Elon Pushback, Trump's Distraction Trap, and Disney Earnings

24:32And one of the things that was interesting is I was able to put those headlines because I controlled my own media. You can't believe what a bunch of idiots. They have such disdain for people. And the press is treating it like it's like an equalized thing. And it's just not. I'm finding it so frustrating. Even, you know, I'm on CNN and on Friday, I was like, this is a hostile takeover. You need to treat it. Stop talking about DEI and the plane crash. You can talk, right? Stop. You need, this is what this is. It's a hostile takeover of government, probably illegal. And you can't look at it like, well, look at that kind of things.

25:10I just I'm perplexed as to why it isn't a five alarm fire everywhere all day long, every minute in the media. Now, your house is on fire. You shouldn't be arguing over the pattern of the couch. It's just in all these things are important. But this really is. Again, I think our elected representatives who have contacts overseas should be calling them and saying you need to put pressure on Elon. You need. And Trump is doing the same thing that Zuckerberg did to Sandberg. He's using him as this very powerful and effective heat shield such that if he does go too far, and in fact, they do find this is illegal and they start, Trump can back away and say, oh, I didn't know they had done that.

25:52Yeah, they went a little too far. He's done that. Yeah, he's done that. So he's basically, I mean, to a weird extent, Elon Musk is a$400 billion media platform weaponized Sandberg. He's a heat shield. and he's like, you understand this technology and how to go in there and shut off payments. And what they're hoping is it resets or recalibrates the playing field for negotiation. Let's start from you're getting zero, despite the fact that our elected representatives passed this law that says Head Start is a good thing. And this is, they went right to the mechanism for the payment. I mean, it, and it's, I don't understand.

26:30This is illegal. I would just very simple. This is illegal. And I believe the people involved in this will be prosecuted. That is that is what I'm planning to do by this Justice Department, because all they're doing is getting rid of threatening companies that have DEI. That's the first thing Pam Bondi did. Again, another weapon of mass distraction. That's not going to go anywhere. What could go somewhere, in my view, legally, is to say these are the laws and I believe you and these 25-year-olds have broken and I plan to do everything within my power to enforce these laws. Yeah. Okay, Scott, let's go on a quick break.

27:08When we come back, Trump continues to flood the zone with crap.

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28:53Scott, we're back, and President Trump is making all sorts of headlines this week. Trump surprised pretty much everyone with a plan for the U.S. to take over Gaza and turned it into a Middle East Riviera, Maragazo. That's the joke, which is not funny. actually, though some administration officials are walking that back a bit. His cabinet nominees, RFK Jr. and Tulsi Gabbard, appear to be on their way to confirmation. He's reportedly getting closer to an executive order abolishing the Department of Education. He's doing everything by executive order because he doesn't want to bother with legislators.

29:25Questionable executive orders, I'd say. We talked a few weeks ago about the strategy of flooding the zone with shit. Let's talk a little bit about this and how people can avoid falling to trap of distraction, Trump throwing up these crazy ideas and orders while Elon is making this power grab. It's quite coordinated from what I can tell, although I don't think Trump knows what he's doing. Courts have done a few things to keep them in check. They're stopping him from, he already was in the Treasury, now they're saying get out of the Treasury. Who knows if he will? Because again, liars, all of them.

29:55A federal judge did block the birthright citizenship order this week. But then Trump was busy signing executive orders, outlining plans for a government-run sovereign wealth fund, which would potentially use to buy TikTok. That's called state-run media. The fund would also support other national endeavors like infrastructure projects. I don't know what to say. Talk a little bit about this strategy as a marketing thing. I hate to say that, but this is – and then we have a story in the New York Times. it's like, well, it's good that he's shaking up the difficult problem in the Mideast. Maybe it will create fresh ideas.

30:32Now, I was sort of like, what? Like moving people against their, two million people against their will to where they've lived their whole lives is a fresh new idea. I mean, and as if no one, because, especially because Gaza is absolutely destroyed. Like, again, they destroyed it. And now, now they've destroyed it. They can't go back, that kind of thing. Well, okay. But before we even get to the notion that Egypt, I mean, look at the borders, look at the Gaza border with its neighboring nations. No one wants to take these refugees, whatever you want to call it. That is such a, I understand the argument.

