Elon’s Power Play, Ozempic Insurance Costs, and the Future of ESG

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Hi, everyone. This is Pivot from New York Magazine, the Vox Media Podcast Network.
I'm Kara Swisher. And I'm Scott Galloway.
Get excited, Scott, because we're doing things a little differently today.

It's a special show with Pivot listeners calling in and asking us their questions on all sorts of topics. We're going to meet the people, Scott, the people.
They have spoken. I don't like surprises.

At 49, it could slip and break a hip when you do this to me. I think you're going to love it.
Are you scared people aren't going to like you? They're going to yell at you.

I got past that a long time ago, Kara. Good.
Our listeners are wonderful, and we're glad to to actually meet them

in person, in real life, but not really in life, remote, but real life.

But first, let's talk about some stuff in the news before we get to our fantastic listeners. Apple is making a big change in its App Store payment policy, and the move is facing a backlash.

The company issued new policies around payment after the Supreme Court declined to hear the appeal in the Apple Epic antitrust ruling.

Developers will be required to pay a 27% commission if using an alternative payment method in the App Store. Epic CEO Tim Sweeney called it a bad faith compliance plan.

They said Epic will contest it in district court. What do you think? They're trying to get her trying to within the bounds of the law,

from what I understand. I just, it's just evidence that we need more competition.

A 27% commission on downstream payments within, and I just don't,

you know, the notion that you could buy a product, you own the product, and then if within

within it, it just makes absolutely no sense to me. That just strikes me as so egregious.
I think they should get a payment on some level for keeping the streets clean or

giving distribution. Like, look, distribution is expensive.

Retailers get paid for end caps, et cetera, et cetera, as you know.

But what would that be? Like, I think this is, I think they're sort of playing games here, especially with the government looking at them so strongly. I don't know if this is the best of ideas.

I see why they're doing it,

but I would have to agree.

It looks bad.

Just feels like a lot. And also, if you're going to charge people,

if you're going to charge people and have the app store, then you shouldn't have your own apps because you immediately have a 27% advantage.

So how does Spotify ever compete with Apple Music when Apple Music starts with a 27% advantage because they don't have to pay these userist fees? So which is it?

I mean, you could make the argument that they provide the infrastructure, but if they're providing the rails and they see everything that's shipped on the rails, they shouldn't go into the business of retail and then charge retailers these onerous fees to ship their clothes.

It just feels like it's literally the definition of anti-competitive. I wonder if they shouldn't charge fees to people they compete with, right? Could that be a way to do it?

Like they could charge you not other others that they don't compete with? Or if they're in their direct business, they can't charge them. They can't, you know, and I get their arguments about safety.

I do. And I get their arguments about they own the rails and they've created the distribution.
There is a cost for that and there is a should be a payment for making that. But you're right.

Competition is the only way to handle this. But there isn't going to be, there's not going to be nine cell phone app stores.

And by the way, that would be onerous to these companies to make a different app for every phone, too, right?

So, I mean, I think it's really, it's a, I don't know, they're going to get in trouble for this one. I think.
But your buddy Barry Diller outlined it perfectly. Look at credit card companies.

Huge infrastructure investments, huge due diligence on who are merchants you can trust, security,

you know, safeguards,

safe,

and they take between one and a half and three percent. Yeah, yeah, I would agree.
Barry Diller's very smart man. Anyway, also, CNN CEO Mark Thompson is sharing his plan for the future.

A lot of what I we discussed this last week because I had interviewed him and he said almost the same things.

Thompson sent a memo to staffers this week, publicly outlining new organizational structure for the company built around the future, not the past.

He told the Wall Street Journal it's looking to monetize CNN contents, potentially through subscriptions.

He was being more experimental. I think he's much looking at it much stronger than that.
That was my impression from our interview.

He also says he wants to find a better way to show CNN videos on phones. These are all sort of

table stakes. CNN's been very behind here.
I think he talked about bringing everything together instead of having these silos. I think that's smart.

He's kind of just cleaning it up and bringing them into the future. That's, you know, that seems to be my impression of this.

If you want to understand what a CEO is going to do at a company, look at their most successful tenure somewhere else. That's the strategy they'll implement.

And Mark Thompson's big victory at the New York Times was he recognized the world was moving away from an ad supported media model and basically moved towards subscription, made some acquisitions and got much more disciplined about putting their content behind a paywall and moved the company from, I think it was a quarter of the revenue was from subscription to over 50% or pretty close.

I think you almost got there. And as a result, the company not only enjoyed an increase in earnings, but more specifically, its multiple

on those earnings went up because people, investors like subscription revenue a lot more than ad revenues, whereas subscriptions, people usually take longer to cancel.

Or they stay there because they like what they're getting. And the Times has added things on like cooking.
You know, we have to pay for that one.

But, you know, they added things, Wordle, connections, things like that.

The other thing that struck me was that Andrew Morris and Rebecca Cutler and Jeff Sucker had the right strategy but it was probably the wrong execution in the sense that if if you had a tighter crisper higher production value version of the news i think you could charge for it so cnn plus should it was exactly the right strategy but it should have been news behind a paywall not news anchors doing their book club right it shouldn't be his book club i just like to say that over

it shouldn't have been scott galloway although my grandmother was outstanding i liked your show i appreciate you saying that

But it should have been,

but Anderson Cooper giving you either a four, eight, or 12-minute loop on today's biggest stories.

The other day I made the mistake of turning on TV, and I went to CNN and I went to Fox, and they were just trying to stretch out the most boring.

They had all this live footage from basketball, from high school gyms, talking to people like, well, why are you voting for Donald Trump? Oh, my God, this is so bad.

The thing that kills broadcast news and broadcast cable is the clock in the sense that they have to fill the goddamn clock.

But if they just had him really tight and they had a bug on HBO Max or on Max, and you could hit it anytime and it'd be like, do you want your seven-minute loop on news?

It's going to be our best news people. It's tight.
And we're going to charge it. Tight seven.
Yeah, I would agree.

You know, one of the things I told Mark when we were talking, and I think I said this last, earlier this week, was, you know, the problem with CNN Plus is it was no CNN.

That's what you're there for, and that's the brand. And he talked about that, you know, the other stuff, it's not known for Anderson Cooper's parenting tips.
It's known for news.

News, news, news has a fantastic news brand. And so they have to lean into news and people will pay for it.
People pay for the news, you know, the Wall Street Journal, the New York Times.

And then you add on other things that are kind of fun for them, right? Kind of interesting and fun things or necessary things, right? Well, Stanley Tucci, like

having an orgasm when he eats, you know, salami. Yeah, I know, but they got rid of that.
That's over at National Geographic.

I mean, they've got to have they gotta have a like a what do you will you pay for and there are things you absolutely if you don't have to sit and wait for the news I think that's valuable to a lot of people and I think people will pay for it one of the things he did say though is he's not gonna do he called it a a lift and shift from his New York Times he goes I don't think I'm just gonna do the New York Times thing here and I have that done it was a surgeon of Beverly Hill oh wait never mind

so he goes don't think I'm just gonna do the New York Times I'm like I think you're just gonna do the New York Times thing here because it actually makes sense for this product it's a news product it's a global product.

There's a lot of, they've got reporters all over the world, all over the world, and they waste their time talking, doing stupid stuff that isn't valuable to people.

And they fact-check their information. It's not entertainment, it's news.
Yeah, they have hundreds of reporters.

They have so much news that's coming out of their ears, you know, and they do a great job at that. And he's really smart.
I think he's going to have a good year.

As you said, you thought Warner was going to have a good year because of him. I was on with Christiana Mamapour last week.
I like to say that because I think it gives me a lot of credibility.

Lastly, very quickly, any thoughts on this Dean Phillips controversy over DEI? You love the DEI topic. He got a million dollars from Bill Ackman.

And Bill Ackman, of course, because he can't stop tweeting publicly, said he was teaching him about DEI and things will change fast. It looks like he was buying Dean Phillips.

And on his website, he changed DEI to something else.

