Twitter Blues, Israel Protests, and TikTok espionage with Emily Baker-White

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Speaker 15 Now now you can do that do that with the all new acrobat it's time to do your best work with the all new adobe acrobat studio my hair is magnificent today look at that look at that scott

Speaker 16 hi everyone this is pivot from new york magazine and the vox media podcast network this is kara swisher and i'm scott galloway i was doing it in the voice of succession you know this is kara swisher doing doing doing doing doing doing doing doing i think we should play that music after i speak all the time now Did you watch the, well, obviously you've seen the opening or the industrial show.

Speaker 17 Yeah.

Speaker 16 Yeah. Yeah.
My podcast went up. I'm very excited.
It was really good.

Speaker 17 I heard it was the second highest rated cable show just behind Bill Maher.

Speaker 16 I wonder what happened there.

Speaker 16 I wonder what happened there. I was thinking about that.

Speaker 16 I have not watched it yet, and I will.

Speaker 17 You know,

Speaker 17 again.

Speaker 16 Have you listened to my podcast? Have you listened?

Speaker 17 No, you haven't. None of my families watch Bill Maher either.
I came home thinking they'd be like, oh, you're amazing. And they're like, what were you doing in L.A.
again?

Speaker 16 They don't know.

Speaker 17 They don't care.

Speaker 16 Oh, no. I did tweet that you were on it.
I gave you support. How did you think? How did it go? And then I'll tell you how successful.

Speaker 17 You know, so just to be like, I get very nervous. I'm on TV a lot.
I do a lot of public speaking. And there's nothing that matches my nerves before that show.
Oh, really?

Speaker 17 I was trying to understand why as a means of not having a panic attack.

Speaker 16 Right.

Speaker 17 And I think it's because, you know, if you're a tennis player, you dream of coming out, you know, center court at Arthur Ashe. If you're a football player playing in the World Cup,

Speaker 17 that is literally me walking out onto Wimbledon for me.

Speaker 17 It's trying to catalyze the conversation around important things. He tries, whether you agree with him or not, I think he does try to be fearless.

Speaker 17 I don't think he's afraid at all of being canceled or being accused of being too liberal or too conservative. I don't think he cares.
And they try to be funny. And those are all things I aspire to.

Speaker 17 So for me, it's like, every time I go on that show, it's really important to me to do well. Also, my father only watches two things: he watches the Toronto Maple Leaves and Bill Maher.
That's it.

Speaker 16 Oh, wow. Okay.

Speaker 17 But I get really, really nervous before going on that show. So when I do okay,

Speaker 17 it's a nice moment.

Speaker 16 Okay. How did you do? Okay.
Did you better than okay?

Speaker 18 It's just another example of instead of working on the things that actually affect us, people want to figure out what offends us so they can raise money.

Speaker 16 It's a bullshit option.

Speaker 16 Yeah, it's um hey, you know, the

Speaker 16 CNN, watch your mouth. I'm sorry.

Speaker 16 Keep your swear words out of your mouth.

Speaker 17 It's, you know, I'm too close to it, Kara. I'm just too close to it.

Speaker 16 I saw good reviews on the Twitter.

Speaker 17 Yeah, Twitter and Social loves it. But the people there are super nice.
They're super supportive. They're just, it's like a lovely group of people.

Speaker 16 They gave you liquor. That was smart.

Speaker 17 They gave me Maker's Mark. I feel seen.
And what's interesting is Bill talks this big game about not having kids. Everyone you meet there has been there like 25 and 30 years.
He has kids.

Speaker 17 They're just all wearing Kim Warner badges. He is very loyal.
He has, he has, I mean, everyone there has been like, oh yeah, I've been with Bill 27 years.

Speaker 17 Anyways, thank you for asking. It was, it was very nice for me.
Good.

Speaker 16 How is Annie and David Sederis? I saw your picture with all of them.

Speaker 17 Well, David is, I mean,

Speaker 17 I remember reading Me Talk Pretty one day and just, it's not only hilarious, but I think it makes young people feel better about themselves. Yeah.

Speaker 16 Louis loves David Sedera. So does Alex.
I was wondering. He made them listen to it when they were littler.

Speaker 17 He's a wonderful writer. Yeah.
Annie Lowry, who writes The Atlantic, she's out of central casting for just a very impressive person who writes. She writes beautifully.

Speaker 17 The thing I was worried about is, you know, we kind of agree on everything. So I didn't think it was going to be that interesting a panel.
But yeah, I thought I'll be very interested to get your take.

Speaker 16 I shall watch it. I shall watch it with Alice tonight.

Speaker 17 I'm just too close to it.

Speaker 16 So yes, we will watch it.

Speaker 16 I'm excited. And I think succession went well.
People seem to like the podcast.

Speaker 17 And did you do the pod, the post-show pod?

Speaker 16 Yeah, what it does is it runs after every show. So there's a show and then my podcast.
And the podcast is about the show, but it's not like, oh, let's recount.

Speaker 16 It does that a little bit in order to get away from that.

Speaker 17 Who was your guest?

Speaker 16 Do you have guests?

Speaker 16 I had the creator, Jesse Armstrong and Frank Rich, who used to work for the New York Times. He's an executive producer.
And then I had, because in the plot of the first episode, the kids

Speaker 16 are trying to start a website to compete with their father called the 100.

Speaker 17 The 100 is Substack meets Masterclass, meets the economist, meets the New Yorker.

Speaker 16 I feel like we said iconic and you guys are leaning ironic. They're just terrible.
They're just, it's a terrible idea for this sort of digital

Speaker 17 thing. You mean it's Vox?

Speaker 16 No, it's semaphore. So I had Ben Smith come on and talk about it, about starting something like that.
And it was very funny. And so they immediately abandoned it on the show.
And it's just so idiotic.

Speaker 16 And only rich kids would come across with something like this.

Speaker 16 And so he talked about starting Starbuck and the difficulties and then how it looked on the show because it just some of the dialogue was really hysterical.

Speaker 17 I think that one of the keys to that show is one of the reasons that Woody Allen films were always so successful in billions.

Speaker 17 I forget what we call it, the setting scouts or the location scouts do such an incredible job because basically what it is, it's wealth porn. Yeah.
I mean, the homes and the clothes.

Speaker 16 Yeah, there's a couple of good homes. They had one in LA that was like where, and one in Napoleon.
Oh, that home in L.A. Oh, my goodness.
Right? Yeah.

Speaker 17 But it's sort of an insight into what would it be like if you were a billionaire and also had much better taste. Because here's the bad news.
I know a lot of very wealthy people.

Speaker 17 A lot of them don't have very good taste. They don't know how to spend their money.

Speaker 17 So when you have a show that shows very wealthy people who know how to spend their money or at least hire people with better taste than them, it's just wealth porn.

Speaker 17 It's just fun to, it's just visually so beautiful.

Speaker 16 Yeah, well, wait, get ready. Get ready.
There's, you'll see a a lot of it. It's really, they've done a nice job with the scouting.

Speaker 16 Anyway, everyone was really good, and the actors, and it's nice to see the three siblings interact so much.

Speaker 17 I love the guy running for president, trying to sit above one percent.

Speaker 16 He gets a lot more

Speaker 16 time. He's really good.

Speaker 17 Jerusalem's day off.

Speaker 16 He was. And then, but he's really good.
And the wife is the woman, he's his fiancé, is, I think, quietly good. There's a lot of very quietly good side actors in this.
Anyway, it's very good.

Speaker 16 You'll see. You'll like it.
I'll enjoy it. I enjoy it.
It's something I enjoy doing.

Speaker 17 Again, HBO. How does HBO with a lower budget continue to always be the conversation?

Speaker 16 Just quality training. Yeah.

Speaker 16 The legacy of Richard Pleppler. Pleppler.
Pleppler, the Plepp, who lives in a beautiful home in Connecticut. Also, speaking of wealth born, I'm going to, I call it the Manor, the Wayne Manor.

Speaker 16 Anyway, today we'll talk about Twitter blues. We have so much to talk about, including some leaked source code.
Oh, my God. Also, another crypto mogul is in handcuffs.

Speaker 16 We'll talk about what's happening there. And we'll speak with journalist Emily Emily Baker White about the moment she learned that TikTok was spying on her.

Speaker 16 This was referenced at the hearings last week. But first, Silicon Valley Bank has a buyer.
First Citizens Bank has agreed to buy up all of SVB's deposits and loan. That's worth about $110 billion.

Speaker 16 The FDIC is still holding on to $90 billion in securities and other assets that we'll have to unload in order to help deal with the problems there. So what do you think?

Speaker 16 It's nice that it went to a regional bank, although a lot of money is shifting, as you said, to the JP Morgans of the world.

Speaker 16 What are your thoughts on that?