31:14It is an interesting argument. The notion that we're setting up a situation where nothing's really going to be different and eventually we're going to face the same problems in two, five, 10 years again. That's a powerful argument. So the notion that we need to be creative and thoughtful, fine. This is not the time. If you go into the emergency room, okay, the term stop the bleeding originates from a very logical place. And that is if you go into the emergency room with a gunshot or you've fallen and hit your head and you're hemorrhaging blood, they don't take your PSA. They don't talk about, they don't say check his or her cholesterol.

31:52They stop the bleeding. Everything else at this point is a worthy conversation that should be had by our elected representatives. But if we let a coup be successful and change the complexion of the negotiation, whereas opposed to arguing over who is prosecuted here and under what laws And how do we immediately arrest this coup such that we're not negotiating? Well, will you give us 50 percent of the funding back for Head Start, dear person who wasn't elected to make these decisions? Focus on stop the bleeding and the bleeding here. America is bleeding out in a small building somewhere that has access, that is being remotely accessed by different locations, by a group of people under the cover of dark to stop payments based on programs that were passed by laws by our elected representatives.

32:47This is a coup. And it's not a slow-moving coup. It's a fast-moving coup. And everything else is an ER doctor saying, OK, they lost their leg and they're going to be dead in three minutes if they continue to bleed out. Let's find out what their good and bad. Let's figure out what their blood pressure. I mean, no, none of that's important at this point. Stop the bleeding. This is our focus. Well, here's the problem. I know, ketamine. Exactly. But this plan, literally, Israeli defense minister said his instructor immediately to draft a plan to allow voluntary departure of Gaza from residents. The only way they're leaving is if you ethnically cleanse them.

33:24None of it makes any sense. You know, it's funny, like one of the right, most of the conservative think tanks are sort of like, oh, dear. Like right now, if you look at some, they were like, this government thing isn't good. This Gaza thing isn't good. And they're like, don't be hysterical and use the term ethnic cleansing. But I'm like, only the comedy shows are getting it right. Like the Daily Show, they have different euphemisms for what it is, like voluntary departure or moving them as refugees. And the word was password of the day is ethnic cleansing. And they keep doing different words and they go back when they have the wrong word.

34:07Only the comedy shows are actually calling out this stuff for exactly what it is. Only the comedy shows are calling it a Nazi salute that Elon did, are saying this is illegal, are just explicitly doing it. And I guess it's under the cover of comedy because some of it's very funny, but it's actually quite strong, I guess. I don't know what else to say because that's where I'm seeing the best coverage of this stuff or the best commentary, I guess. Yeah, I just, look, again, I'm just remiss to engage in the conversation about how ridiculous it is, because I don't think it's going to happen. I think this is, again, an attempt to say, look over here.

34:49Let me talk about gender in the workplace as I figure out a way to create algorithms for profit to make it more likely that your 15-year-old girl is going to engage in self-harm. Look over here. I have a book signing. Yeah, the wealth fund thing. You know, someone, they wanted me to go and talk about the wealth fund. I said, that's fucking ridiculous. State-run media, it's not allowed. And they're like, well, what do you think it would be? I'm like, I don't. I don't. What do I think of the Loch Ness Monster, you're like asking me? It's not, doesn't exist. Or maybe that does. But the wealth fund, I'm sort of like, state-run media, does everyone have a problem with state-run media in a country with the First Amendment?

35:24Like, yeah, I do. Like other countries do have sovereign wealth funds that invest surplus income. The U.S., by the way, runs a budget deficit, so we don't even have money to put into this sovereign wealth fund. I mean, you understand sovereign wealth funds better than I do, but this is nutty. Like it's not to buy TikTok, what? Look, a sovereign wealth, yeah, they play different roles. In the case of the kingdom, it's like we need to figure out a way to transition away from fossil fuels. We have a ton of money. We want to be strategic. We want to turn it into more, a greater return. We want to be thoughtful about it such that we can then make the investments we need to pivot away from an economy that's dependent upon a sea of oil, which is going to dry up in 30, 57 years.

