kara Swisher: Oh, my God. Lie. Huge lie at the end. Enormous lie. And by the way, yes, he has made decisions where he pays himself. It's the presidency and evidence in action, his cryptocurrency and his children, but his children, his adult sons. And anyway, I don't know. We're not paying him, are we?

Scott Galloway: I think we probably are. And keep in mind, if the federal government comes to you and the case ends up, let's assume that this was politically motivated and there was no legitimacy or veracity and these things were politically motivated and unjust and unethical. Let's assume that happens quite a few times when the federal government comes to people, if you're found guilty, which he was in one case and not in others, when that happens to average American citizens, the government doesn't pay them back for their legal fees. So, but we've become-

Kara Swisher: Right, now we're going to have to pay everybody back?

Scott Galloway: We've become, no, sometimes I believe in certain legal cases, if you win, I think if you win a civil case, sometimes the other side has to pay your legal fees.

Kara Swisher: Yeah, but not the government.

Scott Galloway: But if the government comes for you and you're found innocent, they don't pay you back your legal fees. Too bad, Donald. So anyways, but this has become normalized. And to think that this is not going to happen, he got to appoint the head of the DOJ. Now, to think that they're going to stand up to him, keep in mind there are, whatever, 53 Republican senators. These people were freely elected. You'd think they'd have balls.

Kara Swisher: Right, they don't.

Scott Galloway: They watched this guy send people after them to kill them on January 6th. I just think it's hilarious that they try to position the protests last weekend as violent and weird. I'm like, no, that was January 6th. If you're looking for violence and people who hate America, just go back to the protest of January 6th, if you can call it that. It was an insurrection. But the notion that these people are going to stand up when they can't get duly elected senators who he sent a mob after to kill, and they won't stand up against the guy, to think that Pam Bondi is going to say this is a bridge too far? No, no.

Kara Swisher: Here's the thing. Trump's not going to pay for this, but if they do this, they will. At some point, all his minions are going to get got. That's who I'd go for if I was, I'd get all of them. Like Trump will get away with it. It's just, everybody knows he's going to get away with it. But the minions, not so much, I think.

Scott Galloway: Oh, I, but see, this is where, this is the opportunity. And when I'm in one of the shortcomings in the Democratic party right now, if this goes, okay, take the ICE, whatever, sending people to El Salvador. There are people all along the supply chain that made the decision to send American citizens, incarcerate them and send them out of the country. I would be drawing up all sorts of bills and publicizing them saying the statute of limitations on these crimes, whether it's crypto crimes, whether it's fraud, whether it's lying in front of Congress. Just keep in mind, these laws, the statute of limitations, are longer than 37 months. And this is exactly what we're coming for you for. You may think you feel safe now, and you better hope you get a pardon. But I would be drawing up legislation that says, or basically advertising a guy like Senator Murphy or Senator Bennett or Senator Klobuchar and say, these are the crimes we believe have been committed. And he may be the head of the crime family, but the soldiers go to jail too. And he might be safe because he'll probably be dead or he'll pardon himself. But there are thousands of people, and I'd start naming names. And his family.

Kara Swisher: He'll pardon himself and his family. Can I tell you something? Several of the Trump people I've met said they're asking for pardons already. Why wouldn't you? That's what I was. And I at first I was like, what? What did you do?

Kara Swisher: He goes, nothing. And I said, well, he goes, oh, they're coming for us. Like, and we probably deserve. Kind of said we deserve it. Like, it was really weird. This is an orgy of corruption.

Scott Galloway: Yeah, they're coming for you. And where the Democrats, again, the Democrats should be articulating exactly what crimes they believe have been committed.

Kara Swisher: Yeah, Greg Kazar has but go ahead.

Scott Galloway: Lists of hundreds of people they believe have potentially engaged in these crimes and then next to their name what the statute of limitations is on that crime.

