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

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Little do they know that you would put out. That's the thing.

Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network.
I'm Kara Swisher from Korea. Hello, Scott.

So give me your impressions of Seoul. Tell me all about it.
Well, I'm drinking bubble tea, of course.

I was in the Gangam region today with all the lights and all the young people and all the plastic surgery area.

It's great, actually. It's very clean.
It's very vibrant.

Young people wandering everywhere.

It feels good. I mean, I think they feel very emboldened by pushing down the martial law thing because they're good at and we're not.

And

it feels very vibrant. It feels like it's

not a lot different from the last time I was here, I'll be honest with you. But I like Korea quite a bit.
How many times have you been here?

Well, you know, it's painful for me because I had a Korean friend who died. He was so young.
So young. Oh, no.
I can't believe you took that joke.

That's good.

That's the only Korean joke I could find that was only mildly racist. Oh, my God.
That is racist. Get it? So young.

So young.

Anyway,

I went to a company that does robotics today. I was in this neighborhood, this gang neighborhood, talking about,

you know, they do, you would like it because they're very into like preventive health care, but it includes a lot of facials and like I said, and plastic surgery.

And the person I was talking about says, oh, you go to lunch, you get your nose done, and then you go back to work. I was like, what? So it was kind of interesting.

I'm trying not to make it sort of like if you go to Times Square and that's New York, but it's not. But how would you, how, like, give me the analog.
Seoul is the

cross between X and Y city. What's, I haven't been to there in 30 years.
You know, it's a little like New York and Los Angeles because it's so vast. I mean, I've been driving in this.
It's awesome.

Yeah, it's a little. I'm sorry, late night drinking spots and hot Uber driving.
Yeah, and constant,

you know, Korean fried chicken and the food. Actually, the food is, it's interesting.

One of the reasons is because even though, you know, there is like a lot of, like, well, like everywhere in cities, there's a lot of drinking and stuff like that, but it's a very healthy, like you don't see unhealthy looking people anywhere.

Everybody looks really fit. And the food is pretty basic.
It's the rice, the protein, lots of vegetables and stuff like that.

And so, and then one thing that I was talking about today is healthcare is like so revered and everybody take

it. There was a word and I'm blanking on the, I'm not going to mangle it in Korean, but decency, humanity.

They just treat people like they could, they can't, they're like, how do you have your health care there? When we're sick, we have one pain, we go to the doctor and we have takes a lot of time.

15 40% of Korean households do not have medical or dental debt.

Correct. That's right.
You know, just they were, they sort of like shocked. 70% of them are not obese or overweight.
Yes, exactly. That's exactly right.
And so, and they care a lot about their body.

And when they say, how are you? The word is, how is your body?

So it's a, it's a really interesting, they've got lots of problems, obviously.

There's this great wealth gap, and everything else is, you know, as you know, depicted in movies like Parasite and others. But I have to say, around the healthcare and longevity, they're quite

dedicated, which is why I'm here. So I'll let you know at the end.
When I was in elementary school, I had a pen pal in North Korea of all people. North Korea.

In North Korea. Yeah.
And I wrote,

yeah, and I remember writing once,

How are things in North Korea? And he wrote back, I can't complain.

That's a joke. Why do I fall for it? Why do I fall for it? It is weird.
Let me just tell you one thing that's weird. They were also talking about the high.

It's a high, I'm not, I'm going to ignore you completely with your Korean jokes. There you go.
There you go. I thought you'd start singing Golden or Takedown

from K-pop Demon Hunters. Is that K-pop Demon Hunters? Yeah, but you know, that's from the United States.

Those are Korean Americans and Korean Canadians who did that production, but it's very popular here. I'm sorry, Kara.
I don't see race when when it comes to MMA. Anyway,

it's just, it's become popular over here, but it's actually a lot of things go from here. You know, K-pop and that whole cultural Korean stuff has really moved global in a lot of ways.

But what was I going to say? I can't remember before you told that terrible joke. Oh, it's weird to think that I'm this close to like North Korea.

Like, it must be so stressful to be near a country that wants to bomb you out of existence and stuff. So

let's go to a pro-Pally rally at Columbia. Oh, stop it.
Don't even. Sorry, don't even.
With

Trump is like ripping the White House down. I'm not even going to like.
Oh, I agree.

Have you ever seen a visual metaphor that's more accurate?

We'll get to that. We'll get to that.
Wing people tornadoes. I mean, seriously, I'm sorry.
Everybody gets a pass except for Trump. Anyway, I think, I mean, like, I release the Epstein files.

That's all I have to say about this. Like, it's another

thing. Hey, has anyone heard from the first lady? I don't get it.

If she doesn't have to,

if she doesn't have to put up with him, why do we?

She doesn't even live there. Like, where is No, she's not there.
Not a word from Melania. Because they have that weird patio now.

They've got, oh my God, the next president, if it's Democrat, is going to be like, what the heck am I going to do?

Anyway, we'll talk about that in a minute because we've got a lot to get to today, including Tesla and Netflix earnings, which are really interesting.

And OpenAI taking aim at Google with its new browser. But first, Warner Brothers Discovery announced this week it's officially exploring a sale.

After getting takeover interest for summer part of the company earlier this year, Warner Brothers announced a plan to split in two, separating its studio and streaming from its legacy cable networks.

CNN is the most famous of those, but they have several. Now

it's open to an alternative separation structure. I mean, David Zaslov's saying the obvious because it's rejected three takeover offers from Paramounts.

David Ellison, other rumored suitors include Comcast, Amazon, Apple, and Netflix. Scott, we've been talking about this, but you predicted in 2023 that Warner Brothers could face an activist investor.

Let's listen.

I think you're going to see an activist at Warner Brothers Discovery. The stock is now down to a point where I think there's a lot of upside as Zaslov to his credit is reducing debt.

And the assets here are trading at about, even including the debt, about half of what

they paid AT ⁇ T for the asset. So

I think that there's blood in the water. People see these assets have declined to a level where there's a decent amount of upside with not too much downside

so it's not an activist investor but it is you know other companies the ultimate activist is an acquisition true true but it's these are companies that want to what we've also talked about which is taking them cutting costs and consolidating which is a theme you and i have talked about quite a lot um the idea of sort of taking taking you know moving and why should there be abc nbc cbs cnn etc but that's not really the focus here it's um it's uh the studios and streaming i think probably.

So talk a little bit about this, because one of the things I've talked to a lot of people about this, and they feel like if the Ellisons

get to $26 a share, I think they're in the 24 area, it's a done deal, essentially. Zasloff is trying to make an auction happen, I guess.
And he's already in the money.

He's going to do really well himself. But

he's trying to argue that split apart, it's $30 or whatever once you split the two together. So why should they take a cheap offer from the Ellisons?

And the Ellisons are trying to get the studio and the streaming cheap because once you split them up, there are a lot of suitors, right?

The only issue is that the others have one, money problems comparably to the Ellisons, and two,

not a friend in Trump. Like the Comcast, Brian Roberts is not a favorite of Trump.

Amazon probably is more so. Apple probably is more so.
Netflix, probably not.

And so there'll there'll be difficulties in picking up any of these things, except for the Ellisons, which is, of course, because we live in an autocracy. So friends of Trump get what they want.

Antitrust concerns, of course, would be there, but

not in this administration.

And it does, in a weird way, make a lot of sense to consolidate.

some of these assets with other assets. It just depends if the gimmies are spread around.
But what are your thoughts on this? Well,

so there's suitors that do it for economic reasons, and that is they see an opportunity to create scale or consolidate the back end or for growth. So they're buying it for financial reasons.

There isn't a financial buyer here because this thing,

the majority of its assets are in decline, and it never made any sense. Not the studio and streaming or is the CNN part?

