Nvidia Hits $5 Trillion, Elon Musk Launches Grokipedia, and OpenAI's IPO Future

25:15Now, Chesky priced it too low and it was up 120%. Figma went up 140 % circle. Those guys didn't realize that was going to happen. But what you want to be is, this is what he wants the headline. He does not want the headline to be open AI flat in IPOW. What he wants is open AI surges in IPO. That is a branding event that is singular and can only happen once or not. So the thing will be priced. they'll come up with some bullshit thing where they'll say that we're offering our users a chance and they'll let them buy$11 worth of stock and claim that they're letting their users participate. So you've made$14, yeah.

25:56And then they'll run around the world with the biggest hedge funds and biggest institutions. They'll go to BlackRock, State Street, and the bankers will make a shit ton of money. It'll be a huge branding event. But right out of the gates, I bet it's up 30 or 60%. But the problem is, if I got access, which I don't think I'll have, given that I have this podcast where we're constantly critical of them, But the people, the institutions that get in, well, some of them will hold. A lot of them will sell. And then the retail investor, the guy or gal on the street will buy at that first trade. That will probably not be a great price to buy in at.

26:28But, you know, we'll see. We'll see if they'll give Scott some. All right. Let's say speaking of high stock market, let's go on a quick break. When we come back, NVIDIA hits yet another major milestone.

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28:55Everything since I started using computers. And of course, an iPhone, I got one of the first ones. You know, I use my Mac all the time when I'm doing podcasts, especially when I was traveling. But I used it in the very beginning of doing podcasts when I did remote stuff. And no matter what you have an idea for, whether it's an innovative piece of tech, a groundbreaking policy, or a short story concept you can't get out of your head, go for it. You just need to get started. Great ideas start on Mac. Find yours at apple.com slash Mac.

29:27Scott, we're back. NVIDIA just became the first company in history to hit the$5 trillion in market value a little over three months after it hit the$4 trillion mark. To give you some perspective, NVIDIA is now worth about 25 Disneys. 50 Nikes are bigger than the GDP of Germany. It's been a busy week for NVIDIA. The company is also taking a$1 billion stake in Nokia. Oh, that seems, I'm not loving that move. Plus, partnering with Oracle to build the energy department's largest ever AI supercomputer and NVIDIA's annual conference, CEO Jensen Huang took an opportunity to lavish praise on Donald Trump.

30:01Why wouldn't he? Trump has made him really rich. Let's listen. President Trump deserves enormous credit. His pro-energy initiative, his recognition that this industry needs energy to grow. It needs energy to advance and we need energy to win. His recognition of that and putting the weight of the nation behind pro-energy growth completely changed the game. If this didn't happen, we could have been in a bad situation. And I want to thank President Trump for that. Oh, my God. Let me interpret for all of you out there what he was saying. Mr. President, let me sell my shit to China. Yes, that's exactly what I was thinking.

30:41Let me sell my, okay, weapons, greater likelihood they can hack our systems, more cyber attacks on us. That's exactly what I thought. An increased probability they're able to invade Taiwan in a hot or a cold war using our GPUs, which American universities and IP protection have made me worth more than Boeing. Let me sell my chips into China and ignore all of the concerns from the Defense Department. And look how rich I've gotten off of you. Like, it's just, you know, let me tell you something. I've known Jensen for a long time. I interviewed him many times when he had the company that was just selling chips to video game companies, essentially.

31:22He will not do an interview with me. I've known him 30 years. Like, he refuses. Because I'll be like, so let's talk about China. Let's talk about President Trump. Let's talk about, you know. Yeah, he's smart. Yeah, it's just like, actually, you know what? I lost a lot of respect because I like Jensen, but boy, is he like. He should go. Actually, he should go on your show because he'd be fine. I would agree, but he won't because I know him, right? Like, talk about someone I've known. Like, just it's fine if he wants to do it this way. But, you know, he probably looked at a Cisco or something like that and is so much smarter.

31:59Like, speaking of wanting to keep, you know, he doesn't want AMD to show up. He doesn't want Apple to make. He wants to control. He wants to avoid the mistakes of intel over the years. You know, he kind of wants to own it for the next, for the future, essentially. And so sucking up to Trump, he'll do it. He has no problem doing it whatsoever. Though he dresses like a very attractive lesbian, I think. I'm sure that's what he's going for. That's what he says to a stylist. Look at that outfit. Hot lesbian. That's what I want my closet to look like. That's what he's going to be doing. Like the leather.

32:32I have that exact leather jacket. So look, you got to give it to the guy. He's created more shareholder value in a shorter time than any person in history. And he's created tremendous. He's made thousands of people millionaires, if not tens of thousands. He's created an ecosystem. He's paying a shit ton of taxes indirectly and directly for the great state of California. A lot of that. It's great that that ecosystem and he's sort of the ground zero for the ecosystem is happening in America. I think the guy deserves a lot of credit. He seems like a very nice man. My Jensen Huang story is the following.