I forget what it was, restorative justice. I don't really know.

It looks like he was bought and paid for. And then, of course, he says, I can't be bought.

But it looked like it was gone from diversity, equity, inclusion for equity and restorative justice, which I think is even, I don't even understand that, I sort of. So any thoughts?

It looked like, but then Ackman couldn't help but take another lap because he loves to take a lap. Look, I started giving money to politicians,

I guess, about five, seven years ago. And I wasn't disturbed by the fact that you could give money to politicians.
I was disturbed how cheap they are.

And that is,

you get a lot of access for not a lot of money. Yeah, they're cheap.
And I thought, wow, with a decent amount, I can't even imagine the kind of influence the Koch brought.

I mean, you can't even just, and obviously there's Democratic donors too. Yeah.
Yeah. I think, I think Teal only spent $30 million, which is like in his kitchen drawer.

I mean, it was just striking to me how much access you get with just a little bit of money. So, but

basically Citizens United said that money is voice, it's speech. And so

this is how America works. People who give money get to influence policy.
And

I don't think that's news to anyone. It wasn't good for his campaign.

What Ackman represents is what Musk represents, and it's the following.

It's that since when we wanted to put a man on the moon in the 60s, we were spending 3.5% of GDP on the Apollo mission, and NASA was the one putting a man on the moon.

The highest tax rate or the highest incremental marginal tax rate was, I think, in the 70s or the 80s. It's since then gone down to 37 for current income and 22 for long-term capital gains.

The result is a shift of capital from the government to wealthy individuals. And now wealthy individuals get to decide if we shoot projectiles into space.

And they also get to decide what DEI means and if we implement it at our university. So this is Bill Ackman is just the latest incarnation.
This is like government. You don't like government doing it?

We don't like Bill Ackman doing it either.

Well, this is the least productive legislative session since the Depression. And stepping into that void is money.

And specifically, Bill Ackman, and a shareholder, if you think about activism, shareholder activism is going direct to the shareholders around the board.

It's going direct to shareholders saying, kick the bums out. Basically, Bill Ackman is saying, I'm going to take my capital,

my army of PR executives, my communications, my proxy solicitors, my social platforms, and quite frankly, my fearlessness, my intellect, my aggressiveness, and I'm going to go direct to citizens or direct to the university.

I'm going to bypass,

I'm going to bypass elected officials. And here's the problem: we now have individuals who suffer from, at a minimum, a really terrible bout of Twitter

and are attention monsters and might, in fact, be abusing drugs as opposed to leaning on democratically elected officials to make these decisions. I agree.

Let me finish by saying that there's a great piece by Kurt Anderson in The Atlantic. It's called Bill Ackman is a Brilliant Fictional Character, close reading of his remarkable social media posts.

And I think by remarkable, he wasn't thinking they're remarkable. But this paragraph I thought was fantastic.

Taken together, these recent posts of Ackmans are like a novella, an exquisite piece of satirical fiction in a digital epistolatory form.

They have the voice of an absurdly self-regarding, unreliable narrator, a hot-headed, self-righteous, born-rich billionaire investor who considers himself intelligent and virtuous, persecuted by villains as he fights for justice in the honor of his defenseless goddess wife, and reveals his foolishness and awfulness and possible derangement in the course of a week-long public tantrum.

I love Kurt Anderson.

I wish Spy Magazine existed because short-fingered Bulgarians are back.

Ackman and Musk share a lot in common in these guys. They can't,

they become addicted to the attention. What did you say, Twitteria? Like diarrhea.
Twitter. Twitteria.
I love it. Scott, I feel like that's a column for you.
Thank you. I love it.

But they suffer from it.

Bill Ackman has eaten the same fruit plate that was washed in water in Cabo San Lucas and is now literally, like

uncontrollably spraying feces into the world anytime he feels. Oh my God, that happened to me in New Mexico.
It was lettuce. It happens to a lot of us.
And it was lettuce. Oh, how many times?

By the way, my favorite part. I'm going to, you know, we're going to get to our listeners because that was beautiful.
I don't want you to say another word because that was beautiful.

That was, that was fantastic by Scott Galloway. And I need you to write about it.
Anyway, let's go on a quick break. When we come back, we'll take some calls from our pivot listeners.

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Scott, we're back. Let's get to our first listener call.
Our guest already looks horrified. He's already regretting this decision.
He should be, as he should be. He's already regretting this disease.

And I hope that he chastises you for your behavior. Anyway, we're going to meet the people, Scott.
And this is the first person,

which is our first listener call ever. So this is a very exciting thing.
Sean, welcome. Well, hi, Karen Scott.
Thanks for having me on.

I'll try to set the bar as low as possible for the subsequent listeners who are asking questions so they don't have a tough act to follow.

So I'm a longtime listener, and I'm an attorney, and I worked in private practice as a litigator for a while, and the past few years I've worked in the public sector.

Can I ask you a number of questions?

Do you like the penis jokes? No, not that one.

I appreciate Scott's humor, but I feel like now being on the podcast, I'll be unemployable for the foreseeable future. So that's what we like to do here.
We like to win careers.

Can I ask you another question? You sound like you're from New York. You sound sound like

I thought so. Yeah, it's what? Brooklyn or Staten Island? Ah, Long Island.

Oh, Long Island. Yeah, Long Island.
Yeah, Long Island. All right.
Thank you, Sean. Let's listen to your question.
Let's listen to your question.

So it's about Elon, and it's something of a legal question, but it's way outside of my area. Who is it? Who? Elon.
We've never heard of him.

Yeah, you don't talk about him on this show. Never.
Not a lot. So here's my question.

In buying the platform, Elon's turned himself into the main character on Twitter, and he's repeatedly posted controversial tweets.

In multiple instances, Elon's tweets have had a negative impact on the financial interests of X, not to mention Tesla.

So what I want to know, you know, if you guys have any insight into this, particularly you, Scott, since you've served on boards over the years, is there some reason, legal, practical, or otherwise, that no shareholder has pursued legal action against Elon, asserting that his tweets have constituted a breach of his fiduciary duties.

And I'm putting that unsuccessful 420 lawsuit from a few years back in a separate bucket because it involved alleged fraudulent misrepresentations about the company itself, whereas some of his other tweets are just lightning rods for controversy that causes stock price to dip.

So I'm wondering if you guys have any insight on that.

Well, before Scott starts, there are some shareholder lawsuits around how he behaves and his behavior is noted in them, in several of them happening at various times. He's won quite a few of them,

including that one with the shareholders. But there are a number of shareholder actions happening.
But go ahead, Scott. Why don't you talk about being on a board? Because I haven't been.

Well, you have to distinguish between a private and a public company.

A public company is fertile hunting ground for plaintiffs' attorneys who, when they see anything resembling behavior that they think is bad for shareholders, they can initiate a class action suit.

And typically, in a board meeting, you get a list of all the legal actions, and they're numerous, employees,

all sorts of stuff.

And plaintiff's attorneys, while they play a really important role as sort of a check on corporate America, there are quite a few of them who the ecosystem is file a suit and many companies will just settle.

And there's incentive to file a lot of suits against companies that don't see

the distraction and the potential downside as worth it. And so they'll just settle.

He's probably, when you're talking about X now, that is a private company with what is a relatively finite number of shareholders. It's unlikely they filed suit because they're all his buddies.

And as far as I can tell, the only reason they initially invested was hope that they would curry favor with him and have the opportunity to invest in the follow-on round of SpaceX or be one of the book runners.

Sequoia, I can't imagine, consciously made a rational decision in isolation to put whatever it was, a couple hundred million dollars into X. But they think this is an ecosystem.

We want to be involved in all of his other ventures. We want to have an opportunity to participate.
It's a VIG. It's essentially a VIG to hang with Leilon

in the muscosphere.

What's unusual, though, is it relates to what I have never seen. I don't think anyone's seen in governance.

Earlier this week, he essentially took to Twitter to demand that he would get 25% voting control.

