TACO Trade, Elon's DOGE Farewell, and AI Video Gone Wild

26:12When there is a war-torn, ravaged village town in Ukraine, a soup kitchen gets popped up and a lot of those people are Americans. And that just makes people think, oh, they're good guys. It's mostly Jose Andres, but no, it's not the government. Well, but we do have all sorts of hospitals around the world that help kids with vaccines. And I mean, there's just a ton of stuff. It's the old Hershey bar American GI story, right? This idea. 100%. And that will have a long-term impact on our brand. Doge, it's going to end up costing us more than it saves. And again, I go back to the same thing, Cara.

26:52It did its job. It was a distraction from this administration's decision to blow up the deficit to give a tax cut to you and me. I mean, that's what Democrats should be focusing on right now. Yeah. I mean, it's been a failure for him. Also, at first, it sort of raised his wealth substantively, and it certainly got the regulators off his back, which was one of his goals. Absolutely. He got him some Mars stuff that he wants, allegedly, you know, the Mars money. So he got his Mars money. He got some regulators off. He lost a lot of money in terms of Tesla. And also his personal brand is decimated, I think.

27:28He certainly could get it back, I suppose. But he's certainly not draped himself in glory in this effort at all. He looks, you know, one of the things about these tech people is they look a little godlike. And now he looks like he has feet of clay, right? And you've seen parts of him that are a nuisance and irritating and weird. So it hasn't been, you know, this is stuff a lot of us who spent time with him have seen. You know, his book, like telling jokes like that and laughing at his own jokes and stuff like that. He seems odd and strange. And so I just feel like this has not been a plus for Elon Musk.

28:03He may bring it back. He may do other things. The question is whether he's going to return to politics or if he's had it with them. It's felt like a little bit kind of he had it. He kind of has enough of this. And he realized he got taken by the world's most adept con man, which is Donald Trump. 99.9 % of the time, if you're on a board or you have a temptation to take a political stand as a corporation, the answer is no, you don't do it. And not only that, he not only bet one way, he went into politics, which is sort of a no-no, he bet the wrong way. Because three quarters, the people that he's endeared himself to by taking a red pill stand, three quarters of them say they would never buy an EV.

28:46Yeah. So it's just very unusual that he would decide to go into politics in a way that alienates his core market. Maybe it's some psychological problem he has. Please hate me. Hate me. Please hate me. I don't know. It's very strange. We'll see if he can recover. He's certainly a talented business person. He may have gotten data and information that he didn't have before. Who knows? I think that needs to be investigated. Not just me, but Sadiq Bannon does. What exactly did they download? Where is the data? What happened to it? But I think there needs to be at some point a real look at what they did, what Doge has done.

29:19And we'll see if they continue. But without the engine and the threat of Elon Musk, I don't think it's going anywhere. They will just smother it. I was feeling the need to try and bring some semblance of balance around Musk. I've thought for a long time Waymo's just so far ahead they'll never be able to catch him. And I did speak to an analyst around Tesla and said Tesla does have some very real advantages around autonomous. And that is they have more data. That's correct. Because they have a huge, you know, they have hundreds of thousands of cars that have been in the market for a while. And all of that is great data.

29:53And also, the average cost of a Waymo car is almost a quarter of a million dollars. Yeah, it's Jaguar. And outfitting it. Yeah, it's outfitting it. It's just really expensive. And they say that the Tesla autonomous driving vehicle is going to be substantially less expensive. Except that they may be sacrificing safety for that. There's all these debates over whether they have enough points of failure. And look, he doesn't, he takes them off. This guy likes to go commando on a lot of stuff. Well, you bring up an interesting point, because a lot of people say, regardless of what has happened in the markets or the perception of his brand, the Tesla brand has gone from the eighth most revere brand to the 93rd.

30:27I don't think I've ever seen a destruction like that. I don't even think that happened to Exxon with the Valdez. But you bring up an interesting point, and that is a lot of people say, well, he's playing the long game, because all of the inspectors and all of the lawsuits that were getting in the way of his regulation around autonomous or going after him for lawsuits or whatever have all just disappeared. So safety. So it still might have been. He might, in fact, be playing chess. You know, who knows? Yeah. In his case, as opposed to Donald Trump, who is eating the pieces, Musk does. That said, I would not get in a Tesla right now.

30:59I think they don't have as many points of failure. You know what I mean? He doesn't care about safety as much as others. And I just don't. I have talked to a lot of experts about how they're putting them out there. And they're just, I would rather have an extraordinarily safe. Eventually, it'll be looser, but not today. And I don't, I just don't trust them. I trust those Jaguars more than I would trust a Tesla. I don't get in Teslas because I don't like the men and I want to paint the fence with someone who I think is such a terrible role model for young men. But on the safety point, I would get in a Tesla because I.

