Pivot - Meta and YouTube Lose in Court, Insider Iran Trades, and Sora Shuts Down

Episode Date: March 27, 2026

Kara and Scott unpack the Trump administration stacking an AI council with Big Tech names, the market-moving chaos around shifting Iran statements, and surprising Democratic wins in Florida — including in Trump’s own backyard. Then, the TSA mess continues, Meta and YouTube are found liable in landmark social media addiction cases, and OpenAI calls it quits on Sora, just as Scott predicted. Watch this episode on the ⁠⁠Pivot YouTube channel⁠⁠.Follow us on Instagram and Threads at ⁠⁠@pivotpodcastofficial⁠⁠.Follow us on Bluesky at ⁠⁠@pivotpod.bsky.social⁠⁠Follow us on TikTok at ⁠⁠@pivotpodcast⁠⁠.Send us your questions by calling us at 855-51-PIVOT, or email [e-mail] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Try O-D-D-for-free at O-D-com. That's O-D-E. support for today's show comes from The Guardian. The Guardian is a news organization that prides itself on remaining fiercely independent. Being free from outside influence means they can report the whole picture. These are values we should expect from our news coverage, but they're harder and harder to find. They connect what's happening in Washington to the rest of the globe, expose corruption fearlessly wherever they find it and give you a fresh outside perspective on wellness, sports, culture, and more.

And you're free to read it without a paywall. For U.S. and World News Without Compromise or Paywall, read, watch, and listen today at the Guardian.com. You know when you text me mean things at 2 in the morning, it's not a good idea, and you can't help yourself. Hi, everyone. This is Pivot from New York Magazine in the Vox Media Podcast Network. I'm Keroswisher. And I'm Scott Galloway. What's going down, Scott? What's going down? Just life stuff, all this moving parts around. Moving back to the U.S. and then my youngest, who always causes problems, is now.

now like all of a sudden getting A's in his school in London here. So that's throwing a monkey wrench and everything. That's kind of good though. That means he's capable of great things. Well, we always knew that. We just didn't want him to do it at this moment. Oh, well, you know what? He can do it anywhere.

He can do it. Kids are very, you know, yes, I moved my, I'm going to read you, Alex is right now taking a signal exam about the foreign ear transform. I don't even understand the things he sends me anymore. I'm like, what? He's like, let me explain it to you. That's a flex, good for him. Yeah, he's doing fluid dynamics.

I don't even know. When I got at 1130 on the SAT, I thought that was good. I called my mom, and she had no idea what that meant, but she was happy to celebrate with me. She didn't even know what the SAT was. Do you know how much things have changed? This is how I found out. This is how I found out we were moving.

My dad came home. I wasn't even sure what was going on with him and my mom and introduced me to Linda, my new mommy. And Linda told me we had all moved. We were all moving to Columbus, Ohio, because dad got a promotion. That's how I found out not we were moving, but we had already moved.

Oh, wow. My parents were, in fact, divorcing. Oh, my God. And now we literally obsess. You're sensitive to it. Let me say, I will give you a story. I moved a lot as a kid, too. My mom was restless since I was my stepfather,

and I didn't like it, I have to say. But we moved a lot, like a lot. How many different schools are at? Only two, maybe. It wasn't the schools. It was houses, like they were. Oh, but in the same. same school region. It was enough that it was not great. I remember thinking it not great. But let me tell you, my own

older kids thing is we moved when when Megan and I were getting a divorce, she got this offer from the Obama's to President Obama to be the CTO. The CTO of America. Yeah. Again, another flex. And that well, sorry. I mean, it's what it is. So she, she was reticent because you didn't want the kids to have to move from San Francisco where we had a beautiful house. And, They like their school a lot and everything else. And I thought, first of all, it's a great opportunity for you. Second of all, the kids will have a great time in Washington and get to spend time with, like, Obama and stuff like that.

It's like one of this one-of-lifetime opportunities. But it was hard. We got them to school pretty quickly, but it was a big shift. And I felt because of my own childhood stuff, bad about it. And I have to say, I could have done some things better. I should have been there a little bit more. It's complicated. but I have to say they did great and it was, they were fine, and they really liked San Francisco, and this was shift.

Well, I think you're going through the same regrets and dilemmas that the primary breadwinner goes through. And what I would say is having, unfortunately in a capitalist society, money opens too many opportunities. So that sacrifice, which was tough for them, you not being maybe as president as you would have liked, was hard. on you and paid huge benefits for them. At least that's what I say to make myself feel better. No, I, you know, by the way, primary bed winner, my ex-wife was an early Google executive. So no, not.

Just go with it. I'm trying to make myself feel better about not being around when my kids were little. But I have to say, I was, you know, they was moving as hard with kids at the same time. I think they really benefited and they learned to adapt and they loved their, they ended up loving their school and got to sports.

And so it was definitely not unrocky, but I think you have to give your kids more credit for being adaptable than you think. Yeah, I just, I don't know, I pretend like I have any fucking say in this decision. Anyways. Anyway. But so, yeah, we're.

America, gotta get back to America. I always go to, the reason we're worried about this is because we don't have real problems. It's like, is this? Oh, it's a normal thing to be worried about your kid. Every one wants, no matter where you are in the economic spectrum, you want your kids to do well, for the most part, most people do. Anyway. Yeah, but what you said about getting a chance to hang out with President Obama and go to all

those wonderful museums, I've told my partner that my 15-year-old, I can get him a fake ID and and he can come to Shamargo with me. Talk to the lovely Russian lady to make eye contact with me because they think he's so old, he must be rich. No, you know what? New York's an amazing place to be the age you will be. It'll be really interesting for him, I think. It's just really a tremendous city. It really is. I think I've said this before. You never know, it's like you don't know you're in the salad days until you're out of them. Like I know that the last, as I get older, and I'm already doing this, I'm already really, like, painfully missing the period when my kids were like three and six.

Yeah. That, you know, Sunday morning chaos. I love it. I have to say. I love it. You just really, like, you really long for that. Like, that's the moment you want to go back to you. There's a solution.

You can have more kids like I did. Unless my prostate's going to give birth, I don't think that something is, I don't think that's in the cards. In any case, one of the statistics I, speaking that I just read, was you spend by the time they go to college. 90%.

You have spent 90%. Yeah, of all time you're going to spend with them. And that kills me. After I heard that, I was like, last time my kids were crawling all over me. At first, I was trying to eat dinner. I was like, oh, and then I thought, oh, fine, fine, it's fine.