And I think he knew that that would be impossible for a post-public company because he would be retroactively trying to create a new class of stock that had super majority voting control.

I think he knew that wasn't possible. So the only way to get there would be to increase his stake and award him options that would get him to that 25% mark.

He has options that if he exercises now, take him from 13 to 17%.

I have never seen a CEO. I've been on boards where CEOs stamp their feet and threaten to leave over their compensation.

I've never seen a CEO take to Twitter and threaten the company publicly, but he is effectively a walking plaintiff's attorney dream, but he's created so much shareholder value.

And Sean, after Kare response, I'd love to get your thoughts here. My sense is he sees the legal expenses as

a

an expense of doing business the way he does business.

He invites them, he knows they're going to come, but the dollars are so enormous here that he'd rather be aggressive, raise his profile, even at the risk of shareholder losses.

Carol, what do you think? You know, I think a lot of CEOs do this privately, right? Sort of hold up a board or threaten and things like that.

And so he's just doing it publicly because he's that guy, because he gets to be that kind of asshole. But

what's interesting is, as Scott said, a lot of tech companies have these dual-class shareholders.

And he didn't do it at the time Tesla was created and probably wishes he had, but it's not, they can't do it now. They can't do it now.

Now, what's interesting about this is he's essentially saying, I will withhold my

leadership, right, from you

unless you do this, right? That's what he's saying. I will not help you in the future.
I won't help it with AI.

Even though he's touted the company as an AI company and a robotics company, which it has very advanced robotics, it has very advanced AI. I'm not going to help you make.

wealth anymore until you pony up this money. Now, the other problem, besides the fact that it can't make a dual class structure, which I think would be to his liking, but it doesn't matter.

He effectively runs the board. The board

is not an independent board in any way, or doesn't behave like an independent board.

He faced, this is a lawsuit over his compensation package actually going on. A shareholder, you know,

that said his compensation package was outsize

and it didn't require him to work full-time. He's complimented the Twitter board, but it's not a good look.
It looks like he's sort of blackmailing the board. That's what it looks like.

Although he said they like it. It's sort of like

an abused spouse. Doc Holmes syndrome.
Yeah. Well, I don't think they like it.
I get the impression they don't have a choice with this guy.

And so they can't do anything until this, it will make this lawsuit win if the board doesn't do, if they suddenly award him this, because that's precisely what the lawsuit is saying.

Yeah, I mean, I think, first of all, they moved their corporate base from,

they were previously incorporated in Delaware, and they moved to Nevada.

And, you know, when you bring these shareholder lawsuits, I think that's one consideration and the laws where they're incorporated.

I think Nevada might have an intent requirement for these breach of fiduciary duty lawsuits, like as opposed to just careless behavior. You know, there might be some intent requirement.

And I think, you know, Scott makes a really good point about how the people who are in bed with him at this point,

you know,

not only did they know what they were getting into, but

they wanted that. They wanted that access.
So that makes sense to me. But on his recent tweets, Carrie, you brought up the fact that

sort of the AI aspect of this. When I read that story, he wasn't just saying, you know, I'm not going to work on some of these AI issues.

I think he was at least implying that he was going to do it elsewhere. Yeah, do it elsewhere.
Right. And

does that change the calculus a little bit? You know, he's not just saying he's not going to do X. He's saying, I'm going to essentially perhaps compete with you to his own company.

Other people, I don't know if he has a non-compete.

I have no idea, but I assume there is an issue here because there's IP, too, right?

If he takes people, if he takes, you know, other people, the guy at Google got in trouble for going over to Uber, right?

There's all kinds of law about this. And I think that's what's interesting.
He's essentially blackmailing them. And the issue is, will they do anything about it?

And so far, this board has done nothing. Now, that opens them up to liability.
But from talking to them, I don't think they feel like they have any power.

You know, I think they feel like they have no, and he's just, now he's just doing it right to their face. It's not unlike what Trump does to the GOP.

It's like, you know, I'm just going to primary you. That's what he's saying from a business point of view.
And so he puts them in a terrible position and they cannot like it.

And so, you know, I don't, I don't, this guy breaks rules all the time. And sometimes it's good and interesting.
And sometimes it's just,

he just has decided not to play by any rules that anybody else has.

And again, just like Trump in the court, who yells in court at the judge and makes faces?

But he did yesterday, and he's still not in contempt.

So I don't know. I don't know.
I will see what happens. But both Kot and I, and I don't know if you think this, think this board is just

a paper tiger, not even a tiger. What is it? A paper.

Paper mache.

I mean, I think Scott's talked repeatedly about how the corporate governance here is, to say the least, lacking.

So it's a real test. To say it's even uncharted water here is an understatement.
It's not calculus.

It's a different math that's never been seen before because typically boards will err on the other side. Boards are usually full of what I call FIPS, FIP, formerly important people.

And sometimes their ego absolutely gets the best of them and they won't do what's right for shareholders because they get angry and say, well, this activist, I'll show him.

He's going to show up and threaten me.

Or the CEO does something that pisses them off and they fire the CEO, even when maybe they should have just dealt with the ego of the CEO. In this instance, I mean, think about how just crazy this is.

Elon Musk is the wealthiest person on the planet. The source, the primary source of that wealth is Tesla.

So he is now turning to the company that made him the wealthiest person in the world and threatening the board publicly on a platform that he bought by selling Tesla shares.

That unless they pay him another $70 billion,

he's going to take his ideas to another company while he's working at Tesla, which there's like eight different things here that any other board would fire the CEO for.

But what you have is his brother. You have several people who are so conflicted here, VCs.
One person was involved in Solar City. This is just, it's literally an implosion in governance.

And the retort would be, at the end of the day, it's about increasing shareholder value. And this guy has done it.
So this guy,

the argument would be he has earned the right to play by a different set of rules.

But I've never seen anything resembling. Yeah, we've got a goat, Sean, but he's an adult toddler and they're giving him sugar.
I don't know what else to say.

And they're going to keep giving him sugar until he breaks something, which he's done many times. Anyway, Sean, thank you so much.
It was great to chat with you.

We hope you don't lose your job, but it was a great question. Thanks, Sean.
Thank you. Appreciate it.
Thank you very much. All right, bye.

Let's move on to our next caller, a doctor who reached out to us following one of our discussions about weight loss drugs. Hello, Dr.
David Rooney. As in, no, it's Roni, Rooney, right? David Rooney.

Do you love macaroni? I do love macaroni. Who doesn't? And cheese.
Take the MACA off, but you'll love me too. Okay, all right.
Okay, perfect. You're a robotic surgeon with a personal finance website.

This is fascinating.

Can you tell me just briefly about this? Yeah, so

that started because I don't like to be told I can't do anything. And I graduated from the United States Naval Academy with no financial literacy and then thought I was doing okay.

And the great financial crisis started and I called in to add some money to my account. And they told me I couldn't because the funds were closed.

And then they told me I didn't warrant getting a financial advisor because I didn't make enough money, which didn't make any sense to me because I made the most money in my family at the time.

So I created a chip on my shoulder and I started learning as much as I could about finance. Next thing you'll know, I had accumulated a lot of knowledge.

fast forward to the pandemic, and I was watching people lose their jobs. I couldn't understand what was going on and why these things were occurring.

And my brother challenged me to help as many people as I could by just putting the knowledge in my head out there on the internet. Good for you.

Well, congratulations, macaroni. Okay.
So, let me, what's your question? You're also a doctor. So, what did you want to talk about weight loss drug affordability? Yeah, so you know,

Professor Galloway, so

you mentioned that, you know, Ozimpic can be a world changer, right? It can be a thing that sort of leads to further breakthroughs and behavioral modification and getting people

off of things they might be addicted to, right? Because that is a sort of benefit that is seen to have occurred that they've seen in observation.

People stop drinking as much, gambling as much, things of that sort.

The thing that we never really consider, and we healthcare gets a bad rap, right?