But if you look at, but I think if you look at top line revenue here, this isn't a company. This is not a growth company.

And also the stuff, I mean, the problem is you have a mixed match of assets, and that is the streaming company,

the marketplace values growth, but that growth is expensive. And then the other stuff, the market does value EBITDA, but that stuff's declining.

So what you have is the marketplace wants a clean story. And

if it was just HBO and say Warner, the movie studio, they created a vertical integration of content to the streaming platform.

And HBO still has an amazing culture and still manages to punch above its weight class.

It would trade at a much larger multiple, but at the same time, and then it has these other assets that would trade at a lower multiple with a strong EBITDA.

And when you have a mixed match of assets in terms of growth complexion and where they are in the business life cycle, the marketplace finds the shittiest part of the business and assigns that multiple to the entire thing.

So

the merger never made any sense except for David Zaslov. And David Zaslov, so what

Mark Zuckerberg and Sharles Sandberg, there's few people who have made more money while causing more harm to young people, right? But they have added tremendous shareholder value.

From a shareholder standpoint, they deserve their billions.

The most overpaid CEOs relative to shareholder destruction were probably Marissa Mayer, who managed to fuck up everything at Yahoo and walk away with a quarter of a billion dollars.

But she's about to lose the crown to David Zaslov because David has taken out about, I think, a third of a billion dollars so far for taking the stock from 24 bucks where it was when he talked people into merging it and has still managed to take that much money out of the company.

And my guess is, I mean, this is what's going on. I've been on these boards before.
He's pretending there's other bidders. No sane, rational buyer can bid on this.
This is who can bid on this.

The children of people who made $90 billion in one day, who want to go to the Academy Awards and have a big vision for AI and will overpay for this thing? And look what media has become.

Media has become basically just a spa retreat for the Nepo billionaires.

Who are the players here? The Bronfmans, Sherry Redstone, David Ellison. What do they all have in common?

They're children of billionaires because any rational buyer, Comcast, any rational buyer looks at this thing and says, it doesn't pencil out for shareholders.

Let me just interject. Bill Cullen, who's been very smart on this, I think,

is noted that maybe daddy won't do this. Daddy's a little, Larry is a little too smart.
Like, at the same time, why not?

It's like a good, well, the getting's good, and it would help Paramount to have the assets of Warner and HBO. And then they'll just spin off.
They don't care about news. I'm sorry.
They just don't.

All their choices tell me they don't care about news. But, you know, merge them together, cut costs, and then spin it off to some PE company.

And I mean, the cable networks and then bleed them dry, cable and news, essentially. Is that how you see it? Or will they keep it? Just because why not?

I don't know what is an Ellison. I mean, at the end of the day,

Larry Ellison is to David Ellison what Peter Thiel is to J.D. Vance.
And that is when Larry Ellison calls his son David, David can never say no. It's like, look, boss,

you have one credit card and it has my name on it. And you're allowed to use it, but at any moment, I can tell you no.

And

what I think is going to happen, I think the Ellisons are going to get this. And Zazlov is pretending there's another suitor, which there isn't at this price.
And he's also,

I'll bet, spending more time trying to figure out his exit package.

How to stay in here, how to stay in here and have a fake role or pretend.

All I know is he's going to figure out a way to get another $100 to $300 million through selling the company at the price he talked other people into buying it for several years ago.

Slightly above, yeah. And this guy's going to to walk away with marissa mayer like

compensation for adding no value here but what i think they would do is i quite frankly i don't think i don't buy into these hair on fire that they're trying to control the media i don't think larry ellison is that machiavellian i i don't think they're going to try and take cnn and turn it right wing i think they will probably sell it i don't think they want to

like a pe firm so i agree with you yeah what i do think they'll do is say okay david you get to go to the academy awards because we'll own warner and and HBO. And I think they're going to take AI

and Oracle's newfound kind of like, Oracle is kind of a distant, Oracle is sort of a distant number two now to NVIDIA

and try and figure out a way to substantially reduce the cost of the production, you know, the means of production and create kind of a new, a true Quibi.

Meg Whitman and Quibi said, we're bringing together the best of

Silicon Valley and Southern California, which I always thought, well, that's in and out on a sourdough bun.

But these guys are going to try and take content and say, all right, they have amazing franchises, amazing IP. The biggest problem here is we need to reduce costs across the board by 30%.

And we can do that with AI, and we understand AI.

And you're just going to see millions of TikToks of creators in the Hollywood community crying into their camera about how

they no longer need 73 costume designers. Especially,

that's the example I've used many times is they don't need costume designers. They can do storyboards.
They can do all manner of things, you know,

much cheaper. And it takes a cost from, you know, someone was telling me you could take a cost from like 3 million to 330,000, right? Versus something else.
And I think

one of the things that's hard here is

people are very in love with the idea of a CNN or CBS, but these are declining audiences.

So where do they, I think it's smart to grab this before, because if there would be an auction for the studio and for Warner, Warner and HBO, there would be, I think.

I think there'd be a lot of interested buyers for that asset, right?

So, if it gets away from the CNN part of it,

that's a problem for the Ellisons. So, they want to get it on the cheap, right? Presumably, or without a lot of trouble, without a lot of bidding.

That's my assumption. None of these things are cheap.
I mean, it's Warner Brothers Discovery now is in October of 25. Right now, it's trading at a PE of 67.

I think they want Warner and they want HBO. They want growth assets.
The other stuff, they can sell to a PE player for cash flow that's consolidating the back end.

I don't think their desire is to control the world of news. I don't think they want to step into that thunderdome.
But you have,

I mean,

you could see them

right away doing a second auction to pay down some of the debt if they're going to take out debt against this and then try and, as I i said again bring together the peanut butter and chocolate of of ai you you are i think what you've said i think these new i think all these newsrooms just for fun i watch cbs abc and nbc evening news

and they're what 24 minutes and six minutes commercials 22 minutes is the same thing and then they all then they all pick a different feel-good story the same formula

you know again about a moose that keeps showing up because this old lady fed it once And

they're literally, why on earth is the difference? Yeah. Their newsrooms are no different.
Yeah, they're just no goddamn difference. They'll listen every now and then,

as does any news organization, they come up with a good one, right? Like, so CBS 60 Minutes Still is quite good, for example. I bet they sell that off.

I bet they sell that off. That's my prediction here.

CBS Sunday Morning is quite good. I can't, you know what? I don't know what I would do if I wasn't able to watch Andrew Ross Sorkin explain the stock market to an 83-year-old Leslie Skahl.

I just don't know. No, but watch it more.

That wasn't more demand. Don't be mean to Andrew and don't be mean to Leslie.
No, no. Here's this.
It's a good brand. It's still a grant.
There are pieces of it that you could do.

You could presume I could do something with it, Skull.

Face the Nation is an important assistance.

If I had a couple of those assets,

I would have lots of ideas of how to digitize it and make it more real. Yeah, and you'd take something they spent a billion dollars on and make it worth $120 million.

These things don't, unfortunately, journalism is a shitty business. Well, I wouldn't have to pay $120 billion.

So, one of the things, you know, it's really interesting here is that,

yeah, and with the media gets all, you know, like, oh no, CBS and CD. And I was like, you know, they're declining businesses, like really by an audience point of view.
And that's the problem.

And when you talked about ABC, CBS, they are all the same. Many years ago, I'll tell a very brief story I was with, I'm not going to say who it was.
It was a,

I was on this network thing, and they showed a package. You know, know when they do those packages

where like the the anchor sits there and interviews people on a like a like a

gradiated stage where people are sitting. It was a big news event that happened 10 years before and they interviewed people from the day, right?

And I was sitting next to Ken Burns, who had just done this really wonderful documentary on the Gettysburg Address, which just happens to be one of my favorite pieces of writing, right, in our American history.