Yeah, my son's doing orientation at his, college and it's a one-day thing. I'm like, let's go for four days. We'll just hang out. And he's like, no, I don't want to hang out. Yeah, it's cats in the cradle, my friend. Anyway, I love that song. We've got to get to news, though. There's so much going on. Oh, that. That. Listen, President Trump plans to install big tech names like Mark Zuckerberg, Larry Ellison and Jensen Wong to a technology council to weigh in on AI policies and other issues. We were not invited. AI policy. Buy more of my shit. Buy more of my shit. Buy more of my shit. Give me what I need.

You know, it's, again, bereft. No regulation to buy more of my shit. That's going to be their recommendation. The rest of anybody who has a different alternative view, that these are the only experts. I would say our invitation is lost. The dog ate our invitation, but he hates dogs, so Trump ate our invitation. I just don't, this list is nobody who has any doubt about it, nobody who has any good research, no one whose interests are not aligned with it, no regulation with any kind of.

Conflicts everywhere. Everywhere. I just, I don't know, Jensen Huang's a big fan of selling, being able to sell his chips into China,

despite the fact these are the chips that you do war games with and track our Ohio class submarines. Yeah, and Larry Ellison wants more data centers.

And, you know, I just, this, oh, God, these people, like, you think if you were a real president, and I think this guy is losing it every single day,

including the polls, which are just, like, look out below. But it's really amazing that he doesn't want other input. that may vary from his rich friends. It's just, I find it.

It's just not good policy not to have people who doubt each other and debate it. I just, I don't understand. We're waiting for an invite. Even just you, even you if he needs the white guys. Even you. Well, you'd be good. I love that.

Well, I think you. Even you. Well, you're the white guy. They're not going to have me. I'm irritating to all of these people. And so, you know, I'm just saying. I'm just saying. You, speaking of which, someone was, someone said, I don't know, on one of these many, many platforms, which are just so good for your mental health, that Kara was a total shill for big tech.

And I wrote, do you realize, I have been on, when you go on a board and they don't want you on the board, they stick you on the nominating and governance committee. Oh, I didn't know that. Thanks for, absolutely no power. Information, okay. And your job, your job is defined. directors, and it's just, it's literally like, you know, put them, put them at the weird kids table. And so I've, of course, served on a lot of nominating and governance committees. And were you supposed to recruit new board members?

If you were in such a pain in the ass to these people, you'd be fucking chairman of SpaceX right now. I would be good. Because over the last 20 years, we have correctly started saying, all right, let's try and broaden the aperture and bring in candidates who potentially don't look, smell and feel like us. aren't members of the same country club. So a journalist, a gay journalist who's covered tech, you were built in a factory of lesser board members. I'm going to go on a board next year. Well, let's discuss that.

You're going to help me. I know, but the reason, I mean this sincerely, Kara, the reason you haven't been invited to be on. I was invited to one. I was invited to one. Okay. But the reason you haven't been invited to half a dozen is because you get in their face. And on boards, nobody's going to put, they don't mind. someone who has alternative opinions or whatever, but ever since, quite frankly, I'll be blunt,

ever since I started becoming more outspoken on podcasts. I used to get invited to go on three or four boards a year. It's gone way down. Wow. Interesting. Because the public CEOs are like, the public CEOs are like, okay, let's call him, let's bring him in, let's talk to him, but I don't want him in my boardroom. Yeah. Let me, let me address something, though, this week. I gave a thing at Syracuse University. They asked me this amazing tone. The Orange Men. The Orange Men. And, And, you know, I was talking about things that I've talked about a lot about CNN and the Ellison's owning it and this and that, and where AI is going. Ooh, a little controversy this week, and I said a little controversy.

I just want to say that I find David Ellison very attractive. I do too. And Larry Ellison is a huge big brain thinker. He's a nice guy. He makes great movies. And I would absolutely love to work for them. Yes, okay. Listen, this is what happened.

I was telling things I've said 109 times before. I don't want to work for a tech mogul. I don't. I just never have. Walt and I didn't take money from someone down. As opposed to a media mogul? Yes, actually. Yes, yes.

Yeah, I'm calling challenge here. So you'd rather work for Rupert Murdoch than Larry Ellison? We left Rupert Murdoch, my friend. But you did work there. You did work there. You cashed as fast as I could get out. I got out. How long were you there?

Hold on, hold on. How long were you there? No, just like two years before we could get out. You only there two years? No, I was there a long time, but he didn't buy it for a while. In any case, Scott, we left News Corp because of Rupert Murdoch and that behavior around the taping of that dead girl. Oh, God, that was awful. It was awful. We left, like, very soon after. And we, we, on purpose. Is this the voicemail thing?

Yes. Oh, God. I know. Exactly. So we did that. And we took money. We were offered money from Silicon Valley Venture Capitalist, and we took money from Terry Semmel, who had a media fund. Oh, yeah. Yahoo, CBS. Anyway, he's a lovely guy, amazing guy, amazing person. He had a media fund. And then we took money from NBC. But we were offered venture capital money, and we didn't take it because I was like, these fuckers. They're going to fuck me. Like that was real. And also it was. There's a word for that, venture capitalists.

Yeah, exactly. Go ahead. But anyway, we didn't take the money. And then I just don't want to work for tech people. I've said that to you on this podcast, a dozen fucking times, right? Haven't I? Yeah. It doesn't.

So I repeat that again. But what I did was Scott McFarlane who left CBS and is now with Midas touch, which is a very fast-growing thing. And they're going into news now instead of just news aggregation, which is a cool thing. And Scott is an astonishing, journalist. He did an amazing job around the January 6th and the Justice Department, astonishing, very handsome man, by the way. You would love his handsomeness. Very tall. He went to Syracuse. And so he was the MC. And as a joke, he was like, you know, he was talking

about going independent. Oh, no, because he looks like an ad for an anchor, a typical TV anchor. And he was, you know, he's like, oh, goodness, I'm taking a big leap. And I was like, oh, it's going to be great. And I said to him, I said, you made the right decision. And I was looking directly at him and joking. I'm like, you don't want to work for the Ellison's. I mean, he's a terrible person. I was just like laying it on as a joke. The whole crowd laughed. I was not, I don't think Larry Ellison's a terrible person. He's got, he's actually very funny. I don't agree with him on a lot of things. He's an amazing entrepreneur. He has great aesthetic taste, by the way, and his ship, his boats are fantastic. Like, I was joking to Scott McFarling directly, and somehow these reporters were like,