It's clearly not a good system that is designed well as for the times that we're in however the thing that always slips underneath people is the fact that insurance plays a big role and goes unregulated to the degree that they determine who can afford whatever they can afford most people can't afford a sort of like they said a $400 emergency and the average car payment is a thousand dollars but ozimpic and the other GLP one agonists might be twelve hundred dollars right all right question what's your question that what are we going to do about it So the question is, is what do you, how do you envision that insurance is going to sort of change in the future in order to reflect the vision that you see carrying out?

First off, Doctor, it always sounds patronizing when I say this, but I mean it as someone who went to Annapolis and decided not to go there and went to UCL. I appreciate your service.

To be fair, if you're in the top decile of income earners in the United States, I think you have access to best health care in the world, but it's the bottom 90 who are subsidizing it.

And I think that one of the

culprits, if you will, is the insurance industrial complex, which does a very good job of flying below the radar.

So make it very difficult for a mother with childhood diabetes to get her money back such that she gives up and you end up with insurance breakage.

Overcharge young people, who, quite frankly, are very healthy and don't need insurance to subsidize old people who need a disproportionate amount of health care.

I think insurance in the United States on a lot of levels is literally one of the biggest economic taxes that the poor pay. And I've talked about this a lot.

I am not insured because I can afford not to be insured.

It's poor and middle-income households that can't be insured. Now, as it relates to GLP-1 drugs, I do think over time, the benefits are going to be so obvious.

And also the amount of capital going into the exploration of GLP-1 drugs is going to be so massive that it's going to create competitors and bring the cost down.

And I do think the government's going to get involved. It's not getting out to the rural areas where people are obese and it's really impacting their lives in a negative way.

I do think the market to a certain extent and government hopefully will start to increase the distribution or disperse GLP-1 drugs. I'm hopeful that it happens.

Bigger, broader issue, we need some form of healthcare reform that gets rid of this ridiculously fat and happy, expensive middleman that has weaponized government and creates regulatory capture called the insurance industrial complex.

Aaron Powell, yeah, I think one of the things that Scott has talked about a lot, and I think it's important, is to understand the system is good for nobody, including doctors.

My brother's a doctor, as you might know. And

I've never talked to any doctor who likes the insurance system

or how to bill the billing system.

It's so it's so they're so encaptured by it and spend a lot of time dealing with it that they should be treating patients, right? Or they want to be treating patients.

And I don't know, from your perspective,

it's complete, everybody gets screwed, but these insurance middlemen in some fashion. And it's completely unfair.
And for these drugs, which have, you know, they still got to be tested. It's still,

they've been around for a long time for diabetes and everything else. But

I think Scott's right. At some point, there's going to be so many of them, the price naturally will come down.
But that's not always been true with drug prices, right? It hasn't been.

But one might imagine at some point an over-the-counter version of these things, right?

That it's really, that it's going to, it's going to, it's, it's going to be so in demand and it will start at the top and then I hate to use the word trickle down, but this one I think will in that regard.

But it should immediately, the government should immediately be doing testing to try to deal with obese populations to cut prices on this, you know, this diabetes epidemic.

It's as Scott calls it's the insurance industrial complex. There's a diabetes industrial complex, which keeps people living, their health span dies long before their lifespan.

There's a good story in the journal about this, and that's where the costs come in. And they make all the money with these very sick people who don't have to be that sick.

I don't, what are your thoughts very briefly?

Briefly,

it hasn't really come out, but if you talk to people who work in healthcare, you're going to notice that the economic incentives for insurance companies and the pharmaceutical companies not to sort of reimburse this or not to add this to the formulary is completely there.

To the fact that if you look at the starting doses of these medications, they're no longer available.

So you can't even start people on these.

And people are starting to cut corners.

People with diabetes, you're going to be able to do it. People with diabetes.
You can't start people on this medication if they, if weight loss is the cure.

If we think about it, diabetes, the first management is sort of diet mod and lifestyle modifications. And sort of, if you add this into into like the armatarium of doing that, then that is

a thing that can take place. I think we focus on the top 5%

because that we're a capitalistic society and we leave the rest of folks behind. And then we complain about how they can't catch up when, in fact, like our system is doing it.

We waited a long time to

change the insulin prices, right? Like, I don't have a lot of faith that this is going to change anytime soon. And I see a lot of people saying how great this is, but I used to be poor.

I was homeless. Like, I remember what it was like for my mother trying to get medicine.
Like, this sucks. It's like physically painful to watch someone suffer.
I would agree with you.

This is something I feel like, especially as the studies come in and they have good results that the government needs to get involved in. It's a national health crisis in many ways.
And

this is so typical of so many drugs, but in this case, it's one that could really save costs.

What you just said, Kara, people are living longer and longer, but they're not healthier, which means they're more expensive.

And there's fewer people paying their, subsidizing their Medicare. So the system

is not sustainable, but the healthcare system in the U.S. is perfectly American in the sense that everything we do in America is optimized for the top 10%.

As America is optimists, we all believe we're going to be in the top 10%.

So if we can have access to the best care in the world, we want that system,

not acknowledging that, well, if you're in the bottom 90, you're not only not going to get the best health care, you're going to get bad but expensive health care. It creates tremendous strain and it

adds misery upon misery in the United States. For a lot of reasons, the healthcare system in the United States is just not sustainable.
Anyway, Dr.

Oni, we've got to go, but it's a really great question. All right.
Thank you so much. We really appreciate your question.
Yes, ma'am. I appreciate it.
You guys have a blessed day. Thank you, Doctor.

Thank you. Up next, we have someone with a question about AI.
Tell us your name and where you're from and what you do. Sure.
Good morning. It's exciting to be here.
My name is Suzanne.

I'm the Dean of Students at a

very rigorous, independent

high school. And

my question,

coming from a very highly resourced school that is much more concerned with getting it right than being right.

And we're really really wrestling with AI right now. And so my question is, do you believe that AI tools in education enhance or hinder students' creative abilities?

And how can educators sort of balance the use of AI, the fact that it's coming, it's going to be here, with the need to really develop critical thinking skills and creativity? Great question.

I'll start, Scott. You were around for the dawn of the internet age, correct? Or when they were, you know, remember Apple, you saved box tops or whatever to get computers in schools.

You remember that era, correct?

Yeah. So I think this is a very similar shift: a lot of people at the beginning of that, everyone was putting computers in schools without thinking it through properly, right?

And some of it worked and some of it didn't. And some of it was, you know, people were worried about websites or where kids went to and protection.
And were they wasting their time?

Were they playing games? It went on and on. And then everyone got laptops.
Was that worth it? I think it reminds me quite a bit of that, except in this case, people are already computer literate.

Your students are all highly literate in computers. They have grown up with computers.
And so it reminds me a little bit of that, but

to say it's a hindrance or an asset, it's both. It's going to be a hindrance.
There's all kinds of

problems you're going to show. Not that, you know, they write the media goes crazy about.
copying or plagiarism.

I think that's been around forever. It's just a new way to plagiarize and probably a better way, faster, better way.
But you'll figure that part out. And I think you'll have your own software.

And there is software that does that.

But I do think one of the things that you should do is embrace it and use it so you, as teachers, understand it.

I think one of the things is initially, and I talked to Randy Weingarten about this.

We were sitting in the audience with her at the AI thing that Biden put out, the executive order. And she turned around and she goes, I'm not against this to me.

Like, cause I'm always like, you're so negative, Randy. And she was like, I'm thinking, I'm learning, I'm doing this.

And I think that's probably the thing I say to most teachers is you yourselves got to understand it because the kids absolutely get it kind of thing. And they'll get it really quickly.

Nice to meet you. I had this warm

emotion come over. When I was at UCLA, and I realized you were at a high school, I was close with the dean of students, Ray Goldstone, and the assistant dean of students, Peter Weiler.

They were both just such wonderful men, and all they did was put out fires all day.

I remember thinking, like, when there was just an awful problem, no one knew what to do, and ended up with the teenage. Call Suzanne.
Call Suzanne.

So

thanks for your good and challenging

work.

I'm an AI optimist around this stuff.