36:13Such that, you know, we entered the quote unquote modern world. In Norway, it's a means of saying, okay, Norway owns 1.5 % of the world's stocks, and they create an incredible standard of living for their folks because they have thoughtful people trying to figure out how to invest their excess capital to a greater ROI than their competition. America doesn't need a sovereign wealth fund. We have so much capital being invested privately. That's the financial argument. But the other thing is when you buy one firm, this is a sovereign wealth fund invests and tries to find alpha dislocation for the benefit of its citizens.

36:48We don't need that here. In addition, this is the sovereign wealth fund, again, is a distraction from what he's really suggesting. And that is the government owning a business, which is socialism. And a media business, a media business. It's not like it's potatoes or something. But the U.K. made a very compelling argument in time. I see why they probably thought that we need manufacturing to come back. And we have this really compelling guy who built the Pontiac GTO and we're going to bring manufacturing. We have an opportunity here to be one of the largest shareholders in this amazing new technology and manufacturing brand called DeLorean.

37:22And so they made him that. I believe that the critics of Republicans were right to criticize Obama for some of his subsidies around solar firms. The whole Republican argument is that the public sector shouldn't be in the business of picking winners and losers. I kind of get that. Now, if you're going to do it systemically and say we want to support companies who are building our chips for defense reasons, fine. But this is the state controlling the means of production. And even saying this, I'm taking the debate. This is never going to happen. But again, I go back to where we're bleeding. So this, again, is another distraction.

37:59It's a stupid idea. It will never happen. They know it, in my opinion. Maybe he just thought about it and thought, I'm a deal guy. I can make money here for the government. No, we don't want to own TikTok. We want to regulate it or ban it. We want to promote the rule of fair play and even playing fields such that startups have a shot and everyone is playing under the same rules. And meanwhile, if you, in fact, have an algorithm that can be reverse engineered to polarization, radicalization or self-harm among teens. Maybe you should be subject to the same liability as traditional media. OK, that's that's an that's the government's role.

38:34The government's role isn't to start cosplaying business. Trump has been cosplaying business his whole life. This is the reality of Trump. If he had invested his father's massive fortune, which he inherited in any index fund, he'd have more money than he has now. But he's been cosplaying business. He was hugely insecure. I ran across Trump businesses all the time doing business. And the general reputation of Trump and his family was they were a bunch of rich kids who didn't know what they were doing, that they just weren't very good at what they did. He's been cosplaying business his entire life.

39:08And this is, again, him thinking, I've got an idea. We'll own TikTok and we'll make money. That is not a government role. It's not. And again, here I am taking the bait. Look over No, but it's just not happening. It's just such nonsense. It's fucking nonsense. Like, nonsense. Every time they ask me a comment on anything, I'm like, it's nonsense. What else can I say? This is bullshit. This is such—there's no interest. Like, sometimes I think it is good. Like, let's think of some fresh ideas, right? Let's—huh. What should we do here with this? How do we protect our national security and yet protect the First Amendment?

39:41Like, how do we do that? Like, there's always room. And that's the good part of Silicon Valley. Like, let's think of new ways to do things. And by the way, they don't have, let me just say, this attack, I'm going to just have one slight rant here. I got contacted by Bijan Sabat. Do you know him? He's a great investor. He was in Twitter early and stuff like that. And he's written a piece called, there are people in Silicon Valley that are not like this, just so you know. And he wrote a great piece called Public Service, the Backbone of American Democracy. And he really didn't like this one line in these Doge press releases where he says, The way to greater American prosperity is encouraging people to move from lower productivity jobs in the public sector to higher productivity jobs in the private sector reveals a staggering ignorance of the essential work performed by those in government.

40:28It is not only offensive, but also demonstrably false. I was so happy to read that, you know, that the private, he simply put, the narrative that the private sector is inherently superior to the public sector does disservice the millions of Americans who serve their country every day at risk demoralizing a workforce already under strain and undermines the very institutions that protect and advance our shared values. These people who have had so many frigging failures of their startups, they fuck up so much. And Donald Trump is the top fuck up, the top fuck up of business. They're allowed to say they're innovative and they then insult government officials who have done a pretty fucking good job keeping us safe every day.

