Pivot - DeepSeek Fallout, Meta Settles with Trump, and Guest Host Reid Hoffman

Episode Date: January 31, 2025

Kara and Scott are joined by Reid Hoffman, co-founder of LinkedIn, and the author of the new book: "Superagency: What Could Possibly Go Right with Our AI Future." They discuss DeepSeek hype and fears, and why spending money on AI is a good thing. Then, Meta settles with Trump for $25 million, and the White House takes a page out of Elon's playbook to offer buyouts to federal employees. Plus, the contentious (and frightening) RFK, Jr. hearings. And will Kara get a podcaster seat at the White House briefings? Follow us on Instagram and Threads at @pivotpodcastofficial. Follow us on Bluesky at @pivotpod.bsky.social. Follow us on TikTok at @pivotpodcast. Send us your questions by calling us at 855-51-PIVOT, or at nymag.com/pivot. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Stay in the know. Download the free CBC News app or visit cbcnews.ca. Let me just say, Amanda loves your whole, this whole Jam Scott. She was like, Scott's on fire. I love it. She was vaguely attracted to you, I think. Vaguely is doing a lot of work there. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network.

I'm Kara Swisher. And I'm Scott Galloway. Scott, we've got a very special guest today, someone I like very much in Silicon Valley, which is an unusual thing. Joining us today is Reid Hoffman. Good morning. So we're doing a new thing on Pivot.

We're going to make people stay the whole show, and Reid is our very first guest to do this. We're having a really good friend of Pivot. It's not just a friend of Pivot, it's an extremely special friend of Pivot. Reid is the co-founder of LinkedIn, obviously, the host of podcast, Masters of Scale and Possible. He's also the author of a new book, Super Agency,

What Could Possibly Go Right With Our AI Future. I feel like he's positive about the future. Not on everything. Welcome, Reid, again. It's great to be here. I love being on this podcast with you guys. Good. We're going to talk about a lot of stuff. Last time we talked was at your event right before the election, which you had participated in. We're going to talk a little bit about that.

Before we start, we have to acknowledge this tragic crash at Reagan Airport in DC on Wednesday night, the worst air disaster in over 15 years. An American Airlines regional plane with 64 people on board collided in midair with a Blackhawk helicopter with three soldiers aboard. Recording this on Thursday morning as the recovery operation is underway in the Potomac, there was a press conference a little while ago. Authorities confirmed there are no survivors. 28 bodies have been recovered so far. It was a flight coming in from Wichita and the Black Hawk. They don't know.

I'm not going to speak about it because I don't know anything about this. I don't have any extra information. It's tragic and very, very sad, but the authorities here seem to be doing their best to figure out what happened and moving on. And we're not going to politicize it. We're not going to do everything there has that has already broken out online.

Any reaction from either of you? You don't have to have any whatsoever, but Scott. Scott McPherson Well, look, these things, obviously it's a tragedy. The only thing, there's such a spectacle that they attract a lot of media. And I believe about a thousand people a week in the U S or about 800 people a week die in automobile accidents, but they're not nearly as dramatic or as much as a spectacle.

And you know, when I hear this, it's a tragedy, but at the same time, when I look at the data, it's just sort of incredible that it doesn't happen more often. I mean, what you said at the very top of this, it's the worst disaster in over 15 years, because it doesn't happen very often. Yeah. So I'm not saying it doesn't warrant scrutiny. I'm not saying it's not a tragedy.

I do think it's just a miracle though, that this form of transportation is as safe as it is. So anyways, I look at it almost as a glass half full, if you will. What do you think? Yeah, except for the people who died, of course. But go ahead. 100%.

Well, and plus one, Scott's comments, obviously hearts go out to the families and all the people. It's a huge tragedy and loss. On the other hand, there's this tendency to try to blame the FAA. And you look at the fact is that it's much safer to be flying than it is to be driving. And so, you know, there's a credit to how the whole, you know, aeronautics and air transport system works. And there's going to be, I think, overly much of a witch hunt on the FAA camp where actually, in fact,

I think, you know, the system should also be acknowledged. I heard the air traffic controller was a lesbian. Your thoughts, Kara? Oh, awesome. Anyway, I'm sure it was the DEI. If they start with that, I'm not going to have any of it. It's ridiculous. There aren't enough air traffic controllers.

And obviously, there's been a lot of uncertainty around the federal workforce right now. But it has nothing to do with this particular tragedy. But that said, it's a wonderful system that we have and at the same time, just for anyone, I live in DC, flying into DCA is terrifying. I find it terrifying. There's so much air traffic going on. You see helicopters. There's a weird twist that you have to do because of all the federal buildings, including the Washington Monument and the White House. And so whenever you're coming in, I find it always, it makes me nervous to come in because it's such a highly trafficked area with military and everyone

else. But we'll see what happened here because you're right, it never happens. But let's move on and we're so sorry for the families of all the people that were killed. We're going to talk all about the deep sea craziness in a sec, but first, I want you to start this. Why are you so positive about our AI future? I know you've talked about things that could go wrong and stuff. Your position on A is somewhere between do-mers, gloomers, and zoomers. You call yourself a bloomer, accelerating toward a bright future but managing risk.

Can you just explain yourself, so we can put you in the, where we put you on the map here? Well, I think in both creating immense value for humanity and also navigating risks, I think our future will have a much stronger tool set. So in the positive category, thinking about the fact that you can have a medical assistant that's better than today's average GP

on every smartphone running for under $5 an hour for anyone who has access to a smartphone for doing that. A tutor on every subject for every age group. And then of course, the fact that it's kind of the cognitive industrial revolution of increasing productivity in a lot of different vectors. I think all of that is extremely positive. Now, it doesn't mean there aren't risks to navigate and

some questions to navigate in good ways, but that's why I think I'm fundamentally an optimist and fundamentally also an accelerationist in this direction. But one of the things that a lot of people are talking about is cost to zero for lots of things. I mean, Marc Andreessen, I've heard it from Vinod, this idea that everything will cost pennies. Sometimes you all go over the top.