Kara Swisher thinks Larry Ellison is a terrible person. And it was crazy. And it's also all the things I've said before many times. Like it's kind of weird. And then it became a thing. Whatever. I like, by the way, let me just be clear. I like David Ellison. He's a nice guy. Larry Ellison is a tough dude. I'm sorry. He really is. And people can dislike him because he's had a really, he's been a tough cussed cowboy over the many years. That said, I do think he's very innovative and has done at astonishing things. And so, but I don't want to work. I don't want to work for tech people. I don't. And that's perfectly, you know, legitimate. And frankly, the decisions they've made have been terrible around stuff that concerns me. And that worries me of them taking

over CNN. So what? Big deal. I think you're being bigoted against wealthy white men. You know, I don't, you know, you wouldn't have to worry about this if you weren't living forever. I know. I'm sure the CNN people are like, it's premiering soon and she insults the new owners. I mean, honestly. I'm being very serious. I get, I'm speaking in one of these events tonight. Anyways, but I get a huge amount of power for my atheism because I find it very comforting to know at some point, everyone I'm worried about is going to be dead and so I'm on. Yeah. I find it actually quite liberating to realize, okay, squeamie. squeeze all the juice you can out of this lemon called life because we're going to be dead soon and take risks. And if you fuck up, it really doesn't matter. We are on the same wing length. No, in a hundred years, no one's going to remember us or anybody we care about. Anyway, moving on, the Pentagon, this is troubling to me, is sending roughly 2,000 troops from the 82nd Airborne Division to the Middle East. As of this recording, there's been no decision to put, I hate this expression boots on the ground, but that's what it is. Trump is talking a lot of talk this week, saying the war has effectively been won. Iran wants to make a deal and negotiations are happening right now, even as Iran disputes that. And I hate to say it, but I believe Iran. And I don't like the people who are running Iran.

And he said he got a gift from Iran calling it a very big present worth a tremendous amount of money and tied to oil and gas. I think he's just making shit up now. He's also sent Iran a 15-point plan to end the war, demands including dismantling nuclear sites, ending in Richmond and reopening the strait of Hormuz. We certainly had some of those things in place before. And as potential talks may or may not be taking shape, there are reports that Iran would prefer to deal with Vice President J.D. Vance over Jared Kushner and Steve Whitkoff. Wow, that's a choice. But I would agree with the Iranians on that. And Vance has been the person who, you know, is going to be running for president and could possibly be president and also has been opposed to the war quietly.

that he certainly ran on the idea of no more wars, and he's also a veteran. I don't know. What do you think about that? It's all, I mean, I go to the markets. You know, so there was an unusual amount of futures that changed hands at 6.50. Please talk about this. Well, I believe that in a digital world where forensics and AI and investigative journalists,

one of the wonderful things about America is that people see incentive in finding out what actually went down and I think that's one of the wonderful things about our society. I think you're going to see President Trump four or five years post his presidency sitting in front of a camera and a jury

pretending to be too old and he just doesn't remember him telling his buddies, his friends, his family members. To buy, bye, bye. That, oh, I think I'm going to announced that the talks are going really well, even though according to the Islamic Republic, there are no talks, which will send the markets skyrocketing. And then when it comes out 24,

48 hours later, then in fact, there are no talks, and then the markets oil surges again, and the markets go down. This is an insider trader's... It's right from the White House. It's right from the White House. Ivan Boski could not have dreamt of this situation. The ability to trade... on near certainty, the president knows that if he just, A, he can say any, he believes he can say anything he fucking wants. It doesn't matter. I can lie. I can be full of shit. Just put out press releases. It doesn't matter. Kind of the, you know, funding secured over and over. Yeah, exactly. And I know that the markets will respond swiftly to my comments.

there is now zero-day options where you can buy options that expire by the end of the day. And I'm going to go out on a limb here and say that sometimes the president doesn't have that much fidelity to rule of law or conflicts of interest. I find it like this has happened over and over again. There is they must just, he must just say things while in the toilet and people then trade or whatever. And, you know, interestingly, let me note, lawmakers are introducing bipartisan bills to ban prediction markets from listing. There's a lot of action on this now from listing sports bets and to prohibit members of Congress from trading in certain markets, facing the heat calci plans to block athletes, coaches, and officials from betting on their sports and political candidates from trading on their campaigns. And Polly Market announced finally enhanced market integrity rules, including banning trading on stolen confidential information.

I mean, this has happened rather quickly and it's quite important that this happened. You know, it's really, it's just grift. It's just out and out grift these numbers. And you know that Democrats are prepared. This is like so deep in the heart of easy to prove, right? This kind of stuff and who's doing it. And so I think they better, you know, they better hope they get those pardons from Trump. And he pardons himself because this is just really, it's, let me break it down for regular people.

they're making money at your expense and cheating while doing it. Like, I don't know what else to say. Look, the Democrats engage in what I'll call small cap corruption, and that is it's not illegal to trade stocks right now, if you're a U.S. congressperson. I think it should be. And even though there are regulations and guidelines against it, the fines is a slap on the wrist. So the incentives are, if I'm sitting in a, you know, the Senate,

If I'm on the Defense Committee or the Intelligence Committee, and we're talking about a $30 billion contract to Northrop Grumman, and it looks like it's going to go through. And my guess is Northrop Grumman will put out a press release in 72 hours. Hey, honey, hey Paul Pelosi, I really like Northrop. And I just want to be even-handed here. I think what Trump is- Scott, you do this every time.

This is like massive corruption and a different... It's just corruption on a different scale, but it's still corruption. It is, but you tend to go right to Nancy Pelosi who's leaving Congress. We know we should have passed these bills. Because in order to be taken seriously, we have to be critical thinkers

and apply to both sides of the aisle. I understand. This is, okay. So, but let's look at the data. Over the last, what is it, 20 years, the S&P is tripled, and the Pelosi portfolio is up sevenfold. And nothing she has done is illegal.

This is a certain type of corruption. What Trump has done has said, okay, that's small ball. You're corrupt for millions. I'm going to be corrupt for billions. Because what he's done, it's, I'm not sure it's illegal. But we've never, we've been dependent upon, and Barry Goldwater predicted this 50 years ago, we have been too dependent upon a series of norms as opposed to laws and have slowly but surely ceded power. Absolutely right.

So Trump says, oh, everyone's doing it. Marjorie Taylor Green was doing. Everyone, not everyone. A significant number of people in Congress have been trading stocks and beating the market. Mark Wayne Mullen was one of them. They can't. And also, in my solution, I think they should make,

I think people in Congress, I think representatives should make a million dollars a year and senators should make $2 million a year. I agree. They make, I think, $168,000 or $178,000 a year. It's small. If you have two homes and you're living in D.C., and you weren't rich before running for Congress.