And so I was talking to him during the package and the host turned to me and he said, why aren't you watching my package?

And I don't know why I said this and I said it without thinking because I was very interested in talking to Ken about this documentary because it was so good.

I said, well, if it was interesting, I'd watch it. And he looked at me and goes, well, that's harsh.
I go, it's not interesting. Like, it's the same shit.
You're always doing the same exact setup.

And this was five, 10 years ago. And I just was like, you have to make stuff people want to watch, right? Like, and I just couldn't look at it.
And

that's what they all are the same in some ways. And there's little points of difference sometimes that are really promising.
I still think 60 Minutes is an amazing brand.

I think it's, I think you could do a lot with that brand. And it does, it does rather well online once they get it up there.

Look, these things are being picked apart limb by limb because you have something like The Atlantic, which does an amazing job and brings together, I think, some of the most talented writers in the world.

But I think a guy like Derek Thompson is prolific and has tapped into like, you know, he's, he's under the age of 40, so he feels like they're grandchildren walking around these places.

He goes to Substack and he's making more money on Substack now.

I think a lot of the truly great individual contributors are going to use the platform for prestige and then veer off and do their own thing. Nice to meet you.

What do you think I've been doing non-stop at the New York Times? Exactly.

But there is more challenge. Let me just say the Atlantic under Jeff Goldberg, like, and also Wired under Katie Drummond, Drummond, they found invigoration in terms of higher subscriptions.

They're doing pretty good with those.

Only the editors that are invigorating are doing okay, like comparatively to the individual players. But go ahead.
Yeah, but

you're the perfect example. And that is you were at the Washington Post.
You could be the premier

tech reporter. You were the premier tech reporter at the Washington Post, New York Times.
The Wall Street Journal. You make a half a million.

Okay, sorry. And the Wall Street Journal, excuse me.

Off with his head. um

anyways let's be generous and assume with comp and everything and you make a half a million bucks a year

not the salary no that's because i created the conference i made more than that but well okay 150 200.

my point is it's crazy you make 10 or 20 times more than that finding finding a guy who tells dick jokes and doing your own thing now racist so

go ahead so young so young is racist i'm making fun of i understand i'm gonna i love korean baseball players They often hit it out of the park. Oh, my God.
Oh, Jesus. Is that racist?

Anyway, finish up with this. So what happened? So

the news to PE,

the studio stuff. The cable, the cable, the ad-supported cable stuff gets sold off

to just

get rid of that shit. It's more trouble than it's worth for them.
And nobody, they're getting this.

I think the deal is probably done, Kara, because no rational buyer, they're going on record and they're creating, I doubt Comcast is anywhere.

Comcast is like, well, call us if you take 11 bucks a share because that's what we would need to pay for this thing to be able to explain to our shareholders in an earnings call why we paid.

We can't justify anything above that. David Ellison's criteria are different because he is the son of a guy making $90 billion in a day when he announces a contract with OpenAI.

And that's what media has become. It's become a series of irrational buyers whose parents are

worth hundreds of billions of dollars. This thing goes to the Ellisons.
They will spin off the news. It's not a Machiavellian attempt to control the, to enter thought control.

They'll get as much as they can. And then I think they're going to use Warner and HBO and some of the content or some of the studios as their playground to do really interesting shit with AI.

And on TikTok, which they also have control of over. That's a real, you know what? I hadn't thought of that.
That's the most important thing. That is really interesting.

That is the most important thing thing here. That is really an interesting thing.
Taking that content and slicing it up and putting it on TikTok. But it all comes back.

Occasionally I have one of those mind-blown moments. When I was in the Fantastic Four,

the credits took seven minutes. I know.
I just did that the other day.

As many people worked on the Fantastic Four as work at Palantir or Reddit.

And it's a risk. They don't know how this thing's going to do.

That business,

other than healthcare, I think big budget content production is the most vulnerable thing to AI right now. Much, very much.

They're just going to go line by line and go, do we really need 22 costume designers for our shoot in Sweden?

Do we really need Sweden? Do we really need every single thing will be,

you know, every single thing will be. And all the existing guys, Iger and Zaslov, they are still very empathetic.

And also, because they're all 100 years old, they don't want to rattle the unions and saga after his cages like this. But Ellison, Honey Bear, don't give a shit.

He's going to be like, put out 10 block buttons.

Well, although he is known as talent friendly, he was involved very deeply in the Mission Impossible movies, the new Star Trek movies, and of course, in Top Gun. Yeah, he's a rich kid.

I just had, I just had dinner with a friend of mine who's an amazing producer and does these incredible films. Kare, whenever I meet someone, at an event and they say, oh, I'm like, what do you do?

Like, I produce documentaries. I'm like, oh, how did your husband get rich?

I mean,

the people in this business, it's like meeting a kid who's working in an okay job, not a great job in New York, and living in Soho. It's like, oh, your parents are rich.

No young person can live in Manhattan now unless they're working for JP Morgan or got transferred by Meta or their parents are rich.

And every player now in film production, in Hollywood, effectively, is someone who is so fucking frighteningly talented, they managed to break through. They're literally the,

and they're there, but they're in the 0.1%. They're the Michael Jordans of content.

Or their parents are putting them through Hollywood. They're in the system.
They're in the system. So you don't think Netflix is going to try to wait in here in any way, Netflix?

That's the wire that you had, Netflix. I don't.

I think Netflix is becoming like Apple in the sense that

I think Ted Sarandos realized our culture is so strong and so powerful. That's what the CEO

buy shit and then try and integrate it and deal with whoever's running fucking Warner Bros. We don't, we don't, we have a way of doing things.
We're outstanding at it. Maybe Amman.

And if he was going to buy anything, if Sarandos was going to buy anything, he should buy Disney because he would just, he would, that would be, they have a succession problem, the content, they could have Disney as the fam, as Netflix family.

They would just own streaming. They would, it would just sort of be game over.

But I don't even think if I'm Ted Sarandos, it's like, we're so good at doing what we do the the the the existential threat the only reason netflix would potentially weigh in here is that they want to get a ton of content so to compete with youtube so for example 20 of television viewing time last month is 12.6 of youtube 8.3 percent of netflix netflix is squarely figured out youtube is their competitor and if if you look at

What Netflix does need though, and the only reason they might weigh in here and buy some of this content or buy pieces of it it post-acquisition by the big price they can't compete with with the Ellisons is Netflix's content library is roughly 36,000 hours long, right?

That's their entire library, 36,000 hours. That's the same amount of content that YouTube users upload to the site every 70 minutes.

So every hour, YouTube has uploaded content equal to the entire Netflix library. And what you have is the two are going to come together.
YouTube content is going to get much better.

The only thing, the only thing moving podcasts in and out of the top 100 is the quality of their video game.

And then you're going to see Netflix start to look more like YouTube in that as they will figure out ways to have quote-unquote a deal with a podcast.

The deal with podcasts they just did is essentially them dipping their toe, not into podcasts, but into a form of user-generated content that costs much less.

So you've got to see the means of production and the content come down on the one end, and the quality is going to go up on the bottom.

There's a few things on the news because I agree with you that they're like this week, it's all like the

Terranette. We'll talk about the Terran on the West because it's really kind of grotesque, but

what you said about why don't they take my two interviews a week on on and make them into a show? I was like, I had Bernie Sanders and Kamala Harris.

You could have done a great, like, by the way, it was great. I don't like to watch your stuff,

but I did break down the interview with Bernie. It was great.
Yeah, it was great. He's great.
Yeah, he was really good. I'll dig a billionaire.
I don't need them all.

A good billionaire. It's funny.

Some of them believe in democracy. Did you like his little Democratic voice? That was my favorite thing.

He had a tiny little voice for the Democratic establishment that made me laugh hysterically. If, like, literally, if that guy was 70 years younger, I'd vote for him for Brown.

