Warner Bros. Discovery For Sale, OpenAI’s Browser, and Netflix Earnings

25:33Although he is known as talent-friendly. He was involved very deeply in the Mission Impossible movies, the new Star Trek movies, and, of course, in Top Gun. Yeah, he's a rich kid. I just had dinner with a friend of mine who's an amazing producer and does these incredible films. Kara, whenever I meet someone at an event and they say, oh, I'm like, what are you doing? I produce documentaries. I'm like, oh, how did your husband get rich? I mean, the people in this business, it's like meeting a kid who's working in an okay job, not a great job in New York, and living in Soho. It's like, oh, your parents are rich.

26:11No young person can live in Manhattan now unless they're working for J.P. Morgan or got transferred by Meta or their parents are rich. And every player now in film production, in Hollywood, effectively, is someone who is so fucking frighteningly talented they managed to break through. They're literally the – and they're there, but they're in the 0.1%. They're the Michael Jordans of content. Or their parents are putting them through Hollywood. Or they're in the system. They're in the system. So you don't think Netflix is going to try to wait in here in any way? Netflix. That's the wire that you had, Netflix.

26:48I don't, I think, I think Netflix is becoming like Apple in the sense that. We'll just do it ourselves. I think Ted Sarandos realized our culture is so strong and so powerful. That's what the CEO said. We don't buy shit and then try and integrate it and deal with whoever's running fucking Warner Brothers. We don't, we don't, we have a way of doing things. We're outstanding at it. Yeah, maybe Amazon. And if he was going to buy anything, if Surrandos was going to buy anything, he should buy Disney because he would just he would that would be they have a succession problem. The content they could have Disney as the fan is Netflix family.

27:19They would just own streaming. They would it would just sort of be game over. But I don't even think if I'm Ted Surrandos, it's like we're so good at doing what we do. The existential threat, the only reason Netflix would potentially weigh in here is that they want to get a ton of content. So to compete with YouTube. So, for example, 20 percent of television viewing time last month is 12.6 of YouTube, 8.3 percent of Netflix. Netflix is squarely figured out. YouTube is their competitor. And if you look at what Netflix does need, though, and the only reason they might weigh in here and buy some of this content or buy pieces of it post-acquisition by the big price they can't compete with with the Ellisons, is Netflix's content library is roughly 36 ,000 hours long, right?

28:06That's their entire library, 36 ,000 hours. That's the same amount of content that YouTube users upload to the site every 70 minutes. So every hour, YouTube is uploaded content equal to the entire Netflix library. And what you have is the two are going to come together. YouTube content is going to get much better. The thing moving podcasts in and out of the top 100 is the quality of their video game. And then you're going to see Netflix start to look more like YouTube. And that is they will figure out ways to have, quote unquote, a deal with a podcast. The deal with podcasts they just did is essentially them dipping their toe not into podcasts, but into a form of user-generated content that costs much less.

28:51So you've got to see the means of production and the content come down on the one end, and the quality is going to go up on the bottom end. Two things on the news, because I agree with you that this week it's all like the Otero, we'll talk about the Otero, because it's really kind of grotesque. But what you said about why don't they take my two interviews a week on On and make them into a show, I was like, I have Bernie Sanders and Kamala Harris. You could have done a great, like, his work. By the way, it was great. I don't like to write your stuff, but I did break down. The interview with Bernie was great.

29:23Yeah, it was good. He's great. Yeah, he was great. He's really— I'm a big billionaire. I don't hate them all. I'm a good billionaire. It's fine. Some of them believe in democracy. Did you like his little democratic voice? That was my favorite thing. I think he had a tiny little voice for the Democratic establishment that made me laugh hysterically. Like, literally, if that guy was 70 years younger, I'd vote for him for President. Yeah, a lot of people. That's why he was—all the Trump voters went to him. Anyway, let's move on. Let me ask you one more quick question here, one more very quick and answer quickly.

29:56So, if you had—would something like Versant want to buy a CNN and then merge the newsrooms and then have two decent brands to try to work with or not at all? Like, why bother? Because they lost all the news stuff. They lost all their news stuff to NBC, so they're building their own news organization. So why want to take a shortcut? Because CNN has a very good news organization around the world. I think it's all about price. There's a bunch of these upstarts and who's backing them. it cnn would probably it would go for above market because it's such a powerful brand but cnn it has really stumbled the last 12 months i think its viewership is down something like 30 percent i mean it is really hurting right now and it's not even the content i think anderson cooper caitlin collins dana bash jake tapper they consistent michael smirconish they consistently Fareed Zakaria, they have some of the finest journalists in the world.

30:57Right, and across the globe, by the way, which people don't pay attention to. Yeah, and backed by, what, a 1 ,200 or 2 ,000 person newsroom? Like, these guys, they're great at what they do. It's the distribution and the business model that's fucked. And that is nobody's even turning on the screen that is their primary distribution channel, and they haven't figured out a way to monetize it on a very small screen. Yeah, it's tough. That's all I was saying. Someone could consolidate these two and be the news organization and invigorate it. Comcast could buy it. Comcast could buy it. But so could Versant.