41:12And it's so offensive and so easy to insult the government and its workers. And it's they have fucked up so many times that we should start making lists of all the different stupidities they have perpetrated. I find it the whole thing. Just it's nonsense. There's also there's parsing kind of mendacious to just stupid and dangerous. The CIA, I've had the pleasure of working with several officers. These are incredibly bright people, incredibly skilled. And instead of going to work for Google or Procter & Gamble, they decide to serve their country and they take enormous risks. And the fact that they have so little regard for a national security apparatus that they might be unmasking these folks, either recklessly, negligently, that is 100 % the right word.

42:08It's traitorous. And it's stupid because what is the likelihood? The Central Intelligence Agency recruits out of every top business school, every top college. They try and find the best and brightest from a very early age. Do you think you're more or less inclined to go to work for the Central Intelligence Agency right now, knowing that your own government might out you? What if you're overseas on assignment right now? Oh, sleep well tonight. They might know who I am and what I'm doing here. And by the way, it's not like these guys lose their pension if they're found out. It's not like they get fired.

42:44They are tortured and then murdered trying to protect our shores. And you have people who have so little regard for their sacrifice and their patriotism. Let me just take one thing we've got to move on is someone who is very interesting. Some of his comments is Bill Gates. He's on a book tour for a book called Source Code. He has met with Trump because he's trying to stop him from defunding AIDS things. And he has to do that. He's the president. He's got to go in there and make his argument. Why not? And he has been defending USAID. He's someone who was very arrogant about government. When I met him, he was super arrogant.

43:20He now is like, I was arrogant. And let me tell you, there's some amazing people working for the government. I've had government, there's dedicated, important people doing important work. If you partner with the government, he's very quietly doing the right messaging around why this is wrong. And every now and then he's like, what Elon's doing is nonsense and irresponsible, and here's why. I don't think I'd like him to yell more, but I have to say I was pretty surprised how explicit he is being. There's very few other leaders that are doing that. None of them. Like, none of them. He was the only one that you see because he knows he doesn't have a price to pay because he's Bill Gates, right?

43:59So he can do that. So all you other rich fuckers who don't think this is right, not saying anything, is heinous on your behalf. Anyway. Alright, Scott. Let's go on a quick break. When we come back, we'll talk about this week's earnings.

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45:49Scott, we're back. There's lots of earnings news. We still have to talk about earnings. Disney beat expectations, reporting a 4.8 % increase in revenue. The company's experience business, which includes parks, cruises, and resorts, rose 3%. Its entertainment division saw a 9 % jump in revenue. Disney Plus saw a 1 % decline in subscribers following an increase in prices last year. They're doing pretty well. Their streaming business is quite stabilized, and it's moving forward. At some point, you run out of subscribers, essentially, and there's a lot of churn, etc. Alphabet, I'm going to go through them, and then you can comment on.

46:22Shares of company are down almost 6 % in the last five days at the time of the taping. Alphabet's overall revenue grew 12 % compared with 13 % in the same quarter last year. Advertising revenue grew 10.6 % compared to 11 % last year. The company announced plans to invest in above expectations$75 billion in capital expenditures as it continues to build AI offerings. One of the things they did note is they're going to stop all their efforts in DEI because they're going to, Unlike Costco and Apple, they've decided to cave. And there are threats from Pan Bondi and state attorney generals, and they've just decided to cave in all their different programs.

47:02Non-Spotify, shares are up 12 % in the last five days at the time of the taping after the company reported its first profitable year. The company reported 40 % gross profit growth year over year and operating income of 477 million euros. Monthly active users grew by 35 million, up 12 % for the year. Lastly, Uber reported a lower-than-expected operating income of$770 million. 3.1 billion trips were completed on the platform, up 18 % year-over-year. Uber also announced its ramping up for a public launch of robo-taxis in Austin through its partnership with Waymo. Waymo is killing it in San Francisco, I can tell you that.

47:39Well, then, the company is optimistic about the autonomous vehicle market. Admit, there are many, many years to scale. They're absolutely right. So which one of these would you like to take? Well, I'll touch on each of them and then try and extract what I think is an interesting theme. So Disney, essentially the streaming wars, everyone's fighting to be Lyft. What do I mean by that? Netflix is running away with it. So everyone's fighting for number two. And I don't want to say they've given up, but Netflix, I mean, just to give you a sense, in 2015, Disney price to sales was four, Netflix was five.