Speaker 17 I think it's a good thing. I think that the government has done exactly what it's supposed to do, and the market is doing what it's supposed to.
It's taken two kind of

Speaker 17 so First Citizens was, I think, the 30th largest bank. So it's taking two regional banks and making them sort of super regionals.
And what's interesting, or the takeaway I think, from this is that

Speaker 17 I've invested in every part of the food chain, from angel to venture to growth to IPO to growth public to to mature to distressed.

Speaker 17 I have found on a risk-adjusted basis that the best place to invest across the entire stack is distressed because distressed assets are like old people. No one wants to be around them.
Oh my.

Speaker 16 That's true.

Speaker 17 Whenever anyone brings their 80-year-old parents to a party, I've noticed everyone is polite to them, but doesn't really want to hang out with them. And I'm going to get shit for that, but it's true.

Speaker 17 And here's the thing. There's all the money's in old people, or specifically all the money is

Speaker 17 in distressed assets.

Speaker 17 Because what happens is everybody wants to hang out with Giselle and Tom Brady with the growth cool companies. And as a result, these things are overpriced in distressed assets.

Speaker 17 One of the best investments I've ever made was in a Yellow Pages company. It was trading at two times profits.

Speaker 17 And I said, we all knew it was going out of business, but it wasn't going out of business in 24 months.

Speaker 17 And this is the same, kind of a similar situation in that as First Citizens has made a great business out of going in and acquiring with FDIC backing or government help failed banks.

Speaker 17 It's done this 12 times.

Speaker 17 And distress investing is there's opportunity. And this is one of the many amazing things about the market.
When stuff is so broken, oftentimes that's one of the biggest opportunities for upselling.

Speaker 17 Yeah.

Speaker 16 One of the information had a pretty good story about this.

Speaker 16 A lot of people did, but it said among the firms moving quickly are SVB rival Western Alliance-owned Bridge bank and jp morgan chains as well as newer institutions like mercury and brex they are all moving in to fill the void and it's a it's a good void to fill you're right opportunities knocking for these things and it's nice that it was a regional bank i think the fed was determined that it was a read not i don't think they really entertain the bigger ones getting this thing they well the bigger ones from what i understand the bigger ones just feel their eyebrows got burned in the banks they were forced to acquire in 2008s lawsuits that the government wasn't supportive.

Speaker 17 Supposedly, Jamie Dimon never wants to go near one of these things again. And Goldman was probably a little bit conflicted because they were advising SVB

Speaker 17 when everything kind of blew up.

Speaker 17 The big takeaway from, I think, from all of this is going to be the importance of communications.

Speaker 17 And that is the communications at SVB just panicked everybody. The way he communicated their capital raise was just disastrous.

Speaker 17 The reason that credit suites with the same liquidity ratios as UBS had to sell the UBS is because

Speaker 17 the Bank of Saudi Arabia, I think it was, not only said, they could have easily said,

Speaker 17 oh, we don't need to put money in. Instead, they said, no way, like they were angry, like they had just found out something bad.

Speaker 17 So this is, we're going to come away from this.

Speaker 17 When you're loaning more money out than you have, it becomes about confidence and communications. And this was a failure in communications.

Speaker 16 Yep, 100%. So anyway, we'll see what happens with bank stocks.
They're still, you know, it still makes you nervous when something like this happens, but it feels like, yeah, they're going to be up.

Speaker 16 It's still, we're still, you got to be very careful and, and, and not be stupid in terms of panicking.

Speaker 16 Anyway, NPR, speaking of things that upset a lot of people, NPR is cutting 10% of its staff and canceling four podcasts, including Invisibilia and the recently launched Everyone and Their Mom.

Speaker 16 It marks the company's biggest layoff since 2008 and a move the chief executive called Existential.

Speaker 16 It's interesting what's happening here.

Speaker 16 I talked to someone who had worked there and they said this is not a group of people used to being laid off at all and doesn't take it well because it feels like a government entity, even though it's not actually a very small amount of the money comes from, people think much more comes from the government.

Speaker 16 I think it's 2% or it's some very small amount, but it's still a very, it's a very different staff.

Speaker 16 A lot of these kind of things, whether it's PBS or whatever, feels different, even though it's a business.

Speaker 17 Again, I'd just love to know what the hiring has been over the last three years.

Speaker 17 And NPR, I think as it relates to a balanced scorecard of trying to call balls and strikes, of pitch it right down the middle, of production quality, of the ability to attract and retain really talented people, I would argue NPR is one of maybe the three or four best media companies in the world.

Speaker 17 And what's really interesting about NPR is a government-funded media is usually seen as being very liberal. NPR really does a good job of trying to say just the facts, man.

Speaker 17 You know, they really do try to cut through and they try to be real journalists, not make it about the journalists, see both sides of the issue.

Speaker 17 And as it relates to, I think you've played a seminal role in podcasts. I think Joe Rogan has.

Speaker 17 You mentioned Mark Maron, Bill Simmons, but also just as an organization, I don't think anyone's done a better job in audio than NPR.

Speaker 16 A lot of its money comes from corporate sponsors and annual grants from this publicly funded corporation for public broadcasting. But a lot of it are these corporate grants where you hear their names.

Speaker 16 And most of the member stations are owned by nonprofit organizations. But I agree.
I think they do a great job. I think there's a lot of controversy over these things, like political.

Speaker 16 They try to attack them, but they're actually quite,

Speaker 16 I think they do a great job. I really do.
Whether it's, I'm trying to think the other show, the TV show that's amazing.

Speaker 17 News Hour?

Speaker 16 NewsHour, right? So,

Speaker 16 you know, just, I think they're doing a great job. And they do try very hard to stay within the lanes.
You know,

Speaker 16 the private ones, whether it's Fox News or CNN, are much more political, much, more, much, more, much more political by far than any of these. I do.
I agree. I think they do a great job.

Speaker 16 And I'm sorry for the people who laid off, but this is also a business on one level.

Speaker 16 Apple employees, speaking of a business, are skeptical about the company's upcoming interactive headset, according to a report by the New York Times.

Speaker 16 Employees have doubts about the device's utility, high price point, and whether there's a market for the product, all of which things we've said. It's, I think, $3,000.

Speaker 16 The device is set to release in June, but team members speculate they may delay it. External research predicts the company would sell sell less than half a million headsets in the first year.

Speaker 16 I don't know. I don't know.

Speaker 16 I feel like they will see when we see it, right? And people who want it, it's going to be the best version of this. I don't particularly want one, but I didn't think I wanted AirPods.

Speaker 16 And if it comes down in price, I might like something like this, watching movies, et cetera. I just don't know until it's out.

Speaker 16 I never discount anything Apple makes. What about you?

Speaker 17 This is over before it started. The market for a $3,000 unproven headset in a category that is imploding.

Speaker 17 I mean, this whole thing was developed and conceived when everybody was worried that Mark Zuckerberg was in fact a genius and that the whole market was moving into these headsets and VR world.

Speaker 17 Since then, we have learned that is not working. People do not want to put something on their head that doesn't have tremendous utility or make them more attractive to potential mates.

Speaker 17 The market for a $3,000 headset is pretty limited.

Speaker 16 It is for now. I don't think it'll stay at that price.
And so I think about like surgeries, all kind of mechanical stuff.

Speaker 16 They're much more aimed at. Listen, the only thing I, as I told you, is Tim Cook is obsessed with the idea of AR more than VR.

Speaker 16 He finds the complementary things that will help you move through the world that aren't sitting in your hand is where I think this thing is going.

Speaker 16 And I do think it's a little more than that. And so putting it out there and selling it to a higher level of people, they did this with a lot of their early stuff.

Speaker 16 Their design stuff was very expensive and now it's not.

Speaker 16 I don't know. I think it's, they think they can't not play in this space on some level because eventually there will be a heads-up display.

Speaker 16 And so everyone in the business is just not working quite right.

Speaker 16 So take the greatest designers of consumer products, which remains Apple and a couple of other companies, but overall Apple, and you start to...

Speaker 16 put this stuff out there and get it in the wild, I think you just don't know where it's going. But I get that people, it may not be

Speaker 16 for this. It may be for where it's going.

Speaker 17 I think headsets, whatever you call this category, is going to go down. Is the next iteration of wearables only a bigger failure?

Speaker 16 Wearables aren't a failure. Look at watch.

Speaker 17 Watch.

Speaker 17 Okay, I would argue that the watch, first off, the watch by

Speaker 16 the market. Got it.
But go ahead. Go ahead.

Speaker 17 If a CFO were really to apply hard metrics to the watch, it would be hard to argue that it's a success.

Speaker 17 If it was a company that didn't have the massive deep pockets of Apple, it probably would have been shut down. And also, I would argue the Apple Watch is not a wearable.

Speaker 17 It's a second screen for the iPhone.

Speaker 17 I don't think a single wearable has worked.

Speaker 17 You could argue, okay,

Speaker 17 give it to the Apple Watch.