So that's why people question your, not credibility for you, but some people's credibility. Well, that's the difference between bloomers and zoomers, right? The whole notion of everything created with technology is going to create an abundant Star Trek universe immediately. Abundance is their favorite word.

Yes. Freely across this is an exponentialism hysteria that I think actually doesn't have particularly good thinking. I think the question about saying though, that we can create so much better of a future with technology and with AI is very important and just kind of drive, navigate intelligently. So Reed, I'm genuine with this question

because I think you're one of the brightest blue flame thinkers in the world of technology. I'm sort of blown away by DeepSeek and I wanna posit a hypothesis with you and think there's any, and see if there's any merit. And that is, we were just talking about the airline disaster, the air crash, and I was thinking about the airline industry. I was thinking about PCs. We can skirt along the surface of the atmosphere at point A, the speed of sound, it's, it's added remarkable valuable to the economy and to consumers, uh, air travel, jet air travel.

PCs have revolutionized the world yet. Neither of those industries were able to capture or any specific companies were able to capture a great deal of shareholder value. It was consumers and the general public that got captured most of the value. consumers and the general public that got captured most of the value. And I'm wondering if deep seek is in fact, a signal that in fact AI may be one of those industries where there's not a small number of companies that are worth a couple of trillion dollars, but there's so much competition and the barriers are so low that it might have

unbelievable winners, but those winners will be further dispersed into the general public and the economy. And we might not have a small number of winners as we did in social or search. That the big winner is similar to the airline or the PC industry might be the public, but a lack of really big winners in tech. Your thoughts.

Interesting thesis. I would tend to think it'll be more like kind of software, you know, internet dynamics, but I actually don't think that's necessarily because there's only one or two. I mean, I think one of the things that the internet brought about with it is, you know, previously when it was kind of like hardware dynamics and PCs were dominant, it was part of the thing where everyone was like,

Microsoft's going to be competing with Disney and with airlines and everything else because it's the primary software OS and the internet, open it up to allow Google and Amazon and so forth. So I think there's going to be multiple, and I think we're more, call it seven big tech companies heading to 15, but I don't think it's going, I think that the same kind of dynamics where you have

a network effect for a social network or a LinkedIn, or an enterprise integration, or the way that they add words and buying the search traffic works for Google. I think those dynamics probably will still be present in AI. But that doesn't mean that, like I'm a venture capitalist investor at Greylock, I invested in a number of different startups. I think there will be just literally a field of interesting companies.

I think that the public will benefit a lot from that, just the way they benefit a lot from Wikipedia, the Internet, free communications and a bunch of other things. But I don't think it's necessarily completely broadly dispersed. You're not going to see it. So why don't you just go in? Because some of our listeners are like,

we didn't say enough about DeepSeek. Well, honestly, we don't know. Scott and I don't know, like you, for example. So it caused a frenzy in tech and markets. So we brought Read-In to explain listeners because we're idiots. Fine. So Deep Seek causes frenzy in tech in the markets. I'd love your take on what we're seeing and what excites you about it and what worries you. And I will note that OpenAI, where you were an early investor, you're no longer on the board. And Microsoft, where you are on the board now, are investigating whether OpenAI's data

was stolen to build DeepSeq's model. They were also relying on open-source stuff like Llama from Meta, etc. So talk a little bit about, give your take on this and make it a hot take, because that's who the person you are. Yeah, I'm happy to do it. By the way, one of the benefits of me being able to speculate is

I have no internal information from either Microsoft or open AI so I can speak entirely as a, you know, outside commentator, just looking at this. Um, so deep seek, um, released a, you know, highly competent model, um, from, you know, kind of China and, you know, kind of, uh, part of the reason I took the market by storm is the thesis was that it was created for a lot less money and a lot less compute. What I think is there's certainly

some parts of the story that are incorrect. The thing that we're trying to figure out is which parts of it are incorrect. I would speculate with some vigor that they actually had some version of access to larger models and helping training. Because this is actually something we all knew already last year, year before, is that large models will help train small models.

And so that means when you train a small model effectively, but you need a large model in order to do it, that's actually not disproving the need for these scale systems. Because when you have the better and better large scale models, you'll be able to train also really good. They're riding off of your rails, in other words. Exactly. Right. I would hazard strongly that there's something like that in the background.

Now, it could be that they had some access to chat GBT. Certainly, some of the data and evidence suggests that in terms of the way that it answers and does certain things. It could be that they actually had access to a compute cluster of size because the so-called training run really makes sense. I cross-check this across multiple groups,

like outside groups saying, hey, what makes sense here? They're like, yeah, for the final training run on a serious compute cluster, that could be the dollars that was spent on this in order to make it happen. It doesn't include talent, doesn't include all these other things. Right. As they were saying, it was five to six million, no one thinks that. Because again, the talent that they hired, they put in place.

It was a lot of younger people, correct? That's their story, that it wasn't highly paid. Yeah, exactly. And I think that the, I think it's nearly certain that it's dependent upon the large scale compute, the larger models in some way. The only question is we don't know in what ways and how. And I think that's one of the things

that everyone's investigating. And so I think the kind of market frenzy on, oh my God, AI can be here without large scale compute. And of course, by the way, AI can be here. I invest in startups that train small models and so forth. But the large models still bring certain critical elements to the table in terms of ability to train small models, ability to get to performance.

Like if you say, well, hey, moving from 10,000 GPUs to a 100,000 GPUs, we only get a 20% better coder, medical assistant, legal assistant, tutor. Like, well, in a wide variety of those areas, that really matters. That actually, that increase in cost when you amortize it across people accessing it across the entire unit, the billions of people that could use it, that's actually completely worth it and makes total economic sense. So the cheapness of it. So what excites you about it and why did it have such a market impact from your perspective?