48:12So they saw them in kind of spitting distance of each other from a shareholder standpoint. As we sit here today, Disney trades at two times revenue and Netflix trades at 11 times revenue. Disney, they lost 700 ,000 subscribers, but that was in the face of a price increase. Now, it wasn't a huge price increase, but it does show kind of the strength of Disney's positioning around family. Whereas Netflix added 19 million subscribers, Disney's added, Disney Plus has added 13 million. The big thing comes down to churn, and that is there's this really uncomfortable dynamic where everyone but Netflix has to reinvent their entire customer base every 10 years or two years because they go on and they download the entire season of Ted Lasso and then they cancel Apple TV+.

48:57And Netflix has so much, so much gross tonnage that their churn is only 2%. Disney is number two, but it's at 4.8%. And then the other guys have even higher churn rates. Can I just make a note here? Real competitor, and this is me talking to Hollywood people yesterday, is YouTube. YouTube is the competitor of Netflix. That no one talks about. They are killing it. But to your point, total share of video viewership is like 8 % or 9 % for Netflix. YouTube is 11%. You could argue YouTube is the number one streamer, but it's still categorized as a different sector. I think they're going to do a lot more originals, FYI, but go ahead.

49:36Disney's Parks, Cruises, and Resorts continues to be the gift that keeps on giving. revenue up 3%, but the operating income was up 6 % to 8%. Disney's done a good job incorporating ESPN into a pretty compelling bundle with Hulu. Moving on to Google, their full year revenue grew 14%, but people are freaked out about slower than expected cloud growth because they see that as a proxy for their AI offering. So they took the stock down a little bit. They're also worried about the amount of capex. Their capital expenditure is supposed to increase to$75 billion. The thing about Google, though, is that they have five separate businesses that do more than$30 billion in annual revenue.

50:14If their stock were to go down, I mean, look at it this way. That's like saying they have the revenue power of five different Starbucks or five different visas with different businesses. They are just a cash, a series of cash volcanoes. Seven products and platforms with over 2 billion users, Search Maps, Gmail, Android. You know, they're just doing incredibly. Spotify is probably the most impressive performer from where it was, say, 12 or 24 months ago. And that is they essentially set quarterly record highs for revenue gross margin operating income. The stock has tripled in the last year. Their platform growth is accelerating.

50:58Their total monthly active users hit 675 million. Their premium subscribers up 11%. Their average revenue per user or ARPU is up 5%. And now kind of what I'll say, and I'll come back to you in a second, but the big theme here or something hopefully resembling insight is the following. If you look at the acceleration in Spotify stock and in Netflix, I believe that that's more than just growth in the category. It's effectively... So Netflix now has more than 50 % of its production overseas. And if you look at Spotify, less than 1 % of its artists garner more than 92 % of its streaming revenues. Effectively, with the scale that these companies have, and by not sharing analytics or information, what Netflix has done is it has transferred a massive amount of capital, earnings power, money from the means of production, specifically artists to Netflix shareholders.

52:04And that is when you put something on Netflix, they don't tell you how successful it is. They might produce it in Spain or in Seoul, but they basically extracted a shit ton of capital from California based employees, from actors, from producers and said, we're kind of the big dog here and you have to operate under this new religion or this new operating model. Because by the way, if you don't want to be in our Netflix drama, there's 179 ,000 other SAG-after people that are looking for work. And can I just make a point? They also put out so much content that's pretty good, right? None of it's really...

52:40Someone was telling me a story who was with last night who used to work at Google with Susan Wojcicki, the late Susan Wojcicki, and they were thinking about getting into originals. And they walked her through the economics of Hollywood because she wasn't familiar. You know, she had been very successful at Google and she had just taken over YouTube. And they walked her through it and she got up and she goes, this isn't a business. Like what, only one hit carries all the losses? Like she was like, she immediately clocked the problem, right? Like she goes, this isn't a really sustainable business if you don't have this one hit.

