"Brink Of DISASTER!" Andrew Ross Sorkin On Elon Musk, AI Bubble + Ryan Cohen's “Hostile” eBay Plot

15:49Andrew Ross Sorkin:We are on our way towards$40 trillion with a T by the end of this year.

15:55Piers Morgan:I mean, the average person hears that and goes, how does this make any sense? How can America, the great superpower of the world, be that in debt and still be functioning, let alone having what appears to be a still pretty thriving economy?

16:11Andrew Ross Sorkin:This is the thing, singularly, that I worry about more than anything else. People worry about AI. They worry about bubbles. I worry about the sovereign debt of the United States. And if there's going to be a moment, if we do have, by the way, a bubble that bursts in the United States, the playbook we've learned from 2008, from the pandemic, is what do we do? We write a check. Right. Write a check to everyone. Bail everybody out. Buy yourself out, adding to the debt. Adding to the debt. And so what I worry about is the next time we write that check, and it could be trillions of dollars, whatever that check is, that whatever invisible line you think exists in the bond market, that the investors say, no, Mas, we're not doing this anymore like this.

16:47Andrew Ross Sorkin:We cannot do it like this.

16:48Piers Morgan:But what happens then?

16:49Andrew Ross Sorkin:Well, what happens is the bond investors say, we're only going to buy your bonds if there's double or triple the interest. You're going to pay me for the risk that I'm taking on. Well, if that happens, all of a sudden, it completely re-scrambles the budget of the United States, meaning what the government services are offered. And that's what can lead to, I think, real both civil unrest potentially, but a devolution both in services and the economic implications.

17:18Piers Morgan:You say in the book, you quote President Hoover, who in response to the 29 crash said the only problem with capitalism is capitalists. They're just too damn greedy. That hasn't changed.

17:30Andrew Ross Sorkin:That part hasn't changed. Look, capitalism is the best program that I've found over the years as it relates to socialism. But you do need some guardrails. Ultimately, you need guardrails to make a free market actually free. Because what ends up happening is it's not free. It becomes about crony capitalism. It becomes about all of these weird incentives that screw up the system. And that, I think, is ultimately the thing we've got to watch for.

17:55Piers Morgan:Let's talk about Donald Trump before the war on Iran and now. Okay. Because there's a reason why I'm going to separate the two things. Obviously, a year ago, he launched the tariff war. many people predicted total financial Armageddon. It would be a total disaster. Well, that didn't happen. It wasn't a disaster. But was it, by any qualitative assessment, a success? What is the reality of where we are with tariffs?

18:22Andrew Ross Sorkin:Okay, so there's two elements to it. Because, by the way, I was in the category of this could be a real problem. I was in that category, though, and I think most people who were really sort of worried at the moment were in that category on what was called Liberation Day. When he first came out with the tariff program... People freaked. People freaked, but they freaked because the levels of the tariffs were extraordinarily higher than they ultimately were. Right. So part of it was that the plan changed. Is tariff war a good strategy if you are the biggest beast in the room? I genuinely believe tariff war is not good for consumers in America, and I believe it's not good for the world.

18:58Andrew Ross Sorkin:Because ultimately... Because it's ultimately a tax that at least is partly borne by the consumer back in the United States. And not just that, I think there's a broader question, which is to the degree that you are a nation that wants to have relationships with others that are long-term and loyal. We talk about here we are in the UK, the special relationships between the US and the UK. There was no problem between the US and the UK prior to this. Do you believe that tariffs were warranted on the UK?

19:28Piers Morgan:I didn't know. The trouble is, I could see the merit in some of it. He's always had a thing about China, for example, ripping America off. He's always believed in the power of tariffs. None of it was a surprise to me.

19:39Andrew Ross Sorkin:By the way, I think you can use tariffs. And the president, by the way, has authority to use tariffs. And they can be used properly. If there is a country that demonstrably is doing something like China is and was, you can use tariffs against them. We have laws that allow for that. The idea of across-the-board tariffs just as a toll, that creates its own problems.