You saw Nvidia got crashed, it came back up, but this was the idea, because the economic underpinnings of this, which everyone's worried about, this amount of money, $50 billion, $80 billion, etc. Microsoft is 80, I think. The matter is, let's see. Yeah. By the way, I think that all of these questions are in the classic short-termism versus long-termism. Because if you're saying, hey,

I'm building this capex thing thing of 50 to $80 billion. A, I can train much better intelligence, but B, I'm also, these are kind of data centers that in terms of serving intelligence through various apps, you know, to the world. You know, you could say, well, the payoff is longer than I'd like as a public marketer. I'd like the payoff to be three years and maybe it'll be five years or seven years. You know, that's the kind of range you're talking about. So I find that the general discussion on the X tens of billions of dollars to be short-sighted generally.

Me as a private citizen, me as a venture investor, obviously making zero comment as a Microsoft board member. But the, and so I think that it's an extremely important area to be investing in, and I'm actually glad that we as a industry are doing this. I mean, one of the things that I've thought about over December was that I want artificial intelligence not just to be amplification intelligence, I want it to be American intelligence.

In terms of- The China thing, they're always bring the G or me kind of argument. Go ahead. Yeah. And I think by the way, part of the criticism I used to get last year and the year before when I was saying, hey, look, we are game on with China, was like, oh, you're just trying to get the excuse that we shouldn't be interfering with you and slowing you down and so on. It's like, no, no, I see the competition coming.

One of I think the huge virtues of DeepSeq is like, yes, there it is, right? That is serious and real competition. And I think that's the world we're in. Yeah, who would have thought that China would engage in IP theft to create a cheaper product? We've never seen that before. I love that AI is taking the job of AI.

Yeah, that's the big joke. That's what John Stewart said. Yes. So another thesis, most consumer markets, if you think of this as not only B2B, but B2C, they bifurcate, it becomes Walmart or Tiffany. It becomes Android, which is essentially free and it's ad supported or it's iOS.

Isn't this potentially just the first sort of shot across the bow where this market is gonna become similar to every other consumer market where we're gonna have Walmart and Tiffany. And this is kind of the first entry into the Walmart 80% kind of old Navy, old Navy is 80% of gap for 50% of the price. And that hits a large market,

but a lot of people want Gap or Banana Republic, that there's a market for both of these, if you will, both respective positionings. I think yes. And actually, in fact, when we kind of talk about what is our agenda future, most people tend to think, there's gonna be like, be Lord of the Rings, there's one agent to rule them all.

And actually, in fact, I think there's gonna be, in a sense, more agents than people, because every person is gonna have multiple agents. Now, there may be a limited number of code bases, call it 1,000, kind of powering all the different agents, could be 10,000. But I think we're gonna actually live in a very rich agent environment,

and that's gonna have a, it's not just gonna be the Walmart or Tiffany's, I think it's gonna be, this agent's actually particularly good at travel. This agent's particularly good at, you know, kind of interpersonal discussion. This agent's particularly good for, you know, people like Scott and, and, and this other agent's particularly good for people like Kara. Right. Right.

So an agent that writes better dick jokes. Go ahead. Go ahead. Yes, exactly. No, no, but this is precisely the point is like, is like, this one will be sardonic and a little sarcastic, and Scott's like, yeah, that's my agent. And this agent is going to be fiery and say, no, we got to hold you to a higher standard. And that'll be the care agent. And then you'll have the nuanced agent of the one for Reed saying, well, on one hand and on the other hand.

Yeah, that would be your agent, wouldn't it be? So speaking of that, what he was talking about, you just raised $24, $25 million in funding for AI drug discovery startup, focusing on cancer research. This is something that Sam did this at the White House event, for example, and your book is called Super Agency. So this is drug discovery. Super Agency is what you're writing about.

Of these many things, where do you think the quicker is and the more important for the economy? And explain what super agency is, what you were just saying, correct? Yes. Well, super agency is what happens, and we've seen this from everything from the fire and agriculture to the printing press to the car and electricity, is what happens when millions of people all get access to the superpowers of increasing their agency at the same time and we collectively get super agency. Like for example, when I get a car,

I don't just get a place to be able to get a broader geographic mobility. My friends can come visit me, a doctor can come do a home visit. Things can be delivered into kind of the local neighborhood. And so that's kind of the super agency. And the thesis is just like everything else with, kind of the internet and the mobile phone,

that we will all get super agency through AI because the cognitive superpowers that you get, that I get, that Scott gets, we will get even more superpowers because we're all getting them at the same time. William Gibson line, the future is already here, but unevenly distributed, that's already present. There's already a whole bunch of different things

you can do with, you know, AI that most people don't realize is a huge amplifier in both how they navigate their personal life and how they navigate their kind of future life. Now, Manus is kind of my, you know, kind of thinking about like, what are the things that these AI things can greatly do to massively improve the kind of human life

and human condition that are kind of in a different direction that most people are heading. So mannus, for example, is not building an agent. It's kind of saying, actually, in fact, the biology of our human bodies is a complex language, and part of what's going on with cancer is kind of misfires in that language. And we can take these great amplification that you get with AI and take the best of

AI and take it with the best of science, and then you can tackle a problem that five-year-olds get cancer sometimes. It's the entire, everybody in the human race at all ages. Our system is naturally trying to regulate cancer and all of us are at risk for it. It's something that we can potentially solve with AI. Right. That's not agency. That's the other things it's going to do like climate and with AI. Right. But that's not agency. That's the other things it's going to do like climate and everything else. That's what you're focused.

And so you're sort of, where is most of your money going? Agents, these agents that you just spoke of, or is it these other things? Or is it just like electricity? We don't know where it's going to be applied. It can be applied to everything from light bulbs to electrocuting people, right? You just don't know what the application is. Well, I think there's a broad range.

And as an investor and as a kind of a theorist and thinker, it's anything that could make a massive difference for the human condition. So I'm both very pro-agent, agent universe, but I'm also pro all the other applications, whether it's kind of climate change, cancer. And I think that's part of the reason why this technology, like for example, electricity does an entire range of things. It's not just powering light bulbs.

It's, you're heating and now cars and the whole range. Like we can't live in anything like even approximately close to our modern condition without electricity. I think that's the kind of technology that we're- The comparative. Yes. Any amount of money spent is good money spent from your perspective.