We should pay for their apartments. I mean, I just, it's... You can't afford to live there. We should have these nice apartments for them that are actually secure, so make them more secure and everything. Pay them, the Singapore model, probably the best run nation in the world, the Singapore model, they pay their elected officials

a lot of money and they have zero tolerance. You cannot go to work for a lobbying firm or a pack company. There has to be a sunlight period or whatever they call it, a sunshine period. You cannot in any way have any inside domain benefit in any way. We find out you've called your cousin in the Philippines and he or she is trading stocks. You're probably going to get lashed.

That's literally what it's like at the same point. And what do you know? There's no corruption. Anyways, he has taken it to an absolutely new level, but just circling back where I started, we're going to find out that the greatest levels, volume of insider trading and history are happening and originating at a Pennsylvania Avenue.

Absolutely. 100%. I think there are people talking about whether it's treasonous or not to release these things, because these are boots on the ground that could get hurt and everything else. So there's a whole level of complexity here because they're betting on possible deaths of Americans and others. Sending J.D. Van, where do you imagine this Iran thing?

Because it is going back and forth and back and forth. The market is trying to grok it, and it feels very whipsaw. So far they've given, it hasn't suffered that badly. You had talked about a real decline in the market. Is this the thing that will pull it off? The thing that will pull? You mean sending Dady Vance, Vice President?

Yeah, like. But sending Vice President Vance is a signal. There's a few signals here. One, the scariest signal is we have amphibious ships and combat marine Marines being deployed to the region. This is either you could argue he's just playing poker or, in fact, he's planning to put, in the terminal, like boots on the ground and carg and maybe do a source. swap where I'll let the oil flow through Karg if you ensure the Straits of Hormozers are safe passage. There's all sorts of game theory going on here.

He has a tendency to lie. And then before a quote-unquote surprise attack, which I think is bad for our brand long-term America has to be seen as doing what they say and meaning what they say and saying and saying what they mean. Get right. But anyways, sending Vance is a signal because. Well, no, they're not sending Vance. The Iranians want Vance.

Well, but the Iranians want Vance. And this is, quite frankly, this is a signal that for the people who want this to end. Because Vance is on the record as saying for a long time that these types of misadventures overseas were a bad idea. He's been really quiet. Well, he hasn't. He's like, I think I won't. Let Scott Bessent do that. The last thing he wants to do is get on with Kirsten Welker and have her bring up about five million high.

tapes and where he said under no Sir, World War III under Biden, we should never get into these quagmires overseas. There's just, he's trying his best to justify. He is literally just doing everything he can to stay out of the way of mics and cameras. He's literally hiding behind the curtain. He's like, don't ask me. He's done a few, like, real pretzel moves that are really problematic. But the IRGC probably believes correctly, he's more likely to be empathetic, to want to deescalate. So this is a good side. The fact that the Trump administration

is entertaining this, both sides, I think, he is probably the guy that can find common ground here. Not Rubio? Well, we'll see. But Rubio is perceived as a bit of a hawk.

A lot of people think he's the shadow president right now and what has been the most militarily adventurous administration in a long time. Incredible. And they're planning Cuba next, which is like,

oh, God. I mean, let them die themselves. They're already on. their last legs. Just let them fall and then we'll move in the hotels. I'm sorry, under the auspices of having an opinion about shit, I have no domain expertise in. Let me just say that the smartest thing we could do, geopolitically, as it relates to Cuba, would be to be sending humanitarian aid to them right now. If you want the people to rise

up and think, you know, the Americans aren't that bad, maybe we should normalize relations. At some point, the Castro family will die out. It would be starching our hat white and sending sending power, fuel, and food to Cuba right now. Yeah, it worked out so well for the Kennedy administration. But what's really interesting is this is all having an effect. Democrats pulled off a surprising win in Florida, actually a pair of them, but one that was particularly surprising flipping two legislative seats, including the district that covers Mara Lago.

He now has a Democratic representative. Emily Gregory, a first-time candidate with a background in public health, won by a little over two points, astonishing. This was a big Trump district. Trump has taken to social media to support her opponent, obviously, and President Trump, who's called Voting by Mail, Cheating, voted by mail in the election. I mean, these, the list of things Democrats have won recently

is really something else to see them winning in all sorts of districts. And from people I know down there, they're just furious at him. They really are. These are all his fans, like, or people who voted for him. And it's really, it's, I'm not sure, I think people, I think, they're going to try to steal the election? I don't think it's going to be possible giving the overwhelming numbers that are going to happen. And another thing that's affecting him, and these are two topics as we record negotiations to end the five-week DHS shutdown or standstill with Congress scheduled to go into recess any minute. The Republicans have brought a number of possibilities to Trump, and he's turned them all down, and the Democrats are sticking. The sticking points are still ICE funding and enforcement reforms. Very simple things. Don't wear masks, bring in judicial warrants, and and cameras. TSA officers will miss in their paycheck this Friday if the deal hasn't reached.

On Tuesday morning, Delta Airlines suspended specialty services for members of Congress. They're going to have to wait in line like everybody else, which I think is great, all of them. You said in our last show that grounding private planes might move the needle, and I love that Delta and others are pushing back. The TSA is pushing back against ICE.

Great move by Delta. Great, great brand-enhanes. brilliant fucking move by Delta. And no one likes ice there. Like they're, the TSA has said it's useless. The airlines think it's useless. There was a pilot that got on social media where he's like, this fucking sucks people.

And I have to say, this is all at Donald Trump's door, because he's refusing to deal because of the SAVE Act and letting people wait in line. I love that Congress people have to wait in line. I love it. And so talk about this win in Mar-a-Lago and what's happening with TSA, because besides Iran,

this is yet another series of things that are indicators, leading indicators. District 87, Palm Beach County, as you noticed, includes, you know, White House Florida. And a really impressive young woman. I love this. Emily Gregory. Fantastic. 40-year-old small business owner and military spouse running for office for the first time. Yeah.

Defeated Republican John Maples, who had Trump's complete and total endorsement. She won with 51.2 percent. with turnout roughly at 29 percent, Trump carried the district by 11 points in 2020. Yeah, that's a lot. The previous Republican incumbent won by 20 points. I mean, this is, and then let's go up, let's go up the, you know, let's go up the coast of the great state of Florida,

Democrat Brian Nathan, a Navy veteran and union organizer, upset Republican Josie Tom Cow by just 408 votes, a margin of 0.5%, which could trigger a machine recount, but Tom Cow outspent Nathan more than three to one. And it looks like Nathan won and received over 400,000 in-kind contributions from the Florida Republican Senatorial Campaign Committee. The previous Republican incumbent, Jay Collins, won the seat by 10 points in 2022. And this all bubbles up to the most shocking, exciting, and somewhat.