31:30Anyway, we'll see. We'll see if that happens. I think it's going to be P.E. Company and then, you know, Osta Luego for Kara Swisher. Anyway, in any case, Osta Luego for Kara Swisher. Anyway. That's it. You're going to North Korea and you're not coming back? So young. So young. He died so young. Oh, my God. I'm not going to let you do this anymore. Okay. I'll start making Scottish jokes in a second. So let's go move on. You got oatmeal, salmon. You did it. You did it. I knew you would. You're not even drinking. What did the brightest people in Scotland have in common? What? They left, Carol. Okay.

32:00All right. Very good. Okay. That's actually true. OpenAI. Some of the finest minds in the history of science and economics. I'm trying to move on. I'm getting like exclamation points from the producers. OpenAI has launched a web browser, Atlas. Sam Altman called it a once in a decade opportunity to rethink what a browser can be. The launch comes a few months after the company said it would be interested in buying Google's Chrome had it been forced into a sale. Chrome has three billion users worldwide. Talk a little bit about this. And also, Reddit has sued Perplexity, alleging the company scraped the comments of millions of Reddit users on an industrial scale.

32:36Again, I'm going to comment on the last one. These wars are going to break out all over the place until the numbers get right when they start paying. Perplexity has been the one that usually gets into the most trouble here. But talk a little bit about this browser, because this browser knows, will remember everything you read, not just where your search was. They're going to be like super browsers, essentially. I love this. I love competition. I think it's good. I think the biggest tax cut in the history, in modern economic history, would be if the Chinese and American leadership decided to kiss and make up and stop cyber-attacking each other and take their tariffs to zero.

33:16The second biggest tax cut in history would be the breakup or more competition in big tech. I mean, people don't realize you are paying a huge toll. You don't realize it because it's paid vis-a-vis advertisers trying to reach you. But probably the biggest corporate tax in America, other than federal income tax, is the tax of Alphabet to reach consumers online. In terms of advertising, right? In terms of advertising. You have to be on Google. If you want to acquire customers online, which is where all customers are now, you have to start increasingly buying search keywords and boost your videos on YouTube.

33:54These are the biggest toll boosts in the history of mankind for corporations. And so I and they don't have competition. So every year they raise their prices or the taxes they charge consumer and B2B brands greater than inflation. So these companies need competition. There's some more existential things going on here. One, Sam has to figure out a way to become kind of Google before Google becomes open AI. So him launching. Exactly. Well said. him launching a browser makes a lot of sense. I like that it tracks your searches. I think all of the concern that was in your voice around privacy, I understand, but anyone talking about privacy is usually over the age of 50 and lives in Brussels or DC.

34:38Young people will tell Uber everything about where the, a thin layer of AI on top of your Uber records, which by the way, you cannot delete. You cannot delete your Uber record, your Uber driver history, and that people will be able to figure out if you just terminated a pregnancy, if your sexual orientation, I mean, they'll be able to figure out everything based on where you're going and when. Uber has... They don't need a guy to do it. They could do it now. So as long as there's a coupon and utility and I can see that my QX60 is parked around the corner, violate my privacy. That is what America has said.

35:12It's listening to our phone conversations. And by the way, I'm down with that. As long as we have judges who are going to say, no, I can't use this information to start rounding up people. I'm all about violating my privacy in exchange for utility as long as we have thoughtful judges who err on the side of civil liberties. Anyways. Uh-oh, Scott, but go ahead. Yeah, yeah. That's the operative term there is if, right? So what I think is the more interesting thing here is first off, keep in mind, consumers are pretty lazy in terms of getting used to a certain UI. And even with all the existential threat that OpenAI supposedly poses to Google search, they get, I think, roughly 96 times the traffic of chat GPT still.

36:00And Google search impressions were up 49 % year over year. Alphabet was my stock pick of 2025 because I think people overestimate the threat, if you will. Chrome has roughly a market share of 70%, making it the most dominant web browser. Apple's web browser Safari, even with that unbelievable access. It's not Microsoft's? It's Safari's at 14%. Not Safari, that's Apple. Chrome is. Yeah, Chrome. No, no, no. Chrome is, you're thinking of Internet Explorer. Chrome is Alphabet. 70%, 70 % share. And what is Explorers? Well, remember, Microsoft attempted to get into the game with Internet Explorer. Remember, put Netscape out of business.

36:40No, I know, but what is their market share? I don't think it registers. I mean, basically between Chrome and Safari, I mean, and then you have the weird ones like DuckDuckGo and shit like that. But basically what Sam has said is I want to bring AI into search or into browsing. And I mean, so let's look at some of the facts. Google has an extremely strong competitor to ChatGPT and Gemini. Gemini has actually gained more share than any other company in AI. They have 400 million monthly users. It's now the fourth most popular free app on the Apple App Store. Just two months ago in August, it didn't even crack the top 50.

37:24And according to multiple benchmarks and bettors on both Calci and Polymarket, Google currently has the best performing AI model. Either way, I think, in my opinion, Alphabet still at 29 times earnings is a steal. For roughly the multiple of S &P, you're getting a search business with 90 plus percent market share, the largest ever streaming service in the world, a dominant AI effort, a digital ad network, Google Chrome, Waymo. I love you some Google. You love you some Google. Two other businesses that do over 30 billion annual revenue and four other products that have 2 billion users. The most interesting thing about all of this, in my view, is that, and the pre-stage is what might happen geopolitically, and it'll be my prediction at the end of the show, is that technically the new browser is open weight or open source.