Kara Swisher: Yeah, that's a great idea. Let's make that list. And start saying, okay, be clear, folks. Throughout our 250 year history, the White House and the DOJ flipped back and forth. At some point, we're gonna have the gavel. We're gonna have the power of the purse. We're gonna have the power of subpoena and we're gonna have our own DOJ. And unlike this corrupt DOJ, we will be holding people to the letter of the law. And these are the letters that you have violated. And this is their statute of limitations. Because the world is shaped on incentives. What incentives right now are there not to engage in this corruption? They're not getting enough money for what they're going to pay. Trump is and the Trump family. He'll pardon himself and his family and a few choice people. But everybody else, you're going to be shit out of luck. Anyway, we have to move on. Scott, let's go on a quick break. When we get back, we'll talk Netflix and Tesla earnings, which are super interesting.

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Kara Swisher: Scott, we're back. It's time to talk about some earnings. First up, Tesla. Tesla's third quarter revenue was up about 12% from a year earlier, but profit fell short of expectations. That's because a lot of people rushed to buy cars, but then Tesla sold them for cheaper prices, and there was an ability to get loans, so people bought more. Vehicle deliveries were up 7% from a year earlier, but the company says it plans to hit volume production of cybercabs and Tesla Semi in 2026. I wouldn't believe that. Also, Musk was saying he has to create an army of robots. And if he doesn't have control over his army of robots, he's trying to get his million, his trillion dollar deal, which is going to be voted on in a week or two.

And next, Netflix shares of the company are down 5% in the last five days, at the time of taping, after a miss of third quarter earnings. Netflix cited an ongoing dispute with Brazilian tax authorities for weak results. However, revenue for the quarter rose 17%. The streamer said ad sales in the quarter were the best ever, powered largely by my favorite, K-pop Demon Hunters. There's also going to be some merch. Great news for Kara Swisher. Announcing Mattel and Hasbro will release K-pop Demon Hunters toys, plushies, and games. Let me tell you, among the toddler set, in the young below 10 set, they're all dressing like Rumi for Halloween. Not my daughter and son, but all the kids in school, they're all dressing like Rumi, which is one of the main characters in the show. So thoughts on these earnings?

Scott Galloway: Yeah, I think Netflix is one of the best-run companies in business. Their revenue increased 17%. That didn't meet expectations. Their stock fell 10%, but the stock's been on a terror. Net income increased nearly 8% to $2.5 billion, missing estimates by about 15%. Their operating margin was 28%, and that was also short of the 32% that was expected. They highlighted a one-time tax expense in Brazil of $600 million for why their profitability missed. By the way, that charge had been previously disclosed to investors on past earnings reports. So I think at this point, a lot of people are just taking profits. K-pop Demon Hunters was a huge success.

Kara Swisher: Yeah, they keep hitting it out of the park. The movie was produced by Sony Animation, but released directly to Netflix at the end of August. It's now the most watched movie in Netflix history with approximately 325 million views. So essentially, the population of America has watched K-pop. Did you watch it yet?

Scott Galloway: I haven't seen it, no.

Kara Swisher: Oh my God. Will you please watch it so we can discuss it?

Scott Galloway: I only watch things starring my favorite actor, Hitler. Late at night, I take an edible, I have a Maker's and Ginger, and I watch World War II in color.

Kara Swisher: You will love K-pop Demon Hunters. And then we can sing it together on the tour. Are you ready for the takedown? I'll keep singing it until you watch it. That's what we need to do. The soundtrack is also top of the Billboard top charts. Cross-promotion, Netflix, Mattel, and Hasbro have joined together to produce K-pop Demon Hunter toys. The company, I still think, I wouldn't buy Netflix here. I think that their growth is going to be international. I think it's a great company. I think they'll probably grow into their price. I am of the mind now that I think just as we talk about cable cutters or people who cut the cord, I think we're going to start hearing about an entirely new generation of people that just don't own TVs. And also I think our desire for seeing these trying to figure out what they're called, mini soap operas, this one-minute content. And these guys are smart. They'll figure out ways to get into those fields. But I worry, I think that, I just think everything's moving away. Well, I'll ask you this. I know you like The Diplomat. I've been struck in the last 12 months. All of a sudden, I'm not turning on the TV. And I realize that's anecdotal, but I'm supposed to be in the atrium sitting around watching Murder, She Wrote. Are you watching less TV?