Well, yes. It doesn't mean that some of it won't be seriously wasted by a bad approach. is good money spent from your perspective. Well, yes, it doesn't mean that some of it won't be seriously wasted by a bad approach. And by that, that's classic, as you know, for the venture industry. So there will be, you know, hundreds of foolish investments. But the overall industry will create a massively good surplus for humanity and society.

In any case, we've got a lot to get to today. We're going to take a quick break, then we'll talk through some of this week's big headlines with Reed. Support for Pivot comes from Life360. You may not be able to prove everything in your day-to-day lives, but with Life360, you can family proof your family. Life360 is a location sharing app that makes family life easier. Knowing where everyone is at any given time makes coordinating daily routines and activities a breeze.

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That's V-A-N-T-A dot com slash pivot for $1,000 off. Scott and Reed, we're back. We've got a lot to get to today. Let's get into some headlines now. Medit will pay Trump $25 million settlement for shutting down his accounts after January 6. Most of the payment will go towards Trump's presidential library again, much as Disney's payment of $15 million is going to do that.

X who also kicked Trump off the platform after January 6 says it's negotiating its own settlement with Trump. Apparently, the Trump people said Mark wasn't going to get into the tent unless he did this. You don't seem to be paying anybody millions of dollars to get in the tent. So what do you think, Reed? So obviously, I think it's- That was a long sigh that you just had there. Well, look, I obviously think that the notion of this payoff is,

I think, to put it charitably suboptimal. I think that the question of the fact is when people are removed from services for violations of terms of service, they're removed for violations of terms of service. I think that's a perfectly good thing. Myself, I'm a massive advocate for the rule of law and how these contracts work, but I understand expediency in navigation.

Okay. What does that mean? That means- What does that mean? It's a VIG. It feels like a VIG to me. That's my, sounds like a mob move to me. Yeah. I don't want wouldn't want a nice company you got there wouldn't want anything to happen to it.

Yeah. Well, let's hope that we see very little of that in the coming years, although obviously, we have deep worries in the other direction. Couldn't he keep doing this suing people and getting these things? Well, I guess the question will be is, it's kind of like, how much do people kind of respond to this sort of excess pressure on these kinds of things?

And I think that that frankly, we shouldn't want it as a society. And, you know, I think probably there will at some point be a bridge too far on it. And seeing what that bridge looks like, I think is still something where, you know, we're looking for that bridge too far is. Well, there's two dimensions to this. The first is from a pure shareholder standpoint, it probably makes sense when the president's coming after you to say, and you make $20 million a year in operating profit to say, yeah, just make it go away.

Just give them $25 million to the presidential library and make it go away. The problem is, and I wouldn't expect based on pattern behavior, Mark Zuckerberg, to think anything about this, is that this has real societal implications. And that is despite the fact Bob Iger made $45 million last year, I would argue he's becoming more and more impoverished in terms of his citizenship. And that is when a media company says things that are a fraction of the misinformation, slander, disparaging statements that the president has made himself, that happens every day online, and they agree to set precedent by bending a knee and bowing to this intimidation,

it sends a chill across the entire fucking nation. I'm on Morning Joe and I call the president an insurrectionist and a rapist and Mika stops the show to clarify he was found guilty of sexual abuse. Liable. Or excuse me, sexual liable. He was found liable of sexual abuse. Is that the right terminology?

Yes, I just made, call me Mika Brzezinski, but go ahead. But look at what we're doing, all right? And by the way, the judge then went on in his sentencing to say the street term for that is rape. So what do you have? You have a group of people, this is straight out of the fascist handbook, intimidate anyone who says anything negative about you.

And if these companies, in my opinion, had more fidelity to American values and the very important role media plays in checking power, they wouldn't be bending the fucking knee like this. So is it a practical thing to do? Yes, you can't argue with that. Has it sent a chill across the entire country in what is an incredible double standard that the

critics of President Trump are now feel that they're being held to. Look at the shit he has said about people that's been incorrect. So I, you know, yeah, Bob and Mark, I expected this from Mark. I was disappointed to see it from Bob. Where are the men? Where are the Americans who are going to stand up and say, no, if you're not guilty, if we're not, if the entire ecosystem has never been held liable

for things much more slanderous or disparaging than these statements, I'll see you in court. In this case, it wasn't statements. He broke the rules of Facebook and they kicked him off. That's all. It was not, as Reid was saying- Which they're allowed to do.

Yeah, exactly. So Reed, when we talked in October, I asked if you were concerned about Trump and retribution and your own well-being. And you said yes. Talk about now. How are you feeling? Because obviously, you were one of the more prominent supporters

of Kamala Harris, obviously a big Democratic donor. You do give to Republicans also, for which for some reason, you get endless shit. I'm not sure why. I think that's probably fine to do that. How do you feel now? Do you feel in that crosshairs that we had discussed? Well, it's unclear.

I'm hopeful that a bunch of my friends who are around the administration say, look, that's just kind of all rhetoric and, you know, isn't actually going to be. That's what they say to you. Yes, that's what they say to me. And so that obviously is hopeful.

But I obviously it's one of the things that I think, you know, both me personally and we as Americans need to watch carefully because we do want to be to continue to be of the brave and the land of the free. And I think that that's very important to be resolutely against abuses of state power for individual interests. And so, like I said, I went and talked to a whole bunch of people who are kind of in and around the current administration, said, look, I went and talked to a whole bunch of people who are in and around the current administration, said, look, I have this worry. They said, look, we've talked to a bunch of people.

They say, this is not something we're going to do. I was like, okay, then let's wait and see. Are these the same people that said he wasn't going to let out everybody at January 6th? He wasn't going to let out the criminals, but then he did. That's the same people. It wasn't the same people as those. He's done that several times.