I think we should be, you know, if you're trying to teach a kid how to write and put together a paragraph and, you know, subject, you know, whatever, no fragments, new thought, new paragraph, then there's going to be AI tools that can look at it.

It's similar to how we have tools now to see if they're, you know, if they're plagiarizing or whatever, you're going to have those tools.

But in general, outside of them teaching them how to write prose, I think it's a tremendously powerful tool.

I remember in my second year of business school, my professor of manufacturing, Sarah Beckman, who is just this outstanding professor, I remember the moment, I remember when she said, I don't mind you using spellcheck.

Some professors actually back then didn't, they thought it was cheating for you to use spellcheck.

And as someone who writes a lot, I can tell you that what I found so far, and Carrie is the exact right word, that what AI produces is very anodyne. It doesn't compel or move anyone to emotion.

But what I'm writing, I'm writing a blog post tomorrow on Bill Ackman and how basically money has taken the place of democratic institutions. And I was trying to come up with unexpected consequences.

And I typed into GPT-4, what are the most unexpected but enduring consequences of the COVID pandemic? And it came up with 10 things and eight of of them I knew, but two were different.

And I'm incorporating that. I think it's great for, I think it's just a great tool.
I think it's going to expand creativity.

And what I would want to be doing is wrapping my arms around it and having classes, or not even classes, but maybe part of class. Like, what are the right prompts to make your paper better?

What are the right ways to think? What could you ask that would that would give you more examples?

I think it's very, I think it's really exciting. Yeah, that's why you need to use it.
I advise everyone to use it every day for different things, even if you're not going to use it.

One of the things that I think would work well is timelines. Like there's certain things.
Why do them? I mean, you can do them.

You can sit in front of an, you're doing it in front of an encyclopedia or the internet. Imagine the internet used to just take you to the pages and then you pulled off of them.

Some people more than others, including Phil Ackman's wife, but off of Wikipedia.

You know, people have been doing that for a while, paraphrasing or looking up in encyclopedias. This is like that.

It dives into the content itself, which is why they're in so many content fights with content makers,

as content makers should be suing them or doing a deal with them.

But it's very,

you have to be thinking of what it could be used for and how you can not waste time with students and get them to the real discussions.

There's no reason why they have to use an encyclopedia or research papers to do a timeline when it could do it for you.

It's not a skill to do that. It's just not.
And that's fine. You know, at some point,

a lot of reporters are very reticent to use it. You know, I was having an argument about headlines.
I was like, why are we writing headlines anymore? We can pick them.

What's important is then the teacher intervene when, and the student learns about being factual, how to use the research, learning how to research, and this is how people are going to research in the future, is a critical thinking skill.

And so once you have that there, it's sort of like, clay, what are you going to make with it? And that's where teachers

have to and should and should be stepping in. But to make it like a, they're going to cheat, the assumption of cheating immediately is kind of a terrible way to think of your students, right?

No, absolutely. And we don't.
It was, it's really more, we want to use these tools and teach the students how to use them in ways that are helpful.

But we also want to make sure that they are, their creativity isn't limited.

So I love Scott's example that he typed in, give me 10 unexpected consequences, eight of them he knew, two he didn't, and that's great.

But we also want to make sure that our students aren't just going to that list of 10, which we know the large language models are pulling from stuff that's already happened.

So, how so it's how are they going to bring their own stuff into it?

And the other thing that I'll say, and I am very familiar for somebody of my age with what's going on, is that we know that all learning happens in relationship and so we need to make sure that the customized tutoring that Khan Academy wants to do or Grammarly doesn't take the place of those relationships which is something that I think is so hard

and Here we are still seeing the impact of the isolation of the pandemic on our youngest students and their socialization skills. So there's agreed.
I think that's smart.

I mean, I think, but that's why you need to join with the students who are also figuring it out. Like, avail yourself to their knowledge.

I think they feel very good about that, explaining to you how they're using it.

One of the things is I agree with you on in-person stuff. You know, my son's at Michigan right now.
He's a, he was, he was having some difficulty with, I think, a physics thing, and he was using

AI. But he's now, you know, he goes to a tutoring thing too, like where there's a person there.
So they can discuss the ideas. And I think you can do them in conjunction with each other in a way.

For some reason, people think it's either or. And I do think technology can really aid you.
And again, join with them.

You know, again, I think too many teachers that when they talk to me are like, how are they going to cheat? I'm like, well, how are they going to learn? Why don't you think that way?

So it could, and some customized things could be interesting, right? Maybe they could design things.

I think you're talking about serendipity, like the serendipity of learning. Yes.
Yes. Correct.
Yeah. Yeah.

Yeah. So it's really, it's a really exciting time.
And it can be, you can see it going sideways rather quickly. Sure.
And one of the things that's so important always is that this is no different.

The use of AI is no different than using any other unauthorized source. And so we already have tools in place for that.
So

it's not fear, more just. Yeah, you don't know.
Well, you know what? It'll get better. I'm sorry to tell you.
It's going to get better.

Well, we're going to, the last part of my book I just finished, I said, I used an AI thing as a joke at the end. And then I said, it's really bad.

They wrote an end to my book that I said, this is just terrible. I said, but I'm going to get worse and it's going to get better.
Yeah, it's the worst.

It's the worst it's ever going to be right now. And it's just such, it's mind-blowing to think about it that way.
Yeah. Anyway, we appreciate it and we appreciate your work with students.

By the way, Kara, both those things are happening. What?

What? I'm getting worse.

Oh, Scott. Anyway, thank you.

He's insufferable. All right, thank you, Suzanne.
Thank you, Suzanne. All right, bye.

All right, Scott, let's go on one more quick break. When we come back, we'll take some more calls.

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Scott, we're back with our special call-in show taking questions from our listeners. Let's go to our next caller, Andy.
How you doing?

Andy Fishtrom, how you doing from Sausalita, one of my favorite places.

Welcome. Hey, it's a foggy, chilly morning here.

Yeah, but you know, we can't complain. It's 30 below in the Midwest, so we have no right to.
It's very cold here in Washington, too. And I'm sure London's a delightful, sunny place where Scott is.

So you help students apply to MBA programs. I was head of student affairs at a business school called INSIOC for seven years, and so I speak MBA.

I am also a wedding photographer, and then I started working at Whole Foods part-time this year, which I really, really love. Fantastic.
You know, Scott and I are getting married.

We're looking for a wedding photographer.

No, kidding, kidding, kidding. Never happens.
So you want to ask a question about the repercussions of USAI regulations on safety and global competition? I do.

So I, you know, you guys, I don't often yell at the television, but when I saw those congressional hearings, I thought they were just total bullshit.

I think putting guardrails on American companies will, I mean, I don't think we shouldn't do it, but I think it will stifle competition.

I don't think we're going to keep the bad actors from launching the nukes or taking it down the banking system.

So I wanted to hear your guys' thoughts on if those congressional hearings meant anything, if regulations on U.S. companies will help,

and what, if not, what you think the solution might be.

I think a lot of people feel the same way you do, that anything we do that reduces the competitiveness of American companies results in a lack of economic growth, a lack of tax revenue for our Navy, a lack of opportunity for our young people.

What I think, though, a bigger problem has been is that that has become such a

almost it's become conventional wisdom that it's no longer wise.

And what's happened is the industry that is the largest by market capitalization globally and probably has the most impact technology has effectively no regulation.

I think we have a lack of regulation as it relates to AI.

I don't think the regulation would be on the front end.

I thought that to your point, Andy, I thought the idea of an AI pause was ridiculous. It's like Iran, North Korea, and China aren't going to pause.
But that was tech people doing that, not government.

But go ahead. Yeah, but I just thought it was, it never made any sense to me.
Where I do think you need regulation is to say to a company, look,

if you,

the executive order from the White House, you could be cynical about it, but I think it's a start. And I don't think it's doing anything that really inhibits the competitiveness of USAI.