Scott Galloway: No, I'm watching specific TV. I like television. So, yeah, like I watched the entire season of The Diplomat, which is wonderful, as I said. And I noticed a lot of people said, when I mentioned that, oh, yeah, I did the same thing. So I'll watch specific, like I always talk about hunting-wise, but I'll watch specific or the Gilded Age. But it's all over the place, by the way. And I'm watching this Martin Scorsese documentary. I think it's on Apple TV. But I watch specific things and I watch the hell out of them if that makes sense. And some shows I do watch week to week, like The Morning Show. Well, that goes out every week. I'm actually in this episode. This is my episode this week.

Kara Swisher: Really?

Scott Galloway: Yes, I'm on it.

Kara Swisher: Yes, it's lovely.

Scott Galloway: This week?

Kara Swisher: This week, yeah. Whatever this episode.

Scott Galloway: Oh, well definitely tune in.

Kara Swisher: Yeah, yeah. I got a bunch. I can't watch it here in Korea, so I'm not able to watch my amazing Emmy award.

Scott Galloway: Just use the VPN.

Kara Swisher: I know I didn't. I guess I could. So I'm too tired. I don't care to watch myself on TV.

Scott Galloway: You don't know where you are.

Kara Swisher: I don't care.

Scott Galloway: You don't know what's going on.

Kara Swisher: I don't care. I saw Obey the Speak Witch. I saw a good movie. I saw a cute movie. I'm trying to go to the movies more with my boys. I saw Good Fortune with Seth Rogen, Aziz Ansari.

Scott Galloway: Oh, it was supposed to be good.

Kara Swisher: Yeah, and Keanu Reeves. The movie's actually not that well done, but it's a wonderful message, though. It's really a nice.

Scott Galloway: Oh, okay.

Kara Swisher: Quite frankly, it's all about income inequality.

Scott Galloway: Okay, yeah.

Kara Swisher: I'll go see, like, with movies, like, I'm going to see Wicked. That's it. The new Wicked sequel. They're now making crazy rotations again. I'd see that in the theater. Like, it's just specific. I'm a very specific watcher when I used to just watch whatever. As you and I grew up, we just turned on the boob tube and just stared, essentially. So I'm highly specific. And I watch threads. I know it sounds crazy but I watch Instagram.

Scott Galloway: That scary, isn't it? I noticed that too. I get so much of my information now from Instagram.

Kara Swisher: But it's nice. It's easy. It's very snackable. The algorithms are great. They figure out what we want.

Scott Galloway: Yeah, absolutely.

Kara Swisher: But anyway, so Tesla. Talk very quickly about Tesla. What's your thoughts on that?

Scott Galloway: Well, look, Tesla, it's a little bit hard to extrapolate from these earnings because there was a pull forward. And that is because the tax credits were expiring, a lot of people-

Kara Swisher: And loans. They gave very-

Scott Galloway: Went in and bought probably more cars. Deliveries were up 7 percent. So this is the greatest revenue they've seen and registered in two years. But again, this is probably due to pull forward demand due to the expiration of the EV tax credit, and demand is expected to drop.

Kara Swisher: Yeah, and also other things, they've got some other things they get to put in their earnings that Trump got rid of around the environment, and not carbon, but another one, air quality or something.

Scott Galloway: Well, that's right. Because of the expiration of regulatory credits and also their increased spending on AI, their net income fell 36 percent. Last year, they made about $2.8 billion from selling regulatory credits and about 40 percent from America, and this is essentially just lost revenue. This quarter, Tesla reported the regulatory credit revenue was down 44 percent year-on-year.

Kara Swisher: Yeah, all the little games are over.

Scott Galloway: R&D expenses, including AI spend, rose 57 percent. They've got to enter the same spending war as everybody else, and it rose to 1.6 billion. Tesla also blamed tariffs for its crash in profitability, but provided no numbers.