31:29I'm talking about an autonomous Tesla. Yeah, an autonomous Tesla. Just because I think. Really? standpoint, I think if they have two or three crashes in their first month, they're pretty much out of business. I think just from a pure economic standpoint, they got to make sure this thing is pretty safe. He has a theory about what they need on those cars. It's very different from every other person I know. And they all are like, this is a risk you should not be taking. And it's not because they want me to ride in their cars. I'm going to send some people to you because it's really, he argues with the entire industry about how much, how much.

32:02We need test pilots and it's dangerous job. You can get in them. I'm not getting in them forever, but I do not feel unsafe in a Waymo. I suspect I don't feel unsafe. Do you know what I did about a year and a half ago? I went to the DMV and my son, who has barely driven a golf cart, took a test saying that he understood the difference between a single yellow line and a double yellow line. And then they gave him a driver's permit and he was allowed to drive home. I mean, it was just like, God be with you. Here you go. Okay. I will get in a Tesla rather than drive near with your son. I was at the DMV going, wait, he can drive right now?

32:39Yeah. And I said to her, I looked, I'm like, are you sure that's a good idea? He can drive right now? Oh, your son probably was like, dad. And on the way home, on a red light, making a left, he pulled out into the intersection. I'm like, what are you doing? He's like, I stopped first. I'm like, you can't make a left. I don't. I think there's a lot of dangerous drivers. I think humans are much more dangerous than autonomous. You know what? I'd rather take a, like. Quick lucky story. She comes over to our place with her aunt, with her sister. They drove there, which is crazy. You've told this story.

33:12And after her kind of, you know, mildly offensive comments to me over and over. Yeah. She leaves and you're giving her instructions to get to Palm Beach, which is north of where I live. And first off, I'm horrified. I walk out and I see Lucky behind the wheel. I thought you were giving instructions to your aunt or whoever, your niece, whoever that is, who is much younger than Lucky. She's like 90. My aunt. I see Lucky behind the wheel. And so I walk over and think, okay, Lucky, all you have to do, you come out of the driveway, you bang a right. Got it. Stop talking to me. Stop talking to me. Right?

33:52Heads out. Gates open. Bangs a left. Without looking. Without looking. And I'm like, she's going to end up in Havana. It's true. Can I just say, I didn't let my children drive with Lucky at any point. Oh, no. Never. She's like, why can't I drive them? I'm like, because I want them to live until the next century. Yeah. No, she should not be driving. No, no, no. I have not gotten a car with Lucky for decades. It's a cover-up. You're engaging in a cover-up. This is one of the things she'd do. She'd throw us in the car and we never knew where we'd end up. This is why we stay home. Anyway, let's go on a quick break.

34:29Someday I'll tell you the story of her leaving me behind in a store. But that's another wonderful memory from childhood. So let's go on a quick break. When we come back, Trump's many feuds with Harvard, Putin and Tim Cook.

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36:13Scott, we're back. I know you don't think it's important, but I do, actually. And I think it's a real feud. The feud between Donald Trump and Harvard doesn't appear to be wrapping up anytime soon. Trump now says the school should cap international student enrollment at 15 percent. What is he telling people what to do? This follows last week's legal fight where a judge temporarily blocked the White House from revoking Harvard's ability to enroll international students. Trump is also moving to cancel remaining federal contracts with Harvard. It's not just Harvard. The administration is now considering social media vetting for all foreign students.

36:44So free speech. Hello. And is halting student visa interviews. In the meantime, Secretary Marco Rubio, what a chode he's become, also says the U.S. will aggressively work to revoke the visas of Chinese students. Ah, crazy. He's also accusing Russian President Putin of playing with fire after Russia recently ramped up attacks on Ukraine, launching its largest drone and missile attack of the war so far. In the post-untru social, Trump also exclaimed that Putin has gone completely crazy. But despite floating sanctions of Russia over the weekend, Trump now says he's holding off because he thinks, Taco, he's close to a deal and doesn't want to screw it up.

37:21Taco. Trump said he was going to resolve this conflict on day one. It's not day one anymore, and he bragged about his relation with Putin. So that's something. And lastly, it's not the only one. He's still got Tim Cook in his crosshairs of Apple, threatening a 25 percent tariffs on iPhones made outside the U.S. The move comes in the wake of Cook reportedly buffing the White House's invitation to join Trump on his recent Middle East trip that all the others went along on, all the other tech moguls. There is also a Financial Times report that Apple contractor Foxconn is preparing to spend$1.5 billion on a new plant in India.

37:54And problems for Apple are piling up in addition to these tariffs. Cook is also juggling legal battles, global regulators, and a rising AI competition. There's a book out about by Patrick, I think it's Matt Meyer, talking about how much money. McGee, yeah. I had him on the pod. Spending has created the Chinese tech sector, essentially. They train them up. So let's start with all these things. I know you think they're distractions, but I think he's quite committed to this Harvard thing. Either he didn't get in or something is going on here, but he seems obsessed with controlling the amount of foreign students that enter the United States, too.