53:14And she goes, why are they operating like this? And she was, I think she had insight into the idea that if you had a lot of little hits or spread it out with stuff that people like, you would do a lot better. And that's what Netflix has kind of done here. They have nothing, every now and then they have a big one, but all the others are fine. And they help sustain the fact that it's a good product. You find efficacy in the product. You find pleasure in the product. Same thing with Spotify. At its heart, it's a good product. I don't know what else to say. It's like enjoyable to use. You find what you want.

53:51Maybe it's not like soaring, like an HBO can be sometime. But every now and then it is. And it's, so that's, you know, it's a good, I don't know what else to say. It's a good product. Like, that's how I feel about both those companies. There's two ingredients to the secret sauce here. And it's an asymmetry. They both have to do with an asymmetry of information. If Deadpool does$1.3 billion, the agent for Ryan Reynolds and for Hugh Jackman know that. and the next time they want to do Deadpool meets Fast and Furious 18 or whatever, the agent from WME goes to the studio and says, I know how important Hugh Jackman is.

54:30And they extract a shit ton of pound of flesh. In streaming, the only evidence that Ben Stiller has that Severance got more than one viewer is they order seasons three and four. So the asymmetry of information always benefits the person that has symmetrical information. When Jennifer Aniston's agent knew that the Thursday night lineup counted, depended, was resting on the pillar of friends, the people producing and acting in Friends could extract a lot of revenue. No one in streaming has any fucking idea. And then the second big number out of the Disney earnings that fascinated me and explains why Netflix trades at 11 times revenue and Disney two times, is that now more than half of Netflix's content budget is spent overseas.

55:21And some of it's done to be more multinational, but the majority of the reason they do it and the reason why they're building big studios in New Jersey is because New Jersey just supersized their tax subsidy. They realized if we can produce two eights in Spain or Seoul, instead of producing one possible eight or nine in LA, go with the eights overseas. Over 50 % of their content budget is now spent overseas. Do you know what percentage of Disney's content budget is spent overseas? I bet none. Four percent. Right. None. Like none. So essentially what Japan did to Detroit, Netflix is doing to Los Angeles.

56:00And I don't care. You want to talk about nuclear code secrets. When we launch our series on Netflix and I say, if I call them and say, I am not working with you again unless you tell me how many people downloaded this relative to your other dramas, they're going to say, well, it's nice working with you, Scott. Because they don't want anyone to have that leverage. So asymmetry of information and the globalization of content production. And a decent product, a decent pleasurable product. Oh, it's a fantastic product. But all of those benefits, all of, I mean, this is a straight line. There's a lot of innovation, a fantastic product, but you want to talk about a massive flow to the bottom line and who it's coming from beyond the natural growth, organic growth of the sector.

56:45It's coming from the gaffer, the lighting guy, and the woman who wrote season four of SpongeBob SquarePants and used to make 200 grand a year. And Netflix has said, you know what, I figured out a way to pay you 40 grand. And all of that capital coming out of high production states and people has moved to Netflix shareholders. And it represents a much broader trend in our society. And that is the notion that we give a shit about stakeholders and not shareholders is just not true. Everything is run for shareholders. And by the way, there's some upside to that. I'm not arguing that it's the wrong way, but be clear, folks, everything is now optimized to transfer as much capital as possible from states, from workers.

57:31The workers here are not being prioritized. Production in Los Angeles was off 40 % year on year, not because they're not talented, but because they're too goddamn expensive. And Netflix has found a way to keep them in the dark and then hire 80 % as talented a person overseas for 30 to 40 % of the price. It's a transfer of wealth from artists at Spotify and from the creatives in Hollywood to Netflix and Spotify shareholders. And Spotify has made the jump so they have so much leverage. They are now extracting revenue from the bottom 99.9 of artists. They're going to make less and less money. All right.

58:11Very quickly on Uber. Incredibly well managed. I just think you got to give it to Dara. He and Apple were the ones that said, no, I'm not going to jump into the shallow end head first here and make huge capital allocations to autonomous. He pulled back. He pulled back. I'm going to wait. I'm going to Brent other just as, I mean, they're good at this. Uber's innovation is Airbnb's innovation. And that is I'll build a thick layer of software on top of other people's capital expenditure on top of their apartments, their houses and their cars. Right. So it's in their DNA to say, why don't we just ride?