I'm almost worried we're peaking too early right now. No. The prediction markets, Kalshia is saying, for the first time that it's more likely than not that Democrats take the Senate. When have we heard that? Everyone has said, everyone, the narrative so far from quote unquote, all the experts

is it's likely, very likely Democrats will get control of the House, but the map is really difficult for Senate, really difficult, like looking at the people. And now people, more people are betting their money, on Democrats taking the Senate. This is, it's wild. I think the Democrats are fielding much better candidate. This woman, it seems, I love her.

I was like, I love you. She was focusing in a maternal health and affordability issues. You know, you have Abby Spanberger in Virginia. You've got Mickey Cheryl. You've got, oh, even, Madami. There are people. Good candidates everywhere.

Calarico. Yeah, Calerico. And not just centrist ones, just really good everywhere. Young people, fresh ideas. Yeah, fresh ideas. You know, regular-sized prostate, still childbearing, actually think about kids, actually have kids at home. Yep. Yeah.

I feel really good about the candidates. And the Trump ones look like a bunch of cult members or acolytes that really hate him secretly. And by the way, let me stress to everybody, if you hang around Republicans, off the record, they eviscerate Trump. On the record, they suck up to them. It makes them so awful. Like at least the Democrats fight in public, I guess, and they do. But it's really something to see what's happening here. That was, I think there's, the Mara Lago one is particularly notable, obviously.

But across the country in places where Democrats have never won, Georgia, Kansas, all these places, they're knocking up wins. And so that creates a real opportunity of Democrats walk into it. And I think so far on the local level like this, candidates have been speaking what They're listening to voters and they're not, I don't think they're just mouthing things like, I think they actually are concerned with what do voters want? This is our customers and we're going to give them what they want. Anyway, Delta, let's give Delta big old clap.

Oh, this, I met the CEO there and a good friend of mine is on the board. Whoever, whoever came up with this idea, except that is one of the most brand enhancing, thoughtful, egalitarian, American thing. This was such an amazing corporate move. And it directly, and again, it flies in the face, or not flies in the face. It supports what I believe is the greatest commercial opportunity.

I just had a phone call with, I think, one of the most thoughtful business leaders in America who runs an iconic investment bank. And I said to him, the greatest commercial opportunity in a long time has been presented, and that is in a thoughtful, non-ad hominine, non-personal attack, discussing values of America and how they have been,

so incredibly important to our capital markets, to do with Dario Amodi, and now to a certain extent what Delta Airlines is saying, and to say no. This isn't a direct affront on the Trump administration. No, it's all Congress people. For people who don't know, Congress people can sail through security.

Yeah, but what this is saying is, people don't know that. But people blame Trump and the Republicans, mostly for the shutdown. So by them saying, this is unacceptable, but Delta is saying this is unacceptable, and our leadership, who has fucked this up, by quite frankly demanding that the SAVE Act be a part of this or ICE funding,

we are no longer going to engage in facilitating this. We're going to get in the back of the line, back of the line, which is great. All right, we think it's great. Get back in the line. Lines suck, by the way. And it's terrible for the TSA people who deserve to be paid and ice people are being paid and they're doing nothing but buying coffee and irritating people. They handed out water in the line through security.

How stupid can you be? Anyway, okay, Scott, let's go. Go on a quick break. We come back. Meta and YouTube are found libel in the first of the social media

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with features that were addictive to her mental health, a California jury found. Meta must pay $4.2 million in YouTube $1.8 million. It's not very much money. She asked for a billion. The case focused on features like Infinite Scroll and Algorithmic recommendations. As a reminder, both TikTok and Snap settled before the trial began. Meta has also been found liable for failing to protect young people from online dangers in a New Mexico. case. Their meta must pay $375 million, a little more, but still a parking ticket for this company. The company made 160 times that in revenue last quarter. These verdicts are the first in social media addiction trials, social media impact trials. As the New York Post cover said, Metaculpa, which we love.

We love. Scott, what do you think? Here we go. We're over the edge with juries involved. Juries are tired of social media. I generally want to get your viewpoint on it, but my initial instinct is that this is actually big deal. It is. And it's not about, it's, as you said, it's not about the parking tickets that have been issued. It's that there's now legal precedent for what the activities these firms engage in is, makes them civilly at least liable. And the other piece of information I got that found fascinating is their insurance companies are trying to reject the claim saying that they intentionally, they knew they were intentionally doing this. And so they're not covered by insurance. And my sense is it's not about this case. It's that the other several hundred or

several thousand cases against these firms just got a lot stronger because of this decision. Yeah, there's a real back. There's a real backup. You know, this has been something you and I've been talking about. Oh, you think? Yes. Yes. I thought I wrote a book on this about 10 years ago. You did. I was just saying you wrote a book on this and talking about these problems and how liable they were, lack of accountability, lack of regulatory scrutiny of anybody. except some in other countries, in fact, rolling over for them, both by Obama and Trump, of course, because he takes money from them. You know, I think their high water mark was standing with Trump at the inaugural. I think this was starting to be in place when people realized after January 6th,

I think, that social media has a real impact, and it's been a slow burn, that's for sure, and our regulators have done nothing, let me just say, not in states, our federal regulators. I don't mean to say Amy Klobuchar and others have not tried. I just think they have not been successful because of the pushback. And in this case, I think you're going to see furious pushback by these companies, even for this small and amount, right, this tiny amount of money. Because they don't want any accountability for what they're doing. They want to skate out of responsibility.

And they can't because now it's in front of juries. And every person knows addiction is an issue, sloppy management is an issue, and threats to kids are an issue. I saw you on Anderson Cooper last night, and you had, I thought, was exactly the right point, and we've been talking about this, and that is the nation is actually pretty good at recognizing externalities and harm.

It just doesn't act crisply. It took about 30 years with tobacco, 20 years with opiates, social went on mobile in 2012. It feels like that timing's about right, that about at 2032, unfortunately, And I'm personally aggrieved, quite frankly, my kids got fucked up on these things. Yeah. You know, your kids, your first generation, your older kids, Alex and Louis, had to endure this.

And my sense is they've come through a pretty, pretty unscathed. They had less of it. They had less of it. It wasn't quite, you know, they were, your kids are the zero, ground zero, I think. My kids were near a blast zone, but not the same quite thing. I think they like YouTube. They were a little bit on Snapchat. You know what I mean?

