Kevin O’Leary on the Future of AI, Working With Steve Jobs, and Shark Tank

0:01Lowe's knows how to get you ready for holiday hosting with up to 35 % off select home decor and get up to 35 % off select major appliances plus members get free delivery delivery delivery delivery basic installation, parts, and a two-year Lowe's protection plan when you spend$2 ,500 or more on select LG major appliances. Valid through 10-1. Member offer excludes Massachusetts, Maryland, Wisconsin, New Jersey, and Florida. Installed by independent contractors. Exclusions apply. See Lowe's.com for more details. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, a special Black Friday interview episode to keep you company while you shop.

0:40It's a chat with Shark Tank royalty, Mr. Wonderful. It's Friday, November 29th. Let's ride.

0:52Good morning and happy Black Friday. Hope you all had a relaxing Thanksgiving. If you're still in a food coma, we've got a special edition episode that will snap you out of your slumber. It is an interview with the entrepreneur and investor Kevin O 'Leary, better known as Mr. Wonderful on Shark Tank. Mr. Wonderful is known as the blunt speaker of hard truce on the show, and it turns out he's not just playing up the bit for TV. We spoke with him about the state of the U.S. economy, his time working with Steve Jobs, and how to break into watch collecting. This guy was meant to talk for a living, and we hope you enjoy the conversation as much as we did.

1:28But first, a word from our sponsor, Yahoo Finance. You know, I've never pitched a product before a panel of sharks, but if I had to sell them on Yahoo Finance, it would be a breeze. Okay, so how would you kick it off? Hello, Sharks. Have you ever tried to stay up to date on the market but found all the existing options underwhelming? Okay, this is great TV. Keep going. Well, do I have the site for you. Yahoo Finance has everything you need to stay informed about the finance world with constantly updating news, top and bottom stock gainers each day, and insights from experts. So, Neil, can I count you in?

2:01Well, Toby, I've spent some time on Yahoo Finance myself, and it really is an incredible resource for anyone curious about the market. So you don't even have to sell me. For that reason, I'm in. You have got yourself a deal. Well, that was easy. To see why Yahoo Finance can tame even the fiercest of sharks, head to Yahoo Finance dot com today. This episode is brought to you by State Farm. Checking off the boxes on your to do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs.

2:41Like a good neighbor, State Farm is there. Kevin, thanks so much for jumping on the show today. Great to be here. Thank you very much. So I do appreciate you speaking with us, but I also want to thank you for all the likes that you have gotten us on social media because posting a Mr. Wonderful quote to our Instagram goes viral every single time. You are just a quote machine. Where's it come from? I'm just a social media and I'm very proud of it, actually. You're very good at it. As an investor, what sectors are you most excited about? Are you riding maybe the AI hype train at all? I am, you know, I go back to these trends as far back as gold.

3:24I mean, I look at, I'm an infrastructure investor. So I think AI is going to be huge. We use it in all of our businesses, particularly around translation. When we, I do commercials now in Chinese and French and Arabic. We use AI. We do it out of Abu Dhabi. They have a very, very advanced lab there and we have an office there. So, you know, if I send a message out for my watch insurance business, I'll do it in Chinese. A lot of wealthy Asian watch collectors. And my lips are moving perfectly. And we have Chinese nationals telling me that the accent's perfect. So it's advancing. But the real opportunity in AI is not just in the software.

4:04Here in the U.S., we have a huge problem. In order to just meet the demands of the seven largest hyperscalers, the Teslas and the Googles and the Microsoft and the Amazons, they have demand for 30 gigawatts of data centers. 30. And we used to build them at 50 megawatts. So that's a fraction of the size. There's only five under construction in North America right now. 45 % of the data centers in America are in Virginia. But Virginia has just passed a law that does not let you put a backup generator on a data center. A data center today needs to be 5.9, which means it has to be up 99.999 % of the time.