33:03I spoke on stage at some thing at Cannes, and a bunch of people lined up to take photos, and this nice guy comes up and says, I just love your videos. And I was like, the line was really long, and I'm like, boss, where's your camera? He's like, oh. And he pulls out a camera, and we take a snap, and I'm like, I'm sorry, boss, the line is long, and I kind of shuffled him along. And the next guy comes up to me and goes, you know that was Jensen Huang, right? Oh. And I'm like, Jensen, Jensen, come back. Was this recently? Because no one really paid attention to it. It was like three years ago. Yeah, because I got to say, I always thought he was, it was unusual for us to have him at code because he wasn't that well known, right?

33:43But he was doing all sorts of innovative things in chips when others weren't. And it was largely around video games, as I recall, right? He was doing, and phones maybe. But his whole situation has changed, including that entire company, which was sort of not as well known, but yeah. But he has a feel for brand. One, the leather jacket is not an accident that he keeps wearing it. And two, his annual meeting is now the new Berkshire Hathaway Summit. I forget what they called it. But they are very, the investor relations there is very good. So he announced a bunch of promising new things, AI and quantum computing infrastructure.

34:22He announced partnerships with the U.S. Department of Energy and leading U.S. companies to build AI infrastructure, aiming to support scientific discovery and national competitiveness. competitiveness. He hit all the right notes. AI supercomputers. He revealed a project to build an AI supercomputer for the U.S. Department of Energy with a reported$500 billion in bookings for AI chips. Yeah, he needs to keep selling his chips. He needs to keep selling this. He's really good at it. But he's still a chicken shit. You're a chicken shit, Jensen, for not talking to me. I'm not that hard. That's probably a little rough.

34:52By the way, you know who the only politician is, the only candidate who's refused to come on Raging Moderates? What, who? The leading candidate for mayor of New York. He's the only person that said no to us. Yeah. Why would he come on your thing? Well, everyone else is. That's a smart man. He won't come on mine either. He literally talks to a door. He won't come on mine either. He's won. Why take any risks? I would advise him to just go with friendlies right now. I know. He won't come on mine either. It's weird. I was in touch with him months and months and months ago when he wasn't ahead. No.

35:26Was he a babysitter? Anyways. No, he was like polling 2 % at the time. So they revealed a project to build construction in America. They noted that their latest chips, including Blackwell, are now in full-scale production in Arizona, reflecting new investment in U.S.-based fabrication and supply chain. That will be a lot of jobs. He emphasized, at least in the short term to construct it, he emphasized the importance of accelerated computing, national AI strategy. He's a rock star. And reindustrialization. They're hitting all the right words. Reindustrialization, that's a great word. So any kind of bubble?

35:57Are you worried? Oh, yeah. Yeah. I mean, it's not the fear isn't that these things go down. The fear is imagine Leo, when he was hanging on to that piece of furniture at the end, when he was going down, took Kate Winslet and 400 kids down with him. When he vanished into the darkness of the depths, what if he had 11 ,000 arms and took everyone down with him? That's the problem. It's not that these companies correct and their stocks go down. That happens to every big tech stock. That happens to every stock at some point. The problem is they may take the global economy with them down because 40 % of the S &P is 10 companies, which represents 20 % of the market cap of the entire publicly traded companies globally.

36:42So this is – Actually, not everyone goes down. Berkshire Hathaway didn't. That's because he's so good. Like, this guy's not – Actually, that's not true. At the depths of the Great Financial Recession. Oh, did it go down? When Berkshire had been hit hard like anyone else, if you did the calculation on Warren Buffett, at that moment, he was flat. Now, within 14 months, he was now up again 23 % since the inception of his fund. But no one gets out alive if this thing, if these things. No, NVIDIA is keeping everybody up. We should hope that OpenAI goes public at a really good market cap and that NVIDIA keeps announcing record quarters or that it's sort of a soft pullback.

37:29Because if NVIDIA throws up, I mean, everyone else has the stomach flu. Jensen, keep looking like that lesbian you do. You're an attractive, very attractive lesbian. Anyway, let's also talk about Grokopedia, the encyclopedia powered by XAI and his rival to Wikipedia. It sucks so bad. I tried it. I just couldn't. Has complained about so-called propaganda on Wikipedia. He's been doing that for a while. Crackopedia went online with around 900 ,000 articles and briefly crashed after launching. It was full of, like, it loves Elon. It loves Elon, that's for sure. It's full of errors. It leaves things out, like a lot of stuff out.

38:07Factual stuff. And it's, does he, why is he doing this? Like, does he have just an extra five minutes to do something? I don't know. At the same time, Truth Social, which is a majority owned by President Trump and his family, is launching a crypto-based prediction market platform to compete with Polymarket and, I guess, Calci. Truth Predict will allow Truth Social users to place crypto bets on outcome events. The guy in charge of the outcome events is going to have a betting platform. That's interesting. Also, I think Don Jr. is on the board of both the Polymarket and he's involved with them. Any, I just, I don't know what to say.