And also, I think that these companies, unlike tech, should know, should be put on notice that if your AI results in externalities that do real harm to our democracy, to health, to misinformation, and you know what's going on, and you decide to try and delay and obfuscate by saying we need to do better or have PR tours,

I think those firms need to get hit hard. I think that we've, I think pesticides are a good thing.

I think fossil fuels are a good thing, but we have an EPA and an FDA, and we have no such agency in tech. I was going to say, let me give you two examples.

One, there are no laws against for internet companies to rate. There's none.
There's zero. 20 years in, the richest, most wealthy people in the world, there's obvious damages, right?

Because there's no regulation. There's no privacy regulation.
There's no data transparency. Competitively, all these companies dominate.
There's not enough.

I'm more worried about the small startups that don't get to be created. They die in the crib.

And so many years ago, I interviewed Mark Zuckerberg, and he started with this argument. I called it the G or Me argument.
Like, if we're not big, China will win.

And I was, and he's like, I was, and he's like, what would you pick? I go, I don't like my choices at all. Is there a third choice where, um, where we do the reason U.S.

technology is so good and everything starts here, one is because it's innovation and two, because it comes from the bottom up. China's top down.
Now, they do a pretty good job top down.

Let's just, let's be clear. That's a way to do it.

But I think that

there's good in the fact that even though this plane just blew out a window, most planes don't blow out windows, right? But now we're going to look at these bolts.

Now, there's a good reason why our meats aren't tainted for the most part, right? Or else it's a problem if they are, that there's repercussions.

I think the problem with this industry is they don't just have no regulation, they have immunity. They have immunity.
And so you can't even sue them.

So, you know, a lot of these lawsuits against pharmaceutical companies, maybe they're too much, but a couple of them absolutely chills their bad behavior.

Lastly, the person who they consider him a class trader, Mark Benioff, was the first person to me to talk about them like cigarette companies. They're like cigarette companies.

And so it's fine if people want to smoke cigarettes. Nobody's stopping them.
I don't think there's been much innovation in cigarettes, but

if there is danger, they need to tell people so people can make a cogent decision about it.

And if they withhold, which the cigarette companies did, as do the tech companies, they get to go to court and they get to lose in court.

And so I think that's our issue with it is that there's zero laws and they have immunity and they're the richest people in the world.

So like, yes, you're right, you're with your metaphors, regulating the food industry makes the food safer. Regulating airlines, airplanes makes them safer.
But will regulating AI make it safer?

There's a lot of dangers. I mean, should we have, here's a good, say you're a regulator, you're just as smart as the regulators I know is, would you like to have

global laws against killer robots? Probably, right? Don't you think? Or maybe we should. Anybody should make sure that.
Yeah, but that means it has to be in the U.S. too.

Should people, you know, you could not necessarily do AI, but cloning. Should we be able to clone children? Well, maybe we should talk about that as a society, right? I think there's a lot of stuff.

Should people be able to build nuclear bombs using AI? Should they be able to use AI to game the stock market and crash it? Like, there should be some sense of

what could happen wrong. And that's the role of the government.
Now, I agree, it's not, I'm not a big regulatory person, but I think more than zero is better and removing immunity.

And then I'm good with it. If they can be sued like they are right now by the content, they were scraping content and they're suing.

Well, before you couldn't really sue them, they kept winning on fair use. Now,

it's not clear. So I feel like if you have some guidelines and guideposts, it's a better, it creates a better situation for small startups to rise up.
You may not agree with me.

You know, it's funny, I working at Whole Foods part-time, I work with people who are very young, like 22, and I'm 58. And they're like, Uncle Andy, what was it like before the internet?

How did you make plane reservations? And like, oh, you know, we just stood on the roof of our house with smoke signals, right? And all that stuff.

So it's going to be fun to have this conversation in 10 years and

hear what we were talking about today. One of the things, I'm curious, can I ask you one quick question and then we got to go is, do you know the palm thing they have there now? Yeah, yeah.

That you can pay with your palm. Are a lot of people doing that? Because I said no fucking way to the lady who was trying to sell it to me.
So it's awesome.

I mean, it's for people who forget their wallet, forget their phone, which is a lot of people.

And I feel like that ship sailed a long time ago with, you know, when you look at your phone, it uses the same technology. And yeah, people are doing it.

There's no nefarious, I mean, as far as I know. I don't think there is.
I just was like, not today, Jeff Bezos. Certain people, you know, it's interesting where people choose to make their stand.

Like, I'm never doing that.

So the answer is, yeah, I would say anecdotally, it's probably about 50% of the customers so far.

Oh, wow. That's amazing.
Anyway, wow, that's a lot. Anyway.
Real quick, Scott, I'm just getting to know you.

I've been a Cara fan for a long time, and now I've heard you're doing this book on masculinity, which is exciting.

I also want to know what you don't like about short people because I'm short, and I hear you mention short people sometimes. I'm just teasing.
I'm just giving you shit.

Let's leave it at that. Let's leave it at that.
That hurts. He can't take it.
He can dish it out. He can dish it out, Andy.
Andy, thank you so much. What a great question.
Thanks, you guys.

Keep doing what you're doing. By the way,

I'll give you some height for that hair. Yes.

Oh, nice. It's a trade.
All right. Thank you.
Thanks, guys. Bye.
Hi, Karen Scott. I love your show.
Thank you.

Welcome, Betsy. This is our next caller.
We have another AI question about open AI. Betsy, how are you doing? Chris, tell us what you do.
Yeah, sure. I'm a former professor.

I used to work in quantitative finance and I'm a data scientist. And now, oh, thanks.
Now I'm the founder and CEO of a social media startup. Cool.
What does it do? Name? Name? You can name it.

The app's name is kinder. It's in beta.
It's in a quiet beta. We're working on basically a bold way to disrupt the economic model of social media in a non-toxic way.
Wow. Oh, that's a good idea.

So you went from being. a professor of quantitative finance to running a social media company? I was a professor of astronomy.
Then I worked in quantitative finance. Yes.

It's all very similar to data.

Where did you teach, Betsy? I was at UC Irvine. Oh, the Anteaters.
Yeah. UCI.

Yeah.

Greatest gift to America, the great University of California system. I'm UCLA in Berkeley all the way through undergrad and grad.
I love UCI.

Yeah, it was a nice place. It was hard to leave, I have to admit.

How's your startup life going? Oh, startup is a big adjustment. You know, I really spent most of my career in academia.

So it's been a learning curve, I will say that. And yeah.
Are you happy you did it? Yes, I am happy I did it. Cool.
Thank you. Yeah.
It's one life to live.

Anyway, you have a question about OpenAI and Sam Altman and dangers. Yeah, yeah.

Given the drama late last year and the way it was resolved, are there any checks and balances left to stop him and the company from doing damaging things or dangerous things to make money?

I'm worried, given the lack of government regulation, especially, and I think it's a pretty major concern.

Well, I would say, I covered a lot of that and broke some of the stories on it, is that I think it's so public.

He's certainly constrained that way because it was out in the open, this accelerationist versus decelerationists.

Although I think that's kind of a black and white thing, and this is a much more gray area.

I do think the publicity around it certainly is a check in a lot of ways.

If they do things and it gets known, he certainly has a lot of, I guess, I'm not going to say enemies, but people, the decelerationists are watching him. So that's one thing.

He doesn't have that much power there

is another thing.

Although he's backed by Microsoft and

the employees, that could easily change if he abused his power, I think. I think he was, I think people were surprised how supportive the employees, particularly were.
I was.

I thought that said a lot.

That said, I think you have other people like

Adam on the board, who has been a foe, I would say, of him. And so I think it'll be a question of who is the board, who they pick for this board.
And there's all kinds of names.

I have put boards several like Dr. Fei Fei Lee and some others that I think.

And if they get a board that is What happened was the board got out of whack with decelerationists trying to make their move on him. And that wasn't right either, right? The whole thing.

So they've got to to get a board that has people that are skeptical and people that are optimistic and perhaps most more in the middle where they understand both.

I do think more than most people, he is less rapacious than other people I've covered, for sure, no question, and much more thoughtful. But that said, he's very...