20:01Piers Morgan:What was the state of the economy right before the war on Iran started, particularly in the U.S.? What was the reality?

20:08Andrew Ross Sorkin:I think the reality was that things were getting better on the whole. Still the best economy in the world? I think we were... I think... Look, that's the... The funny part about this is the U.S., despite all the hand-wringing, I think is the best economy in the world. I think it was the best economy in the world during the beginning of the Trump term. I think it was the best economy in the world, by the way, even at the end of the Biden term. So I and I say that hopefully just empirically on the data. You know, as we as we moved into the war, I think there was by the way, I think there was some underlying questions underneath the economy.

20:43Andrew Ross Sorkin:What was going on? By the way, this A.I. boom, I pointed the book, but the A.I. boom has inflated everything.

20:51Piers Morgan:And to an unhealthy degree.

20:53Andrew Ross Sorkin:Well, to a concentrated degree when people would say concentration is unhealthy. If you take out the success of AI and remove it, you know, from GDP, you basically have a flat GDP. And then that raises the question about how healthy this really is.

21:10Piers Morgan:This Iran war, I felt from day one was a strategic mistake that Trump got talked into. He doesn't, he won't accept that, but I think he did. And the longer it goes on, clearly the more economic damage is being done, not just to, obviously, the Iranians, but also to everybody, right, because of the power of the Strait of Formos, which most people probably weren't even aware of before this happened. The longer it goes on, what is the real damage to the economy, do you think?

21:38Andrew Ross Sorkin:Look, I've been surprised at how resilient this...

21:41Piers Morgan:Yeah, because the markets don't seem to have even noticed it.

21:43Andrew Ross Sorkin:It is head-scratching to me every day. How is that possible? Investors in the stock market are professional optimists. And, by the way, you have to be.

21:54Piers Morgan:Or are they just... I mean, I'll say this respectfully, because I know you have to... No, no. ..sweet in their pond, but are they not just a bunch of lemmings? I mean, look at the oil price... Right. ..graph, right, since the start of the war. Sure. Every time Trump breaks wind... Yes. ..one way or another, what, what, what, what, what? No actual longer-term thinking, no assessment of what he's saying, whether it bears any relation to the reality on the ground or anything. They just burp up and down, and I'm like, that's not a sensible way of reacting to this news.

22:24Andrew Ross Sorkin:Here's the complication. There's two things going on. One is the stock market is supposed to be looking out 12 to 18 months from now. That is supposed to be the bet. So the bet that's taking place today is that in 12 months or 18 months from now, call it that there is no war, that the straight is open. That is what they're gambling on. Is that a good gamble? I don't know. I hope so. The other thing I just say, having studied 1929 and 2008, it has actually paid to be a professional optimist. I'm a professional skeptic. I'm a journalist. That's right. Both of us are. We're in the skeptical business.

23:01Andrew Ross Sorkin:Our first instinct is who's lying to me and why. Exactly. So it's a little, there is a little bit of a disconnect there. But if you look over the last hundred years, even with the 1929 crash, even with a 2008 or a dot com or you go down the list, you have been better off being invested in the market than not being in the market. And in fact, there's been a number of studies that have shown if you look at wars, anytime a war has broken out, in the past, by the way, you used to see big movements in the stock market. I think people started clocking what was happening. Oftentimes, if you put money into the market when a war broke out, a year later, you were doing better.

23:39Andrew Ross Sorkin:This is not investment advice. It's just historically, I think that's what this investor class today is looking at.

23:47Piers Morgan:In terms of getting rich, people look at someone like you and they go, well, come on, you know, you're like an expert in this stuff. What is the best, safest way to get rich?

24:01Andrew Ross Sorkin:It's the way that Warren Buffett has told people to get rich, which is to buy an INDEX FUND EARLY ON IN YOUR LIFE TO COMPOUND YOUR MONEY. IT IS NOT SEXY. IT IS NOT FAST. BUT IF YOU HAVE SOME PATIENCE AND YOU ARE CONSISTENT ABOUT IT, YOU CAN GET RICH.