38:48And the last thing about Elon, of course, Tezo's looking for internal CEO candidates in case his trillion dollar pay package is not passed and he leaves. So any predictions here? Any of these, any of these topics? Grappapedia? Well, Grappapedia is an attempt to sort of establish a new truth, right? And one of the things I like about Wikipedia is it's almost impossible to have a functioning democracy if we don't all agree that there is an objective truth. and the Congress used to fall in line when peer-reviewed research would come in or data would come in. They wouldn't, I mean, they try and spin it, but they would acknowledge, okay, this is the data and we all need to rally around it.

39:24That's no longer the case. Everyone's decided there are quote unquote alternative facts. There is an alternative truth. And I just see this as an attempt to try and mimic what a lot of people, one of the things I love about Wikipedia, I was freaked out when my Wikipedia page went up because I thought there's no taking it down. That's the thing about a Wikipedia page. It goes up. And then what really struck me was some misinformation went up. It said, you know, it's it said one of my companies was now defunct. And I know it's not. It's still that company's still going. Other people weighed in. It's a community based thing.

39:56And if you show your notes and your work, you get to edit a page. so it's like this this kind of user generated but they're they do try to pursue the truth i find it actually quite apolitical which i like and what you see here what you see here is they're saying shit like uh instead of instead of showing suggestions for gay pornography it it falsely suggests that porn exacerbated the hiv aids epidemic in the 80s I mean, something like that, that's just not helpful. Why is he doing it? Does he care if he's helpful, Scott? Like, really, seriously. Yeah, but I think you've said this. I think something happened to the guy, and he's traumatized and angry at the left, and wants—I mean, he's talking about—he keeps going on and on about a white genocide?

40:47He's just— I mean, I use a lot of examples for how the term genocide has been perverted and overused in a lot of different regions of the world. But there's very few perversions that are less egregious or laughable than that right now there is a white genocide taking place. He's like a plot of White Lotus at this point. Like, you know, between him and David Ellis and they look like the next cast of White Lotus. So why would he why would he do this? Getting in on the action? Truth predict. Well, so they've got to do something. The social media, okay, this is their second pivot. The social media company doesn't work.

41:22No one's going there. So they pivoted to become a Bitcoin treasury company and they took their cash and bought Bitcoin. That's sort of working, not really. So their next pivot is to become a betting market. Because there is, actually, I do think there's opportunity for new players there. And you're going to see Polymarket or Calshi go out in a monster IPO. These things are the new casino, but they feel less dirty. Like, oh, it's about politics, so it's not just gambling. Yeah, they do everything. They don't just do politics. But on his, I mean, okay, so, but I got to give it to the guy. The stock is up 10 % this week and 22 % up this year.

41:57Tesla, the fact they're able to keep this thing in the air. This is Tesla. Yeah, this is just amazing. And his stock package, he's looking for a grant of up to 12 % of outstanding Tesla stock, which could feasibly be worth a$1 trillion package if the company hits a market value of$8.6 trillion, which I think is up six or sevenfold. I actually, I think one of the things about capitalism that I think works is you can't get in the way, I don't think you should get in the way of limiting compensation at a gross level. I think you should continue to publish statistics showing what multiple of the average worker salary the CEO makes.

42:34But I think one of the intoxicating things and the incentives that works in the United States is that there's no limit on the upside. Well, here's the only thing. This is, look, first of all, it's offensive to people. That's part of it. I mean, the whole like hand waving part of it is offensive to people. So he knows he's doing that. He knows he's trolling people. The other thing is, if it gets an internal CEO, we will all value it at what it's worth, right? It will not get the Elon bump. And it's not selling as many cars and it's not as good and it will become what it's worth. Correct. A very good car company that has seen better days.

43:12And, you know, one of the things that it's cost, there was another Yale study out showing that his involvement is costing them, I guess, one million cars or something, some number. It was a massive number. So he's also a downside candidate. I think him out of there would be great for Tesla as a car company. But you're right, not for the stock. But where I was going with this$1 trillion pay package. And you did something you almost never do. You didn't let me finish. That's really unlike you. Oh, yeah, right. Do you like to see the statistics on the talking of this show? I love what you say. You say, no, you always say, is there a period coming?

43:46I know. 73 % Scott, but go ahead. I occupy 73 % of the words. That's right. Is that right? Yes, you do. Yes, that's correct. Oh, now I feel shamed. Don't worry about it. Anyways, where I was going with it is I like the idea of CEOs and people making extraordinary amounts of money at a gross level. I also believe, and this book kind of changed my life, you know, Daniel Kahneman's, you know, thinking fast and slow and his research around money, above a certain amount, you don't get any happier. And the whole point of a good tax is a tax that is the least taxing possible. I believe the two least taxing taxes are the following.

44:32over$10 million in revenue or from stock option income from current income or from stock trades or selling your stock in Tesla. I believe we should have an AMT of 60 or 70 percent and everyone grabs their pearls when they hear that. That's the tax rate for that type of - I just grabbed my pearls, but go ahead. That's the tax rate for people making over a certain amount of money for the majority of the last century, folks, when income inequality was not as out of control, when people felt better about America when we weren't cutting off food payments to kids. So I just don't, because here's the thing, the person who's being taxed at 60%, who made$2 billion in equity grants, they're no less happy.

