Google Nest's Surveillance Secret, Bondi's Epstein Meltdown, Meta & YouTube in Court

9:16Scott Galloway:Yeah, it really feels like we have. Wheels are coming off. I mean, it's a shame because it's just so. It's a serious issue. Weird. And it's the attorney general making a mockery of the institution and just no decorum. But I'm curious what you thought about the hearings. But the moment that I found really chilling was when I think it was Representative Jayapal had some of the survivors stand up and asked how many of them have reached out to the DOJ to provide evidence or input. But all these survivors stood up. And it was clear they've reached out to the DOJ and the DOJ has ignored them. And you thought, let me get this.

10:05Scott Galloway:the Department of Justice investigating what is arguably may go down as the crime of the century to date and survivors and people with direct knowledge about what happened or what didn't happen. They could also, quite frankly, they might exonerate some people.

10:20Kara Swisher:Right. Exactly.

10:21Scott Galloway:They don't want to talk to them.

10:22Kara Swisher:Right. Right. And she wouldn't look at them. That was another moment. She wouldn't turn around. She wouldn't do it. This woman is insane. I just, I don't, she a crazy one. She's like, it was so strange. And I know this audience of one, they always do. But in this case, I was like, wow, you people are desperate and terrified of what's coming next for you. You know, I thought Massey was effective. I thought Becca Ballant was effective. I thought Jayapal was effective, Raskin. I thought they all, one of the things, someone who works there said, how do you think it went? And I said, the only problem with this kind of thing was you lay down with pigs the only one the only people that like wrestling with pigs are the pigs right if you get in the mud with them but i thought they really they relatively handle it well it's just that the craziness is what gets attention and not the victims right it becomes a ridiculous circus and on some level what was interesting is fox didn't show it right they they they keep they're obsessed with the nancy guthrie kidnaping which is a terrible thing too but they're not even And airing it, they don't want to show you the crazy.

11:26Kara Swisher:Like, and any normal person looking at this would be like, what, honey, you need some therapy, like stat kind of thing. And you're, you know, and what happened to you? So I thought that was, it was a really interesting, this Epstein thing isn't going away, Pam. I'm sorry. It's just not now because it's so very clear that you didn't do your job. And neither did people before you, by the way. But guess what?

11:47Scott Galloway:It's a valid point.

11:49Kara Swisher:You're in the chair now. I don't really give a fuck.

11:51Scott Galloway:It's her DOJ.

11:52Kara Swisher:It's her DOJ.

11:53Scott Galloway:Her boss is mentioned in the Epstein files more times than Jesus is mentioned in the Bible, or the term meth is mentioned in Breaking Bad over eight seasons. And I feel like every time yesterday, she claimed that the president had been the most, quote unquote, transparent president. When she uses the term transparent, I think somewhere there's a thesaurus filing for protective custody.

12:16Kara Swisher:Also, why are you laughing at me? It was just, well, it was so weird. It's so weird. It's so culty. It's so strange. One of the things I do think is effective is a lot of these Congress people are going in and seeing unredacted versions, which are very upsetting.

12:32Scott Galloway:When they come out and they look like they've seen a ghost.

12:34Kara Swisher:I know. Even Cynthia Lummis, who was, I didn't know it was there now. Whoa. Whoa, folks. Like, Cynthia Lummis, I'm so glad she's leaving politics. politics. But I have to say, even someone like that who literally puts in the least effort possible, same thing. They're looking like, oh, my fucking God, you're kidding me here.

12:53Scott Galloway:I got to be honest, I didn't realize it was this bad. The more information you read about this, in terms of the number of victims, in terms of how many people were involved, how many opportunities there were to stop it. Yeah, yeah. And it just gets, the web keeps getting deeper and uglier.

13:15Kara Swisher:It is, and the lies. Like, Commerce Secretary Howard Lutnick was on Capitol Hill this week as well. He told the Senate committee he and his family had lunch on Epstein's Island in 2012, but insisted he'd not have a relationship with him. Of course, this was, he had given this sort of ha-ha interview with one of these right-wing outfits where he said, I never will.

13:32Scott Galloway:I was disgusted by him. I was disgusted by my wife.

13:36Kara Swisher:Paul.

13:36Scott Galloway:We're going to have no contact with him again. And here's the thing.

13:39Kara Swisher:He took his kids. I took my four kids and their nannies and I got all the kids off the island.

13:44Scott Galloway:But this is the thing. It's not, it's not, it's usually not the infraction itself. It's the cover up. If he had said.

13:51Kara Swisher:Why did he say the first thing?

13:52Scott Galloway:But if he had just said right up front, he's a neighbor. He had powerful friends. I didn't do the diligence I should have. I went with me and my kids to his island once because it sounded like fun. Okay, poor judgment, but go along, get along. Instead of trying to wrap yourself in some sort of indignance that you immediately smelled a rat and you're lying and you decided to, I mean, if he'd just come clean in the beginning, said like, yeah, it was bad judgment, took my kids to his island, had a lunch. I'd heard he was a big philanthropist and who knows, maybe he was, okay, all right, bad judgment, move along.

14:29Scott Galloway:But again, it's the cover up.

14:31Kara Swisher:He had to take a laugh. He had to take an I'm so pure laugh. And that's because he's a moron. Let's be clear. This guy's a moron. And people are asking for him to resign. He really is a liar. He's a liar and a moron. And it doesn't mean he had to do anything, but he's a liar and a moron. One that's interesting under scrutiny is entertainment executive Casey Wasserman, Chapel Rowan, and other artists have cut ties with Wasserman, as is their right, after the latest file showed he exchanged emails. was Julian Maxwell and seemed to have some kind of relationship with her, probably extramarital, who knows.

15:03Kara Swisher:Washington, who serves as chairman of the L.A. Olympics, organized, and he appears to be holding on to that role. They're backing him. There were other names floated to take his place. Let me be clear for people, I'm not letting him out, but it was 2003 before any of this was known. He may have been able to pick it up. That's different. but this was well before the first conviction, the first sweetheart deal that Epstein did in Florida. So even he's under scrutiny and people are cutting ties. And again, this is this artist's right. They don't like the cut of his jib. That's perfectly fine. In his case, there's just the blast zone of this is so far, right?