38:29And Harvard is proxy for doing that at this moment. Look, if you look at, there's few people that have added more economic value than graduates, foreign graduates of our elite institutions. That's correct. 70 % of graduate students in AI research in the U.S. are international students. And over half of America's startup companies valued at at least$1 billion. So over half of our unicorns have at least one immigrant founder. So let's even go beyond that. Let's just go short term. I have said the term we should use for international students is there are cash cows. They pay full freight. They're not eligible for a lot of financial aid.

39:09Unless they're PhD students who are the brightest people in the world who we bring in and we actually pay. And who we want here. At the first day of class at NYU at business school, I say, get to know the international students because they're rich kids. So the richest kids in El Salvador and Brazil. Get to know them. They like to party. They're fun. And they're really rich. And when you go and hang out in Brazil, you want to know them. By the way. America does a small number of things really well. Hands down, we're the best in tech and software. I don't even know what the export volume is of that.

39:39I tried to figure it out this morning. I couldn't figure it out. We make the best weapons in the world. We sell about 300 billion, 350 billion, about 30 trillion dollars. We export weapons around the world. Right. Right. Violence and death are fantastic businesses for us, for the ability to deliver them. And we have the best military industrial complex in the world. We make the best media in the world and we ship, we, the total export volume or business of our movies and TV. So all the money we make from Fantastic Four and, you know, Frozen and Big Bang Theory and the White Lotus, That is, we get$40 billion in revenue from exporting our TV shows and our movie.

40:24We get$43 billion from the tuition and the economic value of international students who come here to buy our education. So U.S. education is really a bigger U.S. export than movies or TV shows. And if you want to raise tuition on domestic students, just take away the full freight, high margin cash flow of international students. I'm not even talking about the brain drain. Right. The money we get from them. We make so much coin from international students because why? It's the ultimate luxury item. What's the ultimate signal of your success if you live in China or South Korea or Singapore? Your kid gets in and attends an elite American university.

41:11Going to Harvard. Of the 100 best brands, we own like 70 or 80 of them. So it's great for us. Why is he doing the Harvard thing and then Russia next? I think Russia just tickles his censors. I think a lot of his far right supporters love this. But why attack Putin and then come back on it? because he's being played by Putin. I don't know what he is thinking on the, I mean, you want to talk about somebody who makes absolutely no sense. You know, Putin's bombing cities. I don't like what he's doing. He's sending missiles in the city. Okay, you realize he's been doing that for two and a half years, right?

41:47Nothing, I don't know if he got personally incensed or I don't know what's going on there. It's a sclerotic, impossible, and Marco Rubio has to be the clown behind this elephant cleaning up his shit, trying to make some sort of sense of our nonsensical foreign policy. He's being played. I think it occurs to him and he's mentioned it. Maybe he's been playing me. Yes, he has, sir, been playing him. I think, look, for Russia right now, the war is its economy. It's not going to pull very quickly away from it because they don't got nothing else. And they got this war. And Putin has created Russia as a military economy now with this war.

42:27And he hasn't won. And so they're in a world of hurt to get out of this and create a dynamic society. And so war is their best choice right now in a lot of ways. So not going to be easy for them to pull themselves out of this situation. Putin's life depends on it. Depends on it. I mean, we think that he has total control. There's a lot of other people. Yeah. If Putin loses face in Ukraine, we're going to find out he's going to fall out of a window. He cannot not win. And the economy is now based on it. And Trump is being played like a fiddle. It's just like, and this going back and forth publicly is so embarrassing.

43:02Same thing. It's the same thing as the tariffs. It's the same stupidity that got us Trump steaks or the casinos. He's just not very good at business. The Cook one is really particularly strange. And it all is about feelings. It's all about feels, it feels like. He has a point that Apple has created a very robust technology economy in China over the many, many years. 50 billion, something like that. And not in the United States. But there were reasons for them doing that, obviously, to save money, to do it at a cheaper amount. Where do you think Apple is at this moment? On the outs, for sure. It's so fascinating.

43:41You referenced that book by, I think it's Patrick McGee, and he really opened my eyes. So Apple has upskilled and trained 25 million Chinese. That's amazing. Think about that. They've upskilled the population of California. And Patrick's thesis, and I thought it was a fascinating one, is that essentially Apple's investment in upskilling of their tech sector has given rise to Xiaomi and Huawei. basically that the Chinese who are very smart and play the long game have an IP flow that is one way. At the same time, now that Cook is trying to move manufacturing from China to India, China is getting in the way of that flow and not issuing visas to Chinese employees who Apple wants to send to India to set up manufacturing capacity there.