But it wasn't as intense and hateful as it became. But as Big Tech always does, this praise on the poor. Because if I'd had these devices and a mother who was gone before I got up in the morning and got home sometimes after I was asleep because she was working, and I was totally unsupervised, and I had YouTube and Snap and U-Porn and meta and Facebook, I think I just would have been on these things all damn day long. Yeah, they're baby syrup. And as I was going through puberty, my brain would have been wired for constant squeezing of a doper bag,

which I believe could have very easily taken me away. I used to leave my house to go hang out with my friends because I was so bored. I'm not sure I would have left my house. You wouldn't. Why would you? Why would you? I mean, one of the things that they've done, and I think as these cases come to fruit, the discovery is going to be brutal.

I mean, I think they know it. There's all kinds of evidence that they know it. In this case, a lot of stuff came out that they want to attract tweens because they're lifelong customers, right? It's like cigarette. It's literally like Joe Camel when you read this stuff if you put cigarette in there. And what's incredible here is I actually believe the cigarette manufacturers knew exactly the problem of nicotine. I think these guys think that they're not. That's not their fault.

It's never their fault. And then they hide behind the First Amendment. hey, it's just people talking. And there was a great story in the Washington Post today about Republicans worried about young Republicans being so anti-Semitic, Nazi-focused, sort of hateful. And where do you think this comes from? And again, I don't blame them fully. I don't.

I don't think it's fully. But they've created addictive and necessary features without any kind of guardrails in place or any kind of, it's not like they're like, hey, let everything go. And I think that's, it's sort of like they're eating. evil babysitters, right, in some fashion. And at some point, the babysitter has to get dinged in some way. They consider themselves it's not their fault if people eat their shitty food. You know what I mean? Like our tainted meat, it's okay. You know, and of course, everyone else gets regulated but them. Yeah, I think their argument would be we don't get any credit for all the good

we. Yeah. All the good we. Why aren't their parades? Right. That we, that people do learn. people do, it helps them with their homework. They do make connections, you know, parents of kids with childhood, rare herd childhood diseases. Social media does add a lot of value. It creates tremendous economic growth, a lot of high-paying jobs. They would argue we're a net good. And I would argue that's actually true. The problem is with the word net.

And that is we're net beneficiaries from fossil fuels and pesticides, but we still have, we still have a clean air act. We still have an EPA. That's right. Right. And this is fossil fuels and pesticides with absolutely no emission standards. No, when I lived in L.A., I was talking, I went on vacation with a buddy of mine. We grew up in L.A. together. There were days where by the end of the school day, you couldn't breathe in. And they cleaned it up. They cleaned it up. And unfortunately. That's what's happening here. Unfortunately, that I thought of it yesterday. I was trying to think I was asked to go on and talk about this.

And instead I decided to go out and drink. But I was thinking, okay, is this the beginning of the end? It's not, you know what this is? This is the end of the beginning. This industry is not going anywhere. But the era of we need to do better from Cheryl Sandberg or Mark Zuckerberg weaponizing thousands of lawyers and lobbyists to delay and obfuscate and glossed over the internal research

that showed one out of 12 teens in the UK was cited Instagram for their suicidal ideation, I do think that era is coming to a close. And my favorite part of the case is that there was an undercover operation, I think from the Attorney General in New Mexico, where they posed, they created accounts posing as an 11-year-old girl, which was almost immediately inundated with images and targeted solicitations from, wait for it,

child abusers. That's right. So it took the Attorney General about 48 hours to figure this shit out, and we're supposed to believe that META wasn't aware of it. Yeah, we don't believe them. And neither did the jury, by the way. We're going to move on to saying, but I got to say, I did quote you last night on Anderson,

where you say, you know, we're bound by the law, but not protected by it, and they're protected by the law, not bound by it. Now they're bound by it. And they are going to fight their asses off. You know what, Mark, just pay the money and fix it. it. Like, just stop. Like, stop. Because the more they resist, the more a growing group of people bipartisan across the country recognizes the damage these companies. And then, of course, the same

day Donald Trump names all of these people to a committee on AI with not nary a critic on it, right? Everybody with self-interest is on that advisory committee and nobody who's going to talk about the possibilities of problem, only up and to the right. And once again, they're going to try to do it. And let me tell you, folks, we need to stop them now because the damage they have shown no ability to control themselves. You need to age gate. No one under the age of 18 needs to be on any these platforms. And we hate to say that. I have to say. I hate to say that, but this is where we are. Okay, Scott, moving on. I want to start our next story by playing a prediction you made just last week. My prediction is OpenAI SORA social media app will be shut down soon.

Oh, SORA. What do you know? You know something. No, I don't. I've done no original reporting, trust me. Okay. All right. Upon its release, Sora came out at number one in the App Store and actually got more downloads

out of the gates than Chat ChpT did. However, like the parties ended. Downloads fell 32% month over month in December and another 45. 5% in January and some SORA is the little engine that didn't. And also, users continue to drop like flies. You were right. I still think you had insight information. OpenA announced this week that it's discontinuing the SORA app. This is the video app they're doing just months after launching it.

This reportedly one of several steps the company is taken to refocus the business ahead of its potential IPO. Sam Altman says the SOR team will now shift to prioritizing longer-term bets like robotics. As for the Disney deal, they did at the time. If you remember, Scott and I talked about it, a $1 billion investment in OpenAA, which we thought they weren't really going to give them that. And it was just a little experiment that included licensing characters for, so Disney is out. Disney's out. It was more of a press really than anything yet. So talk about this prediction. I'll also note OpenA is closing in on a deal to raise about $10 billion from investors, bringing its latest funding round hall to more than $120 billion.

Geez, of the fucking weas. Talk about this. I mean, they've had to shift very quickly. I don't know what they're doing in robotics, but they should just focus on their core business, seems to me. But thoughts on this? Did you know? Come on, tell me the truth. Kara, Kara, Kara, I don't enjoy talking about myself or taking credit for what is arguably one of the most prescient predictions of the internet tech now. Oh, my God. It was so good.

I got to say. Carol. I was like, he was right. Dammit. My nipples are hard. Touchdown Jesus. I approve these hard nipples. I am fucking John Chavolta when he was thin and caduce.

dance. Yeah. This is, ladies, for the, for the people tuning in on the YouTube channel, watch his shoulders. Watch his shoulders. Hello. To resist his feudal. Okay. The weirdest thing, that was, that was literally the easiest prediction ever.

By the way, it wasn't mean. Why did that? Like, when you said it, I was like, why is he talking about that? Like, I get it. But what prompted you? To be honest, this goes on a deeper level. This goes to the notion, greatness is in the agency of others. I have a data and research team that feeds me with every good

idea I ever had. And this young man named Dan Shalon, I said, I need a prediction for Bivit today. And he wrote, SOR is going to be closed down. And he gave me a bunch of data. So I can't take credit for this. As usual, I'd take credit for it. But it was my team that came up with that prediction.