Yeah, a lot of people would. That's why he was all the Trump voters.

Anyway,

let's move on. Let me ask you one more quick question here, one more, very quick, and answer quickly.
So if you had,

would something like Versant want to buy a CNN and then merge the newsrooms and then have two good brand, two decent brands to try to work with or not at all? Like, why bother?

They get the, because they lost all the news stuff. They lost all their news stuff to NBC.
So they're building their own news organization.

So why want to take a shortcut and get, because CNN has a very good news organization around the world? I think, I think it's just, I think it's all about, I think it's all about price.

I don't, you know, there's a bunch of these upstarts and who's backing them?

It, CNN would probably,

it would go for above market because it's such a powerful brand. But CNN,

it has really stumbled the last 12 months. I think its viewership is down something like 30%.

I mean, it is really hurting right now. And it's not even the content.

I think Anderson Cooper, Caitlin Collins, Dana Bash, Jake Tapper, they consistently, Michael Smirkanish, they consistently, Fareed Zakaria. They have some of the finest journalists in the world.

Right. And across the globe, by the way, which people don't pay attention to.
Yeah. And backed by what, a 1,200 or 2,000 person newsroom?

Like these guys, they're great at what they do. It's the distribution and the business model that's fucked.

And that is nobody's turning, even turning on the screen that is their primary distribution channel. And they haven't figured out a way to monetize it on a very small screen.
Yeah, it's tough.

That's all I'm saying. Someone could consolidate these two and be the news organization and invigorate.
Comcast could buy it. Comcast could buy it, but so could Versent.
Anyway, we'll see.

We'll see if that happens. I think it's going to be PE Company and then, you know, Osta Luego for Kara Swisher.
Anyway, in any case, Osta Lawyer for Kara Swisher. Anyway, that's it.

You're going to North Korea and you're not coming back. So young.
So young. He died so young.
Oh, my God. I'm not going to let you do this anymore.
Okay.

I'll start making Scottish jokes in a second. So let's go move on.
Yeah, oatmeal salmon. Oh, there you did it.
You did it. I knew you would.
You're not even drinking.

What did the brightest people in Scotland have in common? What?

They left Carol. Okay, all right.
Very good. Okay.
That's actually true. Open AI, some of the finest minds in the history of science and economics.

I'm getting like exclamation points from the producers. OpenAI has launched a web browser Atlas.
Sam Altman called it a once-in-a-decade opportunity to rethink what a browser can be.

The launch comes a few months after the company said it would be interested in buying Google's Chrome had it been forced into a sale.

Chrome has 3 billion users worldwide.

Talk a little bit about this. And also, Reddit has sued Perplexity AI, alleging the company scraped the comments of millions of Reddit users on an industrial scale.
Again,

I'm going to add a comment on the last one. These wars are going to break out all over the place until the numbers get right when they start paying.

Perplexity has been the one that usually gets into the most trouble here.

But talk a little bit about this browser because this browser knows will remember everything you read, not just where your search was. They're going to be like super browsers,

I love this. I love competition.

I think it's good. I think

the biggest tax cut in the history, in modern economic history, would be if the Chinese and American leadership decided to kiss and make up and stop sarb attacking each other and take their tariffs to zero.

The second biggest tax cut in history would be the breakup or more competition in big tech. I mean, people don't realize you are paying a huge toll.

You don't realize it because it's paid vis-a-vis advertisers trying to reach you.

But probably the biggest corporate tax in America, other than federal income tax, is the tax of Alphabet to reach consumers online.

In terms of

advertising, right? In terms of advertising. You have to be on Google.

If you want to acquire customers online, which is where all customers are now, you have to start increasingly buying search keywords and boost your videos on YouTube.

These are the biggest toll boosts in the history of mankind for corporations. And so,

and they don't have competition. So every year they raise their prices or the taxes they charge consumer and B2B brands greater than inflation.
So these companies need competition.

There's some more existential things going on here. One,

Sam has to figure out a way to become kind of Google before Google becomes OpenAI. So him launching.
That's exactly well said. Him launching a browser makes a lot of sense.

I like that it tracks your searches.

I think all of the concern that was in your voice around privacy, I understand, but anyone who's talking about privacy is usually over the age of 50 and lives in Brussels or D.C.

Young people will tell Uber everything about where a thin layer of AI on top of your Uber records, which by the way, you cannot delete. You cannot delete your Uber record, your Uber driver history.

And that people will be able to figure out if you just terminated a pregnancy, if your sexual orientation. I mean, they'll be able to figure out everything based on where you're going and when.

Uber has

it now. So as long as there's a coupon and utility and I can see that my QX60 is parked around the corner, violate my privacy.
That is what America has said. It's listening to our phone conversations.

And by the way, I'm down with that. As long as we have judges who are going to say, no, ICE can't use this information to start rounding up people.

I'm all about violating my privacy in exchange for utility as long as we have thoughtful judges who err on the side of civil liberties. Anyway,

Scott, but go ahead.

Yeah, yeah.

The operative term there is if, right?

So

what I think is the more interesting thing here is, first off,

keep in mind, consumers are pretty lazy in terms of getting used to a certain UI.

And even with all the existential threat that OpenAI supposedly poses to Google search, they get, I think, roughly 96 times the traffic of ChatGPT still.

And Google search impressions were up 49% year over year. Alphabet was my stock pick of 2025 because I think people overestate the threat, if you will.

Chrome has roughly a market share of 70%, making it the most dominant web browser. Apple's web browser, Safari, even with that unbelievable access.

It's Safari's at 14%.

Not Safari, that's Apple.

Chrome is. Yeah, Chrome.
No, no, no. Chrome is,

you're thinking of Internet Explorer. Chrome is Alphabet.
70%,

70% share. And

what is Explorers?

Well, remember, Microsoft attempted to get into the game with Internet Explorer, remember, and put Netscape out of business. Yeah.
No, I know, but

what is their market share?

I don't think it registers. Okay.

I mean, basically, between Chrome and Safari, I mean, and then you have the weird ones like DuckDuckGo and shit like that. But basically,

what Sam has said is I want to bring AI into search or into browsing. And

I mean,

so let's look at some of the facts.

Google has an extremely strong competitor to ChatGPT and Gemini. Gemini has actually gained more share than any other company in AI.
They have 400 million monthly users.

It's now the fourth most popular free app on the Apple App Store. Just two months ago in August, it didn't even crack the top 50.

And according to multiple benchmarks, embedders on both Calci and Polymarket, Google currently has the best performing AI model. Either way, I think, in my opinion,

Alphabet still at 29 times earnings is a steal.

For roughly the multiple of S P, you're getting a search business with 90 plus percent market share, the largest ever streaming service in the world, a dominant AI effort, a digital ad network, Google Chrome, Waymo.

You love you some Google. You love you some Google.

Two other businesses that do over 30 billion in annual revenue and four other products that have 2 billion users. The most interesting thing about all of this, in my view, is that,

and it presages what might happen geopolitically, and it'll be my prediction at the end of the show: is that it technically, the new browser is open weight or open source.

And it's actually built on the same technology that Chrome is built on, which Google spends or Alphabet spends like $100 million

upkeeping. And essentially, I think this is, I think this says a lot about the future of AI, and I'll come back to this.
But Sam has to justify a half a trillion-dollar market cap.

So, what he says is,

okay, I'm going to be the next browser and I'm going to be Alphabet. And Alphabet's trading at a trillion and a half or $2 trillion.

I don't know what it's at right now, but why can't I be a better version of Alphabet? And by the way, when you look at Google searches, what do you see?