15:44Kara Swisher:It's really interesting.

15:45Scott Galloway:But it's so indiscriminate. And again, I go to the following. If we had an institution we could trust, including the Department of Justice and the institutions that actually assembled these files, if they could go through it and go, okay, there are three circles here. There's people who either engaged in, provided infrastructure, or trafficked and facilitated crimes. We are going to release those names in the form of grand jury indictments. And we're going to go after these people. That's the headline news here. The Department of Justice isn't supposed to ruin people's careers. It's supposed to create an incentive system where people follow the law by prosecuting criminals and exonerating people who are not guilty.

16:21Scott Galloway:That is what they are there to do. And then the second circle, and this is a harder one, is, okay, if a cabinet member has clearly lied under their testimony or under oath, should they release that information? Didn't commit a crime. This is Howard Ludnick. Should the president, who has not so far been accused of a crime, if he's mentioned in this thing 6 ,000 times, should we release that information? I think that is a really important point. The biggest circle, quite frankly, is I have seen on TikTok and on Instagram people talking about models and how they talked about going to a museum with Jeffrey Epstein and we should no longer have anything to do.

17:02Scott Galloway:They're trying to shame all these people. And it's like, you know what, folks, that's just pure gossip. And unfortunately, the ring light shaming of all these courageous, virtuous people when they're behind a keyboard and have much higher standards for other people than they do for themselves, that is distracting from what the Department of Justice is supposed to do. And that has put pedophiles in prison.

17:24Kara Swisher:Yeah, I would urge people to read. It was really interesting. You know, Catherine Rumler, who's the legal head of Goldman, you know, she had a lot of emails and very chummy kind of emails with Epstein going on for a while. I thought Bill Cohen did a great job talking about why she was in that relationship. And most of it was, in fact, she was professional. She's looking for work, right? And that's a whole different.

17:48Scott Galloway:Guy who knows rich guys who can send me AOM for wealth management.

17:51Kara Swisher:Yes, exactly. So I would urge people to read that. And again, one or two of them, and one or two places she, when he said, oh, it was only prostitution, she goes, that's just this abusive, Jeffrey. Like she, unfortunately, he kept saying your gifts. There was a business relationship. I thought it was actually a really complex situation that made me think, God, if she was a guy and she did like golf with him, she'd get off because she was a woman, was vaguely flirty, kind of. She wasn't. Like, it was a great piece because it made me rethink. I was like, okay, like, not great judgment, right? Should have known better.

18:31Kara Swisher:Should have stopped talking to him after the first thing. but didn't business. It was just interesting. It made me think a lot. I recommend Bill Cohen's column in PAC and I thought this is his area of expertise in finance and I thought, okay, this is why. He was trying to explain why they haven't let her go, right? So I thought that was interesting. Anyway, speaking of power, six Republicans joined Democrats in the House on Wednesday to vote for a resolution aimed at ending President Trump's tariffs on Canada. It's a symbolic gesture, gesture, even if it clears the Senate, Trump would veto it.

19:06Kara Swisher:But that didn't stop him from making threats. Trump posted on True Social that any Republican who votes against the terrorists would seriously suffer consequences come election time, and that includes primaries. I think he's losing the grip, as they say. What do you think?

19:20Scott Galloway:Well, there's some new data that shows that about, so the initial notion was the tariffs would mostly be paid by either corporations, sort of a populist thing, or the exporter themselves, the country would absorb it, or whoever was sending the products. It ends up, and there's finally analysis, 94 % of the costs have been borne by U.S. consumers. And then the other 6 % have been borne by companies either deciding to take a bit of a hit or the exporter themselves reducing their prices. You have about 15 % of the economy is imports. They thought the tariffs averaged around 20%, so that's 3%. Some managed to get out of it.

20:06Scott Galloway:So call it a 2 % of the economy. But the problem is it's an unnecessary 2 % hit to the economy. To be fair, it hasn't had the catastrophic effect a lot of people thought it was going to have. But in a weird way -

20:18Kara Swisher:Prices are higher.

20:19Scott Galloway:Well, yeah, it's just why - I feel it myself.

20:22Kara Swisher:And the shelves are emptier. It's weird. I never have noticed that before.

20:26Scott Galloway:Well, not that, but why reduce people's prosperity by 2 % for no real reason? It doesn't cause growth. It doesn't cause innovation. All it's doing is urging or reconfiguring the supply chain around the United States. The EU is entering into an agreement with Mercosur. There are all kinds of new trade zones being opened up such that people are not as reliant on the U.S. And a weird thing, though, is that if his tariffs are overturned by the Supreme Court or by the Congress, I actually think the markets will rip. So in a weird way, it could end up helping him if these things are turned back. I think the markets will scream if these tariffs are found to be illegal.

21:08Kara Swisher:Yeah, well, we'll see. Although apparently he's got all these plans to put other kinds of fees in place to take their place. that he'll have to go back to court and stop him for those. He's doubling down. This is something he's talked about for years. So I don't know if he's going to back off so quickly and take the victory here. He'd like to take the L, honestly.

21:28Scott Galloway:Yeah, I don't know. It's interesting. I don't know.

21:30Kara Swisher:Yeah, no, that lunatic Peter Navarro talks about him like that. We have a whole bunch of things to happen if the Supreme Court overturns this. What's taking the Supreme Court so long, by the way? Anyway, we'll see what happens. I do think on the broader sense that there's lots more Republicans willing to push back because of their own political survival is not linked to Donald Trump as much anymore. The other thing is it looks like they may lose control of the House.

21:55Scott Galloway:That's right. Another person's resigning it. Yeah.

21:57Kara Swisher:So, you know, they're one they're one sick person away from losing having the Democrats in control. So it's a really interesting time. He doesn't have the power is slipping away. And that's why you're screaming Pam or this nonsense and stuff. So we'll see more of that, I think. Okay, Scott, let's go on a quick break. When we come back, social media on trial, very important case.