Kara Swisher: It's interesting because they're actually the most vertical automobile maker. They have more, quote unquote, made in America parts than anything.

Scott Galloway: The earnings call was really him trying to pivot to AI. And robots. But so far it's off to a rocky start. They've delayed the production of the Optimus bots, abandoning previous plans to make, I think it was 10,000 robots by the summer. Whenever he says it's nonsense. And the head of Optimus is led from Meta. And not only that, this guy was pissed off at Elon because he made a point of saying, I left despite taking a cut in pay, which means you're angry. They also launched their robo-taxi service in Austin. And since then, they've also expanded to San Francisco. And in both cities, safety monitors are in the car during the ride. In SF, the monitor sits in the driver's seat. So that's, I don't know. I mean, Waymo's so far ahead, it's crazy. And this is going to be hard to make money. There's so many players in this area.

You know what? You said something I occasionally do listen to you and you said something that's always stuck to me, and that is it's difficult to have empathy for victims when you've never been a victim. And that is really registered with me, because I've always said, oh, London is safe, New York is safe, you don't need to worry. There's a different set of fears for a guy who's 6'2", 190. And quite frankly, just like, this is a bad thing. This is a dangerous thing to say. I have never been, I don't think, a victim of a crime. I've never been assaulted. I've never been mugged. I've never been pickpocketed. I've never had my phone stolen. So it's just not easy for me. And I have to realize I need to have more empathy for people who are victims. And the thing that really struck me is I have heard several women say the following. They hate getting in Ubers because the Uber driver starts chatting them up and they feel unsafe.

Kara Swisher: You can ask for a woman Uber, both Lyft and Uber. You can ask for a woman.

Scott Galloway: But that's something Uber drivers have no desire to talk to me.

Kara Swisher: Mm-hmm.

Scott Galloway: Wow.

Kara Swisher: You're not going to put out. Little do they know that you would put out. That's the thing.

Scott Galloway: Well, that's the thing. There you go. Sometimes I tip them off when I get in the fun seat. No, but I thought that's the last fucking thing I would want to deal with is I'm coming home late from a dinner. And by the way, I want to be clear, some of these guys, Norwood's guys, are probably just friendly, right? But they shouldn't have to deal with that shit. And I thought, and that's why, and then on the Waymo caller, the guy who runs Waymo was saying, I think it was the guy who runs Waymo, says, some of their biggest uptake has been by-

Kara Swisher: It's a woman who runs Waymo, but there's another guy that runs it with her, but go ahead.

Scott Galloway: But have said some of their biggest uptake has been from women. And I'm like, that just makes sense, right? You don't want to deal with it. And quite frankly, I don't, if I could have a driverless car, I was thinking about it, would I want to do it? My experience so far in driverless, I haven't enjoyed other than the technical sophistication and the wonder because they go so fucking slow. It's like having a 16-year-old over a cautious driver. I hate that.

Kara Swisher: They've gotten better. They now like an aunt who is a good driver but it's too slow. It used to be grandma who's not such a good driver. But the promise of-

Scott Galloway: Yeah. They're faster. I noticed they're faster in San Francisco.

Kara Swisher: That's great because I think the promise of autonomous is the following. In London, one of the most crazy, frustrating experiences is the open road, no traffic, and in certain places where there's cameras, the guy is no joke, has to go 25 miles an hour. And you're trying to get to Heathrow to make a flight and you're on a highway and you're just going 25. And the real, in my opinion, the promise of autonomous is that you'll be able to do away with speed limits. And you'll let the supercomputer decide if that thing can go 90 miles an hour.

Scott Galloway: Yeah, that would be a great thing. That would be great, yeah. Why do we have those signs at all? Anyway, we'll see. You know, we'll see. I think you'll probably get that pay package approved. Although the two big shareholder services who he keeps trashing said, this is fucking ridiculous. And he said he has enough control that he'll be able to control his robot army, whatever that means. But not enough. What do you think Bernie Sanders thinks of that pay package?