38:10And it's actually built on the same technology that Chrome is built on, which Google spends or Alphabet spends like$100 million upkeeping. upkeeping. And essentially, I think this says a lot about the future of AI, and I'll come back to this. But Sam has to justify a half a trillion dollar market cap. So what he says is, okay, I'm going to be the next browser, and I'm going to be Alphabet. And Alphabet's trading at a trillion and a half or$2 trillion. I don't know what it's at right now. But why can't I be a better version of Alphabet? And by the way, when you look at Google searches, what is the first thing you see?

38:45You see that AI summary at the top. Yeah, you do. Let me introduce you because I've covered these companies for so long. But, you know, Chrome really came in and lapped, you know, Explorer and Safari and all of them very quickly, you know, in terms of market share. But it is moving away from the browser. So the more Chrome moves into an AI, a chat GBT-like environment, the better for it, right? I remember interviewing Ben Horowitz once, and he goes, there's never going to be a funding of a search engine. There's never going to be a funding of a social network, and there's never going to be a funding of a big commerce platform because of Amazon, Google, and Facebook at the time.

39:26He goes, why should we? And so, why should we? Because you haven't seen a lot of innovation in Chrome. You haven't seen a lot. And it took OpenAI to get Chrome to innovate, right? It wasn't. It didn't happen. And they came in through a side door. Yep, exactly. And so Sam Allman's vision wasn't wasn't to have a browser or a search. Right. But, you know, it always changes things. So it's nice to have it. Honestly, I feel I don't use browsers. I browse. I'm trying to think of where I search. I guess I search within Maps, within Amazon, within like the search. Search has dissipated all over the place, but it's still owned by the same groups of people, which is interesting.

40:03Any thoughts on we'll get to your prediction at the end, but any thoughts on the Reddit suing perplexity? Some people don't like this lawsuit. Others think it's. Why is that? You know, Mike Masnick was like, this is a stupid lawsuit. But, you know, that some of this stuff is is available. And so they can do it. Other people, you know, I think it's what it is, is another indication of who gets to own the information and who gets to scrape it and what people do with it. But it's open season on everybody's content. That's just that's my feeling. And so everyone's going to try to defend the content they have, no matter what it is.

40:40You know, Reddit certainly has created a really valuable property full of information that they should take advantage of by themselves, that others will take advantage of. Okay, Scott, let's go on a quick break. When we come back, Trump's White House demolition.

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44:25Scott, we're back with more news. The White House is demolishing the entire East Wing to make way for President Trump's 90 ,000-square-foot ballroom. The teardown should be finished by the weekend. Trump initially claimed his privately funded ballroom wouldn't interfere with the existing White House structure, which was a lie. He's also now saying the ballroom will cost$300 million,$100 million more than originally estimated. The White House is dismissing the shock and criticism around the deposition as manufactured outrage. No, mostly he's a liar. released the Epstein files. That's what I have to say about this.

44:56What do you think? The pictures are still very upsetting in some weird way, although the White House has been renovated before. There is a need for a bigger room for some of the functions there. If you've been to the White House, they're quite small, actually. They're shockingly small. And they should have a lot of functions. But there's plenty of other land around the White House they could have built these things on. Instead, he just did this because he felt like it. Probably it is safer. I'm going to try to understand. But he did it without asking anybody, essentially. And, of course, it's the people's house, not his house.

45:29But it's his house, as it turns out. Thoughts? So, okay, there's the clutching your pearls. This is a desecration. It's not your house. What this means is the following, is that he is normalizing federal troops in cities. He's creating doubt around the election process. And he has no intention of leaving. Because I won't, if I'm renting a place, I won't put in a new refrigerator, much less tear down an entire wing. So let's be honest, folks. You really think he'd go through this if he was planning to leave in 36 months? Yeah, it's his new Mar-a-Lago. He's building Mar-a-Lago. Yeah. And so to me, I mean, like, okay, when do we wake up and realize the guy's not planning to leave?

46:11He's making long-term renovations. I mean, how long is it going to take to even do this, to build this thing? It's not. But he's planning to leave, but he's going to. So, look, I don't. I find the whole thing yet again. Everything's adding up to the following. He wants to normalize sending troops into cities during the election process to make sure whether it's to discourage people from voting or to lie or to show up. Bill Maher said it perfectly. It's like, what happens when two people show up to inauguration? and he's basically saying, okay, if the second person tries to show up who legitimately wins, I'm going to show up with troops and masked agents that are basically my secret police.

46:59That's where I see this going, and this is just more evidence that he's not planning to leave. You don't initiate an enormous construction project when you know you constitutionally have to leave in three years. Yeah, I would agree. I think a lot of people think this, right, or put whoever in place that he wants to, Because as you say, which is my favorite expression these days, biology is undefeated. He seems more addled than ever, missing words and everything else. The only reason I'm not worried. Yeah, right. Biology is going to take care of him. Right. Except then what, right? And let me just posit that that doesn't happen.

47:33And a Democrat becomes president. What do you do? He's going to gold this thing up, right? All over the place. It's going to be so ridiculous and grotesque. What do you do when you walk in there? You have this ridiculous, over-badly-sized ballroom next to it. East Wing was quite, it's not really lovely. I don't love the White House, I'll be honest with you. But it was to scale, right? And so this looks like a weird, like, mutated tumor onto the White House. That's my architectural determination, it's a tumor. It's a tumor. But what do you do the next day with this weird patio and then the thing, this behemoth, this grotesque golden behemoth.