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26:09Kara Swisher:Scott, we're back with more news. A landmark social media trial got underway this week with Meta and YouTube accused of deliberately designing their platforms to addict young users. You think? The lawsuit is the first of more than 1 ,500 similar cases to go to trial. This is something that's been building for a long time. The plaintiff's lawyer is arguing that his client, a 20-year-old woman got hooked on these apps as a kid because they were like digital casinos delivering dopamine hits. Instagram head Adam Massari testified on Wednesday that he doesn't think users can be, quote, clinically addicted to the app.

26:38Kara Swisher:Adam Massari is not a doctor, just so you know. I can't believe he said that. It was kind of a mistake on his part. And also, he's wrong. Meanwhile, YouTube is arguing it's not social media. It's an entertainment platform like Netflix, and it's not addictive. That is also not true. The jury, anyone who has kids, knows that. It's very different from Netflix. I mean, it's become more like Netflix recently, but it's also an addictive situation. The jury trial is expected to last six to eight weeks, with Mark Zuckerberg and YouTube's Neil Moen expected to testify. This is a really important trial.

27:09Kara Swisher:The big names are coming out and talking about an issue you and I have talked about for years. What are the actual effects and who is responsible for creating an addictive product? And I'm sorry, Adam, I'm not a doctor either, but any fool will tell you it's, anyone, not fool, any person will tell you it's addictive. Anyone who uses it and you design, there's so much proof that you've designed it like a casino or a cigarette or whatever it happens to be. Thoughts?

27:36Scott Galloway:Well, imagine you're 14 and someone, you go into your room and if you were like me, your mom wasn't home until 6 or 7 p.m. and you're home alone.

27:45Kara Swisher:Gilligan's Island.

27:46Scott Galloway:And yeah, that's, it was Bugs Bunny and Gilligan's Island and I Dream of Jeannie for me. but what if in the corner there was a casino? What if there was an arcade? What if there was porn? What if there was unlimited music? And then you say, no, no, no, study. What if there was the high school cafeteria where I could say something mean about someone else or someone could say something mean about me and all I could think about the rest of the day and night was what they were saying about me, that the high school cafeteria never left. And it ends up that about 6 % of teenagers are clinically addicted or meet the clinical definition of addicted to either drugs or alcohol.

28:27Scott Galloway:But under those same standards, 24 % are addicted to social media. And just some data, the average American teen spends 4.8 hours a day using social media. 16 % of teens, or one in six, use TikTok almost constantly, 15 % for YouTube, 13 % for Snap, 12 % for Instagram. And roughly half of all teens report feeling addicted to social media. And you say, well, okay, fine. What's the impact? Teens who are in the highest use group express two times more suicidal intent or self-harm than those in the lowest use group. And the highest use group also expressed poor body image at three times more than the lowest use group.

29:10Scott Galloway:And it typically takes a society or it takes America 20 to 30 years to respond to really negative externalities. It took us 30 years with tobacco, it took us 20 years with opiates. And if you think about social going on mobile in 2012, 20 years is probably the right number. I think when I'm, I mean, parents always ask me, what should I do with my kids? And I say, how old are your kids? And if they say three or five, I'm like, we'll have it figured out by then. Because the data here is so overwhelming and we're up against intransigence and people trying to delay and obfuscate similar to those tobacco executives.

29:46Scott Galloway:And they have more money and they're more skilled this time. But eventually the tide, the tsunami of parental concern here, understandable parental concern, is washing over all this bullshit. So I think I would say many of entire countries now age gating. Look what Australia is doing. I think another two to three years, I'm hopeful the landscape is going to be much different for children.

30:11Kara Swisher:And the remedies would be warning. There's lots of remedies, like with cigarettes. Age gating. Age gating. Warning signals, the checking of ages, legal liability. The age checking is harder.

30:24Scott Galloway:What every other substance company and manufacturers, a media company is subject to.

30:30Kara Swisher:Yeah. They've got to be kidding. You know, there's so much. They have so many emails of them talking about this. That's the problem. For Adam, sorry to say this, he doesn't think it's clinically addictive. Come on, Adam. Come on. We all think it is. The problem is every adult knows this in their bones, right? Because we're addicted. We're addicted. Like we are. It's a problem. You cannot put it down. And it is different from television. It is very different. And television, listen, Gilligan's Island's addictive enough. I can't believe I watched all that shit. But you can walk away from it in a way.

31:01Kara Swisher:You cannot walk away from this. I find myself, I have to throw the phone across the room, right? Sometimes. I'm like, put it down. You know, Amanda, same thing. We just, it's really interesting. And sometimes I think about it. I'm like, I like news and I'm mostly reading. news, but I don't stop. That's the difference. I put down magazines, I put down newspapers, and I love news. So this is, all this stuff as it gets out, as you see the emails inside the company talking about it, and especially early on, they knew just what they were doing. And perhaps they weren't meaning to be malevolent at the beginning, but it's malevolent for many young people.

31:41Kara Swisher:And the impact is huge. And then they just keep doubling down with AI relationships and synthetic relationships and everything else. This is, the time has come around at last for these companies. We'll see how well, how this trial does, but it's gonna just uncover more and more about what they knew, very much like the cigarette companies.

31:59Scott Galloway:When you have hundreds of billions of dollars in shareholder value, trillions of dollars in shareholder value, hundred billions in revenue, millions of some of the brightest people in the world, and trillions of data points, all trying, all aiming towards one thing. How do we get people to spend one more second every day on social and less time somewhere else, whether it's sports, friends, studying, sleep, and they're winning. And young people, especially young men who have this tremendous fall on their brains where they're constantly dope-ahungry, they're up against an indomitable foe. And then the other - Like sugar.

32:35Kara Swisher:It's like sugar. It's the same thing.

32:36Scott Galloway:And then there's two or three, but your kid can take a 10-pound bag of sugar into his bedroom with them. The other two things - Well, that's your kid.