Kara Swisher: Oh, God, he doesn't like it. Doesn't like it. He has to hit certain numbers, by the way, everybody. Like, if he doesn't, he'll find a way to get paid, this guy. But he said he doesn't have enough control if he's insane not to get fired. And I'm like, sorry, I think we passed that station on the train of Tesla at this point.

Scott Galloway: But let me take the other side of his pay package. I'm actually relatively unoffended by the pay package. Because he's made a lot of money for it.

Kara Swisher: Well, what he's saying is, if I make shareholders $4 or $5 trillion, will you give me a 10 or 20 percent commission on that?

Scott Galloway: In my opinion, from a pure capitalist standpoint, I sort of get it. What I am not comfortable with is someone who aggregates that kind of capital and then pieces out to taxes and engages a massive tax avoidance and that he makes, he pays a smaller percentage of his earnings than a person on the factory floor. So don't get in the way of upside of compensation, but tax people. Have a progressive tax structure. It is linked to his performance. But that said, when he said my robot army, it made me frightened of humanity.

Kara Swisher: Just, he does this all the time. He's such a troll. Anyway, well, he'll propagate it. It doesn't matter. And we'll all be outraged. And then they'll tear down the West Wing and we'll be outraged. Anyway. All right Scott, one more quick break. We'll be back for predictions.

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Kara Swisher: OK, Scott, let's hear a prediction. What's your prediction? Just so you know, New York City Mayor Eric Adams just endorsed Andrew Cuomo, which I predict will make Zoran Mondami the mayor.

Scott Galloway: Well, that'll give him another 11 votes.

Kara Swisher: Oh, God. Jesus.

Scott Galloway: They want that Curtis to get out. Curtis ain't getting out, I think. I think Curtis is in with him and his cats are in it to win it. I think Curtis is the Ralph Nader of the conservatives. He's like, no, it's democracy.

Kara Swisher: I like Curtis a little bit. I like he seems insane but I like him. I like the hat. I like the whole thing. I like the cats. I like I actually have enjoyed him weighing in during these debates. It's usually Mondani and Cuomo screaming. There's always a guy like that. New York's such an amazing city. They always bring out an interesting guy. Remember the guy, the rent is too damn high. The guy with the black gloves. He just kept saying the rent is too damn high. He was right. They're trying to get him to pull out so that Cuomo is doing everything possible that's nothing to do with the voters. It's like Trump's help, get Air Adams out, you know, everything except appeal to voters, which would seem to me to be the thing to do if you want to be mayor of New York. But whatever. Trying to get people to pull out often doesn't work. Okay. Let me hear this prediction.

Scott Galloway: Said my 15 and 18-year-old. So my prediction is the following. So America is run for profits. What dictates our society is shareholder value. The worth of someone's character, their ability to have health care, their ability to have freedom, their ability to have a broader selection set of mates is based on their ability to acquire shit or signal that they can acquire shit through monetary or economic power. That's how America is run. The Chinese government is essentially run, and China is run, for control and for power. And one of the ways they do that is they're much longer-term thinkers about what positions them long-term geopolitically. And I think essentially what's going to happen here is the following. I was sort of blown away by the fact that this open-weight browser that Sam Altman has basically shoplifted, that anybody can use because it's sort of technically open way to sort of like open source. I think if I'm the CCP, I am pissed off. They have their problems, but essentially Trump is really fucking with them with these sclerotic 100% tariffs, non-tariffs, and they are being very strategic. And they said, okay, we're going to come for the heart and lungs of Republican voters. And hey, folks, I don't know if you heard, but we buy 50% of your soybean crops. And from these red states, we're stopping and we're starting to buy from Argentina and your president is stupid enough to give Argentina money as we transfer business. That business is never coming back. Farmers are out of business. They're now going after rare earth minerals that are key to play a real strategic role in everything from cars to missiles. And I think the next, I think after going for our hearts and lungs, they're going to go for our jugular the following way. I think they're going to release a series of open source or open weight AI tools that crush or put real pressure on our magnificent 10 and take down our market and put us into a Western recession. If I were in charge of CCP defense and strategy, I would be saying to Xi, if we really want to go for the jugular, America is now a giant bet on AI. Let's make this a bad bet. And the way we're going to do that is we're going to release a series of DeepSeek and DeepSeek-like competitors that are free, open source and essentially do the following. My biggest client, I started a strategy firm when I was 26, my biggest client was The Gap. We did a bunch of demographic research and the group we found that was most underserved, and I could relate to this, was single mothers who wanted their kids to feel good about themselves because they were very self-conscious about their lower income and that dad wasn't around. And so we positioned what I thought was the most brilliant thing in the world at that time. And that is, we said 80% of the Gap for 50% of the price. And we targeted single mothers and it was called Old Navy. And Old Navy went from zero to a billion faster than any retailer in history. I think China is about to go Old Navy with OpenAI or Old Navy on AI.