The first thing you see, you see that AI summary at the top of the show. You do.
Let me introduce you because I've covered these companies for so long, but Chrome really came in and lapped

Explorer and Safari and all of them very quickly in terms of how they, in terms of market share. But it is moving away from the browser.
So the more Chrome moves into an AI,

a chat GBT-like environment, the better for it, right? I remember interviewing Ben Horowitz once and he goes, there's never going to be a funding of a search. engine.

There's never going to be a funding of a social network. And there's never going to be a funding of a big commerce platform because of Amazon, Google, and Facebook at the time.
He goes, why should we?

And so, why should we? Because you haven't seen a lot of innovation in Chrome. You haven't seen a lot.
And it took Open AI to get Chrome to innovate, right? It wasn't, it didn't happen.

And they came in through a side door. Yeah, exactly.
And so Sam Allman's vision wasn't to have a browser or a search. Right.
But, you know, it always changes things. So it's nice to have it.

Honestly, I feel

I don't use browsers. I browse.
I'm trying to think of where I search.

I guess I search within Maps, within Amazon, within within like the search search has dissipated all over the place, but it's still owned by the same groups of people, which is interesting.

Any thoughts on, we'll get to your prediction at the end, but any thoughts on the Reddit suing perplexity? Some people don't like this lawsuit. Others thinks it's,

you know, Mike Masnick was like, this is a stupid lawsuit, but, you know, that some of this stuff is

available and so they can do it. Other people, you know, I think it's what it is is another indication of who gets to own the information and who gets to scrape it and what people do with it.

But it's open season on everybody's content. That's just

my feeling. And so everyone's going to try to defend the content they have, no matter what it is.

You know, Reddit certainly has created a really valuable property full of information that they should take advantage of by themselves, that others will take advantage of.

Okay, Scott, let's go on a quick break and we come back to Trump's White House demolition.

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Y a horra.

Uf nava comodarte un gustaso por tam poco. Los extra value meals están de regreso.

Gana por la mañana con el extra value meal, sausage, mac, muffin with egg, hash browns, y un cafe cariente pequeño por solo se yis dolares. Bara ba ba ba.
Preses y participación pueden varía.

Los preces de la promosión pueden serminos que lo de las comidas.

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Scott, we're back with more news. The White House is demolishing the entire East Wing to make way for President Trump's 90,000 square foot ballroom.
The teardown should be finished by the weekend.

Trump initially claimed his privately funded ballroom wouldn't interfere with the existing White House structure, which was a lie.

He's also now saying the ballroom will cost $300 million, $100 million more than originally estimated.

The White House is dismissing the shock and criticism around the demolition as manufactured outrage. No, mostly he's a liar.
Release the Epstein files. That's what I have to say about this.

What do you think? The pictures are still very upsetting in some weird way, although the White House has been renovated before. There is a need for a bigger room for some of the functions there.

It is, if you've been to the White House, they're quite small, actually.

They're shockingly small.

And they should have a lot of functions, but there's plenty of other land around the White House they could have built these things on. Instead, he just did this because he felt like it.

Probably it is safer. I'm going to try to

understand, but he did it without asking anybody, essentially. And of course, it's the people's house, not his house, but it's his house, as it turns out.
Thoughts? So, okay,

there's the clutch in your pearls. This is a desecration.
It's not your

what this means is the following, is that he is normalizing federal troops and cities. He's creating doubt around the election process, and he has no intention of leaving.

Because I won't, if I'm running a place, I won't put in a new refrigerator, much less tear down an entire wing.

So let's be honest, folks. You really think he'd go through this if he was planning to leave in 36 months? Yeah, it's his new Mar-a-Lago.
He's building Mar-a-Lago. Yeah.
And

so to to me, I'm immediately like, okay, when do we wake up and realize the guy's not planning to leave? He's making long-term renovations.

I mean, how long is it going to take to even do this, to build this thing? It's not

so, but he's planning to leave, but he's going to...

So

look, I don't,

I find the whole thing, yet again,

everything's adding up to the following. He wants to normalize sending troops into cities during the election process to make make sure whether it's to discourage people from voting or to lie or to

show up. Bill Maher said it perfectly.
It's like, what happens when two people show up to inauguration?

And he's basically saying, okay, if the second person tries to show up who legitimately wins, I'm going to show up with troops and masked agents that are basically my secret police.

That's where I see this going. And this is just more evidence that he's not planning to leave.

You don't initiate an enormous construction project when you know you constitutionally have to leave in three years. Yeah, I would agree.
I think, you know, I think a lot of people think this, right?

Or put whoever in place that he wants to, because as you say, which is my favorite expression these days, biology is undefeated. He seems more addled than ever, missing words and everything else.

The only reason I'm not worried. Yeah.
Right. Biology is going to take care of him.
Right. Except then, then what, right? And would it be interesting?

Let me just posit that that doesn't happen and a Democrat becomes president. What do you do? He's going to gold this thing up, right? All over the place.
It's going to be so ridiculous and grotesque.

What do you do when you walk in there? You have this ridiculous, over badly sized ballroom next to a East Wing was quite,

it's not really lovely. I don't love the White House, I'll be honest with you, but

it was to scale, right? And so this looks like a weird, like mutated tumor onto the White House.

That's my architectural determination. It's a tumor.
It's a tumor.

But

what do you do the next day with this weird patio

and then the thing, this behemoth, this grotesque golden behemoth?

What do you do? Nothing, right? I don't know. I just, I know what happened here.
He sat down with some crazy right-wing, probably

hot blonde decorator. And what decorators do is they say, all right, I want mood boards.

Like, tell me what they, you know, they try and make you feel special, like you're involved involved in the process. And they say, I redid my place in Manhattan.

And they said, what do you want it to look like? I'm like, I want it to look like what it is,

a professor who's done fairly well. Yeah.
That's what I want it to look like. That's what it looks like.
And

what he did was he said, I want this place to look like you walked into the best Iraqi whorehouse.

And they have delivered against it. The decorator, this feels like you are in Baghdad at a brothel.

But it's a high-end brothel.

But it's a high-end brothel. Really? I mean, it's absolutely perfect.

Anyways,

it's not enough. It's marble.
We need more marble. And as Forrest comes at, and that's all I have to say about that.

But what do you do the next day if you're the Democrat? You're like, oh, my fucking God.

What do you do? Let everyone go. By the way, I've only been to the White House once, you know, without.

Yes, that's right. Yes, you've been there.
And I didn't want to go. I was intimidated.
I had to bring a suit. I met met you in the lobby.
I was worried.

I don't, I don't, the idea of seeing all those people and having them kiss your ass like I knew they were going to. Yeah, you definitely.
Like the vice president. Cast wishes.

Someone would hug you and kiss you. Secretary Blink and Carol, Carol.

And all the

only people. And some people like me, oddly enough.
So strange. So strange.
Yeah. Keyword there are some.
Well, no, more than you think. More than you'd think.
I don't know why.

Well, you're exceptionally, you're exceptionally likable. I guess.
I don't know.

I literally say, I dislike you and think you're a bunch of fascists. And they're like, yeah, come to our party.

The other thing that struck me about my one tour of the White House was

I could not relax living there. There were two things.
One, the situation room where you're deciding whether to have nuclear war or not. You can hear the microwave in the kitchen.

And I'm like, can they smell popcorn when they're popping it out here? They can't. It's actually really

poorly designed, in my view. It is.

Like the West Wing, the offices are like weirdly a warren of very uncomfortable. It's a very,

he is right that it's kind of a mess

in terms of as a building, like as a, as an office building.

And then I thought, how does anyone relax here? There are 140 people here who look like they're about to invade Fallujah. It is, there's, that place is armed to the teeth.

And I'm like, you get up at night to grab some milk. I guess the residence is different and you're going to run into someone with an AR-15 and

military. Like there's no taking the dog for a walk.