48:18What do you do? Nothing, right? I don't know. I just, I know what happened here. He sat down with some crazy right-wing, probably hot blonde decorator. And what decorators do is they say, all right, I want mood boards. Like, tell me what you, you know, they try and make you feel special, like you're involved in the process. And they say, I redid my place in Manhattan. And they said, what do you want it to look like? I'm like, I want it to look like what it is, a professor who's done fairly well. Yeah. That's what I want it to look like. That's what it looks like. And what he did was he said, I want this place to look like you walked into the best Iraqi whorehouse.

48:59And they have delivered against it. The decorator, this feels like you are in Baghdad at a brothel, but it's a high-end brothel. But it's a high-end brothel. I mean, it's absolutely perfect. Anyways. It's not enough marble. We need more marble. And as Forrest Gump said, and that's all I have to say about that. But what do you do the next day if you're the Democrat? You're like, oh, my fucking God. What do you do? Let everyone come in and tear it? By the way, I've only been to the White House once. You know when that was. With me? Yes, that's right. Yes, you've been to these two. And I didn't want to go.

49:34I was intimidated. I had to bring a suit. I met you in the lobby. I was worried. I don't, I don't, the idea of seeing all those people and having them kiss your ass like I knew they were going to. Yeah, you definitely. Like the vice president. Cass, where should someone hug you and kiss you? Secretary Blinken. Kara! Kara! And all the, and the only, and the other thing is. Some of the Trump people like me, oddly enough. So strange. So strange. Yeah. Keyword there is some. Well, no. More than you'd think. More than you'd think. I don't know why. Well, you're exceptionally, you're exceptionally likable.

50:03I guess. I don't know. I literally say I dislike you and think you're a bunch of fascists. They're like, yeah, I come to our party. The other thing that struck me about my one tour of the White House was I could not relax living there. There were two things. One, this situation room where you're deciding whether to have nuclear war or not, you can hear the microwave in the kitchen. And I'm like, can they smell popcorn when they're popping it out here? Yeah, they can. It's actually really— It's small. It's poorly designed in my viewpoint. It is. Like the West Wing, the offices are like weirdly a warren of very uncomfort.

50:37It's a very, he is right that it's kind of a mess in terms of as a building, like as an office building. And then I thought, how does anyone relax here? There are 140 people here who look like they're about to invade Fallujah. It is, that place is armed to the teeth. And I'm like, you get up at night to grab some milk. I guess the residence is different and you're going to run into someone with an AR-15 and militaries. Like, there's no taking the dog for a walk. Anyway, we'll see. It's just grotesque. And release the Epstein files. Thank you. Just release the Epstein files. I don't know what they're going to do tomorrow.

51:15I'm, like, waiting to see what are they going to, like, paint the Washington Monument so it looks like the penis that it is. Anyway, Trump is demanding$230 million, by the way, from the Justice Department, saying he deserves compensation for federal investigations. And Tim McCordy, the New York Times, the compensation is tied to two claims Trump filed against the DOJ before his second term. One is tied to the investigation of Russian interference in his 2016 campaign. The other, the FBI's 2022 Mar-a-Lago search. I'm sorry, sir, we have the pictures. Payment would likely come from taxpayer money and would have to be approved by the DAJ, potentially by Deputy AG Todd Blanche.

51:49Todd, Trump's former attorney, personal attorney. Trump commented on the unprecedented nature of all this, to put it mildly, when asked about his claims. Let's listen. It's interesting because I'm the one that makes the decision, right? And, you know, that decision would have to go across my desk. And it's awfully strange to make a decision where I'm paying myself. In other words, did you ever have one of those cases where you have to decide how much you're paying yourself in damages? But I was damaged very greatly. And any money that I would get, I would give to charity. Oh, my God. Lie. Huge lie at the end.

52:24Enormous lie. And by the way, yes, he has made decisions where he pays himself. It's the presidency and evidence in action is cryptocurrency and his children, but his children, his adult sons. And anyway, we're not paying him, are we? I think we probably are. And keep in mind, if the federal government comes to you and the case ends up, let's assume that this was politically motivated and there was no legitimacy or veracity and these things were politically motivated and unjust and unethical. Well, let's assume that happens quite a few times when the federal government comes to people. If you're found guilty, which he was in one case and not in others, when that happens to average American citizens, the government doesn't pay them back for their legal fees.

53:16So, but we've become... Now we're going to have to pay everybody back? No, sometimes I believe in certain legal cases, if you win, I think if you win a civil case, sometimes the other side has to pay your legal fees. Yeah, but not the government. But if the government comes for you and you're found innocent, they don't pay you back your legal fees. Too bad, Donald. So anyways, but we've become, this has become normalized. And to think that this is not going to happen, he got to appoint the head of the DOJ. Now, to think that they're going to stand up to him. Keep in mind there are, whatever, 53 Republican senators.

53:51These people were freely elected. You'd think they'd have balls. They don't. They're watching. This guy sent people after them to kill them on January 6th. I just think it's hilarious that they try to position the protests last weekend as violent and weirdo. I'm like, no, that was January 6th. If you're looking for violence and people who hate America, just go back to the protest of January 6th if you can call it that. It was an insurrection. But the notion that these people are going to stand up when they can't get duly elected senators who he sent a mob after to kill, and they won't stand up against the guy to think that Pam Bondi is going to say this is a bridge too far.