Kara Swisher: Going BYD on...

Scott Galloway: Exactly. But they're going to do it in AI.

Kara Swisher: Oh.

Scott Galloway: And they're going to say, here's an idea. Have you been talking to the CCD? We have a bunch of amazing AI tools that are all free that you can build on top of. You don't have to pay a subscription fee. We're not going to pelt you with advertising. And guess what? We're going to take the Magnificent 10 down and we're going to take your whole fucking economy down.

Kara Swisher: Make them five and a half. The Magnificent five and a half.

Scott Galloway: Oh, wow. That's really good. I like that. I like it. I like it a lot. And by the way, for people who aren't paying attention, she has just consolidated power over the CCP. He's made it smaller. He's gotten rid of people. He really runs the show.

Kara Swisher: Anyway, great one, Scott. Okay. Well, that's quite a... I like that. I'm going to watch that one carefully. Anyway, we want to hear from you. Send us your questions about business tech or whatever on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Elsewhere in the Kara and Scott universe this week on Prof G Conversations, Scott spoke to one of my favorites, Heather Cox Richardson, a historian at Boston College, author and the voice of the newsletter Letters from an American, very popular. Let's listen to a clip.

[Clip plays: Heather Cox Richardson: One of the things that frustrates me to no end is the idea that there was ever a United States of America that was not multicultural is simply a fantasy. And, you know, we talk in history about how whiteness is a constructed category and, you know, that, you know, you get all kinds of pushback on that. But it is worth remembering that Irish immigrants to the United States were not considered white. You know, I just sit there and think, okay, we're just going to make it up, right? We're just going to construct our idea of what the past looked like because the reality has always been that the United States was about working together as communities within a very, very broad range of people.]

Kara Swisher: She is amazing. She's amazing and everybody should read her and listen to this. I love her. I think she's an inspiration. I love a professor who is just so passionate about a very narrow niche of the world. And it's like after working her ass off for 30 years, she's an overnight success. I just love that she's getting a ton of what I think is well-deserved recognition and attention. I love having her on.

Scott Galloway: Wow. Good for you. Good for her.

Kara Swisher: Yeah, she's a very sharp historian. And reminder, we're going on tour. We're going to be going to Toronto, Boston, New York, D.C., Chicago, San Francisco, and L.A. We're sold out in Toronto and San Francisco already. But please visit pivottour.com for tickets, especially you, Chicago. We got an extra large venue for you guys because you have big shoulders. Come see us there. Okay, that's the show. Thanks for listening to Pivot and be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us out.

Scott Galloway: Today's show is produced by Leroy Naiman, Zoe Marcus, and Taylor Griffin. Ernie Unertad entering this episode, Jim Mackle edited the video. Additional support from Kate Gallagher and Annika Robbins. Thanks also to Drew Burrows, Ms. Severo, and Dan Chalon. Mishak Kharraz, Vox Media's executive producer of podcasts. Make sure to follow Pivot on your favorite podcast platform. 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. Kara, safe travels.