Anyway, we'll see. It's just grotesque.
And release the Epstein files. Thank you.
Just release the Epstein files. I don't know what they're going to do tomorrow.

I'm like waiting to see what are they going to like paint the paint the Washington monument so it looks like the penis that it is.

Anyway, Trump is demanding $230 million, by the way, from the Justice Department, saying he deserves compensation for federal investigations into him.

According to the New York Times, the compensation is tied to two claims Trump filed against the DOJ before his second term.

One is tied to the investigation of Russian interference in his 2016 campaign. The other, the FBI's 2022 Mar-a-Lago search.
I'm sorry, sir. We have the pictures.

Payment would likely come from taxpayer money, would have to be approved by the DOJ, potentially by Deputy AG Todd Blanche, Trump's former attorney,

personal attorney. Trump commented on the unprecedented nature of all this, to put it mildly when asked about his claims.
Let's listen.

It's interesting because I'm the one that makes a decision, right?

And, you know, that decision would have to go across my desk. And it's awfully strange to make a decision where I'm paying myself.

In other words, did you ever have one of those cases where you have to decide how much you're paying yourself in damages? But I was damaged very greatly.

And any money that I would get, I would give to charity.

Oh, my God. Lie.

Huge lie at the end. Enormous lie.
And by the way, yes, he has made decisions where he pays himself. It's the presidency.
And

evidence in action is cryptocurrency and his children, but his children, his adult sons. And anyway, I don't know.
We're not paying him, are we?

I think we probably are. And keep in mind, if the federal government comes to you

and the case ends up, let's assume that this was politically motivated and there was no legitimacy or veracity and these things were politically motivated and unjust and unethical.

Let's assume that happens quite a few times when the federal government comes to people.

If you're found guilty, which he was in one case and not in others, when that happens to average American citizens, the government doesn't pay them back for their legal fees.

So, but we've become now we're going to have to pay everybody. We've become, no, sometimes in court, I believe in certain legal cases, if you win,

I think if you win a civil case, sometimes the other side has to pay your legal fees. Yeah, but not the government.

But if the government comes for you and you're found innocent, they don't pay you back your legal fees. Too bad, Donald.
So anyways, but we've become, this has become normalized.

And to think that that's not going to happen, he got to appoint the head of the DOJ.

Now,

to think that they're going to stand up to him, keep in mind, there are, whatever, 53 Republican senators. These people were freely elected.
You'd think they'd have balls. Right.
They don't.

They're watching.

This guy sent people after them to kill them on January 6th. I just think it's hilarious that

they try to position the protest last weekend as violent and weirdo. I'm like, no, that was January 6th.

If you're looking for violence and people who hate America, just go back to the protest of January 6th, if you can call it that. It was an insurrection.

But the notion that these people are going to stand up when they can't get duly elected senators who he sent a mob after to kill and they won't stand up against the guy to think that Pam Bondi is going to say this is a bridge too far?

No. No.
Here's the thing. Trump's not going to pay for this, but if they do this, they will at some point.

All his minions are going to get got at every, that's who I'd go for if I was, I'd get all of them. Like, Trump will get away with it.
Just everybody knows he's going to get away with it.

But the minions, not so much, I think. Oh, I, but see, this is where, this is the opportunity.
And why I'm in one of the shortcomings in the Democratic Party right now.

If this goes, okay, take the ice, whatever. Sending people to.
Sending people to El Salvador.

There are people all along the supply chain that made the decision to send American citizens, incarcerate them, and send them out of the country.

I would be drawing up all sorts of bills and publicizing them saying the statute of limitations on these crimes, whether it's crypto crimes, whether it's fraud, whether it's lying in front of Congress, just keep in mind, these laws, the statute of limitations, are longer than 37 months.

And this is exactly what we're coming for you for.

You may think you feel safe now, and you better hope you get a pardon, but I would be drawing up legislation that says, or basically advertising a guy like Senator Murphy or Senator Bennett or Senators Klobuchar and say, these are the crimes we believe have been committed.

And he may be the head of the crime family, but the soldiers go to jail too.

And he might be safe because he'll probably be dead or he'll pardon himself. But there are thousands of people, and I'd start naming them.
He'll start his family. He'll pardon himself and his family.

Can I tell you something? Several of the Trump people I'd met said they're asking for pardons already. Why wouldn't you? That's what I was like, and I, at first, I was like, what? What did you do?

He goes, nothing. And I said, well, he goes, oh, they're coming for us.
Like,

and we probably deserve it.

He kind of said, we deserve it. Like, it was really weird.
This is an orgy of corruption. Yeah.
They're coming for you.

And where the Democrats, again, the Democrats should be articulating exactly what crimes they believe have been committed. Greg Kazar has, but go ahead.
Lists of hundreds of people

they believe have potentially engaged in these crimes, and then next to their name, what the statute of limitations is on that crime. That's a great idea.
Let's make that list.

And start saying, okay, be clear, folks. Throughout our 250-year history, the White House and the DOJ flip back and forth.

At some point, we're going to have the gavel. We're going to have the power of the purse.
We're going to have the power of subpoena. And we're going to have our own DOJ.
And

unlike this corrupt DOJ, we will be holding people to the letter of the law. And these are the letters that you have violated.

And this is their statute of limitations.

Because the world is shaped on incentives. What incentives right now are there not to engage in this corruption? They're not getting enough money for what they're going to pay.

Trump is and the Trump family is.

He'll pardon himself and his family and a few choice people. But everybody else,

you're going to be shit out of luck. Anyway, we have to move on.

Scott let's go on a quick break when we get back we'll talk Netflix and Tesla earnings which are super interesting

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Scott, we're back, and it's time to talk about some earnings. First up, Tesla.
Tesla's third quarter revenue was up about 12% from a year earlier, but profit fell short of expectations.

That's because a lot of people rushed to buy cars, but then Tesla sold them for cheaper prices and there was an ability to get loans, so people bought more.

Vehicle deliveries were up 7% from a year earlier. The company says it plans to hit volume production of cyber cabs and Tesla Semi in 2026.
I wouldn't believe that.

Also,

Musk was saying he has to create an army of robots. And if he doesn't have control over his army of robots,

he's trying to get

his trillion dollar deal, which is going to be voted on in a week or two.

And next Netflix, shares of the company are down 5% in the last five days, the time of taping, after a miss of third quarter earnings.

Netflix Netflix cited an ongoing dispute with Brazilian tax authorities for weak results. However, revenue for the quarter rose 17%.

The streamer said a quarter ad sales in the quarter were the best ever, powered largely by my favorite K-pop demon hunters. There's also going to be some merch.

Great news for Kara Swisher announcing Mattel and Hasbro will release K-pop demon hunters toys, plushies, and games.

Let me tell you, among the toddler set, in the young below 10 set, they're all dressing like Rumi for Halloween.

Not my daughter, but and son, but all the kids in school, they're all dressing like Roomie, which is one of the main characters

in the show.

So thoughts on these earnings? Yeah, I think Netflix is one of the best-run companies

in business.

Their revenue increased 17%.

That didn't meet expectations. Their stock fell 10%, but the stocks went on a tear.

Net income increased nearly 8% to 2.5 billion, missing estimates by about 15%.

Their operating margin was 28%, and that was also short of the 32% that was expected. They highlighted a one-time tax expense in Brazil of

$600 million for why their profitability mixed.

By the way, that charge had been previously disclosed to investors on past earnings reports. So

I think at this point, a lot of people are just taking profits. K-pop Demon Hunters, which is a huge success.
Yeah, they keep hitting it out of the park.

The movie was produced by Sony Animation, but released directly to Netflix at the end of August. It's now the most watched movie in Netflix history with approximately 325 million views.

So essentially, the population of America has watched

K-pop.

I haven't seen it.