He just saw the down. Because a lot of apps go up and down, right? And many, like, took forever for META to really kill off the Metaurs. OK, OpenAAAid didn't shut down SORA. Anthropic did. Yeah. Of all the new, of all the incremental or new dollars being won by AI companies in the enterprise market, it used to be 60% of new dollars being spent on AI from the enterprise we're going to open AI.

It's dropped to 30 cents on the dollar and Anthropic has screamed a 70 cents on the incremental dollar being spent by the enterprise on AI. Why? Because see above biggest commercial opportunity in history saying no to the Trump administration. And also, to be fair, Anthropics' new products are just outstanding. They have gotten so much. They have to say. They have more momentum right now than any company in the world. They're better. They're better.

It's like when you were using browsers, I remember using Explorer and then Netscape and then Explorer was better. But then, you know, it was like that. You're like, oh, that's like Google. There was a lot of search engine. And then it was like, oh, this is better. This is better. And to Open AI's credit and Sam's credit and the board's credit, they've said, okay, the The best business strategy when you're starting to wobble, quite frankly, is focus.

Moved fast, I would agree. Focus. We, okay, folks, and by the way, it doesn't end with SORA folks in terms of shit that's about to be closed down, and that's going to be my prediction at the end of the show. But you knew they were going to have to focus. You knew this product wasn't working. It was hemorrhaging money. The whole visual space around AI just hasn't panned out the way people had hoped.

It's all slop. It's slop. Yeah, it's just not. It's so interesting. The one, just as what's one of the most interesting things about Amazon is it started in books, and books is probably being the least disrupted industry it's gone into. The book publishing industry, although it's been consolidated, is actually still pretty strong. Big advances.

Agents are still making money. Independent booksellers are actually making a bit of a comeback. Anyways, but what's so interesting I find about if you'd said what's going to happen to designers 24 months ago, you would have said, oh, like customer service and mediocre lawyers, they're just going to get cleared out by SORA, and I forget Google's one. And what's interesting is there's a percentage of the employee base, the number of designers has actually gone up at tech companies because it's the coding that is being commoditized. But the front-end human-faced UI design really compelling is now the point of differentiation. But because these things, this AI, I've played with this stuff, it's just not very good. It's not good. You know, the only thing I like is when they show, they like do all these, like they have celebrities.

Brad Pitt fighting concrete. Like they did a game thrones in high school. Some of it's fun, but it's like, it's sort of like for a minute. And then you're like, okay, now I want to look at something real. I think the human eye can see it. It exhausts you. It is. The human eye is like, hmm, not so much. I don't think you get used to it either. Everyone's like, oh, kids will get used to it. I'm like, it's ruined animal videos.

I don't think so. So, yeah, animal videos are. Remember how amazing animal videos were? Yeah. Animal videos were amazing because when you saw a Norwal or a beluga whale retrieving a Nerf football from adventures or scientists in the Antarctic or wherever the fuck that was, you're like, this is an incredible moment. And now I see it and go, is it fucking AI?

Yeah, exactly. Because if it is AI, I don't care. I don't, it's not real. Yeah, I know. They make weird. I agree. I agree. And that's, it just, it's not satisfying in a way.

that real is. I have to say, and I do think the human eye could, it's just years ago when I was at the MIT Media Lab, when they were having problems with robotics that talked to you on a screen, and it was always the eyes. There's something wrong with the eyes. And humans perceive it immediately.

I'm telling you though, if AI starts producing cute pictures of babies seeing or hearing for the first time, I'm out. I'm logging off of every platform. I would agree. That has to be real. Those things change my day. Those things are my mood.

Amazing prediction. Once again, you have triumphed. Anyway, all right, Scott, let's go on a quick break. When we come back, we'll talk about the return of the Amazon phone. Hi, I'm Brené Brown. And I'm Adam Grant. And we're here to invite you to the Curiosity Shop. A podcast that's a place for listening, wondering, thinking, feeling, and questioning. It's going to be fun. We rarely agree. But we almost never disagree. And we're always learning. That's true. You can subscribe to the Curiosity. shop on YouTube or follow in your favorite podcast app to automatically receive new episodes every Thursday. This week on version history, our chat show about the best and worst and most important

products in the history of technology. We're talking about a gadget that was meant to be used on phone lines and was eventually used by the military and then finally changed the music business forever. That's right. Of course, I mean the vocoder. The thing that let us all play our voices like an instrument and change the way that we think about our voices. We have a really fun guest. We have a really fun story to tell. All of that is on version history, on YouTube, and wherever you get podcasts. This week on Networth and Chill, it's my birthday, and I'm turning 32,

so I'm sharing 32 life lessons I've learned that have actually changed my perspective. These aren't the picture-perfect Instagram infographic versions. These are the real, hard, uncomfortable truths about money, career, relationship, and everything in between. I'll explain why choosing a rest day is non-negotiable or your body will choose it for you, why you should never take advice from anyone you don't want to be, and why nobody is actually looking at you, so you should just go for it. Plus, I'm breaking down why you should always negotiate your salary, why individualism is making you broke, and yes, why you should try eating a popsicle in the shower after a bad day. Listen wherever you get your

podcasts or watch on YouTube.com slash your rich BFF. Scott, we're back with more news. Amazon is reportedly getting back into the phone business working on a new device internally known as, oh my good God, the transformer, according to Reuters. It's what a bunch of idiots they are. This would potentially be an AI-driven phone that sinks with Alexin could eliminate the need for traditional apps. Oh, sure, why not? Details are slim. There's no clear timeline or pricing in sources say the project could be scrap, priorities, or finances change.

That's a lot of maybes. But let's not forget Amazon's last phone for a way. I have not forgotten it since I wrote about it. Creation and decline, the fire phone, which launched in 2014, and quickly flopped, leading to $170 million write down. And I remember getting sent it. I was like, it's like the home, the Facebook home. I kept getting sent these things.

I'm like, what is this? And like, I'm calling Steve Jobs immediately because I need to talk to someone who knows how to make these things. Why would Amazon have a phone? I want you to give me the argument why it's a good idea despite their, and I think people fail at things and they come back. But I don't feel like Amazon is my device place. I think they got knocked over in the audible space.

I think they got knocked over in the reader space. I mean, it's still a business, but it's not on fire. It got knocked out by the iPad in a lot of ways. Any thoughts on the phone from Amazon? And why? Give me the argument. Well, the argument could be that it becomes a new piece of the flywheel around Amazon Prime. that is if you're an Amazon Prime Plus member, you get a very competent phone that perhaps has

even better bandwidth because Project Kiper starts to pay off and they have satellite-based connectivity. So what this is is potentially, I would imagine in the conference rooms where Amazon Strategy Group or some incredibly bright people are saying, yeah, they need a thing. Well, why don't we go after Android? And that is we can offer people. Oh, okay. We can offer people an unbelievable phone for free as part of their Amazon Prime membership and then say, and get off of AT&T, and we'll wrap it all into the greatest loyalty program in history, which is Amazon Prime. It is indeed.