45:17But that$2 billion divided among, call it 100 ,000 households, that's$20 ,000, $20 ,000 in universal childcare credits, food stamps, vocational training, Pell grants. Everybody's happy. That makes them significantly happier. And then the other one I can't stand is we should eliminate the deduction, pull the deduction on inheritance tax down from$30 million to$1 million. If your kid inherits$7 million instead of$11 million, he or she is no less happy. And there's going to be such an immense transfer of wealth. And that needs, a lot of that needs to be reinvested back in the middle class. Anyways, my point is…

45:57Gosh, you know who you sound like? Zoran Mandami. But go ahead. He hasn't talked about any of this shit. You mean what? Government sponsored food lines? I'm just saying, when you said 60%, I was like, ow, no. I think taxes should be lowered on what I'll call the working wealthy. I think taxes should be lowered on Kara Swisher. You make an exceptional living, but living in D.C., you're probably paying 51 % of your income to taxes. That is correct. Whereas, I'm self-conscious saying this, Scott Galloway, who now makes all of his money from selling stocks and is a Florida resident, I'm paying about 20%.

46:31I know. That makes no fucking sense. You're a fair share. That makes no fucking sense. I would agree. In fact, I think you should write me a check. That's what I think should happen. Anyway, make a trillion dollars. Just put$600 billion of it back in the Treasury. Is he going to get that? What's going to happen? They're all against it. I think the board, I think he's going to get most of it. So the board can say we took a stand and didn't give him what he wanted. And I think he'll get most of it. So what if, but a lot of these groups, the shareholders are rejecting it. What will he quit? He'll quit.

47:02Right. Presumably. Yeah, but you'd have to get over. These shareholder votes, sometimes they're non-binding. I haven't looked at the bylaws, but for example, every year, Sir Martin Sorrell's pay package was rejected by the shareholders of WPP. And he was like, honey, Badger, don't give a shit. and then they'd go back and then the next 11 months of the year would click by and no one cared. But he cares. If he loses, he's going to stock off. I know, but he'll stock off. But these shareholder votes are typically non-binding. It's the board that is supposed to take them into consideration and the compensation committee, which by the way, I still maintain the hardest thing as a manager or the hardest thing for me, harder than clients, harder than hiring and firing, compensation.

47:45compensation. It is so difficult to figure out the right number, keep people motivated, be fair, have the money to manage the company. How much do you pay employees versus shareholder? It's really... So is he going to get this? I think he's going to get most of it. I don't think he wants to give up the mantle at Tesla. Also, if he leaves, and I think he probably knows this, if this company starts trading like an automobile company, it loses 90 % of his value and the majority of his net worth is in this company. Yeah, he's got to stay there. Stop whining. So they both, quite frankly, it's a bit of a suicide pact.

48:18And that is the board knows if he leaves. Here's the good news for him. He's invaluable to the company. Here's the bad news. He's invaluable to the company. That's correct. And the majority of his net worth is tied up in Tesla. This board will do a symbolic haircut. They'll give him, you know, 50, 70, 80 percent of the trillion dollar potential upside he's asking for. But this board, and I've seen this happen, they have made so much fucking money with this guy. They all want to name their first child after him. You know, these are these executives on the company. I mean, they're talented executives who.

48:54But they're not that talented. Yeah, I mean, they're probably people who are really good at what they do, had$3 or$5 million, and now they're buying fucking yachts because they met this crazy guy. Yeah, we're talking to you, Robin Denholm, possibly the most egregious board chairman of life history. But you made a lot of money. Good for you, Robin. Anyway, let's go on a quick break. When we come back, we'll talk about the latest tech earnings. We're going to run through them really quick.

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51:59Scott, we're back. It's time to do some rapid-fire highlights of the latest tech earnings. First up, Microsoft. The company's Azure cloud service saw revenue jump 40 % in the quarter. Amazing. And the total revenue rose 18%. Shares are up around 2 % as of the last five days of the taping. As for Meta, the company saw a 26 % rise in sales year over year and net income of$2.7 billion. Impressive, but it still didn't meet expectations. Meta blamed the net income shortfall on one-time tax bill, but also warned of growing capital expenders and spending enormous amounts of money on AI. Shares are down 12 % at the time of the taping.

52:34They got a real haircut there. Lastly, Alphabet, the Google parent company, saw 16 % jump in third quarter revenue, topping$100 billion in quarterly revenue for the first time. Really impressive. Cloud revenue for the year rose 35 % from last year, a little less than Microsoft's. Shares are up around 3 % at the time of the taping. Anything sticking out for you? And we'll note that earnings for Apple and Amazon are coming out after we record today. So, by the way, Amazon's laying off 14 ,000 corporate workers as it invests more in AI. But any thoughts on not, we'll talk about Apple and Amazon next week.