Speaker 17 But

Speaker 17 in terms of this whole notion that we're going to go to different places or AR with smart, I mean,

Speaker 17 Google Glass, obviously the Oculus.

Speaker 17 Yeah,

Speaker 17 I don't think there's no way we can really give a verdict until one of us tries it and has our own view. In general, this space is shaping up to be have the hype of the Segue, but sell fewer units.

Speaker 17 AirPods are $300,

Speaker 17 and the utility is staggering.

Speaker 16 I don't know.

Speaker 16 Let me read you from a Mac world.

Speaker 16 Apple Watch is the most successful flop in history.

Speaker 17 That's a great way to put it.

Speaker 16 Yeah, except it's a success.

Speaker 16 They dominate it completely. They dominate watch buying, which is incredible.

Speaker 16 I think it's, I feel like it's one of these things that's necessary for the whole ecosystem. It's an example of them owning an ecosystem and it's part of the same ecosystem.

Speaker 16 And everybody thought this thing was going to. disappear.
It was slow to come out. It was too expensive.
It didn't have the kind of numbers that iPhone have.

Speaker 16 But it's an I, this, I have the eight, I guess, version eight. I don't have the big one.

Speaker 16 I see them on everybody's wrist, and they, especially, including those new ones that are like very man manly the manly one the the one where the ultra whatever it's called um i just feel like the manly one's called a panora

Speaker 16 it's big it's a big thing but people are using them i i didn't i had all eight of them gave away seven now this one i i find absolutely necessary and something happened in the development um and it's very useful i pick it up as a phone thing you're right it's it's an adjunct to it but it's starting i'm starting to leave the phone and use just the watch when I go places, which is interesting.

Speaker 16 This is interesting. In 2019 alone, the Apple Watch sold 31 million units.
The entire Swiss industry sold 21. Yeah, it's huge.
It's way beyond that.

Speaker 17 It's kind of, it's really punched.

Speaker 17 Yeah, more Apple Watches than the entire, than all of Switzerland produced. That's what I mean.

Speaker 16 Everyone has one. Everywhere I go, people have them.

Speaker 16 I don't know. I have a feeling that if it gets down, if it got to $1,000, you sure as heck will buy one.
God caliber.

Speaker 17 I think when you get to that price point, it has to be an item

Speaker 16 that doesn't

Speaker 17 last longer than 12 or 18 months. I think the shelf life on these things is just going to be so short.

Speaker 16 We're going to disagree on this one.

Speaker 17 This will be good. We should make a bet.
Speaking of disagreements, you forgot to mention our fight made the media.

Speaker 16 Yeah, I know. That was funny.

Speaker 17 So, explain what happened.

Speaker 16 Right. So, we had this very good discussion about woke culture, which Scott and Bill Maher are obsessed with.

Speaker 16 And I said there's bigger problems than Scott accused me of being elite when in fact he's 15 times at least richer than I am and more elite.

Speaker 16 And then we like got into it. And it was good.
It was a great discussion. And lots of people thought we hated each other after it.
It was weird.

Speaker 16 So there was a story in Mediate or wherever saying, you know, look at the big, like, show down and fuck you and whatever. I couldn't believe that.
I couldn't believe it.

Speaker 16 We laughed about it. We laughed and laughed and laughed.
We always, people, people can disagree about things. The Apple Watch wasn't quite as angry as that, but come on.
It wasn't even angry.

Speaker 16 It was just disagree. And you can then, you can then disagree.
And you might not even agree. Sometimes we often come to an agreement in some way, or we change each other's mind a little bit.

Speaker 16 In that case, we didn't. And so people thought we were really, I said bullshit to you.
People seemed upset by that.

Speaker 16 I was like, it's like every day with Scott, what's going on? I got lots of texts. Like, are you okay? I was like, what are you?

Speaker 17 I didn't think it was a thing. Although, I just want to assure everybody, the best thing about us fighting like that is we get to not have makeup sex.

Speaker 16 Yes.

Speaker 16 Ew.

Speaker 17 I can't believe I was just shocked. It was a media story.

Speaker 16 It was so ridiculous. Anyway,

Speaker 16 we'll do a big Jerry Lewis Dean Martin breakups. And that's an old reference, but we'll have one of those someday.

Speaker 17 But no, I thought about it that much once it was over.

Speaker 16 What would have to happen? What would have to happen for us to get in a real fight?

Speaker 16 One of us was date, the other spouse.

Speaker 17 I'm telling you, we should do it. Joe and Mika.

Speaker 16 I don't think you'd mind that either. I'm trying to think.

Speaker 16 I know. We're deeply in love.
Everybody, you'll see. Anyway, let's get to our first big story.

Speaker 16 Scott, how do you make a small fortune in tech? You start with a large one. That's what Elon Musk seems to have done at Twitter as he issues stock grants to employees.

Speaker 16 Musk says the company is now worth $20 billion. FYA, it's worth a lot less than that.
Less than half of what he paid for it, though.

Speaker 16 It was $44 billion is what he paid for it, or him and a bunch of people. Part of that could be due to disappointing Twitter Blue rollout.

Speaker 16 Since relaunching three months ago, the subscription service has made just $11 million on mobile.

Speaker 16 Blue's value is so low, Twitter might soon let subscribers hide their blue check mark, according to reports.

Speaker 16 That could help them blend in with the legacy verified accounts who are going to lose their check marks on April 1st. I'm so sad.
I don't know what I'm going to do without it.

Speaker 16 And adding insult injury, part of Twitter's source code was leaked online. That's a big deal, actually.
It was posted to GitHub. It may have been up there for months, according to the New York Times.

Speaker 16 No one's paying attention. You know, he's, no one's paying attention.
So, one, how did he strip so much value out of the check mark? It seemed to be something you could sell.

Speaker 16 And I think Facebook's about to roll out its version of it, which I think they're doing correctly. Is there any way to bring it back? I guess ours will go unless I don't know.
You're probably paying.

Speaker 16 I'm not. I'm not.

Speaker 17 I've been so upset by the way he's handled the whole thing that I just don't feel comfortable. giving money to them.

Speaker 16 I don't want to give him my credit card.

Speaker 17 Well, that too. I'm less worried about privacy.
I should probably be more worried about it.

Speaker 17 But this was a fundamental, I mean, the reason you take marketing is to understand consumer value proposition and to understand where the real value is and then to try and foot where you charge where the value is.

Speaker 17 And this is just like a classic marketing mistake. The value of the blue check isn't from the person themselves.
It's to the rest of the network so that people know this is actually Kara Swisher.

Speaker 17 And so to try and charge Kara Swisher such that the rest of the network can benefit from her identity, the only way you inject value is if you enforce identity. And they didn't enforce identity.

Speaker 17 So immediately people started buying blue checks for Dr. Phil.
And they said, blue check, I'm Dr. Phil.
And the whole idea of trust and verification got blown up.

Speaker 17 So they not only didn't figure out a way to create incremental value, they figured out a way to destroy the value of the blue check. I mean, this was just so poorly executed.

Speaker 17 Now, to the larger point about valuation here, he's valuing it for the purposes of issuing equity at $20 billion.

Speaker 17 The average multiple on revenues of Meta and Google and Snap is four.

Speaker 17 Optimistically, this company's got held on to $3 billion or is that an annual run rate of $3 billion, meaning it's worth $12 billion. Less.

Speaker 16 Less. He said less.
But interestingly,

Speaker 16 I'm in San Francisco still, and I ran into a former executive, and he was like, they'll be lucky if it's two, someone who would know,

Speaker 16 who was very involved in it.

Speaker 17 But let me finish. Let's give them a benefit of the doubt.
Let's say it's four times revenues. That means the company has an enterprise value of $12 billion.

Speaker 17 It's got $13 billion in debt, meaning the equity is worth nothing. He put a valuation of $20 billion on this thing.

Speaker 16 $22, yeah. It just, he's, this is again,

Speaker 17 he's trying to convince people there's an E-loan effect here, and then he puts out a big number of a quarter of a trillion dollars.

Speaker 16 Yeah, he says that. Yeah, that's right.
Just for people that don't know, he said the company will be worth $250 billion

Speaker 16 and that employees are allowed to cash in their stock grants at specific periods. How would Twitter employees feel who are still there? Like,

Speaker 16 what would you do? I'd go right over to an AI company. There's so many starting and so much funding going on.
What would you do? Is there any upside to staying? Like, well, it couldn't get worse.

Speaker 17 Well, look, I've always said to kids when there's a lot of tumult,

Speaker 17 that's when you stay and see what happens. Because whenever there's a lot of activity, who knows?

Speaker 17 Having said that, I would think at some point, if he keeps treating these employees employees with such a lack of respect or much less empathy, that it's going to be, it's going to exist.