4:48I'm giving you a lot of data you'll find interesting. thing. That means it's only down 14 seconds a month. What does it cost to build one of these? $2 billion just for the platform and another$2 billion for the stacks of chips. $4 billion in the ground for a one gigawatt data center. I built those and we can't get the power. I don't care what state you go to. You go to the power authority there and say, I need, I just want 100 megawatts. can't do it. We have no power in America right now. So is that kind of how you evaluate an opportunity right there? I mean, we started at AI, but then you took us down through the entire basically supply chain and what needs to go into supporting this AI revolution.

5:30Is that generally how you think about these macro opportunities that a lot of people are seeing? Yep. I simply say, where's the problem? How do I fix it? And who will pay me to do that? That's what I do in every sector of the economy. This is a huge, huge, huge problem. And the fixing this is worth billions. And so I like to do big things. This is a big thing. So when you see, when you hear me announce data center projects, it's because I solved the power problem first. And I think the way we're going to solve it is we're going to find stranded gas in places like West Virginia, North Dakota, Texas bring our own generators in the middle of deserts or the middle of the Arctic or wherever it's got to be and generate electricity from clean natural gas and build data centers there that's the only way it's going to work because if you call up here's the other problem you know hi Mrs.

6:27Slabinski I want to build a data center next to your house and your electrical bill is going up 40 percent no thank you that's the problem because when you ask for that much power, the rate payers in that whole county, their bill goes up and they get pissed and they call their local governor and say, no, no, Nanette. So it's a big problem. Speaking about the larger business landscape, since Elon Musk took over, is Twitter better off, worse off or the same? Better, better. There's no question. It's not particularly endorsement of his business acumen though, because I mean, he bought it at$44 billion.

6:59It's now worth less than$10 billion, according to Fidelity. He didn't buy it. The investors bought it. He got the investors to buy it. Right. So there's debt and there's equity in that deal. I thought he overpaid like crazy, but the reason he didn't change the price at the last minute was he already had the bondholders teed up. So when you change the terms of a purchase and you've already got the debt, the debtor, the issuance, those are going to take the debt on, get to renegotiate too, and you lose them. So he decided to overpay for the equity thinking long-term he can make it back up. I don't know if he can or can't.

7:34You've got True Social out there now. There's a lot of different platforms, but Twitter, that's his own network. He's the number one followed guy on his own network. That's pretty interesting. And everybody in his dog is suing him. I'll say one thing about that guy, one way to measure him, whether you like him or you don't. I used to work for Steve Jobs way back. I made all his educational software for him in the learning company for the apples in schools. So Oregon Trail, Rita Rabbit, Carmen Sandiego, Mavis Beacon, teaches typing. We used to go there every quarter to the old offices in Cupertino and bring my team and he would come out in his jeans and his black turtleneck and just abuse us.

8:16He was not a very nice guy, not at all. And he was just vicious. And one day, one of my marketing people said, you know, we're going to do a big upgrade on the Apple platform, Oregon Trail, which is a very big software products been around forever in schools 110 ,000 schools we're gonna spend a million bucks on research in a hundred you know maybe in it was New York Florida Texas California and Jobs looked at her and said no you're not not any of my money is going to market research nobody knows what they want until I tell them what they want and I said Steve you sound like such a dick he said yeah how's your sales on my products I'm saying yeah we're up 30 % this quarter.

8:58You making any money? I said, yeah, we're making tons of money. He said, well, shut up and get back to work. The guy was 85 % signal, 15 % noise. And what I mean by that is he would work 18 hours a day because I'd get, you know, early back in those days, it was like rudimentary emails, like really early stuff. And at two in the morning, East Coast time, three in the morning, and he didn't expect an answer like two minutes later he'd care about the fonts in the software all this crazy stuff but what i realized is he focuses on whatever he has to achieve that day for 85 of his waking hours and he does 15 noise which would be social stuff maybe talking to his wife or something else look at what he achieved there's only one guy that's done better than him in history, Elon Musk.

9:51And I've met Elon a few times. He's a hundred percent signal. Let's talk about Shark Tank. The show turned 50 in this year and the New York Times made this argument that you could track the changes to the U.S. economy by the evolution of products on the show. What have you seen change from when you started until now? Well, it turned 16. 16, sorry. 50? I thought, f***, I must be a vampire. But you know, no, it turned 16. It's one of the longest running shows in history. Um, you know, I remember cause I started on this, uh, I was working in England on TV when I got a call from Mark Burnett. I'd never met him before.