He's a very tech optimistic person, you know, and he's AI optimistic. And lastly, I do think the government has to move in and do some guardrails.

There's a couple that are very clear, just like they didn't do on the internet in terms of privacy, in terms of use of content, in terms of safety, checking for safety issues,

and monitors that are independent of

all of these companies, not just OpenAI. So, Kara, when you refer to Faif A.
Lee, are you referring to the Sequoia Capital Professor of

Computer Science? By the way, Betsy, just a quick question. Do you think that brands should be

companies, private companies should be branding academic positions or have we become i don't know what's the term total whores i so it's hard i in astronomy it's not such a big issue right like i'd be thrilled for for brands to support astronomy research but to support

well companies have done it for people have done it for decades like the scott galloway chair of ding dongs or whatever

but i think it's something that has to be monitored right it's too much fox guarding the hen house potentially

100 we're seeing that play out

so back to your question okay so initially open ai was supposed to be not a regulatory check but it was initially formed it is to do to do thought leadership that would provide a viewpoint and and research to keep the dangers present such that we could address them when other private companies started producing externalities.

But here's the thing. Billions of dollars showed up.
And once this company identified itself and became the leader in the space and became worth $90 billion,

if you think about a concern for humanity versus shareholder value, shareholder value smothered the concern for humanity in its sleep.

And I don't care how many boxes have a mission statement around altruism. Microsoft is in control of this company right now.
And so is, I would argue Sam Altman is also like a close second or number

one because $90 billion, by the way, creating $90 billion

creates a lot of value and good in our ecosystem. That's the reason.
He's not on the board, just so you're aware now. Right now.

Who's not on the board? Sam Altman's not on the board anymore.

Maybe it's not. I get it.
I get it. When 90% of your company is willing to walk out of the door with you, you kind of own the company.
Because they like how he's working.

But I get your, the money is, let me, let me just, one thing that Scott is getting wrong is that the reason they did, one of the reasons they were... Oh, I get more than one thing wrong, Kieran.

Come on, let's be honest. The reason they raised all that money is because it costs so much to do it, right? They needed the money to do it.

And that's, they couldn't raise it for, you know, for altruistic reasons. No one was going to handle it.
But they raised it. Yeah, but they did.

They raised it so they could build generative AI, not so that they could study it. Oh, I think they were going to do that all along.

I think, you know, when Elon talked about it a decade ago, it was because he was worried about the power of Google and Facebook and Amazon and stuff like that, that they would control the destiny of the US.

This is a for-profit company. Yeah.
We called this out a year ago.

When you looked at the structure that they tried to wrap all this bullshit and wallpaper over the notion that this wasn't a for-profit company by saying that, well, actually, once they get above $100 billion in profits, it goes back to the nonprofit entity.

Here's the bottom line. With private, special purpose companies, jazz hands bullshit, unless it's a pure nonprofit, and sometimes nonprofits are not really nonprofits.

For-profit companies are so outstanding at making money, they should be trusted to do nothing else. That's what they do.
That's what they do.

And while we keep hoping they're better angels, they're going to show up and they're going to give a good goddamn about democracy or teenage girls, they don't.

And I'm not saying they're bad people, but when you live in a society where you have better access to health care, better access to powerful people, a broader selection set of mates, and you can take care of your kids and your parents, if you make a shit ton of money, the incentive to wallpaper over externalities in this incredible platform called a for-profit are going to be so great that you have to have a huge check and balance in the form of, first of all, government regulation, but a robust media and journalism sector, plaintiff's attorneys, a fair and balanced legal system, because Sam Altman and Microsoft, led to their own devices, are going to do some amazing things for technology.

They're going to make a lot of people rich. They're going to add value to the world.

And someone needs to be able to hit them hard if they do the same thing that social media and other, these, these other organizations.

But all this jazz hands around it being different entities and altruism. I think that's lost, though.
I think that's gone. I think that's gone.
And they sort of have pushed those

off. And by the way, those people were also

power hungry in a weird way. Can I ask two sort of follow-up short questions if you have time? So one would be, I think...
Part of the problem with OpenAI is it's not just what OpenAI does, right?

They provide, you know, their, their code, not their code, but their service through an an API that anyone could use to do something.

And it's not even going to be easy to tell what people are doing with it, even if they were monitoring it. So you have to be pretty far in knowing what people are doing to deploy it.

Yeah, sort of like the Apple App Store, right? Yeah, the Apple App.

Is it going to be Google App Store, which is like the Wild West, or is it going to be more Apple-oriented? But go ahead. Right.

But also with just some kind of transparency so you could see what people are actually doing. I think that's part of the executive order from the White House is that there is

a requirement. I don't know if it's a requirement or a request for additional transparency because Google will not release their algorithm.

We don't know if you're concerned about young men being radicalized on YouTube, which many are, we don't know how it's happening. They won't release their algorithm.

And I think part of that, Kara, tell me if I'm wrong. No, they're special, Scott.
They're special. Okay? Tell me if I'm wrong.
They're good.

Kara, maybe you know this, but I think part of the executive AI order out of the White House had language in it about you have to be more transparent in terms of what you are actually building here.

Yes, it did. Yes, it did.
And also safety checks, independent safety checks.

Go ahead. What's your other one? The other one is about government, you know, government-formed guardrails.

I worry about the model for this. And I think I've heard you mention the SEC as a potential sort of model for this.
But if you think about like, they're not embedded in what's happening.

And so, you know, they investigated Madoff and they didn't. A new agency is what we think should happen.
And that's led by Scott and Kara. That's what we call.

Or as we like to call it, Scara.

Scara.

There needs to be, that should be our couple's name.

I think there needs to be a new agency, and we can't call it information agency. It's got to be technology.

Just like the FAA or anything else, that's my feeling is because this is special. The FTC can't handle it.

You know, it's hard for these agencies that have other things to do, like monitor pork makers or whatever. We got to go, Betsy, but we do appreciate this.
But I agree.

We think there should be another agency because what will happen is they'll take advantage of the disorganization of this by government.

And so nobody will be able to get their hands on them, which is how they handle it. Betsy, most importantly, do you live in the OC?

No, no, I moved away to New York when I left academia. Yeah.
Most beautiful places in the world.

Can I ask you one more quick question, even though our producers just say we have to move on is what's your biggest fear? Very briefly.

My biggest fear is that the entire economy changes to work around AI and then things like income inequality and then just transparency of what things, what's happening, right?

How much do humans control what's happening starts to really erode. That's a very good concern.
What are these fuckers up to has been my life's work.

Anyway,

I appreciate it. Thank you so much for

theater. Great your question.
Go Auntie, whatever that is. Great to meet you.
Thanks, Betsy. Thank you.

Changing gears here, we have a caller with a question about something Scott will no doubt have thoughts on, ESG. Welcome, Luke.
Tell us what you do and then what your question is. Yeah.

Hi, Karen, Scott. My name is Luke.
I'm calling in from Atlanta.

Longtime listener across all your shows. So I appreciate the opportunity to be able to join an episode.

And Scott, actually, a couple of years ago, I gifted a friend of mine who was struggling personally with your book,

Algebra of Happiness, and it had a meaningful impact on him. So, I appreciate your work.

Thanks for saying that. My question is around ESG and/en environmental, social, and governance.

I've spent seven years as an investor relations professional at one of the largest retailers in the country.

And one of the biggest sea changes that we've seen has been the interest from investors on ESG and the topics that underpin ESG.

And I agree that it's probably not the best naming, but it's really not the words or the letters that matter.

It's the ability to analyze the risks from things like climate change or water or a company's inability to invest in its workforce.

It's more understanding what the risks mean to a company's bottom line.

So over the last few years, my role has evolved and I primarily focus on engagement with institutional investors on everything from our company's climate transition strategy to whether we're paying our associates equally across gender and race.

Scott, so you've recently commented that you think we're seeing the end of ESG.

So my question is, why would institutional investors who have built ESG research teams and integrated ESG metrics into their investment thesis abandon these concepts?