32:46Kara Swisher:My kid could, but go ahead.

32:47Scott Galloway:The other two things, it is a cumulative effect that I think have really hurt our youth or one, I do think parents have some culpability here. And that is we have decided that our job is to clear out all borders and obstacles for our kids. We engage in concierge and bulldozer parenting. And by the time the kid gets to college, he or she has never had a C or a disappointment. and we've created this princess and pea generation with good intentions. We thought we were doing our kids a good thing. And then something that doesn't get talked a lot about, but I absolutely think is adding up to a generation that is at a disadvantage.

33:24Scott Galloway:And that is if you are 21, since the age of 10, the person you are supposed to look up to most in the world is Donald Trump. So performative virality, coarseness and cruelty, online scams, crypto, doubling down on lies. This has been the role model as kids' brains are being wired during puberty. And no matter who is president or what you think of the office, president is the person that millions of young Americans look to as the ultimate of success in American values. So what have we done? We've raised a generation of kids who are dope-a-hungry and their primary role model, maybe with a close second, the richest man in the world, are exhibiting values that are very, I mean, and what do you know?

34:19Scott Galloway:These 21-year-olds are not, it's shocking what good people they are, given what they have to deal with. I would agree.

34:26Kara Swisher:I think they do resist more than you think. And actually, there are a lot of parents. One of the things I spend a lot of time doing with my kids, whenever, like, can you go get this? Can you talk to that person if they wanted something? I'm like, you need to do it. Like, you figure it out has became one of my lines with my kids, my older kids. You figure it out. I do it with my younger kids now. With Saul, I'm like, you figure it out. I don't know. I know, but you can do it yourself. And so that's the best piece of advice you can give to a kid.

34:54Scott Galloway:I've started giving my kid pounds when he gets good grades. Is that wrong?

34:58Kara Swisher:I slip him a 20 pound.

35:00Scott Galloway:I slip him a note when he gets an A on a test.

35:03Kara Swisher:No, do not do that.

35:04Scott Galloway:No, totally. No, no. Anyway. That's called capitalism. Okay. You get a bunch of money.

35:11Kara Swisher:Okay. All right. Whatever. Whatever you want to do there, Scott. We should write competing parenting books. In the same genre about surveillance, as you know, that's another thing I go crazy about. Investors in the Nancy Guthrie abduction case have recovered footage from the Nest doorbell. Nest is owned by Google. It was initially thought to have no video because there was no active subscription. When you sign up, for people who don't know, for Nest or any of these things, you can buy a subscription. If you don't, they say they don't keep the video. As it turns out, they do. The incident shows that Nest uploads video to Google Cloud before you decide to keep it with a paid plan so it can linger after it says it's been deleted.

35:47Kara Swisher:It's supposed to be deleted. I'm glad they got these pictures of this guy at the same time. This is an edge case. They're keeping your video, which everyone thought they were doing, and they said they weren't. The FBI working with Google engineers took 10 days to recover the footage from Guthrie's camera. The companies need to spell out in plain English how long deleted footage actually remains on their servers. And by the way, they're also getting incredible pushback from the ring ad for the Super Bowl, which is like, we're watching everybody, but only for your dogs. And there's been a million memes about only for people we need to take away.

36:22Kara Swisher:Like the surveillance of these kind of things and the ease of which they are hacked, by the way, not just taken off the door like this terrible person did, but hacked into or quite something. A lot of people are getting them hardwired into their house so that they can't do that. And also so that they can't be taken via wireless. There's a lot of wireless activity here, but there are ways to a lot of these things are open season on your home. When I was speaking of my son, my kids, Alex, I had one of them up at one of our houses. When we bought it, it was there, one of these Amazon or Echoes or whatever.

37:00Kara Swisher:He took them all out. One day I came back and everything was gone. And I was like, why? And he goes, because they can watch us. And I was like, don't be paranoid. He goes, I'm not. And he was right. So anyway. I think we have a bit of a different view on this in the sense that I think technology, I think we gave up our privacy a long time ago. Yes, Scott McNeely, we did.

37:22Scott Galloway:What I want to see, oh, remember Scott?

37:24Kara Swisher:Yeah, he said that. Privacy doesn't get used to it, remember?

37:28Scott Galloway:If you are in London or New York, you can't go more than, I think it's 30 feet outside without a camera. And the reason they did that was they implemented massive, they have like a security headquarters because of 9-11. And I actually, what I think you need, though, is really, really well thought out laws and institutions that say, we're not going to go fishing unless it's a felony crime. We don't investigate it. In other words, people have the right. You said something I've thought about a lot, and that is people have the right to have secrets. And if you want to go into a store, if you're, I don't know, you should be able to do what you want.

38:11Scott Galloway:If you murder somebody, then quite frankly, and there are enough, there's enough evidence to say that you are a reasonable person of interest, then we are going to utilize cameras, data, video footage.

38:29Kara Swisher:I agree with you. I just think you buy this product and it says it isn't keeping it. If you don't pay for it, then it's not keeping it. Like, I'm sorry, that's just the deal. That's just the deal when you buy. I have several of these and I've taken most of them off my house, but they say, and I pay a lot of attention, if you don't pay, this stuff is deleted. This is deleted. If it says it's deleted, it should be deleted. That's all. It's just the deal you make with them. And so I don't think they should keep it if it's supposed to be deleted. Same thing with Echo. It shouldn't be listening if it says it's not listening, right?

39:02Kara Swisher:That's which, if you want it to listen, you can tell it. That's in your home. I'm talking about this. outside I think we've lost that battle cameras are everywhere talk about London, Monte Carlo is really wired, so is the United States of America and that's a good thing when it comes to crime but it's a very bad thing when it comes inside of your house because Scott I know if you want to wear your frilly underwear I think I, oh wait was that a secret I back people's privacy in their homes Daddy goes commando

39:30Scott Galloway:Big Ed and the twins want to be free

39:33Kara Swisher:but I think it's in this case it was good to be able to get the picture of this guy. At the same time, she didn't, the intent wasn't to. So plain English of what you're doing and how long it remains, and then it should tell you when it's deleted and permanently deleted. If they say permanently deleted, it needs to be deleted. That's, I feel like that's the deal.