Speaker 17 There's really going to be two types of Twitter employees. One, people who are just enormous fans of his and want to stick around and see what happens.
And also, to be fair, he has turned

Speaker 17 two distinct companies into incredible companies. So they're probably like,

Speaker 17 I'm going to bet on Elon and just see what happens. Or people who have other reasons to stay.
There's a lot of people there that probably lose their visa if they leave.

Speaker 16 Right. That was one of the issues for sure.
Would you stay, Scott Galloway? Would you stay? Or would you think I got opportunities elsewhere in this market, especially in AI?

Speaker 17 You know, Kara, I've been working for myself for so long, I can't even relate. I can't even understand.
I just couldn't, I couldn't stand.

Speaker 17 I mean, this is a guy that takes, that has people introduce them to advertisers and works them really hard.

Speaker 17 And then they find out on the way back from the meeting, they've been fired and they can't even get a hold of HR to get their COBRA payments. Right.
No. She's treated people so poorly.

Speaker 16 Poorly, shabbily. They have.
I think that's why we'll get to the GitHub thing in a minute, but the check mark thing, he wants businesses to pay $1,000 a month to keep their check marks.

Speaker 16 Businesses might pay that, but grudgingly, like not getting it. Because with Blues features, you get longer tweets, edit button, longer video uploads, higher ranked replies, NFT pictures, whatever.

Speaker 16 Nothing works. So why would you want to? That's one thing.
And he said that they still see the same amount of ads as everyone else. And he said they'd see half the number.

Speaker 16 I literally see an ad every two tweets now, if not every tweet. And they're really shitty ads and they're the same ad over and over again.

Speaker 16 I've never experienced such a decline in quality of a service. It's hard.
It's hard when I'm just looking because I was putting up some succession tweets. I use it purely for promotion.

Speaker 16 And I just was like, there's so many terrible ads that

Speaker 16 it's like watching cable late night, you know, one more ad for some, you know, Viagra kind of thing. He said he'd share Twitter ad revenue with blue subscribers.
He hasn't.

Speaker 16 And so it just creates a bad experience. And then the source code gets leaked.
And so usually it's people who have, it seems to be someone who left or this is what he was scared of.

Speaker 16 It's a, it's a problem. I've talked to a lot.
I didn't know if it was that big a problem.

Speaker 16 A lot of techies were like, oh, this is not a good thing because hackers can figure out more how to hack the company or shut it down or steal.

Speaker 16 Like, how are you going to get people to give you a credit card when the source code gets leaked so that hackers can, you're a better attack landscape, I guess.

Speaker 17 Aaron Trevor Barrett, well, if you can feed code into a large language model, AI,

Speaker 17 and ask where's the problem in the code, couldn't you ask different LLMs or different large language models, what's the vulnerability in the code here? I mean,

Speaker 17 this could go a lot of bad places. I'm surprised it took this long.

Speaker 16 He said he was going to release code. Remember that? He hadn't.
Like he said he was going to release it by the end of this month, I think.

Speaker 17 But when you treat, it's not that you lay off 80% of your staff. It's that you you treat 80% of your staff poorly.
And these are intelligent.

Speaker 17 And not only that, you're talking about a group of young, mostly young, mostly men, people who are part of a culture that, quite frankly, is a little bit wily and a little bit mischievous, right?

Speaker 16 And so when they're nice, when they're not nice.

Speaker 17 But then they're treated poorly. How easy would it be for one of these engineers to say, oh, I accidentally put in this line of code, and this line of code does the following in 90 days.
I mean,

Speaker 16 I would bet.

Speaker 17 It's like when a nation, when a departing army leaves a city, they booby trap the place.

Speaker 17 I would be shocked if there weren't booby traps all over Twitter. There's a lot of pissed off people who have been unceremoniously escorted out by security there.

Speaker 16 And not enough people to catch it.

Speaker 16 And not the best people. You know what I mean? It feels like not even his loyalists.
Remember that Esther Crawford got dumped? And, you know,

Speaker 16 even the ones who were super loyal to him get dumped. It's crazy.

Speaker 17 He has implied that good people who tried to stand by him, he has implied that they're guilty of sex crimes.

Speaker 16 That was Yoel Roth. Yeah.

Speaker 17 And, and what about, I imagine there's a lot of people who are loyal to Yoel and think, you know what? Fuck this guy.

Speaker 17 I'm supposed to, I can't even get my health insurance, but I'm supposed to, on the way out the door, ensure maybe I'm in charge of safety or making sure things don't get hacked and, you know, from IPs in Argentina.

Speaker 16 I mean, this is a complicated porous network with a lot of vulnerabilities i think i i'm shocked it took this long yeah this is buying him a lot of trouble i mean the only his only thing is if he can get it public and all his stands you know just like trump had this rally in waco with thousands of people he get a stance to buy it and become a meme stock i don't i don't know how else he can get this money back that's it could have happened that way um or it could not i mean people do you know i've turned everything around sure but doesn't mean you're going to turn this around if he was focusing in on ai AI, where he was very early to open AI and things like that, one of the primary funders, early funders of that,

Speaker 16 he would

Speaker 16 literally make so much money if he just focused on AI and not this. It's really, it's like a weird disease with this guy.
It's like a, you know, you can't fight it.

Speaker 16 Anyway, Elon, good luck in getting to $250 billion and good luck making people think it's worth $22 billion. We'll see.
We'll see. Good luck.

Speaker 16 You know,

Speaker 16 it couldn't happen to a nicer person. Anyway, Scott, let's go on a quick break.
And when we come back, a tough week for the crypto crowd, including Jack Dorsey.

Speaker 16 And we'll speak with a friend of Pivot, Emily Baker White, about TikTok.

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Speaker 16 Scott, we're back. Jack Dorsey's payments company, Block, is the subject of a damning report by the influential short seller Hindenburg Research.

Speaker 16 Hindenberg accuses Block of facilitating fraud through its cash app. The group found multiple impersonators on the app using names like Elon Musk and even Jack Dorsey.

Speaker 16 And Handenberg says it was able to obtain a debit card in the name of Donald J. Trump.
Block's stock price fell almost 15% following the report. Block, of course, is pushing back at all this.

Speaker 16 Any thoughts?

Speaker 17 I think what you have here is there's been such a lack of regulation that you have other entities filling this void.

Speaker 17 The first kind of person to fill the void was Tim Cook, came in and said, all right, Facebook and Meta are such bad actors and have so overrun Washington regulators.

Speaker 17 I'm going to step into this void and basically stop them from molesting the privacy of iOS users, or at least give them the ability, make it opt-in as opposed to opt out.

Speaker 17 And then Hindenburg has come in and said, we're going to pretend that we're the SEC or that we're a regulatory body in India and just highlight what looks like blatant inter-party dealings that you can easily find, yeah.

Speaker 17 And then and now they're going for these guys. The only thing that, I mean, I thought was really legitimate and caused for concern was that it's pretty easy.

Speaker 17 They're claiming that a lot of Cash App accounts are fakes. So when they announce that, oh, our number of Cash App users is up, it's again more of this wash trading or false signals to the market.

Speaker 17 I think it's fascinating. I think Hindenburg is a fascinating company.

Speaker 17 I love it when people figure out a way to, it's like there used to be, you know, instead of investigative journalism, it's investigative investing. And it's really interesting.

Speaker 17 Now, at what point does their

Speaker 17 investigations become sort of hyperbola and quite frankly, exaggeration?

Speaker 16 Because they're a short seller and that's what they get accused of. And Block might take legal action against them.
No, they're not. Well, okay.

Speaker 17 They're going to want this out of the news as quickly as possible. I don't think.
If I were on the board there, it's like, you really want this in the news? You want a judge saying that no.

Speaker 17 You want a judge really looking at all these things they're accusing us of, and it's their First Amendment rights.

Speaker 16 Right. Drug sales, sex trap, facilitating drugs, illegal activity, not monitoring enough.
I think that was more of their thing. And this particular group, I mean, it's a 17,600-word report.

Speaker 16 And obviously, it's a short seller. Let's put it at that.
But it doesn't mean short sellers are always wrong. And, you know, I think

Speaker 16 they're making their case, which is what shortsellers do. A lot of short sellers, you know, they said they're going to explore legal action, you know, and it's interesting.

Speaker 16 But they, listen, Hindenburg just took billions of dollars off of the Adani group, that Indian billionaire guy, Gautam Adani.

Speaker 16 They had allegations of fraud at Nicola, the electric truck maker, and the CEO, and criminal prosecution of its CEO happened. And so

Speaker 16 these are not people to trifle with in terms of just doing things. And of course, short sellers always

Speaker 16 get dinged for this, but sometimes they're quite... accurate and they do want to make the case.
They want to make the anti-case

Speaker 16 for these companies. And so you're right, there's not enough regulation here.
They might not have been running the show as right. And so they can find fraudulent things all over the place, right?

Speaker 16 Even as these things have surged in value. So anyway, it's really, it's an interesting

Speaker 16 thing.