And secondly, what about or what's wrong with investors considering risks

like climate change or unequal pay in their investments or where they're considering to invest?

That's a really thoughtful question, Lee. I think everything you outlined is not ESG.
I think it's smart shareholder-driven actions.

I think having a workforce that represents your customer base and the community doing scenario planning around the threats and opportunities around whatever it might be, climate change, I think of those as just being shareholder-driven

activities, forward-leaning investments to pay off. I think if you want a strong workforce, a robust workforce, all of the things you mentioned are smart for the bottom line.

The issue I have with ESG, and it's not black and white, I think that it comes from a good place. The issue I have with ESG is who gets to decide what the metrics are around ESNG.

And I find that in many instances, ESG has been weaponized

and companies study to the test.

and figure out a way to get an award, even though they're an airline consuming 2 billion gallons a year

as an ESG company.

It's become somewhat meaningless. So the idea of thinking thoughtfully about climate change, your role in the community, having a robust, diverse workforce, contributing back to society,

I think all of that makes sense.

My fear is that ESG has become essentially, one, a branding opportunity for alternative investment funds who underperform the market to charge incremental fees by saying they're going to do the work of ESG for you, and that it's nothing nothing but a marketing ploy for the alternative investments community that has underperformed the S ⁇ P by exactly the amount of its fees.

And it's also used by some companies as a giant misdirect from the harm they're actually doing.

Remember British Petroleum and the ad campaign beyond petroleum, and they'd have ads of all these guys and lab coats studying algae when about 99.99% of their efforts and capital were all about drill, baby, drill.

So I find some of it, quite frankly, is just BS and not productive. Everything you mentioned to me is just smart shareholder-driven strategies.

So let me say one thing, though. I mean,

you can't leave out the fact that the right is trying to weaponize these things too. I don't know when the word inclusion became a negative thing.
I just don't understand why inclusion is a bad thing.

But they've made it bad. They've made it feel like bad.

It reminds me a lot of, if you remember, when they were trying to reform healthcare, which is a laudable thing, they got a lot of traction through death panels.

Like there weren't going to be death panels, but the words worked. And so they managed to make it these things ugly, which are also laudable things.

I think what Scott's talking about is there becomes, whether it's DEI or ESG, there becomes these little industries that arise that aren't necessarily good for it.

Even if for shareholders to focus on climate, if you're a company today and you don't understand the climate crisis is coming, you're going to be out of business because you're going to be impacted in some way, whether you're an airline or a hotel or a retailer.

Second thing is, if you don't understand how workforces are and changing, and if you don't create an equitable workforce, and again, when did equity become a terrible thing?

It's not a terrible thing, but it is right.

Same thing with diversity. Diverse companies make for better companies from their study after study after study.

And I think what's happened is gotten captured by a certain segment of people that are trying to make political points on it, whether it's Ron DeSantis or Ramaswamy or whoever. And so,

you know, again, I think Scott's Scott's right. Overall, it's laudable, not just laudable, that's not what they should do, but it's good business to do it, right?

And I think that's how it's not been sold, good business, you know, appeal to greed. Corporate America answers to the bottom line.

And so I think most of their DEI initiatives have been somewhat rooted in one, either actually thinking thoughtfully about shareholder value. or two, using it as a head fake.

And that's not a good thing. I think at universities, DEI has gone so far that the snake is eating its own tail.

And that what we've ended up with, you know, Harvard brags that 51% of its freshman class is non-white, which to me means you don't have, you've just reshuffled the elites.

Letting rich Asian kids into Harvard doesn't solve the problem. And

diversity to me,

one, we have anti-discrimination laws and we should.

If you can prove that you were not hired or you were fired because of something you can't control, your sexual orientation or your race, you have a legal case against that company.

And I think that's a wonderful thing. And it goes back to the importance of regulation.
I think there's a difference between equality of opportunity and equality of outcomes.

I think certain industries and certain positions are just naturally going to attract certain people more than others. And I think that's okay.
And I think...

Oftentimes we spend too much time and energy and make companies less productive trying to calibrate our workforce to some weird metric that someone has put pressure on us to study too.

Yeah, and I honestly agree with a lot of the points.

I think the term has been, you know, to use Larry Fink's words, hijacked from both the left and the right.

This sort of stuff is not going to solve all the world's problems, nor is it the cause of all the problems or the downfall of corporate America.

You know, it is a bait. At the end of the day, ESG is just a set of alternative non-financial metrics that firms can consider or not consider on the potential impact.

But yeah, I think it often gets confused with impact investing and things like that,

which have a different incentive model versus ESG. And it's the way I view it, and I think a lot of corporates view it is its purest form.
It's just a way, new metrics to mitigate risks at

firms. Can I ask you a question? Has it been very hard to incorporate now, given all the noise around it?

ESG less so than DEI, but. Yeah, it has.
As Scott pointed out, there's a lot of pushback,

primarily, from the political arena.

But I honestly think that sort of pressure is helpful. It helps sort of weed out the BPs who are greenwashing and using it as a head fake.

And it's forcing companies to be much more thoughtful and sharp in how they articulate on these topics.

And they don't get ahead of their skis on some of the things that they're talking about and are looking at things clear-eyed and honest when they discuss it with investors or the public at large.

I have have one more question. I would assume climate would be the most important thing there, not just to save the world, but

it's a business necessity on some level, correct?

Yeah, understanding the risk that climate's going to pose, whether it's if you have stores and flooding areas are changing, you know, that's going to impact real estate of companies or how you're able to source certain raw materials if those raw materials are impacted by climate change.

So it's just understanding the risks, but that is primarily one of the bigger focus that we see.

Yeah. And you would even see it with guns, with retailers.
With, you know, retailers have been plagued by shootings and everything else. Everyone's

my feeling on this whole thing is businesses in this case, if they want to do this, that's great. That's the leadership, and you buy into those companies.

If it's Patagonia, people are buying into it for that reason. Customers are using it for that reason.
In a lot of ways, it's like let people do what they want.

right rather than forcing them to but most businesses that are a little more uh i don't want to use use the term woke because it's gotten so badly, but that are a little more progressive in that regard tend to do a little better.

You can't certainly rule by being like you're in the 1950s, but I think a dynamic workforce, especially among young people, they want other things, it seems to me. It seems when you talk to them.

And I don't think it's because they're woke. I think it's just they want different things.
And you should decide what your company is at the very beginning. What a great question.

We appreciate how thoughtful. One of the things that's great about doing this is how thoughtful our listeners are, much more so than we are, really.
Well, I appreciate the time.

This was great. Thank you so much for your question.
Scott, how great was it to talk to all these listeners? I mean, they're really smarter than we are. That's the conclusion I just made.

I generally registered an emotion of intimidation because I thought these people probably see through my bullshit. I mean, I was struck at how thoughtful and smart these people are.

They are, aren't they? It's crazy. They're so smart.
They're so good.

And they like us. That's weird.
Professor of astronomy from

theater.

A guy, a smart corporate guy, a guy who likes

Whole Foods Doctor. It's so good.
Oh, bet. Wow.
I'm so impressed. Those were all really thoughtful questions.
And what I liked about it is they're thinking about these questions.

And I hope we all help you all think about them. We don't, one of the things that's critical, and the reason we're asking them questions is because we don't have all the answers.

We're just, you know, a couple of white chicks sitting around talking.

And so it's really important to get other people's perspectives. We always like them, even when we don't agree, and they challenge us.

So anyway, if you've got a question of your own and you would like answered, send it our way. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT.

You can all see now why we love our fans. We love them because they're so smart, much smarter than us.
Scott, that's the show. We'll be back on Tuesday with more Pivot.
Please read us out.

Today's show is produced by Lara Naiman, Zoe Marcus, and Taylor Griffin. Ernie Andrew Tott engineered this episode.
Thanks also to Drew Burroughs and Mil Severio.

Yeshat Kirwa is Vox Media's executive producer of audio make sure you're subscribed to the show wherever you listen to podcasts 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

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