39:55Scott Galloway:At some point you should be able to have, you know, I have cameras around my house. You can see almost everything. I know I try to sneak in all the time. If someone were to break in, but I think what you want is, like this is the hack that i think is coming somebody hacks into uber with your uber if you use uber a lot i think you can find out when someone is with a thin layer of ai on top of your uber trips they'll be able to know if you just terminated a pregnancy or if you're a russian spy why is this person continually going to the russian embassy why is this person are you having affairs with same sex.

40:32Scott Galloway:A thin layer of AI on top of your ride history, when and where you are going places, it would be very easy to say, okay, this person is clearly suffering from diabetes. This is why they keep going to this type of clinic. This person is clearly engaged in a love affair with this dude at this address. This person is clearly -

41:01Kara Swisher:This Kara Swisher is constantly going to Amtrak, but go ahead.

41:03Scott Galloway:This person is clearly cooperating with the CIA as evidenced by the fact they keep going to this one address that is a - They could find out - That hack, folks, this is the trade we all make and we all talk a big game. Anyone who talks about privacy is typically over the age of 50 and in Brussels or D.C. We consistently trade our privacy for utility.

41:30Kara Swisher:Yep, we do.

41:31Scott Galloway:And what I want is massively, okay, unless it's a felony, maybe even more than that, it's a felony that has a threat of violence. And there's really strong evidence against one person. All that shit is off limits. No one can use it.

41:50Kara Swisher:All I'm saying is if they say it's off, it needs to be off.

41:53Scott Galloway:Or at least give you the power to delete it.

41:54Kara Swisher:It's like if you buy, like, I don't know, organic apple. It's not organic. You can't do that. Yeah, that's fair. It's the same thing. You're selling a product. You say what it is. Stay with what you say it is.

42:05Scott Galloway:But at the same time, I love the fact, okay, when there's a crime, crime is hitting, despite all the scariness and everyone saying whether it's Eric Adams or Mayor Mom Donnie or it's Bedlam in the streets, crime. The number of shootings in New York last year, I think, hit like an all-time low. Violence is going, and crime, violent crime has consistently gone down the last several decades. Is it because we're a better people? I don't think so. It's because if you commit crimes now, everyone has seen those law and order SUVs that if you go into a 7-Eleven in the middle of fucking nowhere and shoot the clerk, ATMs have cameras.

42:46Scott Galloway:So was there any ATMs outside? Then they check the footage on the ATM. I like I don't like a surveillance state. I like a state. I like a place where if a really strong lawyers that where they consistently say, I get you think a crime is committed here. There's not enough evidence. You do not have access to this video.

43:05Kara Swisher:Right.

43:05Scott Galloway:Oh, there's evidence that you're planning a terrorist attack. Sorry, boss. We're violating your privacy rights in every ring light, every Uber ride.

43:14Kara Swisher:Well, they're also, but we have due process. We still, I still think we have a due process. We can't have the wrong people getting a hold of stuff. Anyway, I hope they find Nancy Guthrie and I hope it helps that they have these, but we have to be, it brings up a big issue about surveillance and we should pay attention to it. Anyway, let's go on a quick break. When we come back, we'll talk about the latest in AI news. There's a lot of it.

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44:43support for pivot comes from anthropic there are bumps in the road the ones you can just throw a

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46:27Kara Swisher:Scott, we're back with more news. Time for rapid fire of AI news. First up, Anthropic is in the final stages of raising$20 billion in new capital at a valuation of$350 billion. Valuation also at Anthropic. A researcher submitted a resignation letter saying the world is in peril, saying employees constantly face pressures to set aside what matters most. That researcher is going off to write poetry, by the way, which should trouble you. Over at ex-AI, Elon Musk has lost two co-founders, Jimmy Ba and Tony Wu. Both announced their departure as a big restructuring over there, too, as he's brought it into SpaceX.

47:04Kara Swisher:The company at OpenAI, the company's fired and executive, after he opposed plans for an AI erotica feature in chat GPT, citing sexual discrimination. We don't actually know what happened here. where Anthropic raised twice the funding initially sought based on investor demand. So thoughts on any of these stories? Lots of different, lots of stuff happening around AI again.

47:26Scott Galloway:Yeah, why people get fired or why they say they were fired, I don't know. I haven't sorted through that. What I think has already happened, whether it's reflected in the valuations or not, I think Anthropic is now worth more than OpenAI. I think OpenAI -

47:41Kara Swisher:What was their valuation? $800 billion?

47:43Scott Galloway:Well, I think they're trying to close around at 850.

47:46Kara Swisher:Yeah, 850.

47:46Scott Galloway:But that one VC who kind of, if there was a moment where the balloon was burst, if you will, the bubble was burst, it was when that VC had Sam Altman on his podcast and said, you've made a trillion dollars in spending commitments on a company with 20 billion in revenue. How are you going to do that? And he got very defensive about it. And they've gone consumer, Anthropics gone, Enterprise. they haven't made the kind of crazy commitments. I think there's been kind of the mother of all industrial pivots. I think now, if you will, Avis is now Hertz. I think Anthropic is now worth more or will be soon than OpenAI.

48:26They are not making money.

48:29Scott Galloway:Yeah, but they're stronger in the enterprise. Anyways, none of this makes any sense in terms of a multiple on revenues, But I think open AI is in real, I don't know, crisis is the wrong word.

48:45Kara Swisher:And XAI, there's a lot of arguments over on X about that they have now do not have. His big thing was I have the best AI researchers. Now he does not, right, from what most people, intelligent people are saying about it. But, you know, he always does this. He always goes in and shakes the tree and then shakes the tree again. That's his MO, I guess. They're a distant, but third or fourth or something like that.