He's done that several times. There's worries. And like, for example, letting out the people who assaulted police officers, as per what Scott was saying earlier, is a terrible signal. It's basically saying, hey, if you're doing violence in a cause that I am supportive earlier is a terrible signal. It's basically saying, hey,

if you're doing violence in a cause that I am supportive of, I have this thing of a presidential pardon. That's obviously, frankly, terrifying, concerning. Right. But you didn't want a presidential pardon, correct? No. Of course not. Yeah. You didn't do anything. Yeah. But here's the problem. If I'm a thoughtful guy who's high profile with a lot of business interests with a family, I would be inclined, I'm not going to speak for you, Reid, I'd be inclined to keep a very low profile over the next 12 months. Whereas the people on the right are emboldened to be aggressive

and pollute and flood the zone with misinformation and bullshit and attacks. And the people on the other side of the aisle feel like, well, maybe I should just keep quiet for a while because they are removing security details of people, which is nothing but repackage violence. When you took out the head of the Iranian security forces and you ordered that strike as a general and the president for whatever reason doesn't like you is removing your security detail, that is repackage violence against that person. So what we have is a group. This is the road to fascism. Keep them quiet, put a chill across people. I'm gonna keep a low profile.

Maybe I'm just not going to be quite as aggressive. That is, let me be clear. That one of the roads to fascism, and I want you both to respond to this, is littered with calls or accusations that people are overreacting. Call me overreacting. Call me overreacting. Let me just say, Amanda loves your whole,

this whole jam, Scott. She was like, Scott's on fire, I love it. She was vaguely attracted to you, I think. Vaguely is doing a lot of work there. Vaguely is doing a lot of work there. She was, she wanted me to tell you. I think you're right, but that's, I think it's, you know, people that are very high profile,

like Reed, certainly aren't backing down, don know, people that are very high profile, like Reed, aren't certainly aren't backing down, don't seem to be disparaged right here, right? And he's talking about it. So I think the question is, when Mark does these deals, when he just doesn't have to, and it doesn't help them from a shareholder point of view, I really that's nonsense. It's really, but again, we expected Mark to do this. Sorry, I know, Reed, you were, Reed was early at Facebook for and has and had been a mentor to Mark. I don't think he's listening to someone like you anymore. But that said, you and Bill Gates had been,

and probably are no longer, I would guess. I think that the American people should pay a lot of attention to removing the security detail from a you know, a person who spent their entire life serving the American people, putting himself in harm's way, you know, kind of helping secure the safety of America, you know, both locally and Americans abroad and saying, hey, for petty reasons, I am putting that person directly in the harm's way of violence. And I think that is an unpatriotic personal thing

that I think is extremely important that everyone should pay attention to. And I think it's exactly that, is I think that as Scott's saying, on the things that are like, that is the kind of thing that is deeply un-American, like I think people need to speak up about. And so, you know.

100%. So, another thing that people are talking about a lot here in Washington, at least, the Trump administration is offering 2 million government employees the option to resign by February 6th if they're not willing to return to the office full-time. And what's being called a deferred resignation, employees that resign will continue to be paid and get benefits for eight months. This move has Elon Musk's fingerprints all over it, down the subject line of the email sent to those employees,

a fork in the road, which was an email Elon sent to Twitter staff in 2022. I have been stopped by so many government employees saying, what should I do? I said, do not leave because they won't pay you because Elon still has severance issues with those people that were supposed to be paid at Twitter. It's one of these ploys to get people out the door. There's also federal employees have more, private employees have rights in California, New York especially, but here they have more.

What do you need to make of this plan? It's unclear whether Trump can even offer this buyout package without budget authorization, if he has the money for it. They're hoping that five to 10% of federal employees accept the offer, which could mean hundreds of thousands of people. You know, you've been involved in companies that do things like this, and obviously you end up paying them unlike what Elon did at Twitter. It looks like he went around everybody. It looks like he went around everybody. It looks like he went around everybody. This plan was sort of foisted upon people without even Trump officials knowing it was happening. That was the story in the Washington Post today.

So, thoughts? Yeah. So, it is a technique that when deployed with honor is actually in fact something that has some strength in the private ecosystem. Because it's some strength in the private ecosystem. Because it's kind of in the private ecosystem, the way it works is if you're not committed to the future of this, then now is a good time to exit. Because doing it works in the private ecosystem in part

because part of it is not only am I committed to the mission of this, but there's also an economic reason to be keeping going. You believe in the stock options, the bonus plan, all these kind of things for that. Now, I worry in the public circumstance that applied here that a lot of the folks who go, okay, I could get jobs in 10 different places. I'm going to go do one of those and do this. This will be depriving the American people of some really great talent. So the good people will leave, in other words.

Which is always a worry when you're doing this, right? When you're doing one of these broad layoffs. Yeah. I think unlike in the private ecosystem where you actually have a, and we have a rich incentive plan for staying too, here it's like here's an incentive plan for leaving versus an incentive plan for staying. So the best people leave and in the case of private companies, they try to retain or they specifically target certain employees, correct? This is too broad in that regard.

The best people will go with the experience and the worst people will stay, correct? Or the less people will stay. Yeah, there the less good people will stay. Yeah. There's a worry about a selection effect. Right. Did you notice the echoes of what Elon had done here? Yeah, of course. Yeah. And? Well, I mean, look, I think we will see many things that are the parallel to how Elon thinks an organization should be

turned around from Twitter to the federal government. The fact that you're looking now where, what was the leaked emails like, hey, we're not doing very well, is whatever X years on it is for Twitter. It's like, well, should be learning from that. And that's within the standard understood commercial ecosystem.

Yeah. Just so today, you're not going to talk about financial results, but Tesla's results were terrible. Even though the stock is going up because they aren't selling as many cars. In any case, Scott. You guys have said it. I don't like buyouts because the people with the most options, the most talented people,

the ones that exercise them. I don't think there's anything wrong with the thesis that there's too many federal employees and we need to trim it and they should be subject to the same standards and insecurities and anxieties and work week that private employees are subject to. I don't have a problem with that. I think it should be based on what departments are least efficient or performance. But these, your most talented people leave. The people with the most options leave.