54:30No, no. Here's the thing. Trump's not going to pay for this. But if they do this, they will at some point. All his minions are going to get got at every. That's who I'd go for if I was—I'd get all of them. Like, Trump will get away with it. It's just everybody knows he's going to get away with it. But the minions, not so much, I think. Oh, I—but see, this is where—this is the opportunity in one of the shortcomings in the Democratic Party right now. If this goes—okay, take the— Ice, whatever. Sending people to El Salvador. There are people all along the supply chain that made the decision to send American citizens, incarcerate them and send them out of the country.

55:10I would be drawing up all sorts of bills and publicizing them saying the statute of limitations on these crimes, whether it's crypto crimes, whether it's fraud, whether it's lying in front of Congress. Just keep in mind, these laws, the statute of limitations are longer than 37 months. And this is exactly what we're coming for you for. You may think you feel safe now and you better hope you get a pardon. but I would be drawing up legislation that says, or basically advertising a guy like Senator Murphy or Senator Bennett or Senators Klobuchar and say, these are the crimes we believe have been committed.

55:47And he may be the head of the crime family, but the soldiers go to jail too. And he might be safe because he'll probably be dead or he'll pardon himself. But there are thousands of people, and I'd start naming names. He'll pardon himself and his family. Can I tell you something? several of the Trump people I've met said they're asking for pardons already. Why wouldn't you? That's what I was. And I at first I was like, what? What did you do? He goes, nothing. And I said, well, he goes, oh, they're coming for us. Like, and we probably deserve. He kind of said we deserve it. Like, it was really weird.

56:23This is an orgy of corruption. Yeah, they're coming for you. And where the Democrats, again, the Democrats should be articulating exactly what crimes they believe have been committed. Greg Kazar has, but go ahead. Lists of hundreds of people they believe have potentially engaged in these crimes. And then next to their name, what the statute of limitations is on that crime. Yeah, that's a great idea. Let's make that list. And start saying, okay, be clear, folks. Throughout our 250-year history, the White House and the DOJ flip back and forth. At some point, we're going to have the gavel. We're going to have the power of the purse.

57:01We're going to have the power of subpoena. and we're going to have our own DOJ. And unlike this corrupt DOJ, we will be holding people to the letter of the law. And these are the letters that you have violated. And this is their statute of limitations. All right, then we'll see. Because the world is shaped on incentives. What incentives right now are there not to engage in this corruption? They're not getting enough money for what they're going to pay Trump is and the Trump family. He'll pardon himself and his family and a few choice people. But everybody else, you're going to be shit out of luck.

57:36Anyway, we have to move on. Scott, let's go on a quick break. When we get back, we'll talk Netflix and Tesla earnings, which are super interesting.

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1:00:38Scott, we're back. It's time to talk about some earnings. First up, Tesla. Tesla's third quarter revenue was up about 12 % from a year earlier, but profit fell short of expectations. That's because a lot of people rushed to buy cars, but then Tesla sold them for cheaper prices, and there was an ability to get loans, so people bought more. Vehicle deliveries were up 7 % from a year earlier, but the company says it plans to hit volume production of cyber cabs and Tesla Semi in 2026. I wouldn't believe that. Also, Musk was saying he has to create an army of robots, and if he doesn't have control over his army of robots, he's trying to get his trillion-dollar deal, which is going to be voted on in a week or two.

1:01:18And Next Netflix shares of the company are down 5 % in the last five days, the time taping. After a miss of third quarter earnings, Netflix cited ongoing dispute with Brazilian tax authorities for weak results. However, revenue for the quarter rose 17%. The streamer said a quarter ad sales in the quarter were best ever, powered largely by my favorite, K-pop Demon Hunters. There's also going to be some merch. Great news for Kara Swisher, announcing Mattel and Hasbro will release K-pop Demon Hunters toys, plushies, and games. Let me tell you, among the toddler set, in the Young Below 10 set, but they're all dressing like Rumi for Halloween.

1:01:53Not my daughter and son, but all the kids in school, they're all dressing like Rumi, which is one of the main characters in the show. So thoughts on these earnings? Yeah, I think Netflix is one of the best-run companies in business. Their revenue increased 17%. That didn't meet expectations. Their stock fell 10%, but the stock's been on a tear. net income increased nearly 8 % to$2.5 billion, missing estimates by about 15%. Their operating margin was 28%, and that was also short of the 32 % that was expected. They highlighted a one-time tax expense in Brazil of$600 million for why their profitability mixed.

1:02:41By the way, that charge had been previously disclosed to investors on past earnings reports. So I think at this point, a lot of people are just taking profits. K-pop Demon Hunters was a huge success. Yeah, they keep hitting it out of the park. The movie was produced by Sony Animation, but released directly to Netflix at the end of August. It's now the most watched movie in Netflix history with approximately 325 million views. So essentially, the population of America has watched K-pop. Did you watch it yet? I haven't seen it, no. Oh, my God. Will you please watch it so we can discuss it? I only watch things starring my favorite actor, Hitler.