44:26Also, the notion that I said, I used that stat that that analyst used, I think it was Dan Ives, that a phone produced in the U.S. would be$3 ,500. And he said, it might as well be a million. We're not capable of it. There are a thousand parts in every iPhone that make a million phones a day. So that's a billion distinct parts. It was easier for Oppenheimer and the army and these universities to get to splitting the atom than it would be for us to get to producing all of the iPhones. We just couldn't do it. Yeah, so what is happening with it? How will this affect, you know, they have their legal issues, of course, with the government right now in terms of cases and all kinds of stuff.

45:06But this falling out, I mean, this appeasement that Tim did, I never thought would work. There's no appeasing Trump. There's no appeasing this guy. He's endlessly thirsty. And I think I did talk to Maggie Haberman over on my podcast this weekend. He was genuinely angry that Tim didn't go, like genuinely angry. Strange. Well, he takes these slides personally, but the market. He does. The market is starting to respond to the taco trade, and that is the juices coming out of it. Because if you look at Apple, I mean, if he did what he said he's going to do, it would seriously diminish the most profitable product in history, and Apple stock would take a pretty big hit.

45:48Apple's off, I mean, it's down 15 % in the last six months, but that's off an enormous high. And it's still up in the last 12 months. So I think - What would you do if you were Tim? Be nice, stay out of his way and put out fake press releases. Still. That says, oh, we're investing in, you know, because of the great work of President Trump. It depends. Does Tim want to be totally focused on shareholder value or on the rights afforded him as an American? I mean, it depends who you're calling on. If it's calling on his fiduciary obligation to shareholders, he should just kiss his ass, put out a bunch of fake faux press releases, stay out of his way.

46:32And what do you know, Trump will move on to the next red dot that angers him. And the cult of iOS will be fine. It's like a cat. If Tim Cook recognizes that the reason I'm a billionaire, the reason why if I want to marry a woman or a man, I can do that because America has had the foresight and the rule of law to afford to give people rights. Or if I want to continue to access the deepest pools of capital in the world, if I want to have a society where I am fairly safe, if I want to have a society where someone can't wake up and come take all my shit just because they don't like who I am. then he should, in my view, take a stand.

47:14He won't. And say, this is an American company and what is going on here is un-American. Nobody has done that. I don't want to put that pressure on Tim Cook because nobody has done that. Yeah. He is going to be a billionaire the rest of his life. That's correct. The question is, at the end of his life, does he want to be known as an American hero? Right. And most of these CEOs, and I understand it, have decided my job is just to stay out of the angry child's way until he gets mad at somebody else and go about my business. You know who could do that? An owner of a company, a Zuckerberg. Someone who has full control is the only one who can do that, is the only one who has the ability.

47:50Tim is not the owner of Apple. The shareholders are, right? And so it's got to be that guy, whoever that guy is. There's a Zuckerberg, controls his company. Very few companies are controlled. I guess Snapchat, nobody cares. It would be very hard for Apple to all of a sudden get high and mighty about American patriotism when they've essentially outsourced their entire supply chain to China and upskilled China. So shareholders will win. The company that has the ripest opportunity here to wrap themselves in the flack through the lens of sport and immigrants is Nike. And their stock has been kicked in the nuts so badly they don't have a whole lot to lose.

48:25That is the ripest opportunity in branding right now would be for Nike. Not even to mention Trump's name, but to talk about American immigrants who have excelled, built the world of sport and competition and rule of fair play. When you're on a field, you have to have rule of fair play. And they also have the creative resources. They are known as risk takers. Go Nike. Just do it. Just do it. The majority of their business comes from young people who are more progressive and don't want to be part of a fucking fascist state. Anyways, Nike, get on it. All right. Last quick, quick, quick, quick. Harvard, what should they do?

49:00Well, they've already. Many people. There was a New York Times piece saying they've got to they're going to get hit hard by this, even if Trump is wrong. Get rid of because of the. All the things he's doing is very damaging to Harvard. They were like, they may not win this fight with him until he goes away, which is inevitable. I don't see – I think Harvard has so many – in a weird way, I'd go long Harvard. I think Harvard comes out of the stronger. Maybe so. I think Harvard was developing such an awful reputation for the definition of elitism and how progressivism, when it goes out of control, can accidentally turn into racism.

49:37And I think them standing up – if you think about it, what I'm urging Nike to do, Harvard's been the first important organization to actually stand up and say, fuck you. Yeah. And they're winning in the courts. They have a lot of powerful alumni. They have the Capitol. Yeah, you're right. It cleans them out. It starches them white. That's correct. And it starched their hat white. I never thought I'd be wearing a Harvard T-shirt. I wore one at the 92nd Y a month ago when I was on with Jess. You like to slap those Harvard people a lot. You like to run around Harvard Yard and slap them. Well, when you have a$54 billion endowment and you decide to let in the number of students at a good Starbucks service, you're not a public servant.