49:10Scott Galloway:Well, these guys are all, here's a symbol of how easy it is and how difficult or how vulnerable they are. It says, here are some, Dario and Daniela Amodi were at OpenAI, now at Anthropic. Ilya Sitskiver, OpenAI, now at Safe Superintelligence. Eravind Srinivas, OpenAI, now at Perplexity. Mira Mirati, OpenAI, now at Thinking Machines. Arthur Mensch was at Google, now at MistralAI.

49:39Kara Swisher:You got all the names.

49:40Scott Galloway:It's the brightest minds here are, supposedly, and I used to work with a lot of luxury brands, and they said the biggest problem they were having in China is that at the biggest malls, if Prada had a store across the street from Bottega Veneta, if the manager of that Prada didn't have people show up, he could go across the street during the lunch hour to the lunch court and offer someone 11 bucks an hour from the Bottega store who was making 10, and they wouldn't even go back after their lunch break. they would go over and work at. It was just so easy to pick off people by offering them a dollar more per hour.

50:15Scott Galloway:And it feels so many of these people who have, you know, fairly or unfairly have established themselves as some of the few minds that really understand this stuff. The amount of money and temptation to go do their own thing or join another firm, I mean, supposedly, wasn't there reports that Zuckerberg was paying some people $100 or$300 million, and then he wasn't. I mean, it just feels like it's total, I don't know, bedlam right now.

50:44Kara Swisher:Right. They all think they're going to be the one, right? I'm going to be the final one standing, and I'm going to own the world, essentially, which is a bet. It's a bet, right? I think one of the things that continues to plague these companies are these researchers who are like, or fucked everybody. Like, they come out and almost, you know, like, they're sort of like, shh, it's going to kill us. And so I think a lot of people are much more concerned about this than you know.

51:11Scott Galloway:I think, but quite frankly, Kara, I think a lot of it is people backfilling the reason why they're leaving with morality sometimes or some sort of victimhood. If you look at, just to go back to musical chairs here, if you look at XAI, the company lost its second co-founder in just two days. And that means that half of XAI's founding team, six of the 12, have left the company in less than three years of existence. And Musk said, you know, we've reorganized XAI to improve the speed of execution, which required parting some ways with some people. And I think for some of these founders, there's legal risk to staying at XAI.

51:50Scott Galloway:The EU is currently investigating the company for its creation of non-consensual sexual deepfakes based on real people, including children. So this really is the Wild West. This is, you know, I don't know. It's so difficult to even keep track of, you know, who ends up where and why.

52:11Kara Swisher:It's like as if science people went crazy, right? I do think the warnings are getting really interesting. They're like, I wish someone would just explain, but we're in peril. How? How are we in peril?

52:24Scott Galloway:Yeah, how does that manifest? What does that mean?

52:26Kara Swisher:Heh? Heh? Like, it's like the people who knew that we were about, you know, in those movies where a bunch of people know we're about to get hit by a comet or something and they're not telling us. They're like, I wouldn't hug your family. Why?

52:41Scott Galloway:Is it Arnold Schwarzenegger showing up at your door wearing Oakleys and a lot of leather? Like, what is it?

52:46Kara Swisher:What is happening?

52:47Scott Galloway:What does it look like here? What does it mean? Because the employment destruction that was supposed to be already well underway, I would argue is not happening yet. I don't know.

52:55Kara Swisher:But why would someone say they're in peril? We're in peril and set aside what matters most, which is safety, presumably. And then they go off and write poetry. I would like some more information, if you don't mind. If you're going to do that, you need to tell me. Yeah, exactly.

53:08Scott Galloway:Why are we in peril?

53:10Kara Swisher:Why are we in peril?

53:11Scott Galloway:Save us from what? Tell me.

53:13Kara Swisher:Tell us. I know there's these legal things, but if it's so terrifying, you need to, like, step out and, like, tell us. Tell us what it is. And bring proof, too, by the way. We'd love to know when the comet's going to hit us. In any case.

53:28Scott Galloway:But the VP of product policy at OpenAI was fired after she voiced opposition to OpenAI's upcoming erotica features for adult users. Yeah. She did flag that enabling erotica would likely strengthen feelings that users already have for the chatbot. Based on a recent report released by OpenAI, out of ChatGPT's 800 million weekly users, 1.2 million users are prioritizing talking to ChatGPT over their family, friends, school, or work. That's less than what I thought. Roughly 560K are experiencing psychosis or mania. This is shitty research. As a ratio by 800 million people, is that normal or not normal?

54:08Scott Galloway:And about 1.2 million people discuss suicide with chat GPT. Again, what I want to see is someone to say, all right, is that just a function of people who are depressed thinking they can talk to chat GPT just as they would talk to a friend or a therapist? Or is it something about talking to chat GPT?

54:24Kara Swisher:Right. You get the psychosis.

54:26Scott Galloway:Suicidal ideation or psychosis.

54:28Kara Swisher:I think the last latter. You know, interesting, I just did an interview with Sherry Turpel for my doc series, and she's been studying it for years. And she's like, I've never seen anything like it now. It was before on the sidelines and in the darker places. Or people had, you know, it was a small group of people. She goes, it's really on mainstream in a way. I would like the information from these people. Would you come out and bring a bag and bring it to me or Scott or something like that? Anyway, don't bring it to you. Bring it to Kara Swisher. On a separate note, speaking of sort of normal journalism and getting information out, one of the most depressing things is Hong Kong media mogul and pro-democracy activist Jimmy Lai was sentenced this week to 20 years in prison after he found guilty in sedition and collusion with foreign forces.

55:10Kara Swisher:It's the longest sentence ever handed down under Beijing's death sentence. Lai's children are saying a potential visit by President Trump in China April could be crucial in securing the release of their 78-year-old father. This is something Trump should do. Back in December, Trump said he asked President Xi to consider releasing Lai. But on the campaign trail in 2024, he was a lot more confident, saying 100 percent, I'll get him out. He'll be easy to get out. He's not so easy to get out. Let's not forget the real surveillance economy, the real control economy. We've talked about these issues around control and the uses of AI for badness.