1:03:15Late at night, I take an edible, I have a Makers and Ginger, and I watch World War II in color. You will love K-pop Demon Hunters. And then we can sing it together on the tour. Are you ready for the takedown? I'll keep singing it until you watch it. That's what we need to do. The soundtrack is also top the Billboard top charts. Cross promotion, Netflix, Mattel, and Hasbro have joined together to produce K-pop Demon Hunter toys. is like the company, I still think, I think, like I wouldn't buy Netflix here. I think that their growth is going to be international. I think it's a great company. I think they'll probably grow into their price.

1:03:52I'm of the mind now that I think just as we talk about cable cutters or people who cut the cord, I think we're going to start hearing about an entirely new generation of people that just don't own TVs. And also I think our desire for, I don't know, seeing this trend, I forget what they're called, mini soap operas, this one minute content, And these guys are smart. They'll figure out ways to get into those fields. But I worry, I think that, I just think everything's moving away. We'll ask you this. I know you like The Diplomat. I've been struck in the last 12 months. All of a sudden, I'm not turning on the TV.

1:04:30And I realize that's anecdotal, but I'm supposed to be in the atrium sitting around watching Murder, She Wrote. Are you watching less TV? No, I'm watching specific TV. I like television. So, yeah, like I watched the entire season of The Diplom, which is wonderful, as I said. And I noticed a lot of people said, when I mentioned that, said, oh, yeah, I did the same thing. So I'll watch, you know, specific hunt. Like I always talk about hunting wise, but I'll watch specific or the Gilded Age. But it's all over the place, by the way. And I'm watching this Martin Scorsese documentary. I think it's on Apple TV.

1:05:05but I watch specific things and I watch the hell out of them if that makes sense and some shows I do watch week to week right? like the morning show well that goes out every week I'm actually in this episode this is my episode this week really? yes I'm on it yes it's lovely this week? this week yeah whatever this episode oh we'll definitely tune in yeah yeah I got a bunch I can't watch it here in Korea so I'm not able to watch my amazing Emmy Award just use the VPN I know I didn't I guess I could ExpressVVN. I'm too tired. I don't care to watch myself on TV. You don't know where you are. I don't care.

1:05:39You don't know what's going on. I don't care. I saw Obey's Spigawich. I saw a good movie. I saw a cute movie. I'm trying to go to the movies more with my boys. I saw Good Fortune with Seth Rogen, Aziz Ansari. Oh, it's supposed to be good. And Keanu Reeves. The movie's actually not that well done, but it's a wonderful message, though. It's really a nice... Oh, okay. Quite frankly, it's all about income inequality. Okay, yeah. I'll go see, like, with movies, like, I'm going to see Wicked. That's it, the new Wicked sequel. They're now making Crazy Rich Asians again. I'd see that in the theater. It's just specific.

1:06:11I'm a very specific watcher when I used to just watch whatever. As you and I grew up, we just turned on the boob tube and just stared, essentially. So I'm highly specific. And I watch threads. I know it sounds crazy, but I watch Instagram. That's scary, isn't it? I've noticed that, too. I get so much of my information now from threads and TikTok. But it's nice. It's easy. It's very snackable. The algorithms are great. They figure out what we want. Yeah, absolutely. But anyway, so Tesla. Talk very quickly about Tesla. What's your thoughts on that? Well, Tesla, it's a little bit hard to extrapolate from these earnings because there was a pull forward.

1:06:47And that is because the tax credits were expiring, a lot of people went in and bought probably more cars. Deliveries were up 7%. So this is the greatest revenue they've seen and registered in two years. But again, this is probably due to pull forward demand due to the expiration of the EV tax credit. And demand is expected to drop. Yeah. And also other things. They've got some other things they get to put in their earnings that Trump got rid of around the environment. And not carbon, but another one, air quality or something. Well, that's right. Because of the expiration of regulatory credits and also their increased spending on AI, their net income fell 36%.

1:07:27So last year, they made about$2.8 billion from selling regulatory credits and about 40 % from America. And this is essentially just lost revenue. And this quarter, Tesla reported the regulatory credit revenue was down 44 % year on year. Yeah. Yeah, all the little games are over. And R &D expenses, including AI spend, rose 57%. They've got to enter the same spending war as everybody else. And it rose to$1.6 billion. And Tesla also blamed tariffs for its crashing profitability. but provided no numbers. It's interesting because they're actually the most vertical automobile maker. They have more, quote unquote, made in America parts than anything.

1:08:05The earnings call was really him trying to pivot to AI. And robots. But so far it's off to a rocky start. They've delayed the production of the Optimus bots, abandoning previous plans to make, I think it was 10 ,000 robots by the summer. Yeah, I remember. Whenever he says it's nonsense. And the head of Optimus has led for Meta. and all like that. This guy was pissed off at Elon because he made a point of saying, I left despite taking a cut in pay, which means you're angry. They also launched their robotaxi service in Austin. And since then, they've also expanded to San Francisco. And in both cities, safety monitors are in the car during the ride.

1:08:41In SF, the monitor sits in the driver's seat. So that's, I don't know. I'm not sure that - Waymo's so far ahead, it's crazy. And this is going to be hard to make money. There's so many players in this area. You know what, you said something, I occasionally do listen to you, and you said something that's always stuck to me, and that is it is easy to, it's difficult to have empathy for victims when you've never been a victim. And that is really registered with me because I've always said, oh, London is safe. New York is safe. You don't need to worry. There's a different set of fears for a guy who's 6 '2", 190.