24:22Piers Morgan:WARREN, I INTERVIEWED HIM AT CNN. AND HE WAS CERTAINLY, I WOULD SAY, THE MOST IMPRESSIVE BUSINESS PERSON I 'VE EVER MET. I THOUGHT HIS WORLDVIEW ABOUT IT ALL, EVEN DOWN TO HE SENT ONE HE DIDN'T HAVE ANYONE. HE DIDN'T HAVE ANYONE. HE DIDN'T HAVE ANYONE. HE DIDN'T HAVE ANYONE. HE DIDN'T HAVE ANYONE. HE USES A NORMAL PHONE. HE HAD A NOKIA FLIP PHONE WHICH HE TOOK CALLS ON. AND IT WAS A MASSIVE BOOK CALLED SNOWBALL ABOUT HIM. INCREDIBLY DENSE BUT BRILLIANT. BY ALICE SHRODER. INCREDIBLY WELL DONE. BASICALLY THE PHILOSOPHY WAS TO INVEST IN GREAT BULL RUN COMPANIES

25:03Piers Morgan:of human beings. So when times were tough, people tended to stay at home, they'd order in pizza, they'd chew more gum because they were worried, they'd eat more confectionery and so on, and he would buy accordingly. And similarly, when times were great, he'd be into airlines and restaurants because that's what people are doing. In other words, he's chasing behavioral patterns and habits. I thought that was just incredibly simple, but fascinating.

25:29Andrew Ross Sorkin:He has the strongest sort of emotional core. Yes. Most people, when the stock market falls, freak out. He says to himself, oh, my goodness, everything's on sale.

25:43Piers Morgan:Well, he said, when others are fearful, be greedy. When others are greedy, be fearful.

25:48Andrew Ross Sorkin:It's very hard, I think, for most people to be able to follow that path. I think it's the right path, but emotionally... You've got to have balls of steel, right? It's not a natural act for most.

26:02Piers Morgan:Your book is called 1929. We're heading towards 2029. So 100 years later. What is it going to look like, the world, if you were a betting man? And things are looking pretty unpredictable right now, but your job is to try and predict these things. What are we going to look like, in particular, that relationship between AI and jobs? Because that seems to me to be the crucial fulcrum forgetting about war and whatever stuff you can't control. The thing we can control is that balance between artificial intelligence, where it goes by 29, and what that does to the human jobs market.

26:42Andrew Ross Sorkin:Okay, so just next three years, that's the prediction? Next three years, actually, I don't think it necessarily takes all the jobs that actually we've been expecting. I don't know if you've been following what's happening with mammograms. People talk about mammograms because they always thought that radiologists for mammograms were going to lose their jobs first because AI can read a mammogram better than a person. There are more people who are radiologists doing mammograms than ever before. Because the price of mammograms has come down and more people are getting mammograms than ever and somebody still has to read them and still has to talk to the patient personally.

27:17Andrew Ross Sorkin:So I think there's going to be an opportunity.

27:19Piers Morgan:Well, what about, say, I can talk about legal clerks, right? Where their job is to just go and find old case studies. Yes, those people are not going to have jobs. Right. So then what happens to the ladder in industries like that? Because you have to become... The apprenticeship. Right. So what happens to those people? Because if you can't get on the ladder,

27:38Andrew Ross Sorkin:then surely the whole ladder eventually just falls. So this is, to me, the issue. And what I don't know is, is that over the next two or three years, or is that over the next five or ten years? I think it's going to be incredibly quick. So I think it's going to be slow and then incredibly quick.

27:52Piers Morgan:When you see companies like Facebook and others, getting rid of thousands of people. The moment that starts to happen, and they're citing AI as the reason, I'm like, that surely has to accelerate.