55:44Kara Swisher:China wins the boats everywhere. And they go after this guy who's a really important figure in this area. And so if President Trump can do anything, please do it. If anyone can do anything, but Jimmy Lai is a hero. And what's happened to him is, as you say, a death sentence.

56:03Scott Galloway:Look, I go to the economics. When you start imprisoning journalists, whether it was Turkey in 2012, Soviet Union at the turn of the century, or China taking a very hard-fisted approach to Hong Kong in 2021 as kind of best epitomized by Timmy Lai being imprisoned. Distinct of the morality of it, distinct of the importance it plays in a society, the nation gets poorer and angrier. It is literally a canary in the coal mine saying, we are about to send a chill across some of the most talented people and scrutiny about what can be said about companies that hurts the economy. The nations get poorer and angrier.

56:43Scott Galloway:And it's literally a symbol of when an economy is about to move to an authoritarian state, which is really bad for innovation, for attracting outside capital. When you're thinking about investing in Turkey and all of a sudden they start locking up journalists, does that, does that, does that, does that, I fear Google, you think, yeah, I'm going to start, I'm going to open an office in Istanbul? Or you think, I'm going to wait and see if they sort that out. If you're one of the brightest PhDs in the world and you're doing research on authoritarian governments, you're doing research on innovation, and you're worried that your research might contradict something that the leadership is espousing to, do you go teach at those universities?

57:28Scott Galloway:No, you go somewhere else. So this is, look, China is not a model for, but having said that, I was just supposed to be on with Don Lemon who got arrested. Yeah, exactly. Why are they arresting Don Lemon? Don Lemon.

57:46Kara Swisher:Like, give me a break. They shouldn't be arresting any journalist like this. It's just ridiculous. I would agree. Anyway, Jimmy Lai, let's get him out. Let's get him out. He's a hero. I'm going to finish up with something that just happened. And Gail Slater, who hugely respected lawyer, antitrust lawyer, who was running antitrust at DOJ, just announced she's stepping down. It follows the resignation of a guy named Mark Hammer, who was one of her top deputies. She's had clashes with Pam Bondi over the handling of antitrust investigations. I have heard she was in a real bind over the Paramount thing.

58:19Kara Swisher:They're trying to like shove through things that are friendly to the Trump administration. And she just can't do it. She can't do it during 11 months on the job. She found herself in this bind caught between the Trump administration. She was close to J.D. Vance. This is a very respected and well-regarded antitrust version. This should be an enormous signal that Gail Slater is stepping down. I had hoped to talk to her, but everyone had told me they didn't know what she was going to do about the Netflix Paramount thing. You cannot be against the Netflix thing if you're not against the Paramount thing.

58:52Kara Swisher:I'm sorry. Like, and of course she's being, you know, she's been putting a bind all over the place. A talented and well-regarded person has put into a bind. And so she's stepping down. I just don't know who they'll put in some idiot like a Brandon Carr type of person who will just do what they say. But it really brings it down rather significantly. Even making Dalrahim, who works for Paramount actually now, very well-regarded. Like, they're going to have to put in a village fucking idiot in the Pan Bondi mode. So not a good sign. Not a good sign. Anyway, one more quick break. We'll be back for predictions.

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1:00:55Kara Swisher:Okay, Scott, let's hear a prediction.

1:00:58Scott Galloway:I think that what was supposed to be the most anticipated IPO, maybe with the exception of kind of SpaceX AI Tesla, the...

1:01:07Kara Swisher:Whatever. Tesla's not in there yet.

1:01:09Scott Galloway:Probably the most anticipated was the IPO of OpenAI in 2026, sometime this year, early 27. I don't think that's going to happen. Oh. Whoa. Yeah, I think this company is now, is gone into full, I don't call it panic mode, but it feels as if the momentum has a habit of creating more momentum. And I think the momentum is really negative around this company.

1:01:34Kara Swisher:What happens then? Where does it go? What does it do?

1:01:36Scott Galloway:Well, I think they'll substantially scale back there. I mean, have you already seen the war? Have you ever seen Jensen Huang and Sam Altman who were, you know, bud buddies are already shitposting each other? Claiming that the$100 billion agreement was a framework and they're actually not going to. The$100 billion investment.

1:01:55Kara Swisher:May I just say, you said that.

1:01:58Scott Galloway:Well, that was ridiculous. These circular deals, I'll give you$100 billion. I'll invest$100 billion if you invest$100 billion in our chips. And now, quote unquote, Jensen's backtracking and saying, well, it's just a framework. They couldn't justify it. NVIDIA stock has gone down because people are worried about exposure to open AI. So what does open AI do? They start shitposting NVIDIA and saying, no, it's because their chips didn't live up to our expectations. when the biggest player in the space, Jensen Huang, and kind of the young gun, OpenAI, start shitposting each other and they back out of this$100 billion investment framework, that is a really bad sign.

1:02:38Scott Galloway:Yeah.

1:02:38Kara Swisher:He kept using, what was the word? We're honored to be invited. What was he saying? It was so funny.

1:02:43Scott Galloway:Yeah, but they're both going on background now and blaming each other.

1:02:45Kara Swisher:Oh, totally. Utterly. Like, can I just give people a lesson? And when you hear sources close to the situation, if they were any closer to either of them, they'd be on the other side of them.

1:02:54Scott Galloway:That's them, right? So I think the momentum, the worm has turned. And it's not that OpenAI is an unbelievable company that could go public at like a$50 billion market capitalization. But the problem is when you sell some investors in at$250,$450, and then if he's able to close this round at$850, they're not willing to go public or let you have a liquidity event that cuts there. What happens in an IPO, say he went public at$300 billion next year and said, okay, the market isn't what we thought. Unless there's a couple years where the latest round of investors get so fatigued they're willing to take a 60 % haircut, all of your shares, the last round of investment has a preference, meaning they're the first money out.

1:03:35Scott Galloway:So the$50 or$100 billion going in at$850 doesn't want to give up their liquidity preference and let them go public if they're going public at less than$850, which I think they would. So your last round of investors become a veto block for going public unless you're going to go public at a valuation greater than$850. So what do they do?