It is a degradation, I think, in the quality of the workforce. It's not the way to go about this. Is there a good way to do this, Reid, from Reid? Elon's using all his playbook, right? What is the playbook that would work here to do what Scott was talking about if you had to think of it off the top of your head? Well, I mean, the parallel on the commercial side is that you actually also have

incentives for keeping the good people to stay, whether they're stock, bonuses, other kinds of things, as ways of doing it. So it's not just the stick, it's the carrot for going long in your long-term commitment to the organization and its mission. So this would probably be harder and maybe not within the This would probably be harder and maybe not within the presidential remit, but bonuses. The thing you'd say is, hey, if you figure out how to cut 10 percent of your budget,

we'll give you a 1 percent bonus on these things, would be the thing that I would potentially look at. But I think it's all of course very tricky and difficult. Difficult in a public environment versus a private one. Yes. Exactly. Because what is results? Because sometimes results, people being less poor. It's not a stock,

you can see it in the stock market versus something else. Exactly. Right, which is difficult. Is the concept of cutting people a good idea from your perspective? Fundamentally, yes, just because it's part of what makes, like, what are the things we should learn from a bunch of the things that we learn from the commercial side? And part of it is refactoring organizations is essential for keeping them healthy. And so that refactoring is extremely important.

I'm quite certain if one looked through the kind of the federal government, one would find like, and I'm sure that I'm using this as a hypothetical example. It's like, you know, you've got, you know, maybe still a weather balloon department, you know? And it's like, well, we should have one of those, we've got satellites, a bunch of other stuff. I'm sure we have one of those, we've got satellites, a bunch of those, I'm not sure we need one of those.

That kind of thing. I think that refactoring is good and I think getting that refactoring, figuring out how to do it in a good intelligent ways is one of the things that I think we could be hopeful for, maybe some good will come of this. Right. A blunt force to it is a way to get it started. Yeah.

Look, I think one of the things we're going to have to pay attention to is I think the default will be massively increase the deficit. Um, and I think the problem should be is we should not be, we should be trying to reduce the deficit. I mean, if you look at the actual budget and you want to get, you know, a lot of money out of what we're spending, we're spending on debt service is one of the massive line items. And so increasing that is just mortgaging our children's future more.

I mean, it's already somewhat mortgaged. Let's try to pay off the mortgage versus add to it. Right, in doing this. Well, we'll see what happens. Anyway, one of the other things that besides doing this, Elon's doing is, and this is an area you obviously came together with PayPal when he had x.com, but they're partnering with Visa to allow real-time payments through its upcoming xMoney service. CEO, Linda Yakarino announced the deal saying it would enable instant funding to an xWallet

via Visa Direct, will also allow users to make peer-to-peer payments. Look, they were going to do this, they announced this, but I'm just curious where this is going, these ideas of the Everything app. This was a concept that, and not just ex has, it's been going around forever. Everyone talks about this. But where is the payment space right now? Away from this, I would never trust anything Linda Iaccarino's working on with my money,

but that's different. Where is it right now, the payment space? It seems like Apple dominates this whole space right now and PayPal. Well, payments is an area that at least has scale effect, if not sometimes network effects. One of the things is you have to get to a certain scale before you even have a viable payments network.

Getting that scale really matters. I think that we want to see a bunch of good innovation on this. It is a very common pattern to go, the way I'm going to more verticalize and extend my service is by adding in payments and banking. And we see it in a number of different contexts. I mean, Google has one, there's a stack of these. And Kevin, my own background,

kind of doing the kind of payment space, it's actually one of the areas that I kind of look at because it adds to the flexibility. Like one of the things I really loved about what we did at PayPal was trying to make every individual able to be a merchant. Now that's now much more true in the whole world, which wasn't true before,

which allows kind of individual entrepreneurship inside. And so I think it's a good area to improve. Lots and lots of people are doing it. Yeah, a platform built on rage, porn and crypto scams handling your money. What could go wrong? Look, the FDIC or banks have the FDIC. Twitter has dog memes. I just, our financial institution is based on trust that you hit a, that they have figured out a way to get it there safely, that along the way, it doesn't get sequestered, that money

does not know your customer. There's all sorts of things. FDIC insurance. I mean, there are so many protocols. Twitter, to me, does not reek of security or safety when it comes to people's money. It might actually, the underlying technology and its ubiquity, it might be a good use case for it. But the entire financial system is a case study in

trust. And I don't feel this organization has created a great deal of trust. LESLIE KENDRICK All right. So where is the most innovative thing you're seeing in funding right now? I mean, obviously, again, I don't think I've touched, I've dealt with money for a year now. I found a 20 in my wallet and I was like, oh, look at that. I use Apple almost entirely for all payments everywhere I go, obviously, because I have an iPhone. But what is the most innovative thing you're seeing in this area? Well, since I've been so focused on AI stuff, I haven't actually been looking've been so focused on AI stuff, I haven't actually been looking

at this particular area closely. Obviously there's a whole bunch of things that are being developed within the crypto arena to try to have kind of ledgers and identity and all the rest of that. And the kind of the promise of that is to try to create something that has, to elaborate on, I think Scott's excellent comments is, how do we have trustless trust, which is a trust in the system that doesn't

require trust in a centralized authority whose ability to hold that trust may be limited. And so I think that's one area that I think continues to burrow along. Now, none of it has any And so I think that's one area that I think continues to burrow along. Now, none of it has any of the in-depth traction that Apple or other, because the key thing with payments tends to be ease of use and integration into your environment. And so I think that part of what Stripe's doing that I think is great is making it very easy to incorporate kind of Delaware corporations from anywhere or from many areas in the world and then provide a kind of a economic powering structure underneath that to power entrepreneurship is I think like a really good thing. But like

I said, this I've been so focused on AI that in this area, I'm, I think someone may call me after this and say, this is really good. And I go, oh yeah, that's the thing I should have said, but I just didn't know at the time. All right, Scott and Reid, let's go on a quick break. When we come back, we'll talk about RFK Jr.'s contention confirmation hearing. Health and Human Services Secretary nominee Robert Flouride Kennedy Jr. went before the Senate today in fiery confirmation hearings. Did you say Lyme disease is a highly likely militarily engineered bio weapon? I probably did say that.