53:13But what do you think about these three, the three biggies? Nothing short of extraordinary. Advertising revenue at Meta up 26%. And you want to know why your employer is dying, CNN or your partner, CNN. Instagram video time was up 30%. Up 30%. Much of that is me watching it, but go ahead. I hate to say this. I'm embarrassed to say this. People constantly ask me, what are your sources of news? And I always say, the BBC, the FT, and The Economist, which is all a fucking lie. Well, you do watch those. I subscribe to them so I can signal. For me, they're self-expressive benefit. I read those, but go ahead.

53:52When I go to Breakfast at the Crosby, I take my FT because I think it makes me look smarter than I am. And I barely read it because my eyes are going. And then I go back and I watch reels on my phone and I watch the Geo Hussar or Justin Wolfers or a reel from some economist or our YouTube or David from or and these little two and three minute hits of really thoughtful people on YouTube and Instagram. That is now where I'm getting my news. I hate to admit it. You and I both. You and me both. And they will take the best articles and they'll summarize them for them. And they'll put someone better looking to explain the article or more articulate.

54:28Remember when the New York Times started doing video about 10 years ago? It was like, oh, my God, that guy, that guy writes so much more handsome than he is. You know, you think. That's why they that's why they glowed up Ezra. They're trying to glow up Ross. Do that. But that's impossible. When you find someone like Ezra who's handsome and kind of dreamy in sort of a metrosexual way. He wasn't even close to this dreamy. They've glowed him up. Or like an Andrew Ross Sorkin. Because I worked with a lot of these journalists at the New York Times. I'm like, Jesus Christ, swipe left a billion times.

55:03Yeah, yeah. And then they put them on camera thinking everyone would want to talk to the journalist. And you're like, oh, God. No. Anyways. Anyway. So get back to the results. These are kids who are traumatized and found refuge at the school newspaper. All right, get back to the revenues. Because cloud revenues up, everything. The stocks are not that up. The stocks are sort of— Yeah, the people are anticipating this. The CapEx at Meta, you got to give it to him. He is not afraid to make unbelievable investment. As a result, though, the operating margins fell to 40 % from 48. CapEx reached 38 % of revenue.

55:40That is crazy. I mean, Apple, I think, is in the high single digits most of its life. Mark, I'm going to pay you a comment. You are a baller, I have to say. He's like, I'm going this way. He's not scared. That's what control is about. He has full control of that company so he can do whatever he wants. He's arguably – he's one of the great business minds of the last 100 years. Unfortunately, he's done more damage to young people while making more money than almost any person in history. Thank you for noting that. So, okay, their CapEx drew the harshest market reaction. He doesn't care. if you look at their valuation, it's up 25 % year to date.

56:15It has some show me risks now, but for the most part, it's just unbelievable and can make these staggering investments. They have the cashflow alphabet. The thing that really struck me here, okay, cloud revenue, 34%, up 34%, net income up 33%. Their income up 16%. And all of this fear, this existential risk of AI is going to ruin the search business. The search business was up 15 % this quarter. Because they have a lot of AI embedded in it. It's not only growing, it's growing faster. Paid clicks increased 7 % year on year. I mean, Google Cloud backlog. I got to say, their AI is getting better, isn't it?

56:56When you search now on Google. They're like, no need to go to ChatGPT. Here, we'll give you - Let me say, it was terrible and now it's good. I don't say it's as good. It's not as good as ChatGPT. It's not. It's not. Their Google Cloud backlog, which is basically business that they've signed up, was up 46 percent quarter on quarter, up 82 percent year on year. Over 70 percent of existing cloud customers now use Google AI products, and the company signed more than a billion dollars in deals this year than the prior two years combined. It's also their cloud, unlike the Amazon cloud, which AWS has had a real issue with, which is still the number one by gross dollar volume.

57:35But what Gemini has done, which is really smart, is they have made it, quote unquote, the AI cloud. And it's become the preferred platform for AI workloads. Google offers AI startups$350 ,000 in cloud credits, access to its technical teams, and go-to-market support. And nine out of the top 10 AI labs use Google's infrastructure. Can I make a note? Many years ago, when Amazon pulled forward in the cloud market, I had lunch with Sundar Pichai, who's the CEO. And I was like, you really missed the boat on this cloud thing. And he was like, we did because we were using our cloud for our own search service, right?

58:11And he's like, we had so much business over here. We didn't pay attention. I'm like, you should go in a cloud. Like, you missed the cloud turn. And since then, I have to say, they have recovered rather nicely, I would say. Like, in Microsoft, a revenue on a big number up 18%. Azure, again, as goes the cloud, goes the stock in the company. Azure revenue, their cloud offering was up 39 % year-on-year, topping Wall Street's 37 % estimate. Azure remains the core growth driver for the company. He expects to double, Satya said he expects to double its data center footprint over the next two years. And these companies, there's just no getting around it.