10:28And I flew out of the next morning to shutters, which is a hotel in Malibu where he wanted to meet. And we're supposed to have a 20 minute meeting and his head of international sales was there. That name was Chili, really nice guy. I'll never forget this meeting. And we didn't talk about Shark Tank. We were both going through marital troubles at the time. We ended up talking about marriage for like four hours. And at the end of that, like way past lunch, he said to me, look, I got this new show I'm taping. I'm doing a pilot. It's called Shark Tank. It involves investors were looking for a real asshole and you're it.

11:09I said, okay, well, how does it work? He said, I don't know. Just meet me there tomorrow morning. Let's see what happens. He didn't want to give me any information. He just wanted to go raw. And I met Barbara that day and Damon John, a couple of other guys that aren't at the show anymore. And we just started taping and it just, it, it just took off. It just started to gel. And cause he was a genius that way. He just let people be themselves. He said, don't go changing, just be yourself. That's the way it is. What it's become today is an international platform for me. It's a passport. I can go to any country in the world and get a meeting with its leader.

11:47Because what I've learned is that entrepreneurship is bipartisan. Every single leader, even in communist countries like Cuba or Venezuela, even dictatorships want to create jobs. And so that it's transcended. Tomorrow night I'm flying to Dubai, then I'm going to Riyadh. All Shark Tank related. You know, just all this stuff is, and I remember last year, maybe it was the year before, I was on a train from Geneva to Zurich to catch a plane. My stepdad lives in Geneva, so I often fly over to see him. And I'll tell you, the Swiss trains are fantastic. They just get you right to the airport, get on the plane.

12:31And this couple comes up to me and says, you're the most hated man in Austria. I said, what? Everybody hates you. You're so mean. And we just got married. Can we get a picture with you? I said, okay. They were going to Zermatt. And I realized, wow, this thing's gone nuts. You know, it's really nuts. And so I'm pretty proud of what we built. I think entrepreneurship is the American dream. We've made hundreds of millionaires and we've sold billions of dollars worth of consumer goods and services. You know, it's been great. How does being the crotchety guy on the show, that role make you feel? Would you like to change the perception at some point?

13:10No, no, no. I am the only shark that tells the truth. Barbara on my right, Lori on my left. Oh, kumbaya. Listen, I'm not going to give you any money, but you keep doing what you're doing with your crappy deal. you'll go bankrupt and you'll lose your home and all your parents money but you go you go and I just say you know your deal's stupid it's going to go to zero because it's a bad idea and you should realize that now it doesn't mean you're a bad person take it behind the barn and shoot it and try something else I'm the only one that tells the truth I don't think I'm being mean I'm being nice but everybody else particularly Laurie with that kumbaya you know stuff kumbaya kumbaya, you keep going and lose all your money.

13:55Like it's so dumb. And Barbara, you know, oh, oh, oh, oh, I don't want to hurt your feelings. I'll hurt your feelings. I'm happy to do it. They're pretty successful investors. Yeah, look, that's great. The only reason Barbara gets her a year is I buy her a new broom. I think I've heard some of those lines, by the way, on the show before. It's never going to change. Yeah, you got those lines down. I do want to dig into your process of evaluating products in people though, if you had to assign a percentage to when someone is pitching you, what percentage would you put towards, all right, this is a good product or this is a good idea?

14:25And what percentage do you go, I'm just betting on this person as a founder? Well, that's a good question because both can work. What I look for the most in almost all deals now is I say, do you know what it costs you to acquire a customer? Do you have any idea what that cost is. Most people don't. And if they don't, I never invest because you, you can't pour gasoline on the fire if you don't understand the business model. And so what happens is they kind of 80 % of companies, even 85 go bankrupt within 36 months because they're never able to get their customer acquisition costs below the lifetime value of the customer.