50:15You're a fucking Chanel bag. There he's back. He's back. All right. All right, Scott, let's go on a quick break. When we come back, Trump dives deeper into crypto, if possible.

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52:13Scott, we're back. President Trump's romance with cryptocurrency is getting more serious. Earlier this week, the administration killed Biden-era guidance against using crypto in 401k plans. Oh, my fucking God. Trump Media and Technology Group, the parent company of True Social, announced raising$2.5 billion to invest in Bitcoin, a Michael Seller move. And listen to what J.D. Vance told a crowd in a keynote address at Bitcoin 2025 conference. I'm here today to say loud and clear, with President Trump, crypto finally has a champion and an ally in the White House.

52:54In our administration, we understand the full potential of the digital assets industry, not just as an investment, not just as a flashy technology, but as a symbol and driver of personal liberty for all our citizens. Also, grift. He left out grift. The president's crypto holdings now reported represent around 40 percent of his net worth or approximately$2.9 billion. Scott, you had a rant where you called the crypto dealings in Trump's first 100 days the greatest grift in our history of our economy. And now it is a divisive issue for Democrats. Some want to support the Genius Act, which regulates stablecoin.

53:30Others say it supports Trump's grift. What do they do here? Public companies are leaning into crypto as well, not just true social. There are reportedly 114 publicly listed companies that own Bitcoin up from 89 at the beginning of April. What do you think about also the reports that big U.S. banks are having internal discussions about expanding into cryptocurrencies? Look, they're smart. One of the genius moves of the Trump campaign was recognizing that this was not going to be a referendum on women's rights. It was a referendum on struggling young men. I'd still hold to that. And I think the evidence is everywhere.

54:03That's who showed up. was young men and the people worried about them that swung this election in terms of the people who pivoted hardest from blue to red. And the easiest way to signal that was to go Joe Rogan, embrace Musk, and also really embrace crypto, which has this almost like, you know, testosterone smell to it. It's so male. What is testosterone smell? And is that your perfume? I don't know what it smells like. I'll tell you later when I inject it in my ass. Yeah, okay. Actually, I don't think it has a smell. I don't think it has a smell. I don't want to think about that. Smells like victory in the morning.

54:39Okay. Anyways, that's right. I think they're smart to embrace the crypto. We should have scratch and sniff on this podcast. Go ahead. Sorry. I think they're smart to embrace the crypto community. I think financial services innovation is a good idea. You know, fine. I'm a no-coiner. I was on the board of a company that was, you know, the leading hardware wallet. But it feels to me that the Democrats screwed up by not at least being more clear about what the regulation is so people could actually do something with it. Do a mega business of it. And I think Trump has leveraged beautifully the crypto community.

55:14And also, it's the perfect vehicle for a grift because there's no records. I mean, people say you can track it, but my sense is when a guy launches a meme coin the Friday before his inauguration and it runs to$70 billion. And now it's, like I said, he's made a billion dollars a month since he's had this thing. I think they're smart to embrace it. I also think a lot of small and medium-sized investors are probably going to lose a lot of money. And what I tell people is if you want to take 2%, 3%, 5 % of your net worth and put it in Bitcoin, I wouldn't do any of these other coins. There is a genius to Bitcoin because it has established a credible sense of scarcity because people do believe the technology will result in that they will stop mining at 21 million coins.

55:59I do think that's actually a very elegant way of creating a currency that has more veracity than a fiat currency, which everyone has failed throughout history. The other coins I see as just like, that's just Vegas. But I think he's smart to embrace the community. I think it's working for them. Yeah, I think it has to become something more than just like a speculative instrument. like that it's useful in some fashion. And there's all kinds of companies working at that. For Trump, it's a casino. This is a casino kind of mentality that he's got around it. And a fee, getting fees. Most of the money he's made has been in fees of the transactions.

56:34The current income. They made over 300 million fees so far. Right, yeah. And then the value of it is, and it's not traceable in some ways. And so it's a perfect sort of bribery, grift, slash scam kind of thing, which he's very familiar with. That said, you're right. The Biden administration didn't really lean in. They had the SEC head who was openly hostile. I think these people got activated politically. And they should have been because they needed to defend themselves. And they took out Sherrod Brown in Ohio for sure. Like they targeted a lot of things. And so they really got organized in ways that Trump helped facilitate and were able to do that.

57:12And I think they will remain political. But at some point, though, there has to be safety around it. If you put a lot of Bitcoin in these 401ks and they get destroyed through scammery, it's going to be a real problem. But Bitcoin is or crypto, just going mad as a bit of it. Whenever you have these levels of income inequality, you have war, famine, revolution. I think it's a form of revolution because I think young people have decided if you're going to continue to bail out the market so it's the incumbent stay wealthy. Can't buy a house. And I never get disruption. I can never buy a house or stocks on sale like you guys have gotten to do time after time every seven years of the recession.