Speaker 17 But 20 years ago, some incredibly talented person of the New York Times or the FT

Speaker 17 would have had the license and the resources to have an editor assign

Speaker 17 this to them. And they would go in and do all of this themselves and then they would write something on it.
And the stock might go up or down based on that.

Speaker 17 Instead, because there isn't enough money in covering this from a journalistic standpoint, the new business model is investigate companies. And when you find there's trouble in Mudville, write it up.

Speaker 17 But before you do that, go buy, go short a shit ton of stock.

Speaker 16 I think it's fascinating.

Speaker 17 I'm really interested in that.

Speaker 16 This is not a group to be trifled with. I think they're quite careful.
Well, they do the work.

Speaker 17 I mean, have you seen this? Have you seen this presentation? It's pretty popular.

Speaker 16 I have not. 17.
Well, look, you did that around WeWork and lots of, you know, you can be right and also have economic

Speaker 16 interest in it.

Speaker 17 Anyway, just by the way, I did not have an economic interest in it.

Speaker 16 You did, but lots of people, you know, a lot of short sellers wandering around that and stuff like that.

Speaker 16 Anyway, another thing that's happening this week, authorities in Montenegro arrested Doe Kwan, the founder behind Terra and Luna cryptocurrencies.

Speaker 16 Terra and Luna collapsed last May, wiping out nearly $40 billion in value. This year's second biggest crypto disaster, none of which was covered by the federal government.
Kwan is wanted in the U.S.

Speaker 16 and South Korea on charges charges of fraud.

Speaker 16 SEC is stepping up enforcement against crypto companies. It's been a bad week for Kathy Wood.

Speaker 16 Anyway, last week, the agency issued a Wells notice to Coinbase warning of possible violations of securities laws.

Speaker 16 SEC also issued a warning to investors saying crypto companies may not be complying with the law.

Speaker 16 You know, they charged a handful of celebrity, including Lindsey Lowen, of illegally promoting crypto securities. Lowen and Paul settled without admitting any guilt.
Talk a little bit about this.

Speaker 16 This is where the SEC can take action. This is an area that remains the Wild West.

Speaker 17 Everything they're doing here makes sense.

Speaker 17 The problem is,

Speaker 17 is it a day late and a dollar short?

Speaker 17 And that is so many retail investors have gone on a roller coaster ride and had very smart people going on CNBC or on Twitter making very compelling cases for crypto

Speaker 17 and then lost a lot of money. And

Speaker 17 I just wonder, the point of the government is to do things

Speaker 17 that citizens can't do, you know, fund and run the Navy. The government's better at that than any private agency.

Speaker 17 And they're also supposed to think long term and prevent a tragedy of the commons, even when it's not popular.

Speaker 17 And the thing I don't like about this is my sense is they're moving in now because they feel as if they have public support and cloud cover.

Speaker 17 And the whole point of leadership is that you're supposed to move in and do things even when they're unpopular, which these things would have been 24 months ago, but they would have taken some heat out of this Ponzi scheme balloon that ended up costing a lot of people, mostly retail investors.

Speaker 17 You can bet the people on the inside here, the Carnival Barkers, were selling over the last 24 months. And so great.
It's good to see you.

Speaker 17 It would have been great had you shown up when the house was on fire.

Speaker 16 Yeah. Yep.
Yep. And what it does is, you know, there's a lot of, someone pointed out to me, there's a lot of good stuff in here too, that should be helped, right? So all the better players.

Speaker 16 And so what it does is it takes the whole industry and throws it in the trash in a lot of ways because of these very bad players. And listen, they got out of control, a lot of these people.

Speaker 16 It'll be interesting to see what happens to something like Coinbase was considered one of the more viable companies, right?

Speaker 16 And its CEO was Brian Armstrong, was quite out there, you know, being a thought leader, doing thought leader things.

Speaker 16 And what happens, who comes in and becomes the face of this? Obviously, because of these bank failures, Bitcoin was up. It's not going away, you know, so it's a really interesting time.

Speaker 16 But you're right, the government should have come in before.

Speaker 16 But it didn't come in like we talked about with TikTok. It didn't come in many years ago.

Speaker 16 I mean, it just didn't, it doesn't come in with all the internet stuff. It just waits and waits and waits until damage is done, whatever the damage happens to be.

Speaker 17 Yeah, I just, it strikes me that what we've seen over the last few years is there's been a lack of regulation. across almost every industry.
And it's ended up hurting those industries.

Speaker 17 There's even, there are some very very thoughtful people in the Web3 and crypto space.

Speaker 17 And most of them, ranging from Michael Saylor to Novogratz, have actually called, you know, they did, to be fair, they did say regulation would be a good thing. And it wasn't a fake Zuckerberg.

Speaker 17 Oh, we want to be regulated, wink wide.

Speaker 16 Wankman Freed. So that's who, remember, he was Mr.
Let's Regulate Us kind of thing.

Speaker 17 Yeah, and then sending out text messages saying, fuck the regulators, they're idiots.

Speaker 17 I do think that the people who see value in an alternative form of some sort of store of value or currency in crypto would like to see some form of regulation because they realize that the Wild West is becoming lawless and people are going to stop settling.

Speaker 17 They're going to go, no, I don't want to live in that town because there's no sheriff.

Speaker 16 Well, except the price of Bitcoin. Right now, it's

Speaker 16 $26,000, almost $27,000. It was at a low of $16,000 back in January or something like that.
It's obviously the high has been in $61,000, $62,000. So it's still around.
It's still a thing, right?

Speaker 16 Of course, and the same carnival barkers are still there, essentially.

Speaker 16 But it'll be interesting to see if real, not just enforcement action, but real rules around rules of the road here and what it does. Because I don't think you would ban this entire sector.

Speaker 16 I don't know. I don't think you think that.

Speaker 17 No, I just, the thing that's most troublesome about

Speaker 17 Bitcoin, and again, I've always thought Bitcoin's genius is they figured out a technological way to create scarcity value. And that's the key to a fiat currency that endures.

Speaker 17 And no fiat currency has ever endured because of the political pressure to avoid, you know, to ruin the scarcity illusion and just keep printing.

Speaker 17 And some people would argue we're already starting that downfall based on the amount of debt we've taken on in printing. One in $3 in circulation has been printed since COVID.

Speaker 17 The most distressing thing from a national standpoint is that when you see the banking system, when you see what is arguably one of the most existential threats, maybe with the exception of COVID over the last 10 years to the U.S.,

Speaker 17 to the country, you see Bitcoin skyrocket. The problem is it separates interests from some of the most powerful people in the world and those of Americans.
And that is you start betting on the U.S.

Speaker 17 banking system unraveling and America becoming a more insecure place. In other words, typically businesses do have some alignment with the interests of American.

Speaker 16 Supervisibility, yeah.

Speaker 17 And when all of a sudden it's like, oh, wait, if I shit talk the banking system and the U.S.

Speaker 17 economy and say we're going to go into hyperinflation and the banking system is going to collapse, and that means my $10 billion in crypto investments go up, it's just a dangerous place when we can't figure out a way to create regulation that aligns the incentives of the most powerful people with the interests of Americans.

Speaker 17 That's the frightening thing about Bitcoin's rise over the last week or two weeks.

Speaker 16 Yeah, I would agree. It's very dystopian.
But let's get back into the real world and bring in our friend of Pivot.

Speaker 16 Emily Baker White is a journalist and senior writer at Forbes, where she's broken some of the most impactful TikTok stories that we talk about every week. So Emily, welcome.

Speaker 16 I just want to say you work for someone used to work for me, John Pachkowski. When we call patches, you're welcome to do that.

Speaker 16 And if he gives you any trouble, please let me know and I'll make sure he doesn't. Okay.
Noted. Okay, good.
So let's talk about how you first started reporting on TikTok.

Speaker 16 Last year, you reported that American TikTok user data had been accessed in China. The same day your story broke, TikTok announced it was moving American data Oracle.

Speaker 16 Talk a little bit about that first, and we'll get to what happened to you.

Speaker 19 Yeah. So I first started reporting on TikTok a little over a year ago.
And my first story broke the existence of Project Texas, which is TikTok's sort of big bet to try to sequester U.S.

Speaker 19 user data to be managed by a team based in the United States and to host data only in the United States and sort of limit access to that data abroad.

Speaker 19 And after I reported that first story, I received an email that said, Project Texas, want more question mark. And as a journalist, you definitely want more.

Speaker 19 So I began speaking with the person who sent me that email. And eventually, that person

Speaker 19 was able to share with me audio recordings of over 80 internal TikTok meetings about Project Texas,

Speaker 19 which took a long time to go through, but taught me a lot about Project Texas and about how TikTok is thinking about data management. And I wrote a story based on that leak last summer,

Speaker 19 which showed that in the course of trying to

Speaker 19 redo its sort of data pipelines, which was the right thing, right?