28:03Andrew Ross Sorkin:I'm a little worried that there's a little bit of theater going on in some of these announcements. Right now, I think people are using AI as an excuse for firing people, and I'm not sure that's the actual case. By the way, one of the things that's happened in the last two weeks, the cost of using AI is so incredibly high. Companies like Uber are saying that the ROI, the return on investment, doesn't make sense. They'd actually prefer to use engineers. So I think it's going to play itself out for some time. Then I think there'll probably be a cliff. And there's going to be a big question about what that transition looks like.

28:33Andrew Ross Sorkin:I think that's when it becomes a political and policy story. But I think it's probably a 2029 story. What's the number one lesson we should learn from this, from the 29 crash? The lesson of Warren Buffett, it's to have humility. It's not to chase the next thing. You know, the phrase FOMO did not exist in 1929. but boy, do we have it now. And when we see folks making a fortune, everybody wants the lottery ticket. Everybody wants the ticket. The problem is that most people who buy the ticket lose.

29:05Piers Morgan:Talking of people potentially winning or losing, after your highly entertaining interview on CNBC's Squawk Box, you pressed Ryan Cohen... Oh, right. ...on how GameStop could possibly finance its$56 billion bid to acquire eBay, saying the math just didn't work. so he came on unsensitive to respond he said this chronic migraine 15 or more headache days a month

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30:36Andrew Ross Sorkin:It's half cash, it's half stock. We have the ability to issue stock. Essentially, the eBay shareholders are going to continue owning eBay, except it's going to be run by an owner operator as opposed to an entrenched management team that has zero invested and zero skin in the game. And the other half of the structure, we've got$9 billion of cash on our balance sheet. And our bankers have advised us that they feel confident in our ability to raise$20 billion. So it's a straightforward deal. but, you know, it was too complicated for them on CNBC.

31:20Piers Morgan:Now, the reason I wanted to play that to you is because it was way too complicated for me to understand whether anything that he said there was actually credible. You've now heard it. He says it's too complicated for you to understand.

31:34Andrew Ross Sorkin:I would beg to differ.

31:36Piers Morgan:From what you just heard there, which was his kind of clarifying explanation, what would your response be?

31:41Andrew Ross Sorkin:So, look, I think what he's trying to do is slightly different than what is a classic acquisition. And just for the record, I did understand exactly what the transaction was. I was desperately trying to get him to explain it to the public in a way that they could understand it. But in terms of what the deal is, typically when you buy a company, you have more money than the company that you're buying and you're buying out their shares. In fact, he said that he was buying it at a premium. That's not exactly what this deal is. he's paying some money to the company, but he's effectively telling eBay shareholders, you are going to roll in with me, meaning a big portion of your shares are still coming here, so I'm not really buying you out at all.

32:26Andrew Ross Sorkin:You're going to roll in with me, and if you like me as the manager and think that what I've done with Chewy, he had a great success with Chewy, if you think that what he's doing with GameStop was great, then you'll follow down this path. And that's what the deal is. The question is, he needs to ultimately persuade those eBay shareholders. And those eBay shareholders are big Wall Street institutions, by the way. It's not retail investors necessarily. A lot of retail investors in GameStop got him very excited about GameStop. He's got to persuade BlackRock and T. Rowe Price and all the big funds that he's the guy to run this and that they need to trust him.

33:03Andrew Ross Sorkin:So that's what that's doing.

33:04Piers Morgan:Polymarket, when asked, will GameStop acquire eBay by the end of the year, 15 % are saying yes in the prediction market, down from 22%. Where would you put the percentage?

33:17Andrew Ross Sorkin:Look, I think it's going to be a challenge for Ryan. I think he's done a... By the way, he did a great job with Chewy. I think he's doing a good job with GameStop. Could he pull it off? In the next... This year, I think it would be very, very challenging. Like, almost impossible challenging. but that's because he effectively would have to get the board, which doesn't want to hand over the reins, and he'd have to get all the big institutional investors behind him. Could he ultimately do it, like, over time? Maybe. But it's not an easy one.

33:46Piers Morgan:Is an easier one what's going to happen to SpaceX when it floats in a couple of weeks? Is that going to be the rocket that we all expect?