57:47I'm going to create my own asset class. Yep, absolutely. And I get it. I can empathize and understand it. It's like, great, Scott, you had your time in the sun to buy Netflix at 11 bucks a share. But now that you and your other seniors voting yourself more money and using my credit card to bail your ass out every time the economy gets rough and I have an opportunity to buy in inexpensively, fuck that. I'm not going to play your game. I'm going to invent my own asset class. Yeah. And they have become very politicized. And so it's up to the Democrats to not be they don't cut your nose to spite your face kind of thing, I think, is a play here.

58:18Trump is grifting this thing. But you can't not lean into it just because he's doing that. You come after him later if you have to. But you can't, a lot of them are, we can't do it because Trump will grift more. He's going to grift no matter what. No matter what, he will find a way to grift. And we can't make policy based on, you need to lean into those Democrats in a way that's safe and good for consumers and good for young people. And not worry about the Trump part until later. That's my feeling. Anyway, one more quick break. When we come back, is Google's new AI video tool a studio killer?

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1:01:22Okay, Scott, a story we didn't get to chat about last week is Google's launch of VO3, which is a video generator that creates full video with audio. Its main competition is OpenAI's Sora, but the key distinction is VO3 is supposed to be able to incorporate audio. And that includes dialogue between characters as well as animal sounds, the main buzz about it on the Internet as well. Will this replace movie studios? Some of this stuff is pretty impressive to look at. And will this flood the news media with misinformation? Oddly enough, I interviewed Jesse Armstrong, who is the creator of Succession for his new movie that's coming out this week called Mountainhead.

1:01:56And this is one of the plot points in it. It's a social media company with a sort of a Musk Zuckerberg character who runs a company called Tram that floods, puts out tools like this and causes worldwide destruction. In any case, you talked a lot about this during the writer's strike, and we're going to talk a little bit about it by stuff that we made, too. But quick thoughts? I think it goes after commercials first and quick hits where if you're selling stuff on Facebook or Shopify and you need just a 30-second kind of competent, elegant-looking, I think it'll start there. It'll start moving its way up.

1:02:34I just see it similar to what CGI did in terms of reducing the cost of special effects. It'll start to move its way up. It'll just lower the cost of the means of production. It'll be especially hard on certain people. But I still think as someone who has a limited but increasing amount of exposure to the industry, the way I see it is we outsource the shitty manufacturing jobs overseas, but the real value add in the higher paying jobs are in design, distribution, product marketing, all that good stuff back here. I think this is kind of the same thing. And that is, I don't want to say the low value work, but things like, you know, lighting and sound and extras, you know, the people that Tom Cruise is going to be very aggressive and smart about protecting his own IP and his own likeness.

1:03:24Mm hmm. The what I have seen with we talked about this before, whenever I write, I use I use AI to brainstorm and to when I say I don't like this paragraph, what additional data could be out there. But when I try and write stuff with just AI, it's very anodyne. It lacks all sex appeal. It's all chip, no salsa. I still think that for the boring stuff, it works for press releases, things like that. like commercials are showing up. I think you're absolutely right. Or simple legal agreements. By the way, the document you signed with Vox, I generated on AI. Oh, good to know. Oh, no. What did we give away?

1:04:04I was sick of dealing with my lawyers who were like going back and forth with Vox lawyers to run up our bills. And I'm like, fuck it. I just produced. And by the way, I didn't even run it by our lawyers. I just said, I sent it to Vox. I'm like, sign this and we're going to sign it. Oh, good to know. Thanks for telling me. Okay, flex. But I think it's going to go after some of the, It's going to lower the means of production. Did you give away our liver or kidneys at all in the agreement? Did AI suddenly do that? Just one. We have two. Okay. Just one. And plus, you don't want to give away my liver.

1:04:33You really don't want to give away my liver. So it's my liver that's going to see excellent shape. All right. So you're absolutely right. I think this is something I discussed with Armstrong, who's just a brilliant person. He was like, I'm not really sure what to think. I've seen some of this and it's very impressive. I'm like, but it's not you, Jesse Armstrong. Like you can't make, for the untalented, it will be a problem for, or the stuff that's anodyne, as you said, it will be a problem. And there's a lot of people like that, right? There's a lot of people who make sort of the boring scut work that are going out.

1:05:03Okay. Now for our personal experience on doing this, we had our video producer, Kevin, mess around with it. And he said, he's not too worried about his job just yet. We just hired him. I hope not. Here are his initial findings. VO3 automatically puts makeup on Kara, but not Scott. It crashed and failed to generate video an aggravating number of times. And people are complaining online about its audio failures as well. And what VO3 can do frighteningly well is generate videos of fake people. For example, this AI newscast we asked it to create. Scott Galloway has broken the record for most dick jokes told in a podcast.