Speaker 16 Which is important for them, sure. Yeah.

Speaker 19 In service of a good thing, employees at TikTok's parent company, ByteDance, who live in China and work in China, had to access U.S. user data regularly because that's the way the app was built.

Speaker 19 And so TikTok and ByteDance had often answered questions about whether our

Speaker 19 US user data was accessible in China by saying, oh, it's okay, the data is stored in the United States. But that's an answer to the different question.

Speaker 19 And so what we were reporting on was data access.

Speaker 16 That they could get it, that they could get it.

Speaker 19 That they could access it. I don't know where my Gmail messages are held.
I don't know where the server is, but I know that I can get them no matter where I am around the world.

Speaker 19 And it's sort of the same thing.

Speaker 16 So it's the access idea. So they noticed your work.
And when did you first learn that they were accessing your location data?

Speaker 19 I learned that in October of last year.

Speaker 16 So how did that happen?

Speaker 19 So a source from inside the company let me know that there was a leak investigation into who had leaked me audio from those meetings. And as part of that leak investigation, sure, normal thing.

Speaker 19 But as part of that leak investigation, a team at ByteDance

Speaker 19 was going to pull my TikTok user data, including my IP address, which gives an approximation of my location.

Speaker 19 And the idea was that they would also, they would then match that data or attempt to match that data against the IP address based location of all of TikTok and Byte Dance's employees, which also meant, by the way, they were watching where all of them were going.

Speaker 19 But the theory is that

Speaker 19 if my phone, if my TikTok account showed that I was in a cafe at a certain time and a TikTok or Byte Dance employee was in that cafe at the same time or a library or whatever public space, that might be a clue as to who was leaking information to me.

Speaker 19 Apparently, they didn't actually get any leads on their leak investigation from pulling this data, but the fact that they pulled it meant that it was possible sometime between October and December when they concluded their investigation for individuals in China who work for ByteDance to pull the IP address base location of individual U.S.

Speaker 16 citizens such as you, that they're able to do it. Again, they had to be able to be accessed.

Speaker 16 It's interesting because years ago, there was someone at Yahoo called me and said they were surveilling me, meaning actually physically following me.

Speaker 16 Who knows? You know, who knows, right? That's the thing. This is what these people do.
But in this case, pulling your actual data.

Speaker 16 Now, this group of employees who've all been fired, their bosses didn't know. Do you believe them?

Speaker 19 I know that some bosses knew.

Speaker 19 Some of the people who were fired were the bosses of other people who were fired. So clearly

Speaker 19 there was some senior knowledge. I don't know exactly which executives knew what thing.

Speaker 19 But what's scary to me is they say they've, first of all, they've fired some people. Second of all, they reduced access to those to that team.
So that team can't pull that kind of data anymore.

Speaker 19 But how many teams like that team exist? And this team, it was sort of part of their job to figure out who was leaking.

Speaker 19 So they sort of thought they were doing their job, but it turns out that they were using data in a way that really makes us concerned.

Speaker 19 And so are there other teams that sort of think they're doing their job that could be pulling data that could be putting people at risk?

Speaker 17 Nice to meet you, Emily.

Speaker 17 So there's kind of what I'll call the espionage threat.

Speaker 17 And it sounds like when they spy on journalists, as they were with you, that's the espionage threat and most social media companies in one way or another have been accused of or been proven sort of guilty of engaging in this they have all this data it's hard to resist the temptation to you know you can see how these bad decisions get made oh my gosh there's an existential threat to the company someone's leaking confidential information let's find the leaker that's our right and you can see how one bad decision leads to more bad decisions but the other threat and i would argue it's the bigger one is the propaganda threat and not access to user data as much as it's access to the algorithm such that you could just elegantly put your thumb on the scale of anti-American content.

Speaker 17 What are your thoughts on this as the threat of

Speaker 17 propaganda versus espionage?

Speaker 19 I agree that it's the bigger and more complicated threat for a couple of reasons. First of all,

Speaker 19 there's a strong argument that the Chinese government could get my IP address another way if they really wanted to. Data brokers can sell it to them, right?

Speaker 19 But there aren't that many people or entities that have access to sort of subtle control over what millions of people are seeing each day. So I agree with you that I think that's bigger.

Speaker 19 It's also, we might not know if it were happening.

Speaker 19 Obviously, there's content that's critical to the Chinese government on TikTok today, but we don't know whether it's being subtly downranked or other content is being subtly upranked.

Speaker 19 So we don't have evidence that TikTok is manipulating its algorithm to serve the Chinese government.

Speaker 19 The closest we have is I reported a story last year when I was still at BuzzFeed about another ByteDance app called Top Buzz. It was a news aggregator app.

Speaker 19 And people who previously worked for ByteDance told me that the Top Buzz app would sometimes pin or promote or sort of send to the top of the feed

Speaker 19 content that

Speaker 19 shared sort of pro-China messages. And this was soft stuff, like this is a cute panda or this is a great place to go on vacation.

Speaker 19 ByteDance denied that that happened, but multiple former employees told me that it happened and how it happened.

Speaker 19 And so that's sort of the closest we've seen to a direct allegation that ByteDance has ever used its international acts anyway.

Speaker 16 Right. Right.
But we wouldn't know. That's the whole, that's the whole point of this stuff is it's very subtle.

Speaker 16 In this case, I want to just get back to the access things because the idea of tech companies monitoring journalists, again, as Scott Scott said, is not new.

Speaker 16 And they all do it at Harvard. Mark Guckerberg allegedly used Facebook data to read the emails of Harvard Crimson journalists who are writing about his drama with the Winkleboss twins.

Speaker 16 Facebook was accused of people there looking at ex-girlfriends and stuff like that. I remember in the early days, Uber had the god view that everybody was watching and they were watching journalists.

Speaker 16 I think they said, I was Travis Callan for one of the executives said, oh, I know where you went, like that kind of stuff. Is it, and I know I've been tracked in some way.

Speaker 16 I don't use these things as much as you were doing in this case. Do you think it's a, what, what do you think the impact is? How did you feel when this was happening? Because it does create,

Speaker 16 I mean, as Scott said, they feel like they have a right to do it because someone's asked with me, it was because I had all their internal memos. They wanted to figure out who was giving them to me.

Speaker 16 What was the impact on you?

Speaker 19 It certainly didn't make me want to report on them less.

Speaker 19 I think when a company is trying that hard to keep you from getting information, as a journalist, you're more determined to go with the information.

Speaker 19 I also just think it was a terrible bad decision. I mean, Scott called it a bad decision.
And I think that's exactly what it is here, because

Speaker 19 these are two companies. This is an entity that's trying so hard to get the government and the public to believe that it is not spying on people.

Speaker 19 And this was such an unforced error. I don't think it ever, like when companies spy on journalists, and to your point, many of them have, it comes out and it looks really bad for the company.

Speaker 19 So like companies, come on, like, you know, this is going to end badly if you do it. You know, it's probably not going to get you that much information.

Speaker 19 Why on earth did they think this was a good idea?

Speaker 16 Well, they, they do think they can stop whistleblowers. In one case, I think Carol Bartz was the CEO.
They were implicating someone who didn't leak to me.

Speaker 16 And I called them and I said, I've never done this, but this is not a person who leaked to me. And if you fire them, I'm going to make sure you pay the price for being wrong, right?

Speaker 16 I'll actually come out and say this wasn't a source of mine.

Speaker 16 How do you stay safe online now when you're, because you want to use this app because you're covering it, right?

Speaker 19 I do not have the app on my phone.

Speaker 16 Oh, you don't? Well, neither do I. So that's one thing you do.
What else do you think you have to do? Do you worry about where you go or that they're continuing to monitor you? Or are you a safer?

Speaker 16 Are you in a great shape? Because they won't. They'll stay away from her, even if she breaks stories.

Speaker 19 I assume there are lots of people who want access to my communications. And so I try to take all the reasonable steps we can.

Speaker 19 Use Signal folks.

Speaker 19 I use encrypted email sometimes. And a lot of it's also about meeting sources where they're at because sources have different strategies for staying safe.

Speaker 19 And at the end of the day, they probably know what they're afraid of more than you do. And so

Speaker 19 I have had sources communicate with me in ways that I wouldn't have thought of.

Speaker 16 But what, like a dead drop? What? I'm not going to tell you. Okay.

Speaker 16 I hope it's a dead drop. I love it.

Speaker 19 But I think we do have to meet sources where they are and

Speaker 19 help them do whatever they need to do to stay safe without sort of, obviously, we can't tell sources what to do. That wouldn't be smart and it wouldn't be right.

Speaker 16 Yeah. This brings me back to the days.
I liked when they were spying on me. It was so ridiculous and they were so stupid and cloddish in the thing.
There's also,

Speaker 16 someone brought up your status as a former Facebook employee. Facebook's obviously thrilled that this is all happening.
How do you think about that? Explain that so people understand it.