58:51They're extraordinarily well-run. Stocker seems flat. Do you think it's going to keep running up? Well, I've said this over and over. It was my big tech stock pick for 2025. It's up 62 % in the last 12 months. So I think it's, let me put it this way. The buying opportunity is over. It was trading at a P of 17, which made no sense. And now I bet it's up in the high 20s. So I don't, you know, I don't, I don't like to make, let me just say, I was a buyer last year. I'm not a buyer right now. I'm not a seller either, but I'm not a buyer right now. It's come up. It was undervalued a year ago because of the quote unquote, everyone thought But within a year, OpenAI, Google Search, and it had gone from like 91 to 89.

59:33Everyone thought it was going to go to 50. It hasn't. Google Search gets 96 times the traffic of ChatGPT. It's big. It's big. And they've managed to be, you know, credit to, apparently, Sergey Brin's spending a lot more time there. Credit to them for coming back from that or making certain that they didn't get their lunch eaten. In any case, last thing, CNN has launched its new subscription streaming service. The service will be like, quote, close sibling of CNN's cable product offering access to select live programming for$6.99 a month. It's not really CNN Plu. I think it's all of these. How is it any different?

1:00:11Exactly. How is it any different? It's not. It's not. Except now it's Zaslav and Mark Thompson's idea? It's CNN with CNN. Remember when it was Plu and I said, how can you have CNN Plus without CNN? This has CNN. Oh, okay. Yeah. That's it. They have to do this. Seven bucks a month and subscribers will be able to access. My idea, and this was an idea that I said, you should have a bug on CNN Plus on their streaming thing where you're just live streaming live CNN. and Mark Thompson implement, this is typically what happens with managers. You have one, you have a business that works and you think that's the playbook for the rest of your life.

1:00:54And he, to Mark Thompson's credit, he moved the company, he moved New York Times from an ad-based model to not an entirely subscription-based model, but the stock run-up in the New York Times, which has been strong, not exceptional, but stock was largely because the revenue mix move much more to subscription under the leadership of Mark Thompson. The problem is it just may be too late. CNN is struggling, even in comparison with other dying cable news networks. In the September primetime slot, get this, Fox News averaged 2.5 million viewers. That's flat. MSNBC, 810 ,000, down 43%. And CNN averaged 543 ,000, down 36%.

1:01:35And in the coveted 25 to 54-year-old demo, which is all advertised, the people buying their product, advertisers, they only care about people 25 to 54. Fox News averaged 280 ,000 in the core demo, down 14%. CNN averaged, get this, Cara, 87 ,000. Yeah, we're bigger. I know. And MSNBC averaged 68 ,000. If you look at our downloads plus our video views, we're averaging, I think, around 350 or 400 ,000. 60 to 70 percent of our listeners are in the core demo. So we're getting about 150 or 200 ,000 in the core demo versus MSNBC and CNN at 68 and 87. Our tiny little selves. We have like six. We can fit everyone around a table.

1:02:19These things literally. No one. A table. We did fit everyone around a table at lunch. And I flew back with Van Jones last night and he said something really interesting. He said, all we're doing is bringing on people, encouraging them to yell at each other such that it gets clipped and goes on social and goes viral. Yeah, which makes more money. Which we know. But what he said that I thought was really insightful, he said, just two years ago, occasionally we would make news live. Something would happen live on the program that would make news and change things. Instead, it's like, how do we get this shit on Reels and on TikTok?

1:02:56And then it starts having an impact. They're all just essentially a content creation machine hoping to get to clear the hurdle such that it goes viral on one of these platforms. He is not a moneymaker. That's for sure. I don't think they'll sell many of these. I got to say. I don't know. I think it's all like, look, they're all going to get bought up all together, whether it's Comcast or David Ellison. It's a trophy property, though. You know, Nepo money, which is fine. There's got to be a Nepo billionaire who's a Democrat who's going to want CNN and be willing to pay for it. Unless Ellison gets it.

1:03:28And then it just doesn't. But what about a guy like Michael Bloomberg? Why wouldn't he buy CNN? I don't know. He's been a great steward of Bloomberg News. He's moderate. He has the money. I don't know. I just I don't think they're really big businesses. That's all. I think they're little businesses. Anyway, one more quick break and we'll be back for predictions.

1:03:48This week on Net Worth and Chill, we're joined by Marina LaRude, the powerhouse founder and CCO of LaRude, the luxury footwear brand that's redefining accessible luxury. From conceiving the idea during an RV road trip with her husband to winning the FNAA 2024 Brand of the Year Award, Marina's journey from Teen Vogue fashion director to building her own empire is nothing short of inspiring. Marina gets candid about the money mindset shift from executive to entrepreneur, how she's scaling internationally while maintaining her values, and what it really takes to compete with footwear giants when you're bootstrapping your way to the top.

1:04:23Get ready for an unfiltered conversation about wealth building, taking calculated risks, and turning your corporate expertise into entrepreneurial gold. Listen wherever you get your podcasts or watch on YouTube.com slash Your Rich BFF.

1:04:40Okay, Scott, let's hear a prediction. What's your prediction? I predict we're going to have a great tour coming up. It's one more week. That's right. And by the way, I predict your book is going to be at the top of the New York Times bestseller list. Very generous. Thank you for saying that. By the way, can I just make an insight before you start? The back cover, is that your back cover that you sent? That is wonderful. It's a picture of Scott as a teenager. I don't know how old you are, 12, 13? 13, yeah. 13. And you. And I love, I thought it was, both Amanda and I were like, wow, that was really good.