1:05:47The competition was extremely stiff. That was good. That's it? I was waiting. That wasn't a real person. I was showing the video to someone and like, who is that person? I'm like, that person doesn't exist. And they were attracted to the person. It was a fake newscaster reading a very realistic but unconfirmed story that the competition was stiff. I don't think the competition is stiff at all. When prompted to use images of real people like me and Scott, it failed to generate audio and came up with some less than ideal results. results here's what we got with the prompt cara and scott podcasting on mars uh what we're seeing here is karen scott cara look with a lot of makeup on and scott why don't you describe it oh you look like what's that scoop neck shirt you've got on i'm more handsome than that guy i think so and i have a third hand i have a third hand at least i got the panerai right yeah you don't look like you yeah no that's not me that guy looks like he knocks on your door and as the law mandates that I notify you I've moved in next door.

1:06:49All right. Here's what we've got with the prompt, Kara and Scott. As bodybuilders, Scott, describe the situation as we're watching it, please. Oh, hello. Oh, my God. That does look like you. That does look like you. It's us as bodybuilders, and the faces are actually quite accurate. Jeez, this is so disturbing. This looks like the beginning of the most disturbing Cinemax. It's like from that movie Stanley Kubrick with Malcolm McDowell, the really disturbing one about… Clockwork Orange. Yeah, Clockwork Orange. You know when they basically want to turn him off violence and sex and they force his eyes open and they show him?

1:07:34This would literally turn… Watching this, do not watch this, folks. This will turn you off any physical encounter with anyone for a long time. This is so rattling. Get a max. Kara and Scott is body telling us. This is so rattling. All right. Here's what we got with the prompt. Kara and Scott getting married. Okay. What we're going to watch here is, let's see it. Seventh circle of hell. Oh, that's nice. Oh, that's nice. That's nice. Holding hands or walking down the aisle. Oh, no, no. Oh, my God. No, no. No, they're kissing. Don't do it. Don't do it. Don't do it. Oh, no. Stop. It looks like Stanley Tucci and Marlo Thomas.

1:08:10Oh, my God. And by the way, I'm a good foot taller than you. That is just unrealistic. Look at me thrilled to be married to you. A very heavy version of me. Oh, my God. And they make me a lot fatter in, anyway, okay. Okay, we'll post these on our social media accounts later today. But we are unimpressed. George Clooney doesn't have anything to worry about right now, is what we have to say. Well, no, he'll be able. Well, I do think that the, but again, it'll be more of a transfer of wealth from the entrance to the incumbents because the incumbents that already have established their IP will be able to scale it.

1:08:43A guy like Jesse Armstrong is going to make a lot more money because he's going to get to produce three things a year, not one. And because he has already established brand equity, he'll, it's like a really good lawyer. I think it's going to make more money because they'll be able to scale themselves faster by outsourcing the 80 % of the document. And then have the creative part. But I think that the entrants are just going to have a really tough time because there's going to be less training, fewer jobs at the lower mid-levels that really teach you about creative and filmmaking and give you an opportunity to shine and rise up.

1:09:14It's just going to be, I think, the incumbents are just going to get wealthier and wealthier. I would agree. One of the things I was talking to Jesse about was like, what if you put all of your work in succession? They could make more seasons of succession eventually. They will be without your input. And he's like, well, we have those rights in the contracts. I said, but do you? Like, it'll be interesting to see what happens. Like, for example, I would love more episodes of The West Wing, and they're not going to make them, but they could, right? If they jammed all The West Wings in there, they could possibly make a pretty decent thing.

1:09:46I have the feeling they will be able to. Well, that's a really interesting thought because it ends up that HBO owns the IP to The White Lotus. Yeah. And that was, I think,$100 or$200 million, I don't want to call it a mistake, for the original producers. Now, they still make a lot of money because they want that incredible talent back to make seasons four, five, and six. But if at some point it's no longer worth the$150 million in production for that season, they might say, well, we'll spend$3 million and we'll use new characters and we'll do seasons five, six, seven, and eight and squeeze. And then it makes it even harder for new entrants to break in.

1:10:22I can't figure out, does it help? Does it make it less expensive? It could help the studios. Whoever owns the IP, whoever owns the IP of the original IP. And there's got to be a lot of it. So you could make more, all kinds of shows like Happy Days. There's lots of shows that went on for 10 seasons and that you could possibly, it could write them. It could write them. It could. Anyway, so we want to hear from you. Send us your questions about business tech or whatever's on your mind. or go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Elsewhere in the Kara and Scott universe this week on the latest episode of Prof G Markets, Scott spoke with Aswath Damodaran, professor of finance at NYU's Stern School of Business.