Speaker 16 I think it's ridiculous.

Speaker 19 I've reported a bit on Facebook and Meta too. And you can see from my reporting that

Speaker 19 I don't pull punches against Facebook and Meta. I think they have a lot of problems and should do a lot of things better.

Speaker 19 But I think a lot of the issues that TikTok faces, not all of them, but a lot of them are faced by other companies as well. I mean,

Speaker 19 I think a lot of the data security things that TikTok could do better, Meta could also do better.

Speaker 19 And of course, all of the sort of content moderation, privacy versus security, like all of these trade-offs are trade-offs that all of the companies are dealing with.

Speaker 19 And so I think it's, you know, hopefully the fact that I have worked at other,

Speaker 19 at these companies in policy can give me like a more granular understanding of what's happening.

Speaker 16 100%. Zoe Schiffer, a platformer.
I think she knows more because she's a techie

Speaker 16 who works at Casey Newton's platformer. I think it gives

Speaker 16 you a thing up.

Speaker 17 Emily, what do you think happens here? If you had to predict or speculate, there's been so much discussion around a ban or a spin.

Speaker 17 What do you think is going to happen? How do you think this plays out?

Speaker 19 I think a spin is the more desirable option, but I like, obviously, if we don't have to ban an app that half the country is using, that's better than banning an app that half the country is using.

Speaker 19 And I don't think anyone really wants a ban, except maybe Mark Zuckerberg, but he can be in his own little world there.

Speaker 19 But I think there are questions about whether the government will successfully be able to force a spin or a sale.

Speaker 19 The Chinese government could try to prevent that through tweaking its export laws or saying ByteDance doesn't have sufficient licensing in order to sell a recommendations algorithm, which is something that they sort of tinkered with before.

Speaker 19 And there also aren't that many companies with enough cash to buy TikTok. And the ones who do have enough cash to buy TikTok, like Meta, like Google, might have an antitrust problem if they tried.

Speaker 19 So it's going to be complicated, but I don't think anyone wants a ban here.

Speaker 16 Is it going to happen? What was the mood on the hill? You were there at the hearing. They were citing you too.
I thought, they thought they were ridiculous.

Speaker 16 I thought they were ridiculous too, but maybe it's just me.

Speaker 19 They often would ask a question and then not allow the question to be answered. And at that point, you're not asking a question, at least not one that you actually want to hear the answer to.

Speaker 19 And I thought that was frustrating. But it was a big tech hearing.
There was a lot of theater.

Speaker 16 Yeah. It was a startling lack of evidence.

Speaker 16 That to me, I mean, to make TikTok look like a victim was really hard here in a lot of ways and i think that the lack of evidence is my problem um and they bet they hung a lot on you too uh which i think you wouldn't do i think you'd be much more even-handed in how what happened there which you have been um is that effective of congress doing that sort of you know banging all these drums it depends what they're trying to do yeah so what do you think they're trying to do i mean congress has long

Speaker 19 had big tech hearings, pulled people in, made a lot of noise, and nothing actually came of it. I think the mood here is a little different.

Speaker 19 I think there are a lot of people who do want to do something. And there's also a sort of question of which organ of the government is actually the one making choices here.

Speaker 19 There's sort of a weird thing that happened where TikTok told the press last week, maybe it was more than last week now, maybe it was two weeks ago, that the Committee on Foreign Investment in the United States, with which they've been negotiating for years,

Speaker 19 had basically rejected Project Texas as a solution and was saying, by dance, you're going to have to divest or separate from TikTok or else face a potential ban.

Speaker 19 And then TikTok CEO went on the hill, which is, if anything, probably a more hostile audience and made the case for Project Texas, which the Biden administration per TikTok is rejecting.

Speaker 19 And so it wasn't totally clear to me who Shou Chu was talking to or who he was trying to persuade.

Speaker 19 But I think

Speaker 19 the Biden administration and Cepheus have been looking at this for a long time.

Speaker 16 And Cepheus is the real deal. They're the actual techies.
Yeah.

Speaker 19 But go ahead. And they appear to think that

Speaker 19 an arrangement where Byte Dance continues to own TikTok is insufficient. They don't seem to be willing to go there.

Speaker 19 And if they're not willing to go there, I'm curious why Shochu is arguing to Congress that they should go there, because I think Congress is less likely to do that.

Speaker 19 So I think it will be interesting to see what the Biden administration and CFIAS do in the coming weeks, whether we hear from President Biden himself on this and whether Congress tries to actually pass legislation in the meantime.

Speaker 17 Do you think, I mean, you've gotten to know this company pretty well.

Speaker 17 How would you describe the culture in contrast with some of the other social platforms that were always that we kind of have done a 180.

Speaker 17 We sort of thought they were our heroes and then they kind of turned to the villains.

Speaker 17 Do you feel as if you know the other companies well enough to sort of compare and contrast their cultures as it relates to this,

Speaker 17 lack of a better term, rationalizing bad actions?

Speaker 19 Well, I'll say this about TikTok, and it's true of the other companies, but it's even truer of TikTok. It has grown incredibly fast.
And when you grow that fast and you hire that many people,

Speaker 19 you are standing up so many teams. You don't even, there was a team stood up last week that does the thing that your team is doing now.
And it just causes a huge amount of chaos.

Speaker 19 And I think that that's true at all of the companies. I think that's true at Facebook.
I think it's true at Google.

Speaker 19 But Facebook and Google have more time to sort of figure out how to make the left hand talk to the right hand talk to the, you know, 14 other hands.

Speaker 19 And

Speaker 19 I think just because TikTok has grown this fast, it's a very chaotic place to work. And there's not always necessarily a really clear

Speaker 19 chain of command for every decision that needs to be made. And I think that can lead to what we call in the tech industry thrash.

Speaker 16 Oh, thrash. That's a great word.

Speaker 19 Fantastic. They talk about things being thrashy all the time.
I use it with people. Chaos.

Speaker 16 Yeah.

Speaker 17 The tech and the skateboarding community use that word.

Speaker 16 That's like chaos, right? That's essential.

Speaker 19 I didn't know that this was a tech word until I started saying it to Ngai people.

Speaker 16 They're like, what are you talking about, thrash?

Speaker 19 And when things are thrashy, like everyone's going back and forth and there's no clear decision and we don't know what's going on.

Speaker 16 Yeah, it's chaos. Chaos.
That's what we call it in our world. Okay.

Speaker 16 well this is fascinating emily um it's really great that you're in digital media john is lucky to have you just so you know uh congrats on your work yeah congrats and let's see that's we're excited to see more thank you and congrats on being spied on hasn't this made your career no

Speaker 16 this has it i didn't ask to be spied on thank you i would argue it's been good for your brand because it shows that that very powerful people are worried about you for a reason yeah but at the same time i got to say i think you're being very fair to them too you're not like you know it's not uh you don't seem like i cannot believe this company and i think there are a lot of there are a lot of people with a lot of like do trying to do good there are a lot of people trying to make money it's it's it's chaotic and sometimes bad decisions are made you and harry and megan just want your privacy you just want your privacy yes yeah but listen emily can i give you only one word of advice it's usually um i said this about what was happening at twitter this week but it's always the case is intelligence has its limitations and stupidity is infinite and these companies are much more thrashy than you realize and once you start to that was one word.

Speaker 16 That was one word of advice. Thrashy to stop you.
Anyway, Emily Baker White's work is in Forbes. You can follow her on Twitter at EBaker White.
Emily's a gangster.

Speaker 16 Well done. Thank you, Emily.

Speaker 19 Thanks both.

Speaker 16 All right, Scott, doesn't it make you feel good, all these amazing journalists, young heroes? Are we going to doctor? No, but also Zoe Schiffer. There's so many great journalists.

Speaker 16 I feel good for the journalism profession when I talk to reporters like this.

Speaker 17 It's very heartening. And by the way, Yahoo is spying on you? Oh, yeah.

Speaker 16 I forgot that.

Speaker 17 That's about as threatening as like American Samoa declaring war on you.

Speaker 16 It's like it was at the time. It was at the time.

Speaker 17 To be clear, I just want to say when you say, well, Yahoo was spying on me, that's literally the weakest flex in the world.

Speaker 16 At the time, it was a big company.

Speaker 16 Let me just say I took down three CEOs, I believe. Anyway, we'll see.
It was just ridiculous. It was so comical and stupid.

Speaker 16 But it was at the time worth a lot. And a lot of people lost a lot of money.

Speaker 17 MySpace, Lyft has been tracking me.

Speaker 16 Uber was tracking. It was a problem at the time.

Speaker 16 I agree. I agree.
Always try to denigrate my

Speaker 16 achievements. And it's hard.
You're trying to keep it real. Yeah, right.
It was a big deal at the time. Obviously, it's not now.
I don't even mention it.