1:05:10Oh, thank you. It's a wonderful, I didn't see the back cover. I love it. I love it. It's all Catherine Dillon. My partner for the last 15 years in business has been a professor of the arts at the Tisch School named Catherine Dillon. And she's a creative. Well done, Catherine. She teaches visual design and she's essentially run my companies. In addition to being a great manager, everything we do just has a certain level of aesthetic strength. It's very touching, actually. It's very hard to pull that off, but it was very touching. Thank you. So, look, my prediction is the following. AI is now absolutely the equivalent of corporate Ozempic.

1:05:46and that is what do Zempic or GLP-1 drugs do is they turn off the switch, kind of the instinctual switch that if there's food in front of you, you need to keep eating. And I hadn't realized how obvious or how linear when you're on a board and the CEO is planning the next year and trying to get approval on CapEx and hiring, he or she will come in and say, our plan is to grow revenues 8 % and that means we're going to grow our headcount 6 % because that'll increase profits by 8 % or 12%. And there was always a correlation. And if they came in and said, business is tough, I think revenues are going to be down 8 % next year, then, okay, we need to lay off between 6 % and 12%.

1:06:28So the corporate growth number, the hunger, if you will, was always matched by how much calories you were going to intake or get rid of. And then Meta said, using AI for better targeting, they announced what I still believe is one of the most seminal earnings quarters in history, they said, okay, we grew 23 % last year with 20 % fewer people. So there's this entirely different gestalt in corporate America, especially among information age companies that says, wait, just because I'm growing doesn't necessarily mean I need to eat more. I don't need more calories. I don't need more people. As a matter of fact, I may need I may be able to pull off the ultimate gangster move for shareholders here.

1:07:16I'm not saying it's good for society Is that I can grow while reducing my headcount. So amazon announced that they were Doing a restructuring 30 ,000 corporate job cuts roughly 10 percent of its white-collar workforce to they say they're aiming to reduce bureaucracy Do you realize that amazon has said on the retail unit that they think They can maintain the same level of top-level revenue, or they can double their top-line revenue by 2032 or 33 while maintaining the same headcount. That's insane. That's insane. So I think the corporate ozempicking of AI is already underway. The number of managers dropped 6.1 % between May 2022 and May 25, while executive-level roles fell 4.6%.

1:08:09The average supervisor now manages six direct reports, double the number five years ago, and Amazon isn't the only one. Meta cut 600 workers inside its AI division. Salesforce eliminated 4 ,000 support roles. Chegg reduced staff by 45%. Klarna downsized 40%. Duolingo plans to replace contractors with AI. Target, 1 ,800 people, Paramount, 1 ,000, Intel, 24 ,000, Nestle, 16 ,000, all announced reductions. And so some of this is a bit misleading because these companies went on a hiring spree after the pandemic, but these moves are still pretty big. And as the market normalizes, more workers are now moving down the ladder.

1:08:5117 % of workers who changed employers saw a pay cut in 2024. That's up from 15 % in 2023. The share of job changers taking a pay cut was even higher for tech, 18%, managers 22%, and managers transitioning to individual contributor roles was 32%. So, look, the hard part is who's next. So I have some companies that I think are going to announce multi-thousand-person layoffs. And I did a screen here. I spent some time on this. Etsy, Pinterest, Apple, Airbnb, PayPal, and HubSpot. I believe, and this is my prediction, along with a raft of other information age darlings, are going to announce 1 ,000 to 10 ,000 to 15 ,000 person layoffs in the next 90 days.

1:09:34Oh, wow. That's a big one. In that vein, I'm going to have to be laying you off, Scott. I knew it was coming. I knew it was coming. I knew it was coming. I knew it was coming. Yeah, that's a good one. I like that. I love that. That's a great one. That's a great prediction. And just to add on this, this has real societal implications because unfortunately, what you have is one of the greatest threats to democracies right now is that the ratio of young people who are productive and pay more than their fair share taxes is getting flipped upside down in terms of its ratio to old people who are unproductive and don't pay their fair share.

1:10:09And without, it used to be 12 to 1 workers to Social Security recipients. Now it's 3 to 1. And if it goes much lower than that, we're not going to have the money. 40 % of our entire budget now goes to payments for seniors. And unfortunately, our tax code encourages in our stock market, which drives everything, is now encouraging people to hire robots, not people. And the thing about robots, Kara, they don't pay Social Security or payroll taxes. Yeah, we're going to tax them. We've got to tax them. We've got to tax them robots. We've got to start taxing robots. That was a Bill Gates idea. Can I just say, in this nature of what you're saying, is I sent – Alex is doing great in school, and he's a mechanical engineer.