33:53Andrew Ross Sorkin:So, it's interesting. It's a rocket that almost invariably has to be a rocket for the first couple of weeks because the NASDAQ, the stock exchange where it's going to go public, has an index fund called the QQQ. Anyone who buys the NASDAQ index fund is automatically, within the first five days, going to be buying shares of SpaceX. So there is effectively an automated buyer of SpaceX shares. And by the way, there's other investment funds out there that try to mimic the NASDAQ fund. So they have to automatically buy shares, too. So I think in the immediate aftermath, there will be lots of shares moving higher.

34:35Andrew Ross Sorkin:Having said that, Elon's done something very interesting, talking about the democratization of finance. He's allowing a lot more retail investors to buy in than historically. Why is he doing that? He believes in this idea of democratizing finance and believes there's a big audience for his shares. The question, it's going to be a big test. Most companies don't put the shares in retail investors' hands immediately because they're not considered diamond hands. They're considered quick hands that they may sell if the stock moves too high. So it's going to be a very interesting one to watch.

35:08Piers Morgan:I sat with three billionaires about three, four years ago over lunch, and I just said to them, come on, if you could invest in one stock, what would it be? And they all said SpaceX, which I thought was very interesting. So it's going to be a fantastically exciting thing to watch.

35:23Andrew Ross Sorkin:And watch for the next move. Elon's next move. SpaceX, I think, is going to ultimately buy Tesla. I think that's inevitable. And they're going to rename the company X for the whole enterprise. Really? The whole thing? That's my... Really? That's my call.

35:39Piers Morgan:That's a big call, but you're usually right. I want to end with one simple question. In Wall Street, perhaps the most iconic movie about Wall Street, obviously, but about the financial world, the classic Oliver Stone film. There's the line, lunches for wimps. Do you go to lunch?

36:00Andrew Ross Sorkin:I used to go to lunch. These days, I don't really go to lunch that much.

36:04Piers Morgan:So you concluded lunches for wimps?

36:07Andrew Ross Sorkin:I just don't know what the power lunch is anymore. I'll tell you where it is. Maybe when we go to lunch.

36:14Piers Morgan:No, it's Michael's. It's Midtown Manhattan with our mutual friend Jonathan Wald. Absolutely. Isn't that the epicenter of power lunches? The epicenter of power in New York. Andrew, great to see you. Great to see you. 1929, inside the crash. As you've got here, a quote here from David Grand, riveting and illuminating. It certainly is, and a massive wake-up call for all of us right now, I would argue. Great to see you. I appreciate it. Thank you so much. Thanks very much. Well, joining us now to react to that interview is Ryan Cohen, the CEO of Gaze. So, Ryan, you were listening there to Andrew. There was a little glimmer of hope.

36:49Piers Morgan:He didn't think it was impossible, just very difficult. What's your reaction?

36:57Andrew Ross Sorkin:It reminds me of the movie Dumb and Dumber, where the girl tells Jim Carrey, he asks, what are my chances? And she says, like, one in a million or something. And he says, so you're saying there's a chance.

37:15Piers Morgan:I mean, look, Andrew is, notwithstanding your little dig, which I played to him, he didn't understand it. I think he does understand it, and he outlined just now the reasons for his concern and wanting you to really articulate how you thought this would work. I mean, do you understand his concerns? Do you accept that he, you know, is pretty expert in this and the concerns are valid?

37:41Andrew Ross Sorkin:yeah i mean uh it's tough everything that i've done has always been tough i i um if you would have looked at what the chances of chewy to succeed against amazon the odds you know were very very low and turning around gamestop if you asked all of wall street what they thought uh the business was going to be doing in 2026 when i joined the board they would have said that the company would have been bankrupt a few times over so uh yeah this is uh it's tough

38:20Piers Morgan:there have been reports today saying that you've not given up on this project and you may now take your proposal directly to shareholders for an attempted hostile takeover is that true

38:33Andrew Ross Sorkin:I'm definitely not going to give up.

38:38Andrew Ross Sorkin:I'm not going to stop.