Will you please watch it so we can discuss it? I only watch things starring my favorite actor, Hitler. Late at night, I take it out of all.

I have a Makers and Ginger, and I watch World War II in Color. You will love K-pop Demon Hunters.
And then we can sing it together on the tour. Are you ready, follow me? Take down.

I'll keep singing it until you watch it. That's what we need to do.
The soundtrack is also top to billboard top charts.

Cross promotion, Netflix, Mattel, and Hasbro have joined together to produce K-pop demon hunter toys. Look, the company, I still think, I think.

I wouldn't buy Netflix here. I think that their growth is going to be international.
I think it's a great company. I think they'll probably grow into their price.

I'm of the mind now that I think just as we talk about cable cutters or people who cut the cord, I think we're going to start hearing about an entirely new generation of people that just don't own TVs.

And also, I think our desire for, I don't know if you've seen this trend, I figure what they're called, mini soap operas, this one-minute content.

And these guys are smart. They'll figure out ways to get into those fields.
But I worry, I think that

I just think everything's moving away.

Well, I'll ask you this. I know you like the diplomat.

I've been struck in the last 12 months.

All of a sudden, I'm not turning on the TV.

And I realize that's anecdotal, but I'm supposed to be in the age where I'm sitting around watching Murder She Wrote. Are you watching less TV? No, I'm watching specific TV.
I like television.

So, yeah, like I wrote, I watched the entire season of the Diplomat, which is wonderful, as I said.

And I noticed a lot of people said, when I mentioned that, said, oh, yeah, I did the same thing. So

I'll watch, you know, specific hunt, like I always talk about Hunting Wise, but I'll watch specific or the Gilded Age.

But it's all over the place, by the way. And I'm, I'm watching this Martin Scorsese documentary.
I think it's on, I think it's on Apple TV.

But I watch specific things and I watch the hell out of them, if that makes sense. And some shows I do watch week to week, right? Like the morning show.
Well, that's, that goes out every week.

I'm actually in this episode. This is my episode this week.
Really? Yes, I'm on it. Yes.
It's lovely. This week? This week, yeah, whatever this.
Oh, we'll definitely tune it. Yeah, yeah.

I got a bunch. I can't watch it here in Korea, so I'm not able to watch my amazing Emmy Ward.
Just use a VPN. I know, I didn't.
I guess I could.

So I'm too tired. I don't care to watch myself on TV.
You don't know where you are. I don't care.
You don't know what's going on. I don't care.
I saw Obey Speakwitch. I saw a good movie.

I saw a cute movie.

I'm trying to go to the movies more with my boys. I saw Good Fortune with Seth Rogan as the Sinsario.
Oh, it was supposed to be good. Yeah, and Cana Ross.

The movie's actually not that well done, but it's a wonderful message, though. It's really a nice.
Oh, okay. Quite frankly, it's all about income inequality.
Okay. Yeah.

I'll go see, like, with movies, like, I'm going to see Wicked. That's it, the new, the Wicked sequel.
They're now making crazy rotations against. I'd see that in the theater.

Like, it just, it's just specific. I'm a very specific watcher when I used to just watch whatever.
As you and I grew up, we just turned on the boob tube and just stared, essentially.

So I'm highly specific.

But, and, and I watch, I watch threads. I know it sounds crazy, but I watch Instagram.
That's scary, isn't it? I've noticed that too. I get so much of my information now from

snackable. The algorithms are great.
They figure out what we want. Yeah, absolutely.

But anyway, so Tesla, talk very quickly about Tesla. What's your thoughts on that? Well, look, Tesla, it's a little bit hard to

extrapolate from these earnings because there was a pull forward. And that is because the tax credits were expiring, a lot of people

went in and bought probably more cars. Deliveries were up 7%.

So this is the greatest revenue they've seen and registered in two years.

But again, this is probably due to pull forward demand due to the expiration of the EV tax credit, and demand is expected to drop. Yeah, and also other things.

They've got some other things they get to put in their earnings that Trump got rid of around the environment and not carbon, but another one, air quality or something.

Trevor Burrus, Jr.: Well, that's right. Because of the expiration of regulatory credits and also their increased spending on AI, their net income fell 36%.

So last year, they made about $2.8 billion from selling regulatory credits and about 40% from America. And this is essentially just lost revenue.

And this quarter, Tesla reported the regulatory credit revenue was down 44% year on year. Yeah.
Yeah, all the little games are over. And R D expenses, including AI spend, rose 57%.

They've got to enter the same spending war as everybody else.

And it rose to $1.6 billion. And Tesla also blamed tariffs for a scratch in profitability,

but provided no numbers. It's interesting because they're actually the most vertical automobile maker.

They have more, quote-unquote, made in America parts than anything.

The earnings call was really him trying to pivot to AI. And robots.
But so far it's off to a rocky start.

They've delayed the production of the Optimus bots, abandoning previous plans to make, I think it was 10,000 robots. Yeah, remember, whatever he says, it's nonsense.

And the head of Optimus has led for Meta. And not only that, this guy was pissed off at Elon because he made a point of saying, I left despite taking a cut in pay, which means you're angry.

They also launched their robotaxi service in Austin. And since then, they've also expanded to San Francisco.
And in both cities, safety monitors are in the car during the ride.

In SF, the monitor sits in the driver's seat. So that's, I don't know.
I'm not sure. Fuemo's so far I had it.
It's crazy. And this is going to be hard to make money.

There's so many players in this area. You know what?

You said something, I occasionally do listen to you, and you said something that's always stuck to me.

And that is it is easy to, it's, it's difficult to have empathy for victims when you've never been a victim. And

I've, that has really registered with me because I've always said, oh, London is safe. New York is safe.
You don't need to worry. There's a different set of fears for a guy who's 6'2, 190.

And quite frankly, just like,

like, this is a bad thing, you know, this is a dangerous thing to say. I have never been, I don't think,

a victim of a crime. I've never been assaulted.
I've never been bugged. I've never been pickpocketed.
I've never had my phone stolen. So it's just not, it's just not easy for me.

And I have to realize I need to have, you know, I need to have,

you know,

more empathy for people who are victims. And the thing that really struck me is I have heard several women say the following.

They hate getting in Ubers

because the Uber driver starts chatting them up

and they feel unsafe. You can ask for a woman, Uber, both Lyft and Uber.

You can ask for a woman. But that's something Uber drivers have no desire to talk to me.

They don't. You're not going to put out.
Little do they know that you would put out. That's the thing.
Well, that's the thing. There you go.

Sometimes I tip them off when I get them a friend.

No, but I thought, I thought that's the last fucking thing I would want to deal with is I'm coming home late from a dinner.

And by the way, I want to be clear, some of these guys, and they're always guys, are probably just friendly, right?

But they, but they shouldn't have to deal with that. Most of most are.
And I thought,

and that's why, that's why, and then on the Waymo caller, the guy who runs Waymo was saying, I think it was the guy who runs Waymo, says this,

some of their biggest uptake has been by the woman who runs Waymo, but there's another guy that runs it with her, but go ahead. But have said some of their biggest uptake has been from women.

And I'm like, that just makes sense, right? You don't want to deal with it. And quite frankly, I don't, I don't,

if I could have a driverless car, I was thinking about it, would I want to do it?

My experience so far in driverless, I haven't enjoyed other than the technical sophistication and the wonder because they go so fucking slow. It's like having your 16-year-old over a cautious driver.

I hate that. They've gotten better.

They're now like an aunt who's a good driver, but it's too slow. It used to be grandma who's not such a good driver.

But the promise of depression. They're faster.
I've noticed they're faster in San Francisco. well that's great because i think the promise of of autonomous is the following in london the most

one of the most crazy frustrating experiences is the open road no traffic and in certain places where there's cameras the guy is no joke has to go 25 miles an hour

and you're trying to get to heathrow to make a flight and you're on a highway and you're just going 25 and the real in my opinion the promise of the promise of autonomous is that you'll be able to do away with speed limits and you'll let the supercomputer decide that they can go 90 miles an hour.