15:05In other words, they advertise themselves to death. They go bankrupt. So that matters. But every once in a while, you get an entrepreneur that's so compelling. And in my case, over 16 years, 70 % of my successes have come from companies run by women. So I tend to invest with women because they're very good at mitigating risk. Anaskaya is my most recent success. Base paws, cat DNA testing kits. What a stupid idea. But she was so compelling with her story. and just, I just couldn't, she wasn't going to leave until I gave her a quarter of a million dollars. Like that was the deal. And I just said, okay, I'll give you the$250 just to get you out of here.

15:45But she turned that company into a monster success because it turns out the data was worth more than the kits. And she had, there's 110 million cats in America and she learned how to extend their lives. And people that love cats want to have their cats longer. So they, because it was dumb. The kit cost$29.95, a new cat's five bucks. I said, why don't you just buy a new cat? The cat goes Snuff City in 12 years, get a new cat. That was not a popular thing to say. How is the show different without Mark? He's kind of your foil in a second. Yeah, you're right. Well, we don't know yet because Mark's on this season.

16:20He won't tape next season. We're casting now for season 17. I think, you know, at this point, we have everybody wants to be on Shark Tank. And I think the producers and Mark Burnett and Sony and ABC and Disney and MGM are so good at making this show. And the people have been working on it for 16 years, the Chase producers, the editors. I mean, I just let them do their thing. They're so good at it. They're going to solve. They're going to find me the right person. And we're just going to go at it like we always do. and you want to have that different idea. You want different structures. Look at what happened with Shark Tank.

17:05We're now doing convertible to benches up 20%. We're doing safe notes. We're doing all these complicated structures that no one even knew what they were. And now a nine-year-old knows what they are. So I think we've done a great job in advancing the cause of entrepreneurship and being the ambassadors of the American dream. And I don't think that's going to stop. We'll be back with more Mr. Wonderful after the break.

17:29eczema isn't always obvious but it's real and so is the relief from ebglyss after an initial dosing phase about four in ten people taking ebglyss achieved itch relief and clear or almost clear skin at 16 weeks and most of those people maintain skin that's still more clear at one year with monthly dosing ebglyss libri kizumab lbkz a 250 milligram per two milliliter injection is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema. Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies.

18:05Epglyss can be used with or without topical corticosteroids. Don't use if you're allergic to Epglyss. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with Epglyss. Before starting Epglyss, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about Epglyss and visit epglyss.lily.com or call Call 1-800-LILY-RX or 1-800-545-5979.

18:32When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans, send event invites and pin messages so no one forgets mom's 60th, and never miss a meme or milestone, all protected with end-to-end encryption. It's time for WhatsApp. message privately with everyone learn more at whatsapp.com you're a big linkedin poster and you spend a lot of time on the platform one of the most controversial features is that open to work banner i don't know if you've seen it that people who are looking for work post uh can put on their profile do you think they should yeah i think these platforms particularly linkedin um should be as transparent and open and experimental as possible because the value of that platform, I think I have four million plus people on LinkedIn and we use that all the time.

19:34It's huge for me in watch collecting. It's huge for me in asking questions of this base, what they think about products or services or prices or anything. They're very open. They're very transparent. And I've told the LinkedIn executives, You have a network here. You are just as powerful as any cable or linear television network today. And I respect you for that. And I want to be a contributor. I want to have, you know, what are your rules for me to be, to have a narrative with you? You did tweet back in early October, and I'm paraphrasing here a little bit, that if you look at any great manager, investor, or entrepreneur, a common trait you'll find is what they do in their spare time.

20:19Often it's something to do with art or sports and nothing to do with business. You go on to say that you need a balance in your brain between chaos and the arts. Can you elaborate on why you think hobbies are so important? It's not so much hobbies. It's challenging yourself in something that you do not have a comfort zone for. What keeps the brain active is trying to solve for a new task that it never did before. They even talk about this in avoiding dementia and Alzheimer's. when you put yourself out of your comfort zone it triggers all kinds of new neurons in your brain saying okay i've never been here before what do i have to do what do i have to be careful of when you're trying to advance in let's say the arts or playing guitar which never ends you never get good enough in as a guitar player you never get to be where you want to get to it forces you to practice.