1:03:52Kara Swisher:You haven't answered my question.

1:03:53Scott Galloway:They'll dramatically, in my opinion, they'll dramatically scale back their capital, their CapEx. And they'll end up with a much smaller, much less ambitious, amazing company that's only worth$100 or$200 billion. It's only one of the 30 most valuable companies in America. Not the - Get bought?

1:04:09Kara Swisher:Well, that means everyone else will get collapsed, right? Or not?

1:04:12Scott Galloway:I think the whole, my opinion, if you look at, and I look at weird signals, the percentage of ads at the Super Bowl, right? Yeah, I know.

1:04:19Kara Swisher:Yeah, you said that.

1:04:19Scott Galloway:If you look at all this, I think there's a ton of anecdotal evidence showing that while AI may live up to its potential, the market cap of the biggest players this year is about to throw up. Which isn't to say that similar in 2000, when the market cap of Amazon went down 95%, it's still not going to be an unbelievable company. But I think we're about to see a dramatic recalibration in the markets, which includes OpenAI's IPO plans getting queered. Now, who's going to take their place? And this is the prediction. The most impressive numbers, hands down, that no one I wasn't expecting, Calci. Calci's year on year.

1:04:57Kara Swisher:Calci and not Polymarket, right?

1:04:59Scott Galloway:Well, Calci's actually of the two, the clean, well-lit space of this marketplace, right? It's a little, Calci is CFTC regulated. It's also in the US, it's peer-to-peer trading. It's federally regulated. I have some, I don't have moral clarity around these issues because I do think they tap into the DOPA of a young, more risk-aggressive male brain. But just let me go straight to the numbers here. In 2026, or in this Superbowl, right? Over a billion dollars in trading volume on Calci. That's up 2 ,700%. It was up 28-fold this year. And you know who's getting absolutely the shit kicked out of them?

1:05:44Scott Galloway:Is Flutter, is the gambling sites. They're killing these guys. The sports market accounted for about 90 % of CalShield's activity this month. And it's having an incredible impact on traditional gambling and sportsbook. analysts have noted that Calci's rise coincides with the underperformance in major sports books stock prices, DraftKings, Flutter, as traders shift some activity towards prediction markets. And with a venue that's easy to access nationwide, which Calci is, even in states without legal sports betting, the firm is attracting bettors who might otherwise have used traditional sports book.

1:06:22Scott Galloway:So this is, this company, and my prediction is the following. Open AI, way to the downside, doesn't get public. CalShe is about, is going to be, in my opinion, the kind of IPO we're all trying to get into in Q2 of Q3 of this year. CalShe it is. All right.

1:06:40Kara Swisher:Well, that's interesting. You've been sounding this alarm for these companies. Interesting. Fascinating. That's a big one. Scott, that's a big one. We'll see, right? That's a big one. Yeah. Anyway, we want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com slash pivot to send a question for the show or call 855-51-PIVOT. Elsewhere in the Kara and Scott universe, this week on Prof G. Markets, Scott spoke with Eswar Prasad, professor of trade policy and economics at Cornell University to discuss why he thinks economics, domestic politics, and geopolitics are stuck in a doom loop.

1:07:14Kara Swisher:Doom loop. Let's listen to a clip.

1:07:17Scott Galloway:Globalization used to be seen as a positive-sum game, where countries could benefit mutually from trade. And that would be an offset to what is intrinsically the zero-sum game of geopolitics, where one country can gain influence only at the expense of another. But now even globalization has become seen as a zero-sum game, so it isn't offsetting the zero-sum game of geopolitics. And worse, some of the negative dynamics of globalization have started infecting domestic politics, not just in the U.S., but in many other countries.

1:07:50Kara Swisher:God, I feel smarter already.

1:07:51Scott Galloway:Professor Prasad, one of the things that struck me, and I said this, we graduated the same year from undergraduate, me from UCLA, him from the University of Madras. I graduated with a 2.27 GPA with an incredible ability to make bongs out of any household item. He won a scholarship in India that identified like one of the 50 smartest kids of a billion kids. Yeah. And so what does a guy who's one of the 50, like, this guy could walk into the Rose Bowl and take the average IQ of those 80 ,000 people up a couple points. That's how smart and hardworking this man is. So what are we doing? What are we saying to these people now?

1:08:30Scott Galloway:Can you imagine a kid coming out of the University of Magos right now in 2026? Is he going to go to Brown? No, he's going to go to McGill or he's going to go to Instituto Mbresa or he's going to go to INSEAD or who knows, maybe the University of Cordoba in Argentina. I mean, we are.

1:08:46Kara Swisher:Speaking of doom loops, academic doom loops.

1:08:48Scott Galloway:We're the sports team that used to have access to the number one draft of any college in the world. And we've said, no, we don't want to.

1:08:56Kara Swisher:And now we just have Prof G coming back to the United States.

1:09:00Scott Galloway:Talk about a bad trade.

1:09:01Kara Swisher:He is repatriating himself in the summer. He's coming back. Anyway, it sounds like a great interview. I'll be listening to it. Anyway, that is the show. Thanks for listening to Pivot. And be sure to like and subscribe to our YouTube channel. We'll be back next week.

1:09:17Scott Galloway:Today's show is produced by Lauren Eamon, Zoe Marcus, and Taylor Griffin. Ernie Intertied engineered this episode. Manolo Moreno edited the video. Thanks to Officer Dubros, Miss Severo, and Dan Chalon. Nishat Kuro as Vox Media's executive producer podcast. Make sure to follow Pivot on your favorite podcast platform. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back next week for another breakdown of all things tech and business.

1:09:49Kara Swisher:Rinse knows that greatness takes time, but so does laundry. So Rinse will take your laundry and hand deliver it to your door expertly cleaned. And you can take the time pursuing your passions. Time once spent sorting and waiting, folding and queuing, now spent challenging and innovating and pushing your way to greatness. So, pick up the Irish flute or those calligraphy pens or that daunting Beef Wellington recipe card and leave the laundry to us. Rinse. It's time to be great.