1:11:05Aswath shared his take on the recent tariff turmoil and what he's watching with the next round of earnings. Let's listen. This is going to be a contest between market resilience and economic resilience as to whether, in fact, the markets are overestimating the resilience of the economy. And that's what the actual numbers are going to deliver is maybe the economy and markets are a lot more resilient than we gave them credit for. In which case, we'll come out of this year, just like we came out of 2020 and 2022, with much less damage than we thought would be created by what we saw happening on the ground.

1:11:42That's interesting. He's so smart. And by the way, an Indian immigrant who got his PhD at UCLA. That's correct. And is arguably one of the 10 best instructors in America. Yeah, right. I know. That is a kid training young Americans. So much value. And, okay, but yeah, let's go after those folks. Yeah. Well, good thing Barron's at NYU. Scott, before we go, you have a quick fail. Trump is claiming, you know, one of the things Trump's calling for claiming that America would benefit if Harvard reduced the number of international students as it would open up more seats for domestic students. I do think there is some truth to that, that we need to expand freshman seats for Americans.

1:12:24There's great university systems like the University of California do take their commitment to native Californians really seriously. 83 % of the University of North Carolina seats are reserved for graduates from North Carolina high schools. I do think, you know, University of Wisconsin is living up to its mission. But what if he was really serious, though, it's all such bullshit because also in this big, beautiful bill, he's talking about gutting Pell Grants. And that is he wants to cut Pell Grants by about 67 billion through 2034, reducing grants to low income students by more than one fifth from 2027 through 2034.

1:13:05And really, it's more like one half when you take inflation into account. And more than half of Pell students would have their aid reduced in some way. I'm not exaggerating, Kara. There's a lot of things that led me to being here and having the wonderful life I lead. One of them is Pell Grants. I didn't know that. I got Pell Grants because my mother was a secretary. We were considered in the lowest quartile of income earning households. Every summer, I had to save$2 ,300 at least, work and save$2 ,300 because I knew I would get a Pell Grant for$1 ,300 to$1 ,800. And I could go back for my next year at UCLA.

1:13:41Wow, I didn't realize you were a Pell grantee. The reason I got through UCLA was because of Pell Grants. Wow. And by the way, the Cal State system in California is the largest grantor of Pell Grants. Pell Grants, in my opinion, and I'm biased here, is where all affirmative action needs to go. And that is affirmative action should be based on color, should be based on green, specifically the economic situation you face. And without Pell Grants, without affirmative action, I'm a beneficiary of affirmative action. It's called Pell Grants. And these things are a lifesaver for those of us who just wouldn't have had access to college.

1:14:14Gives you that extra amount of money that you don't, that will give you the chance to excel. Wouldn't have graduated from UCLA. I just wouldn't, I couldn't have done it. It also gives you the relief that you don't have to work, you know, slinging burgers. Well, and it's a grant. It's not a loan. I don't have to worry about, okay, with my philosophy degree and 150 grand in student debt, is this worth it? These are like, okay, the fastest way for us to level up America, full stop, is to put more money in the pockets of people who don't have money. That's correct. It's not complex, folks. And Pell Grants figured that out.

1:14:49But we need to save Pell Grants, a really important program. I'm going to give a quick positive one was Go See Mountainhead by Jesse Armstrong. I'm curious what you think about it. It's really crazy, but it's— Mountainhead. Mountainhead. It's an HBO show that's going up, a Max show that's going up on— I get that in Aspen every year at the summer solstice. Oh, stop it. I knew you'd say that. Anyway. Mountainhead. Steve Carell is starring, and it's really good. Anyway, and it's by Jesse Armstrong, who's fantastic. There's so many good lines in it that it's crazy. One line, I'll do one line. They were in nature.

1:15:25They were up in Utah, essentially. And they look around and the guy who plays Mark Zuckerberg slash Elon's characters goes, oh my God, it's so beautiful. You could fuck it. And I just thought it was the best line ever. That's exactly how they look at nature and think. Anyway, that's the show. Thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us out. Today's show was produced by Lara Neiman, Zoe Marcus, Taylor Griffin, Kevin Oliver, and Corinne Ruff. Ernie and Rertod interviewed this episode. Thanks also to Drew Burrows, Ms.

1:15:58Saverio, and Dan Chalon. Nishat Krooz, Vox Media's executive producer of podcasts. 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.

1:16:20Adobe Acrobat Studio. So brand new. Show me all the things PDFs can do. Do your work with ease and speed. PDF spaces is all you need. Do hours of research in an instant. With key insights from an AI assistant. Take a template with a click. Now your Prezo looks super slick. Close that deal. Yeah, you won. Do that. Doing that. Did that. Done. Now you can do that. Do that. With Acrobat. Now you can do that. Do that. With the all new Acrobat. It's time to do your best work with the all-new Adobe Acrobat Studio. Support for this show comes from Airbus. It took 100 years for electric vehicles to catch on.

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