1:09:14And quite frankly, just like, this is a bad thing. You know, this is a dangerous thing to say. I have never been, I don't think, a victim of a crime. I've never been assaulted. I've never been bugged. I've never been pickpocketed. I've never had my phone stolen. So it's just not easy for me. And I have to realize I need to have more empathy for people who are victims. And the thing that really struck me is I have heard several women say the following. They hate getting in Ubers because the Uber driver starts chatting them up and they feel unsafe. You can ask for a woman Uber, both Lyft and Uber.

1:10:01You can ask for a woman. But that's something, Uber drivers have no desire to talk to me. They don't. You're not going to put out. Little do they know that you would put out. That's the thing. Well, that's the thing. There you go. Sometimes I tip them off when I get in the front seat. No, but I thought that's the last fucking thing I would want to deal with is I'm coming home late from a dinner. And by the way, I want to be clear. Some of these guys, those guys, are probably just friendly, right? But they shouldn't have to deal with that shit. Most. Most. And I thought, and that's why, that's why, and then on the Waymo caller, the guy who runs Waymo was saying, I think it was the guy who runs Waymo, says this, some of their biggest uptake has been by.

1:10:47It's a woman who runs Waymo, but there's another guy that runs it with her. But go ahead. But have said some of their biggest uptake has been from women. And I'm like, that just makes sense, right? You don't want to deal with it. And quite frankly, I don't, I don't, if I could have a driverless car, I was thinking about it, would I want to do it? My experience so far in driverless, I haven't enjoyed other than the technical sophistication and the wonder because they go so fucking slow. It's like having a 16-year-old overcautious driver. I hate that. They've gotten better. They're now like an aunt who's a good driver, but it's too slow.

1:11:19It used to be grandma who's not such a good driver. But the promise of – They're faster. I've noticed they're faster in San Francisco later. That's great because I think the promise of autonomous is the following. In London, one of the most crazy, frustrating experiences is the open road, no traffic, and in certain places where there's cameras, the guy is no joke, has to go 25 miles an hour. And you're trying to get to Heathrow to make a flight, and you're on a highway, and you're just going 25. And the real, in my opinion, the promise of autonomous is that you'll be able to do away with speed limits.

1:11:56And you'll let the supercomputer decide that the thing can go 90 miles an hour. That would be a great thing. That would be great. Yeah. Why do we have those signs at all? Anyway, we'll see. You know, we'll see. I think he'll probably get that pay package approved. Although the two big shareholder services who he keeps trashing said, this is fucking ridiculous. And he said he has enough control that he'll be able to control his robot army, whatever that means. But not enough. What do you think Bernie Sanders thinks of that pay package? Oh, God. He doesn't like it. Doesn't like it. He has to hit certain numbers, by the way, everybody.

1:12:26Like, if he doesn't, he'll find a way to get paid, this guy. But he said he doesn't have enough control if he's insane not to get fired. And I'm like, sorry, I think we passed that station on the train of Tesla at this point. But let me take the other side of his pay package. I'm actually relatively unoffended by the pay package. Because he's made a lot of money for it. Well, what he's saying is, if I make shareholders$4 or$5 trillion, will you give me a 10 % or 20 % commission on that? In my opinion, from a pure capitalist standpoint, I sort of get it. What I am not comfortable with is someone who aggregates that kind of capital and then pieces out to taxes and engages in massive tax avoidance and that he pays a smaller percentage of his earnings than a person on the factory floor.

1:13:18So don't get in the way of upside of compensation, but tax people. Have a progressive tax structure. You know, it is linked to his performance. But that said, when he said, my robot army, it made me, like, frightened of humanity. He does this all the time. He's such a troll. Anyway, well, he'll probably get it. It doesn't matter. And we'll all be outraged. And then they'll tear down the West Wing and we'll be outraged. Anyway. All right, Scott, one more quick break. We'll be back for predictions.

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1:14:25Scott, we're hitting the road, bringing Pivot Live to the people. Seven cities, Toronto, Boston, New York, D.C., Chicago, San Francisco, and L.A., of course. You went to Oasis, you went to Beyoncé, you saw the remake of Wizard of Oz and The Sphere. All those suck compared to the Pivot Tour. This is the biggest tour. Same people that are organizing our tour that organized Taylor Swift's tour. They are much more excited about our tour. All right. That's enough, Grandpa. It's going to be so good. And we're bringing our brand of whatever we do to the people. And we're excited to meet our fans. We love our fans.

1:15:04For tickets, head to pivottour.com. See you there.

1:15:14Okay, Scott, let's hear a prediction. What's your prediction? Just so you know, New York City Mayor Eric Adams just endorsed Andrew Cuomo, which I predict will make Zoran Mondani the mayor. Well, that'll give him another 11 votes. Oh, God. Jesus. They want that Curtis to get out. Curtis ain't getting out, I think. I think Curtis is in with him and his cats are in it to win it. No, I think Curtis is the Ralph Nader of the conservatives. He's like, no, it's democracy. I like Curtis a little bit. I like, he seems insane, but I like him. I like the hat. I like the whole thing. I like the cats. I like, I actually have enjoyed him weighing in during these debates.