58:47Why don't we just be the remora fish off of Google's multi-decade, multi-tens of billions of dollars investments and autonomous? That's where we should be riding. That's where we should be playing the game. He is doing a great job of managing that company. You're right. It's on top of it. I got to say, Waymo is so integrated into San Francisco now, and you're going to see it all over the country. It's so convenient. And they live together with Uber, by the way, that's in a very comfortable way. I took both in San Francisco this week, and both were great. Prices are still too high for all of them, and I know they need to make money and stuff, but it's a really interesting time.

59:24You're right, Dara's done a nice job here, and there are no competitors, really. I mean, Lyft is sort of a competitor, I guess. Anyway, one more quick break, and we'll be back for predictions.

59:39There is a lot to talk about when we talk about Donald Trump and Jimmy Kimmel. One big question I've got is why, in 2025, are late-night TV shows, like Jimmy Kimmel's show, still on TV? Even in our diminished times, Jimmy Kimmel, Stephen Colbert, they're just some of the biggest faces of their networks. If you start taking the biggest faces off your networks, you might save some nickels and dimes. But what are you even anymore? What even is your brand anymore? I'm Peter Kafka, the host of Channels. And that was James Ponowozik, the TV critic for The New York Times. This week, we're talking about Trump and Kimmel, free speech, and a TV format that's remained surprisingly durable for now.

1:00:27That's This Week on Channels, wherever you get your favorite podcasts.

1:00:38Okay, Scott, let's hear a prediction. Well, if you think about the three layers in AI, there's the infrastructure layer, the invidious of the world. There's the LLM layer, the anthropics, the chat GBTs, and then there's the application layer. And the entire infrastructure and LLM world was thrown into disarray when shocker, China came up with something cheaper, right? But I think what you're about to see is a kind of a golden age or dozens of new unicorns in what I call the application layer. And I met with this incredibly impressive young man yesterday who founded a company called Rogo, which is essentially they take all of these financial data streams, whether it's CapIQ or Bloomberg, and then they put a layer of intelligence, AI weaponized intelligence on top of it.

1:01:27And they turn an investment banking analyst into someone fighting on horseback to someone in a panzer tank. So you can type into this AI that's customized for financial services or institutions, put together an IPO roadshow deck for a fast fashion company that does this revenues and these are the concerns. And it'll put together a 60 slide deck of which 48 are pretty good. So you can basically do the job of three analysts. And they'll say that it's making people more productive, but it's going to result in massive layoffs. Anyways, I think you're about to see dozens of unicorns in the application layer.

1:02:06I do think that the infrastructure in the LLM layer is about to shed tens of billions of dollars as people realize the moats aren't as big as they thought. that if Sam Altman can copy everything out there, someone's going to be able to figure out a way to copy Sam Altman's shit. But the additional customization or artisanal AI application layer in healthcare and in financial services and fitness and all sorts of things is going to create a much of branded consumer AI applications. I mean, that's what Airbnb is, right? That's what Uber are. They took existing infrastructure and breakthroughs and they branded it and they created interesting vertical niche applications.

1:02:42I think that you're about to see a bunch of companies. I mean, this guy, I had breakfast with this kid, 25. Jesus Christ. I'm like, can I come back as you? By the way, I'm going to be him tonight under the influence of ketamine. No, you're not. I'm going to get a call from the police and I'll have to come get him or something. No, by the way, you're not my call. Preet Bharara is my call. That's true. All right. I literally, I have him. I'm about to make him and his phone number tonight my screensaver. Oh, that's a good idea. Call Preet. Tonight, it's like, this is the guy. Here's his number. I've told Preet this.

1:03:14I know. He thought he was very touched. I just need you to do one thing. You can ask me for anything, but if you see my name come up, I need you to answer. Yeah. And I'm not calling to say hi. I'm not calling to say hi. Oh, wow. Okay. All right. Anyways, I've told him I'll send millions of dollars of money to this law firm he's now like the rainmaker for. Anyways, but, you know, I'm not calling you. I'm calling Preet. I would leave you. I would scold you. I would. I'm going to make a very brief prediction. You know, there's a lot of new polls out. The Economist had a poll that back in November, 47 percent of those surveyed Republicans says they wanted Elon Musk to have a lot of influence in the Trump administration, while 29 percent wanted a little.