1:10:45I think it'll be just fine. But I sent him the note about GM laying off a whole bunch of people, too, in the EV area, largely because of the tax credits, et cetera. He goes, I love how all young people are being outcompeted by experienced workers and AI. So there is a zero opportunity for even the most qualified. Do you think we are totally cooked as a generation? Which was an interesting—and he'll do fine, is the thing. But it was an interesting thing for him to write, I thought. Yeah, but this is what you have is labor and opportunity inequality. And that is your son is frighteningly bright.

1:11:20He's big. He's strong. And he's going to graduate from Michigan with a degree in computer science. No, it's mechanical engineering. Okay, even better. Which basically means when you show up from Michigan with a degree in mechanical engineering, I don't care if you're interviewing at Warner Brothers or Google, they just want you. Yeah. Because the assumption is this kid is really curious and really smart and really hardworking. There's no way of faking mechanical engineering in Michigan. There's no way. of they're going to go, oh, he's an Epo baby. His classes are so hard. He's a Nepo baby. I recognize that name, but he's clearly one of these kids who's, who, despite being born a Nepo baby, is really hardworking and really smart.

1:11:54Let me tell you, I don't help him at all. He's so brilliant, but I'm just saying, but that's his mentality. Like, you know what I mean? Like a lot of younger people, even someone as qualified as Alex is, is worried. They're worried. But this is, this is the reality. A kid like that garners a disproportionate amount of wealth at a young age, there's more opportunity for, Alex is in the 1%. There's never been a better time to be a 20 or 22-year-old in the top 1%. There's never been a worse time to be in the bottom 90. And that is the kids who come out of a decent school, but not a great school, but had a lot of student debt and are good, but not great.

1:12:32A lot of us, I would have been fucked. I was not especially impressive at 22. And I got a job at Morgan Stanley because I lied about my grades and talk my way. And I'm a good interviewer and I rode crew and the guy who ran the fixed income department rode crew. But in this age, if you don't have your shit together, if you're not one of the top 1%, and the problem is we all delude ourselves into thinking our kids are in the top 1%. And I can prove to every parent, 99 % of our children are not in the top 1%. So the inequality, I say this in my class, it's never been easier to be a billionaire. I say, look around, My classes are 160 kids.

1:13:08Two or three of you are going to be billionaires through tech, alternative investments. I said, but unfortunately, there's probably about 10 or 15 of you who are going to be living with your parents at 30. Yeah, yeah. Well, let's hope Alex is one of those billionaires because then I will live high on the hog. High on the hog. I go to Korea a lot for treatments. He promised me he'd buy me a house with a roller coaster if he got really rich, which I'm very excited for. I was not expecting that. Anyway, we have to move on because guess what? I'm going to be interviewing Scott Galloway really soon.

1:13:34That's right. on. Talk about his book. 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 submit a question for the show or call 855-51-PIVOT. Elsewhere in the Karen Scott universe, gosh, you interviewed someone you made fun of on 60 Minutes recently. This week on Prof G. Markets, Scott spoke with Andrew Ross Sorkin about his new book, 1929, Inside the Greatest Crash in the Wall Street. I'm just making fun of Leslie Stahl, not Andrew. Well, all right. Wall Street history and how it shattered a nation. And let's listen to a clip from our favorite Canadian.

1:14:06The truth is that, you know, over time, the market goes up. You know, a lot of people, by the way, since this book came out, they said, oh, Andrew, you know, you're calling for a crash. It's all going to end terribly. What are you saying? And the truth is that you can have all the Cassandras in the room, you know, saying the sky is going to fall. But over time, things have gone up. And I do think that's worth noting because being a professional optimist has been a better business than being a professional skeptic, again, over time. Covering his ass on that one. He's actually pretty bold, though.

1:14:46He's not afraid to make statements about CNBC. Yeah, no, I love it. First, I want Andrew to run for mayor of New York. And two, I want Andrew to be the trustee for my estate. I think he's just such an honorable, smart, nice man. It's a great book. I have it. It's really terrific, actually. I love those historical books. And we love Andrew. It took him seven years. We love you. We want you to father all our children. Well, imagine he does all this while maintaining a status as an undercover operative for the Canadian Intelligence Minute. I mean, it's really impressive he's able to balance all this.

1:15:18Yep. And he does all the pick up and drop off at preschool. Anyway, speaking of Canada, we're going on tour. We are sold out in Toronto, Boston, and San Francisco, but we still have just a few tickets in D.C., not very many. Some in New York is a big place, and L.A. and Chicago. Please visit PivotTour.com for tickets, especially UChicago. It's a very big venue. We've got a big venue because you're such big-shouldered people, but come see us there. Okay, that's the show. Thanks for listening to Pivot, and be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us out.

1:15:53Today's show is produced by Lara Neiman, Zoe Marcus-Taylor Griffin, and Kate Gallagher. Ernie Unitat engineered this episode. Manala Moreno edited the video. Thanks also to Drew Burrows, Ms. Severo, and Dan Shalon. Nishat Kauras, Vox Media's executive producer of 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 later this week for another breakdown of all things tech and business. Cara, I'll see you in a few hours.

1:16:24Thank you.