1:15:50It's usually Mondani and Cuomo screaming. There's always a guy like that. New York's such an amazing city. They always bring out an interesting guy. Remember the guy, the rent is too damn high. The guy with the black gloves. He just kept saying the rent is too damn high. He was right. They're trying to get him to pull out so that Cuomo is doing everything possible that's nothing to do with the voters. It's like Trump's help get Adams out, you know, everything except appeal to voters, which would seem to me to be the thing to do if you want to be mayor of New York. But whatever. Trying to get people to pull out often doesn't work.

1:16:26OK, let me hear this prediction. Said my 15 and 18 year old. My prediction is the following. So America is run for profits. What dictates our society is shareholder value. The worth of someone's character, their ability to have healthcare, their ability to have freedom, their ability to have a broader selection set of mates is based on their ability to acquire shit or signal that they can acquire shit through monetary economic power. That's how America is run. The Chinese government is essentially run and China is run for control and for power. And one of the ways they do that is they're much longer term thinkers about what positions them long term geopolitically.

1:17:09And I think essentially what's going to happen here is the following. I was sort of blown away by the fact that this openweight browser that Sam Altman has basically shoplifted that anybody can use because it's sort of technically openweight is sort of like open source. I think if I'm the CCP, I am pissed off. They have their problems, but essentially Trump is really fucking with them with these sclerotic 100 % tariffs, non-tariffs, and they are being very strategic. And they said, okay, we're going to come for the heart and lungs of Republican voters. And hey, folks, I don't know if you heard, but we buy 50 % of your soybean crops from these red states.

1:17:52We're stopping and we're starting to buy from Argentina and your president is stupid enough to give Argentina money as we transfer business. That business is never coming back. Farmers are out of business. They're now going after rare earth minerals that are key to play a real strategic role in everything from cars to missiles. And I think the next, I think after going for our hearts and lungs, they're going to go for our jugular the following way. I think they're going to release a series of open source or open weight AI tools that crush or put real pressure on our magnificent 10 and take down our market and put us into a Western recession.

1:18:32If I were in charge of CCP defense and strategy, I would be saying to Xi, if we really want to go for the jugular, America is now a giant bet on AI. Let's make this a bad bet. And the way we're going to do that is we're going to release a series of DeepSeek and DeepSeek-like competitors that are free, open source, and essentially do the following. My biggest client, I started a strategy firm when I was 26. My biggest client was The Gap. We did a bunch of demographic research, and the group we found that was most underserved, and I could relate to this, was single mothers who wanted their kids to feel good about themselves because they were very self-conscious about their lower income and that dad wasn't around.

1:19:13And so we positioned what I thought was the most brilliant thing in the world at that time, And that is, we said 80 % of the gap for 50 % of the price. And we targeted single mothers and it was called Old Navy. And Old Navy went from zero to a billion faster than any retailer in history. I think China is about to go Old Navy with open AI or Old Navy on AI. Going BYD on. Exactly. But they're going to do it in AI. And they're going to say, here's an idea. Have you been talking to the CCP? We have a bunch of amazing AI tools that are all free that you can build on top of. You don't have to pay a subscription fee.

1:19:47We're not going to pelt you with advertising. And guess what? We're going to take the magnificent 10 down and we're going to take your whole fucking economy down. Make them five and a half. The magnificent five and a half. Oh, wow. That's really good. I like that. I like it. I like it a lot. And by the way, for people who aren't paying attention, she has just consolidated power over to CCP. He's made it smaller. He's gotten rid of people. He's really runs the show. Anyway, great one, Scott. Okay. Well, that's quite a, I like that. I'm going to watch that one carefully. Anyway, we want to hear from you.

1:20:16Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot. Submit a question for the show or call 855-51-PIVOT. Elsewhere in the Karen Scott universe this week on Prof G Conversations, Scott spoke to one of my favorites, Heather Cox Richardson, a historian at Boston College, author and the voice of the newsletters from an American, very popular. Let's listen to a clip. One of the things that frustrates me to no end is the idea that there was ever a United States of America that was not multicultural is simply a fantasy. And, you know, we talk in history about how whiteness is a constructed category and, you know, that, you know, you get all kinds of pushback on that.

1:20:55But it is worth remembering that Irish immigrants to the United States were not considered white. You know, I just sit there and think, okay, we're just going to make it up, right? We're just going to construct our idea of what the past looked like, because the reality has always been that the United States was about working together as communities within a very, very broad range of people. She is amazing. She's amazing, and everybody should read her and listen to this. I love her. I think she's an inspiration. I love a professor who's just so passionate about a very narrow niche of the world.

1:21:32After working her ass off For 30 years, she's an overnight success. I just love that she's getting a ton of what I think is well-earned recognition and attention. I love having her on. Wow. Good for you. Good for her. Yeah, she's a very sharp historian. And reminder, we're going on tour. We're going to be going to Toronto, Boston, New York, D.C., Chicago, San Francisco, and L.A. We're sold out in Toronto and San Francisco already. But please visit pivottour.com for tickets, especially you, Chicago. We got an extra large venue for you guys because you have big shoulders. Come see us there. Okay, that's the show.

1:22:03Thanks 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. Today's show is produced by Lara Neiman, Zoe Marcus, and Taylor Griffin. Ernie Unertod, entry into this episode. Jim Mackle edited the video. Additional support from Kate Gallagher and Annika Robbins. Thanks also to Drew Burrows, Ms. Severo, and Dan Chalon. Nishak Karwa is 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.

1:22:33slash pod. We'll be back next week for another breakdown of all things tech and business. Kara, safe travels.

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