21:13It forces you to test yourself in ways that you've never done before and explore and find new outcomes. The same in photography, the same in painting, the same in dance. So I look for those executives that have that on their resume. And I tell people, the resume should only be three paragraphs. The last one should be what you do outside of work. If it's something really interesting, I go there first because my greatest managers are skilled in many things and particularly the CEOs. I love it when they have something outside of the binary task of losing or making money in business because it's very binary.

21:51I think that's very important. And so I encourage that even for myself. I'm always looking for a challenge outside of my comfort zone. It happened to me recently when I got a phone call from Josh Safdie who said, listen, Ronnie Bronstein, who's writing this new movie for me, is a huge Shark Tank binge watcher. And he thinks there's a character in this movie that's you. And we want you to read for this part. The movie's called Marty Supreme. It's being shot in New York right now with Gwyneth Paltrow and Timothy Chalamet, Fran Drescher, some others too. And I said, I've never done scripted. How am I going to do that?

22:36Like TV, reality TV is not scripted. He said, well, I'm going to send you the script and then I want you to come down to New York and sit down with the cast and read. I said, I'm not going anywhere. I had my hip replaced yesterday. I'm sitting on the dock, sucking back a little Montrachet, relaxing here, trying to recover. He said, screw it. I'll be up there tomorrow morning. So he brought Ronnie up, the writer, with one of the producers, Eli and Josh. and we started reading this part. And I realized, I am that guy. That's me. That's me in 1952. And I was reading what Ronnie wrote and said, a billionaire in 1952 wouldn't say that, Ronnie.

23:20He'd say this. And I wouldn't say that. I'd say this. And he said, okay, let's rewrite it. Let's read it again. By the time that day was over, I was in 100%. But I'd never shot a feature movie. So my first day on the set, I went, whoa. how many lines do you have i i'm gonna be working on this movie for the end of february okay yeah yeah in tokyo that's where i ended up this is one i don't know if you've seen uncut gems oh yeah this is uncut gems on steroids oh gosh that's one of the most stressful this this is so full of crazy that when i read my lines and they often change as we're shooting i say i'll say to Ronnie, Ronnie, I can't say this.

24:05He said, yeah, you can. You got to put yourself back in 1952. You could say that in 1952. And I'd say, okay, I mean, those guys are crazy. Like they are absolutely crazy guys. I mean, you can see them how they think in some other universe, but it's, it's, it's watching them make the art. And what happens on a set, because we go, we'll start at three in the afternoon. We're still shooting at five in the morning, because if you take over, you know, the Plaza Hotel, you're only going to get it for 12 hours or 15 hours or 17 hours. You shut the whole hotel down to shoot it in 1952. And you as the actor, and I'm learning this pretty quickly, you want to get it right.

24:48It's just maybe, we did seven pages last week of script, which is a ton. It took us all night. But I didn't want to leave until we nailed it. So you get into that mode where you want to leave the very, very best take. It's always the last one. It could be 42 takes later. But that's how they work. I'm in the groove. And that was outside of my comfort zone. And I f***ing love it. Your Oscars nominations. You already got the Emmy under your belt. Let's see if we can get Oscars next. Let's not get ahead of ourselves. I can't wait to see this movie because these boys are sick puppies. That's coming from you.

25:30Yeah. So I know you are a big watch guy. You're wearing two watches right now. And I recently saw this clip of you talking to slash lecturing Marquez Brownlee, the tech YouTuber. He was wearing an Apple watch. Why were you kind of getting on his case about that? And I'm asking you as someone who is currently wearing an Apple watch. Well, the only problem with wearing an Apple watch is you lose your soul. And so you have to be careful about that. I wear one when I work It's a good electronic piece of consumer electronics. Watchmaking is like contemporary art. There are watchmakers around the world.

26:10There's many brands you know already, the Rolexes, Patek, Adam R.P.K. But once you have all those, you start collecting. They appreciate better than a Warhol. You can wear them. They're extraordinary in terms of what they represent. the craftsmanship, you have to give up your life at 14 to become a master watchmaker. You know, I support horology. I support young watchmakers. And I just love the community of crazy people around the world. Once you become known as a collector internationally, they reach out and you become part of the community. And the people I've met through watch collecting are unbelievable.