That would be a great thing. That would be great.
Yeah. Why do we have those signs at all? Anyway, we'll see.
You know, we'll see.

I think he'll probably get that pay package approved, although the two big shareholder services who he keeps trashing said this is fucking ridiculous.

And he said he has enough control that he'll be able to control his robot army, whatever that means, but not enough. What do you think Bernie Sanders thinks of that pay package? Oh, God.

He doesn't like it. Doesn't like it.

He has to hit certain numbers, by the way, everybody. Like, if he doesn't, he'll find a way to get paid, this guy.
But he said he doesn't have enough control if he's insane not to get fired.

And I'm like,

sorry. I think we passed that station on the train of Tesla at this point.
But let me take the other side of his pay package. I'm actually relatively unoffended by the pay package.

And that is.

Well, what he's saying is,

what he's saying is, if I make shareholders $4 or $5 trillion,

will you give me a 10 or 20% commission on that? In my opinion, from a pure capitalist standpoint, I sort of get it.

What I am not comfortable with is someone who aggregates that kind of capital and then pieces out to taxes and engages in massive tax avoidance and that he makes, he pays a smaller percentage of his earnings than a person on the factory floor.

So don't get in the way of upside of compensation, but tax people. Have a progressive tax.
You know,

it is linked to his performance. And, but that said, when he said my robot army, it made me like frightened out of humanity.
Just, he does this all the time. He's such a troll.
Anyway,

he'll probably get it. It doesn't matter.
And we'll all be outraged. And then they'll tear down the West Wing and we'll be outraged.

Anyway, all right, Scott, one more quick break. We'll be back for predictions.

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Okay, Scott, let's hear a prediction. What's your prediction? Just so you know, New York City Mayor Eric Adams just endorsed Andro Cuomo, which I predict will make Zoran Mondani the.

Well, that'll give him another 11 votes. God, Jesus.
They want that Curtis to get out. Curtis ain't getting out, I think.
I think Curtis is in with him and his cats are in it to win it.

I think Curtis is the Ralph Nader of the conservatives. He's like, no, it's democracy.
I like Curtis a little bit. I like, he seems insane, but I like him.
I like the hat. I like the whole thing.

I like the cats.

I actually have enjoyed him weighing in during these debates. It's usually Mondani and Cuomo screaming.
There's always a guy like that. New York's such an amazing city.

They always bring out an interesting guy. Remember the guy, the rent is too damn high.

The guy with the black gloves.

He just kept saying the rent is too damn high. He was right.

They're trying to get him to pull out so that Cuomo is doing everything possible that's nothing to do with the voters.

It's like Trump's help, get Air Adams out, you know, everything except appeal to voters, which would seem to me to be the thing to do if you want to be mayor of New York. But whatever.

Trying to get people to pull out often doesn't work.

Okay, let me hear this prediction. Said my 15 and 18-year-old.

My prediction is the following.

So America is run for profits. What dictates our society is shareholder value.

The worth of someone's character, their ability to have health care, their ability to have freedom, their ability to have a broader selection set of mates is based on their ability to acquire shit or signal that they can acquire shit through monetary or economic power.

That's how America is run. The Chinese government is essentially run, and China is run for control and for power.

And one of the ways they do that is they're much longer-term thinkers about what positions them long-term geopolitically. And I think essentially what's going to happen here is the following:

I was sort of blown away by the fact that this open weight browser that Sam Altman has basically shoplifted that anybody can use because it's sort of technically open weight is sort of like open source.

I think if I'm the CCP, I am pissed off. They have their problems, but essentially Trump is really fucking with them with these sclerotic 100% tariffs, non-tariffs.
And they are being very strategic.

And they said, okay, we're going to come for the heart and lungs of Republican voters. And hey, folks, I don't know if you heard, but we buy 50% of your soybean crops from these red states.

We're stopping and we're starting to buy from Argentina. And your president is stupid enough to give Argentina money as we transfer business.
That business is never coming back.

Farmers are out of business. They're now going after rare earth minerals that are key, play a real strategic role in everything from cars to missiles.
And I think the next,

I think, after going for our hearts and lungs, they're going to go for our jugular the following way.

I think they're going to release a series of open source or open weight AI tools that crush or put real pressure on our magnificent 10 and take down our market and put us into a Western recession.

If I were in charge of CCP defense and strategy, I would be saying to Xi, if we really want to go for the jugular, America is now a giant bet on AI. Let's make this a bad bet.

And the way we're going to do that is we're going to release a series of deep seek and deep seek-like competitors that are free, open source, and essentially do the following.

My biggest client, I started a strategy firm when I was 26. my biggest client was the gap.

We did a bunch of demographic research, and the group we found that was most underserved, and I could relate to this,

was single mothers who wanted their kids to feel good about themselves because they were very self-conscious about their lower income and that dad wasn't around.

And so we positioned what I thought was the most brilliant thing in the world at that time, and that is, we said, 80% of the gap for 50% of the price.

And we targeted single mothers, and it was called old Navy. And old Navy went from zero to a billion faster than any retailer in history.

I think China is about to go old Navy with open AI or BYD on AI.

Going BYD on

AI.

And they're going to say, here's an idea. Keep them talking to you.
We have a bunch of amazing AI tools that are all free that you can build on top of. You don't have to pay a subscription fee.

We're not going to pelt you with advertising. And guess what? We're going to take the magnificent 10 down and we're going to take your whole fucking economy down.
Make them five and a half.

The magnificent five and a half. Oh, wow.
That's really good. I like that.
I like it. I like it a lot.

And by the way, for people who aren't paying attention, she has just consolidated power over the CCP. He's made it smaller.
He's gotten rid of people. He's really runs the show.

Anyway, great one, Scott. Okay.
Well, that's quite a, I like that. I'm going to watch that one carefully.
Anyway, we want to hear from you.

Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot, submit a question for the show or call 85551-Pivot.

Elsewhere in the Karen Scott universe this week on Prof G Conversations, Scott spoke to one of my favorites, Heather Cox Richardson, a historian at Boston College, author on the voice of the newsletters from an American, very popular.

Let's listen to a clip.

One of the things that frustrates me to no end is the idea that there was ever a United States of America that was not multicultural is simply a fantasy.

And, you know, we talk in history about how whiteness is a constructed category. And, you know, that, you know, you get all kinds of pushback on that.

But it is worth remembering that Irish immigrants to the United States were not considered white. You know, I just sit there and think, okay, we're just going to make it up, right?

We're just going to construct our idea of what the past looked like, because the reality has always been that the United States was about working together as communities within a very, very broad range of people.

She is amazing.

She's amazing, and everybody should read her and listen to this. I love her.

I think she's an inspiration. I love a professor who's just like so passionate about a very narrow niche of the world and is like, after working her ass off for 30 years, she's an overnight success.

I just love that she's getting a ton of what I think is well-earned recognition and attention. I love having her on.
Wow. Oh, good for you.
Oh, good for her. Yeah, she's a very sharp historian.

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We're sold out in Toronto and San Francisco already, but please visit pivottour.com for tickets, especially you, Chicago.

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Okay, that's the show.

Thanks for listening to Pivot, and be sure to like and subscribe to our YouTube channel. We'll be back next week.
Scott, read us out.

Today's show is produced by Lara Naiman, Zoe Marcus, and Taylor Griffin. Ernie Intertod entered this episode.
Jim Mackle edited the video. Additional support from Kate Gallagher and Annika Robbins.

Thanks also to Jude Burrows, Ms. Severo, and Dan Shallan.
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