38:41Piers Morgan:You're not denying the report which includes the proposal potentially direct to shareholders for an attempted hostile takeover. Is that been true?

38:52Andrew Ross Sorkin:Ultimately, the owners of the business are the shareholders and the fate of the business is going to be decided by the owners of the business. And the vote is going to come down to who they want running the business. Do you want an entrenched management team that's collecting tens of millions of dollars in risk-free compensation running the business? Or do you want someone that's putting all his chips on the table, both through GameStop and me personally? But ultimately, the management team and the board has all kinds of perverse incentives. but I'm going to do everything to make sure that ultimately the owners of the business get to make that decision.

39:37Piers Morgan:That doesn't sound like a denial.

39:42Andrew Ross Sorkin:It's not a denial.

39:44Piers Morgan:Wow, OK. So that is news. So you are seriously considering a hostile takeover?

39:54Andrew Ross Sorkin:Going to do whatever we need to do in order to maximize shareholder value for GameStop. And we've made a big investment. We're one of the largest active shareholders of the business. And I love eBay. And the business is highly complementary to GameStop's business. And it's a business that I personally understand very well and is within my circle of competence.

40:27Andrew Ross Sorkin:So we'll see what happens.

40:31Piers Morgan:Well, I look forward greatly to your next move on that. Just very quickly, SpaceX. You know, we just heard Andrew talking about it, that it's going to be a rocket launch launch, but it's going to have to reach rocket levels to justify, I guess, all the hype. What's your view about it?

40:51Andrew Ross Sorkin:I wouldn't bet against that. I wouldn't be arrogant enough to bet against Elon. And what I find interesting on all the skeptics on Wall Street is how quickly they are to take the side of the establishment. I don't know what it is. Maybe they play by the rules. They go on the show. They answer all their questions. They bow down to them. They get together in the Hamptons. I don't know what it is, but there is nothing that is more American than risking your own money. And if you end up making money, great. And if you end up losing money, then you lose money. And yet you look at the mainstream media like with with GameStop as an example, and it's almost like everyone is rooting.

41:49Andrew Ross Sorkin:and wants to see our demise. And it's the same thing in this situation too. They want to see us fail. They hope we fail. And it doesn't really make sense to me. It's anti-American. What we're doing is tough, but we're taking on risk. And if you look at the current management team and the board, you've got a board of directors that are making hundreds of thousands of dollars a year for attending a few board meetings. You've got a management team. You've got a CEO in particular that's making tens of millions of dollars, have never bought a single share of stock on the open market with his own money.

42:33Andrew Ross Sorkin:And yet, why are they so quick to protect and want them to succeed? Like, you know, you talk about, like, I watch what, you know, wealth inequality and all of these systemic risks. And then you have someone that's taking on a lot of risk and putting a lot of skin in the game. It's like, why do they want us to fail? I don't understand.

42:55Piers Morgan:You know, I love entrepreneurs. I think they make the world go around. I think that most people are risk-averse and play safe in their lives and their business. And actually, if it wasn't for people like you and Elon Musk and others, the world would be a very dull place. And sometimes you've got to speculate to accumulate and you may crash and burn. But as we learned in Top Gun, sometimes you will crash and burn. but other times you're going to win. And I wouldn't bet against you either, Ryan. I've enjoyed talking to you the few times we've done it. I hope we continue to do it. And if you put it off, it'll be amazing.

43:29Piers Morgan:And if you don't, well, you had to go.

43:33Andrew Ross Sorkin:I appreciate it, Pearce. We're on the same page.

43:36Piers Morgan:We are, and we will talk again. Ryan, thank you very much. Nice seeing you. This morning on Sensor is proudly independent. The only boss around here is me. You enjoy our show. We ask for only one simple thing. Hit subscribe on YouTube and follow Piers Morgan Uncensored on Spotify and Apple Podcasts. And in return, we will continue our mission to inform, irritate and entertain. And we'll do it all for free. Independent, uncensored media has never been more critical and we couldn't do it without you.

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