1:03:57And 12 percent wanted him to have none at all. Today, the number of Republicans that say Musk have, they want him to have a lot of influence has fallen substantially to 26%, according to this story in the Hill. Meanwhile, 43 % of Republican respondents said they wanted Musk to have a little influence and 17 % they want him to have none at all. I see that, but I have to tell you, I had thought they would have a falling out. I think he is, as I have said, he is little pussy for Trump the mob boss, essentially. He is the heat shield. He is the junkyard dog. And I think Trump understands this intuitively.

1:04:35There's one thing about Donald Trump, he has an intuitive sense of things. Musk is good for him because he gets the shit done, even if it's illegal and he's willing to. And nobody else is. And as much as these insiders are going to complain about him being bigger than his britches or overstepping, I think maybe he might be around a little longer. I think I was wrong about that falling out. I wish I wasn't, but I do think even if people are indignant, this guy has a – everything has shown when everyone thinks Musk is going to lose on the pedophile case or with the SEC, he's got an ability to not just to take risks but also take ridiculous, heinous risks, but to also stick it out.

1:05:18So I don't know. I think Trump recognizes that it's good to have a junkyard dog. You're my junkyard dog. I like that. Thanks for saying that. get away from her. Yeah, that's right. Anyways, this is, I mean, this is insanity or crazy, but I would describe it more apt as like late stage syphilis crazy. Yeah, that's what they were saying. Syphilis crazy. But the thing is, that can go on for years. You can have syphilis for a long time. Please don't get it. No, no, no. Unfortunately, the good news is I'm so unattractive and unappealing now that you have to have someone else to engage in giving you syphilis and that's just not going to happen.

1:06:00That's not a word we use enough, syphilitic. It's a great word, isn't it? Let's use it like several times. I used to like the word encephaletic, but that's not syphilis. That's a brain disease, cloutiness, but syphilis. I do like syphilis. Can I tell you, Amanda's always like, Scott used that word wrong. She's like such a word person. Several times you've used words that - She means I used it incorrectly. Incorrectly, that's correct. Yeah, anyway, she's often doing that to me. I'm like, did he? I don't know. Like, she's like, you need to tell them. Like, I'm not telling them. I forget. I completely forget the minute she tells me.

1:06:29I wouldn't mind her. Your texts are mean. If she calls me and says, you meant this, I'm open to that. All right, I'll tell her. I'll tell her. She can be your spelling lady. Anyway, elsewhere in the Karen Scott universe, which is growing by the second. It's expanding. This week on Prof G Conversation, Scott spoke with Mo Gadot, the former chief business officer of Google X, bestselling author and founder of One Billion Happy. Let's listen. the truth is uh the the world is is not ready for what is about to hit us whether you take the simple things like the economics of the world and how they will change as a result of ai all the way to the change of the dynamics of power and and you know the resulting deprivation of freedom you know all of the all the way to how the economics of the world are going to change and how you know the the jobs are going to change and how the human connection is going to change and our understanding of reality is going to change.

1:07:24And these are decisions that are not made by us anymore. Think about it this way. Spider-Man's with great power comes great responsibility. We've disconnected power from responsibility. There is massive, massive power concentration concentrated in hands that do not answer to anyone. Well, Ketamine, I say. He's a very thoughtful guy. Mogadad, I really enjoyed the conversation with him. And basically, way, you should listen to the conversation, but basically summarize like, you know, Sam Altman is reshaping the way we think about things, the way we approach problems, potentially what types of weapons are developed.

1:08:02And he was kind of like, who the fuck is Sam Altman to get to do this? Right. That's correct. Who the fuck is Elon Musk? Who the fuck are any of these people? But that's where we're going. Okay, Scott, that's the show. We'll be back on Tuesday with more Pivot. Read us out. Today's show is produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie and her Todd, enter into this episode. Thanks also to Drew Burrows, Miss Averio, and Dan Shulon. Nishak Kurwa is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thank you for listening to Pivot from New York Magazine and Vox Media.

1:08:30You 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. Who is that guy in the corner at that Fashion Week party? I get the sense he likes him a lot. That's the dog.

1:08:49Thank you.