Kennedy makes two big arguments about our health, and the first is deeply divisive. He is skeptical of vaccines. Well, I do believe that autism does come from vaccines. Science disagrees. The second argument is something that a lot of Americans, regardless of their politics, have concluded. He says our food system is serving us garbage and that garbage is making us sick. Coming up on Today Explained, a confidant of Kennedy's, in fact, the man who helped facilitate his introduction to Donald Trump on what the Make America Healthy Again movement wants.

Today Explained, weekdays wherever you get your podcasts. Scott and Reed, we're back as we tape this. HHS Secretary nominee Robert F. Kennedy Jr. is in the hot seat for the second day of his confirmation hearing. Things got a little heated on day one with Kennedy rejecting claims that he's anti-vaccine, addressing abortion flip-flops and struggling with the question about Medicare and Medicaid. He's also asked some of his previous controversial comments. Let's listen to exchange with Democratic Senator Michael Bennett, who's a favorite of Scott's and mine

Did you say that COVID-19 was a genetically engineered bio weapon that targets black and white people? But spared Ashkenazi Jews and Chinese people. I didn't say it was deliberately targeted. I just I just quoted an NIH funded and NIH published study. Did you say that it targets black and white people but spared Ashkenazi Jews? I quoted a study, Your Honor, I quoted an NIH study that showed that certain races... I have to move on, Mr. President. I have to move on. Kennedy's own family is also expressing concerns.

JFK's daughter, Carolyn Kennedy, sent a letter to senators ahead of the hearing. She called her cousin a predator and accused him of exploiting their family's tragic history. Let's listen. Bobby continues to grandstand off my father's assassination and that of his own father. It's incomprehensible to me that someone who is willing to exploit their own painful family tragedies for publicity would be put in charge of America's life and death situations. Unlike Bobby, I try not to speak for my father, but I am certain that he and my uncle Bobby, who gave their lives in public service to our country, and my uncle Teddy, who devoted

his long-s long center career to the cause of improving health care, would be disgusted. Okay, that was the nice part, just so you know, for everybody, which wasn't very nice. You know, all these things seem to be going through Pete Hegseth and everybody else. Any of them you'd like to comment on? The Kennedy one is particularly, it looks like he will probably get through. Same thing with Tulsi Gabbard and et cetera, et cetera, on down the line. What is happening here?

I do believe a president should have pretty wide berth in terms of bringing in their own people. And for all of the weirdness and incompetence parade of some of these nominees, I think this is the most dangerous. You know, you have an individual here who is not only anti-vaccine. If you were to list the greatest innovations in history,

I think most thoughtful scientists from both sides of the political spectrum, vaccines would be near the top of the list. And the fact that we have now politicized it and have an individual with no science background, spewing misinformation who seems to be committed to reducing or creating skepticism around vaccines. And then something that came out yesterday from Senator Warren was that he is being paid to find people to sue Gardasil, an HPV vaccine that so far has shown to reduce cervical cancer in women by 90%. I don't know if either of you have known anyone

with cervical cancer. I have. My God, we have something that can prevent nine out of 10 times this vicious, awful disease. And we have the head of HHS being paid to try and discourage and financially damage that miracle. This guy has no business at HHS. He is probably the most dangerous of the nominees in terms of what it could mean long-term without attribution, where in 10 years

we wake up and go, oh, cervical cancer's back and reverse engineer it to this individual who is blatantly, repeatedly anti-vaccine. I think this is awful. I made my sons get it immediately when it happened. Reid, how are you looking at these? Obviously, you're making these AI investments in cancer research. This guy will be right there at the head

of all these organizations that are very related to some of these things. So look, I think the unfortunate prediction for RFK's probable confirmation is it will probably be measured in thousands of American lives lost. I think that the question around the fact that he's saying, I'm just following science, no he's not. Not only is he anti-vaccine in many, many statements over decades.

He is essentially anti-science. I've heard of meetings where he is meeting with scientists, where the scientists try to tell him, he's like, no, no, you're supposed to listen to me. It's like, no, no, the whole point is to listen to good scientists. And I think this will be, to good scientists. And I think this will be, if this confirmation goes through, I think the senators who vote on it should track how many thousands of American lives they're willing to spend in this calculus. Because if he implements any of the things

that he has articulated and talked about, I think the cost is going to be measured in lives. Have you been surprised by how many tech people have been attracted to him? I'm not going to leave that Nicole Shanahan, she was not a tech person. She's a rich person who married a tech person and got money that way.

Have you been surprised by that? Because there is a whole strain of people who really back him in the tech firm, in the tech area, even as they make these big investments in AI and cancer and where he will have an impact. So I think that one of the strengths and weaknesses tend to go together. A lot of tech people tend to think they go, well, I've met him and it was a perfectly reasonable conversation.

And so therefore, like, oh, that's just all media stuff. It's like, it's media stuff that he said, that he did in other rooms that you weren't in. Right? But there tends to be this really strong, kind of like, no, no, I met him and I came to my own judgment. Yeah, I got the cut of his jib. Actually, Gates did this the other day with Trump, which was disappointing, but go ahead.

I think one of the things that's very important is to have a little bit of, like, look, just how a person talks to you is not necessarily how they actually, in fact, operate in the world and you have to apply that. So I've had a number of tech people try to say, R.F.K., he's great. I'm like, just look. Like, for example, in an alternative like hiring context,

I prefer references to interviewing. I prefer to have both, but reference checking is much better. And it's like, I've seen the references on R of K. Like that's part of the reason why it's like, okay, this appointment will be measured in thousands of American lives lost. Well, let's leave it at that then.

All right, Scott and Reid, one more quick break. We'll be back for predictions. Okay, Scott and Reid, let's hear a prediction. I'm going to go first, actually. I'll be at the White House soon with Tracy Flick, the new press secretary. The White House is welcoming podcasters to the briefing room. Carolyn is running it right now.