Speaker 17 Well, you're a big deal at this time.

Speaker 16 Oh, okay, whatever. I don't take people down anymore.
I just comment on people taking people down. Let's not have another argument, okay? Because people will talk.

Speaker 17 We get to not have makeup sex again.

Speaker 16 Okay. One more quick break.
We'll be back for wins and fails, a win that I don't have to have makeup sex.

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Speaker 16 Okay, let's hear some wins and fails. I'm going to go first.

Speaker 16 What's happening in Israel? Israeli Prime Minister Benjamin Netanyahu, who fired his defense minister this week. This is a fail.

Speaker 16 It's a fail for him after official publicly opposed a plan to weaken the nation's judiciary system. Led to outrage.

Speaker 16 Departing flights were grounded at the airport there on Monday as protesters and laborians rallied against the plan. They are the win.

Speaker 16 There's thousands, 100,000 protesters blocked Tel Aviv's main highway. The Israeli orchestra was performing in the street.

Speaker 16 A lot of these ministers of Netanyahu, there are reports that he's suspending the plan,

Speaker 16 which could get him in trouble with the far-right members of his coalition. It's tech companies are protesting that are in Israel.
It's causing real and serious problems. What a fail on behalf.

Speaker 16 It's inexplicable that he's continuing to be this stubborn.

Speaker 16 And the Israeli people handling this, you know there's there's instances of fires and things like that but in general what a way to handle a situation like this it's sort of a little taste of what might come if trump ever got back in office in a lot of ways i was thinking so anyway uh benjamin netanyahu it's time to go and uh go good for you israeli people for doing this very prominent people of on all sides of this are coming out against this was coming and it's just the way a democracy needs to work and uh at at some risk i would assume so anyway that's my win.

Speaker 17 Yeah, so my fail is the same as yours:

Speaker 17 this kind of

Speaker 17 democracy to autocracy shuffle inspired by Donald Trump. Bolsonaro tried it, and now Netanyahu is trying it.
I always thought Netanyahu was conservative, but I thought he believed in democracy.

Speaker 17 I think that he has literally just shit in the pond that is his legacy. This is nothing but an attempt to replace the Supreme Court.

Speaker 17 It is really damaging

Speaker 17 to the region and to democracies globally, because Israel, in addition to having an incredible culture and creating what is arguably one of the most productive societies out of dirt,

Speaker 17 and was always seen as a real beacon of democracy. And to just say, well, the Supreme Court and our laws don't match my political,

Speaker 17 you know, my political opportunism. So I'm going to try and dismantle the Supreme Court.
And

Speaker 17 you're right. Israel,

Speaker 17 this attack on our institutions, I mean, institutions, there's, I forget who said it. Institutions are just the long shadows of people.
And the people, the Israeli people are stepping in here.

Speaker 17 On my way home from dinner last night in London, I saw a bunch of Israeli flags outside of, I don't know if it was an embassy or someone's home.

Speaker 16 You know, the U.S. has said, ex-U.S.
Ambassador Israel said it was a bad miscalculation. You know, each of the leaders from London to Paris to Biden are saying things, which usually you don't.

Speaker 16 Probably they'd say a lot more if it wasn't Israel in a lot of ways, but and they have all the flags. It's kind of beautiful in a way.

Speaker 16 It is, but it's still, Israel is a vulnerable country. And this kind of instability is dangerous too, right? It's very dangerous just to get out of a corruption, you know, or say that.

Speaker 16 Speaking of which, essentially is saying that the justices have too much power and that they're too captive of the left, which is such a, it's the same thing that Trump was doing at the rally, is the left was doing it.

Speaker 16 Let's celebrate the insurrectionists. Let's take down government.
It's the same little song that they're doing it.

Speaker 17 I don't think people realize how powerful a role model, both positively and negatively, America serves.

Speaker 17 I don't think this would have, I don't think Netanyahu would have had the audacity to try and dismantle the democracy that is Israel if he hadn't looked at America and said, well, if they can almost get away with it, maybe I can't.

Speaker 17 It just, it's this, this democracy to autocracy shift is rolling across the world. And Israel, which is arguably one of the strongest democracies in the world, is also not

Speaker 17 totally immune from this. So anyways, I loved your win and fail, and I just want to echo it.
I won't add to it. I think that's exactly right.

Speaker 16 There's also the far right there. The far right minister says he will resign if the overhaul legislation is stopped.
A lot of these people are under investigation themselves, including Netanyahu.

Speaker 16 But he said he's going to freeze the legislation. It doesn't mean he's giving it up.

Speaker 16 But they're going to,

Speaker 16 you know, the far-right minister just right now is looking at Haretz, says Netanyahu has agreed to postpone judicial overhaul.

Speaker 17 And so that probably kills it. He probably postpones it and never brings it up again.

Speaker 17 They miscalculated here. This was the Israeli people have said, sorry, democracy kind of works for all of us.

Speaker 16 We'll see.

Speaker 17 There has been an enormously inspiring pushback on this. My win is

Speaker 17 as somebody who's been talking a lot about the struggles that young men are facing, I think the narrative has really shifted in a very positive direction over the course of the last 24 or 36 months.

Speaker 17 It was kind of the narrative or highlighting the struggles of young men. I think you have to give

Speaker 17 I'm trying to separate the person from the politics here and recognize that the conversation was initially somewhat catalyzed by Jordan Peterson.

Speaker 17 And I do think he deserves some credit for catalyzing the conversation.

Speaker 17 I think that a lot of it.

Speaker 17 Hold on. I think a lot of it was couched in thinly veiled conservatism and red pilling.

Speaker 17 But he does deserve credit for catalyzing a conversation.

Speaker 17 Unfortunately, the conversation from that point went to very dark places, and a lot of TikTok celebrities picked up the torch and basically wrapped pro-male

Speaker 17 narrative in misogyny, or they used it as a front for what was thinly veiled misogyny. And then I do think it's taken a much more positive turn.

Speaker 17 And I would argue that the turning point, I think, recently was Richard Reeves' book.

Speaker 17 And Richard just has this wonderful...

Speaker 16 Good. Thank you for citing someone terrific.
Go ahead.

Speaker 17 Well, I'm glad you approve.

Speaker 17 So, but Richard has this wonderful statement, and I parroted him on Bill Maher this Friday, and I should have credited him, so I want to credit him right now.

Speaker 17 But he says something that is really powerful, and that is compassion is not a zero-sum game. And that just because he said, and it makes sense, right? If

Speaker 17 civil rights was not a zero-sum game, it didn't take away from white people. Gay marriage has not taken away from heteronormative marriage.
They've both been accretive to all those things.

Speaker 17 And having compassion for young men does not mean you can't continue to have compassion for the

Speaker 17 important strides and the continued need to work on the problems facing girls and women in our nation.

Speaker 17 But I just love he is he has turned this narrative to something much more positive and productive. And you are seeing elected officials talk about the need for vocational training.

Speaker 17 We don't talk about this, but the Infrastructure Act is going to create 70% of the jobs that will be created will be created for men who don't have college degrees.

Speaker 17 And that's something to be celebrated because a lot of these men have seen a lot of their jobs or a lot of job opportunities go away.

Speaker 17 But anyways, my win is this discussion around the importance of talking about struggling men and young men in the U.S. has taken a more positive arc.

Speaker 17 And people don't immediately have an understandable

Speaker 17 gag reflex of being advocating for men has somehow being anti-women. It isn't.

Speaker 17 So, anyways, my win is I think the narrative, largely shaped by some really wonderful work by Richard Greaves and others, has moved the narrative away from this TikTok, thinly veiled misogyny to a real open and honest discussion around how we have more compassion for any group that is really struggling or falling.

Speaker 16 I will take that. That sounds good.
I like it. I like it.
It's bigger. It's bigger rather than someone's aggrieved victim.
I would agree. We don't agree on Jordan Peterson, but nonetheless.

Speaker 16 But I really like that, Scott. And I agree, Richard Rees.
It's worth reading that book. It's really quite something.
Anyway, we want to hear from you.

Speaker 16 Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com/slash pivot to submit a question for the show or call 85551-PIVOT.
pivot. Okay, Scott, that's the show.

Speaker 16 And you are accretive to me. Let me just say that.

Speaker 17 I like the word accretive. That's right.
Thank you. Let's argue and get more media.
By the way, we got more downloads.

Speaker 16 I hate you. We'll be back.
I hate you so much. God, I'm going to find you and hit you.

Speaker 17 Anyway, that's the menopause speaking.

Speaker 16 That was a long time ago. We'll be back on Friday for more TMI.
Scott, read us out.

Speaker 17 Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie Andrew Tott engineered this episode.
Thanks also to Drew Burroughs and Miles Saverio.

Speaker 17 Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media.

Speaker 17 We'll be back later this week for another breakdown of all things tech in business. Compassion is not a zero-sum game.

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