She has decided that new media, which I agree with, including independent journalists, podcasters and influencers, will be able to question, ask questions at briefings. I welcome this. The Biden administration should have done it, should have had different and not just the traditional people. So I'm super excited to go to the White House and I will be there this year. That's my prediction that Carolyn is going to let me in, Tracy, slash whatever the heck she is. Thank you. Any comment?

I love that prediction. And by the way, I think it's a good thing to begin to broaden the set of different folks in the briefing room. I just think it's critical if you think, this is the office of the president for all Americans to have a diversity of access to it. I mean, so for example, you have a kind of a, you know, a Democratic president,

you still have Fox News, obviously, in the room. You need to have that breadth of perspective to be representative to the American people. So I love that prediction. Yeah, I know she wants me there. She wants me on that wall. Well, first off, on your prediction, I immediately read that and I sent Jim Acosta an email

saying I need you to start a podcast. I want you back at those press briefings. This is the CNN person for people who don't know who left when they tried to put him on at midnight. He started his own, he has started a bunch of stuff on his own, and he's a great guy. We love him. He's a great journalist.

So I'm fascinated by what I think is kind of a tectonic shift with DeepSeeker, just the notion that there might be a reasonable facsimile of the best AI models at a much lower price. I think that this, regardless of what we find out, it was probably exaggerated, there is now I think a much greater likelihood we might be able to see cheap and cheerful kind of old Navy-like models. So my prediction is there's an entire layer of companies and pharmaceuticals in the consumer sector that had allocated $100, $200, $500 million for CapEx for the cost, or OpEx, for the cost of AI that they were going to have to spend to rent these models to develop new drugs, come up with a better itinerary for your Airbnb stay,

that all of a sudden are going to decide, wow, we're going to be able to get all of the great taste of AI with a lot less calories, a lot less op-ex, and you're going to see a bunch of companies that were setting aside a ton of reserves because they thought this was going to be a lot more expensive than it's going to be, recognize, take those reserves back, and it'll juice their bottom line. So I'm in the midst of trying to identify those. I don't know if it's

Airbnb. I don't know if it's Johnson & Johnson or GlaxoSmithKline, but I think there's an entire layer of companies that just got great news that their capex on AI could be 30, 50, 80% less than they'd originally anticipated. Well, I think that actually we will see a variety of those. I don't think it's necessarily because of the deep-sea canoes. I think that we were actually already heading towards that. I think that the part of the eugenic future, this is commenting on Scott's, part of the agenic future will be actually in fact compositions of smaller models that deliver

really effective services across a wide range for individuals, for organizations, and so forth. So I agree with his prediction, but not necessarily just as a deep-seek response. Okay. Reid, your prediction. So, you know, I was thinking about this a little bit, and I think that one thing that would be

an interesting thing that people wouldn't expect out of this is, I think that the AI agents will trend towards creating agents that will be actually massively positive for human mental health. And I think that the actual natural market dynamics will reach in that direction because as people interact with these agents, and I think I've already seen this from what, you know, my startup inflection did with Pi that, you know, has helped a bunch of other agents following this to be high EQ, kindness, and other kinds of things. And I think those will actually, in fact,

help people feel more heard, more seen, a dynamic of interaction that is more who we aspire to be and will actually help naturally through people just choosing the agents they wanna interact with to an increase in kind of mental health and well-being. Well, unless, you know, as you know, I interviewed the mother of the character AI, there's the lawsuit there, they can take that turn where they shouldn't be around young people, for

example. They shouldn't, you're talking about adults here, correct? I'm talking about adults, although I think we also can, and I think we should be much more careful about how we, you know, engage with children in various ways. That's saying it's one of the important things for the technology industry to get much better at. But I tend to think that the natural dynamics of we will prefer the agents that have this characteristic.

Now, I think part of the thing that it can be is, you know, having even agents that are trained to be very good in mental health will also be good. So that they will, so that there are good agents. My only issue is the potential for abuse is so massive, and you're seeing it. The lack of care, you know what I mean? Like, why didn't that kid, why didn't that company alert it when the kid said suicide?

Like for stuff like that, like what, where was, why was that never there? And that's the problem. And their argument is now that it's free speech. It was going to be section 230, but now it's these agents, these like in that case, should bots have free speech? Like that's the kind of stuff we're going to have to deal with as a society.

Is it free speech when it's bot generated? I think at the moment it's definitely not free speech, Reed. Like that's the kind of stuff we're going to have to deal with as a society. Is it free speech when it's bot generated? I think at the moment, it's definitely not free speech when it's bot generated. Yeah. Well, that's one of the issues we're going to talk about because it will be just off the fly. I prefer kind agents to mean ones, but I suspect this is why I love Reed. He's such a Sonny character, but I expect really mean agents because people like that,

like abusive agents and that kind of stuff. So. It may be that they prefer agents to be abusive to other people, but I think most people prefer them to be kind to them. I don't know. I'm gonna, as usual, take a darker turn on the thing.

We'll see which our future brings us. Elsewhere in the Scott and Kara universe, this week on ProfDMarkets, Scott spoke with Robert Armstrong, U.S. financial commentator for the Financial Times. Let's listen. In the world we lived in last Friday, having a great AI model behind your applications either involved building your own or going to ask open AI, can I run my application on top of your brilliantly good AI model?

Now maybe this is great for Google, right? Maybe this is great for Microsoft, who were shoveling money on the assumption that they had to build it themselves at great expense. Interesting. Interesting. OK, Scott and Reid, that's the show. Thank you for joining us, Reed.

And again, your new book is Super Agency, What Could Possibly Go Right with Our AI Future. Thank you, Reed, again. Scott, Reed us out. Today's show is produced by Lara Neyman, Zoe Marcus and Taylor Griffin. Ernie and her Todd engineered this episode. Thanks also to Drew Burroughs,

Miss Severio and Dan Chalon. Nishat Kurwa is Vox Media's Executive Producer of Audio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pitiful New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back next week for another breakdown of all things tech and business. Have a great weekend.