So I think there's a really solid argument. The problem is this all works on a whiteboard, and then people hold these phones, the Facebook phone, the Amazon fire, and they go, I don't like it. And the Microsoft phones? Yeah, all the handheld. All of them. And by the way, just a shout out, a colleague of mine who teaches brand strategy at another university, called me and said, saying that Apple shouldn't go into a lower-price computer is all wrong. And he said, my views on it were all fucked up.

And I just want to give him his props. He said that, look at all the luxury car brands. They were all shit-posted for going into lower-end models, and it's expanded their share. And I thought that was a really good point. If they're going to give people a really good version of it, and then you have to buy the shitty Dell version. Yeah. Well, all the Porsche appears said they should never launch an SUV. They did. It sells more than any other car in the Porsche lineup.

And also, Mercedes has an A class in Europe. They have, what is it not the E, the C class. That's a fair argument. Well, if they don't do it too much, right? You can't do it too much. You have to do it just right. PMW has the three, the two, the one. Anyways, I just want to acknowledge the point because when he called me and told me,

that. All right. So this is a good. Androg, now I see. Thank you for that. They, they, this could be, in my opinion, the biggest increase in shareholder value that's fallow is a function of the friction between silos of different companies. The new CEO at Disney should have something called Disney Plus Plus and you get Disney Plus videos, you get free merchandise, you get the Princess experience. And most importantly, when you come to the parks, it's on only Disney Plus members days where there are no lines.

and it would be the ultimate loyalty program. And Amazon, if they keep, if they added telco and a device into Amazon Prime, I think theoretically, it's worth, you know, it's worth a couple billion dollars to investigate. They don't do that. They don't do that often. You're right. They just, like, here you go free. It's like a club.

And you would do that with Amazon because they do deliver really well. They, the thing they do. They're talking about autonomous. The core stuff they do, they do really well. But preloaded. Free Amazon music, free Amazon Zooks or whatever their, their autonomous is. Those are cool. Zooks is cool.

And just say, okay, folks, we're going to take care of you. Amazon is arguably the most trusted brand in the world right now. Yeah, Kuiper. They could offer that for cheap. And they say, all right, you don't need to trust us when you're in front of the TV screen or the computer screen. You should trust us as much when you're in front of the phone screen. The CEO, the one person running at the vision, I'm supposed to meet with him. Anyway, one more quick break.

We'll be back for predictions. At Medcan, we know that life's greatest moments are built on a foundation of good health. From the big milestones to the quiet winds. That's why our annual health assessment offers a physician-led, full-body checkup that provides a clear picture of your health today and may uncover early signs of conditions like heart disease and cancer. The healthier you means more moments to cherish. Take control of your well-being and book an assessment today. Medcan, live well for life.

Visit medcan.com slash moments to get started. What's it like to talk to a digital twin of a relative who died before you were born? This week on Solutions with Henry Blodgett, I talked to writer and artist Amy Kurzweil about just that. She helped her father, famed inventor and futurist Ray Kurzweil, build a chatbot based on her grandfather. We discuss how increasingly lifelike digital representation. of people will change human relationships, especially how we grieve, and how AI is forcing us to reckon with what consciousness even means. Follow solutions with Henry Blodgett to hear our conversation. Okay, Scott, let's hear a prediction. I'm going to say very quickly, just so you know, at the time of this taping SpaceX is aiming to file its IPO within a week.

And I predict, I will not be asked on the board, as you noted at the beginning. I predict that. People literally don't, if I was your financial, your wealth, advisor and I kind of have been for the last few years. Yeah, you have. But if I got in a hold of you 10 or 15 years ago, I would have been like, toned down the anti-Musk, anti-Big Tech thing. Oh, sorry. And we're going to make hundreds of millions of dollars on boards.

I know, I can't do it. I just said, as a joke, where I was a terrible person. I can't help myself. That was a joke. You know when you text me mean things at two in the morning, it's not a good idea, and you can't help yourself. I can't help. I mean, some of them are very good.

You can't help yourself. I get it. I can't. I know I shouldn't drink as much as I do. By the way, speaking of I was right about these people, I was right. Anyway, your prediction, please. Okay, so what do we have here? OpenAI is in a five-car alarm right now.

In the last six months, they have... Oh, and by the way, this... Have you seen the deals of this financing to top off the round with, I think it's TPG? They are guaranteeing a 17.5% return. What? Yeah, they're guaranteeing to top up the round in private equity. The deal is along the lines of the following. It kind of makes industrial sense, but it's more of these circular related party deals.

They're saying to these private equity firms, if you invest and top up my round, I'll guarantee you a 17.5% return. Now, the idea is it makes kind of industrial logic because all of these firms have a massive portfolio company of firms, which likely means they're going to encourage these firms to adopt at an enterprise level open AI products. So Open AI goes immediately we get... Eat the dog food is what you're saying. Yeah, we get industrial scale here. And because we're going public, and Sam's bankers have probably said, distinct of the problems, you're going to get X valuation, hundreds of billions or even possibly trillion dollar plus valuation. So he said to

the private equity guys, I guarantee you a 17 and a half percent return on your money. The problem is a guarantee at the top of the kind of the capital stack means that the people underneath them, the investors might get squeezed out if they have the first, you know, if a decent amount of returns has to go to the top. But it is more of this kind of what I'll call shell game. And as long as things keep increasing, it's fine. But this is the kind of thing that could absolutely brush or trickle that. Or if they don't go. You can't make people like you, Scott. That's not, that's like a, like a, Let me pay you to be my friend.

Well, this is. Don't like it. It's a really, that's the most interesting component of the deal. It's a, you never offer. I have never seen, it's a preferred return that aggregates. Would you, would you invest then? I would, I would want, for OpenAI, I feel that what I would want to do is the following of just being purely capitalist. I'd want allocation in the IPO because Sam is smart.

And Sam and his bankers will say, okay, the first. trade of this is likely going to be 80 bucks. So let's price it at 50 so we can say we're the best performing IPO at the year. Yeah, yeah, to do those tricks. It's a one, that's nothing new. It's a once in a lifetime branding event, the IPO. So the investment banks have an incentive because they get to buy shares at a discount. They get to give shares to their buddies and institutions at a discount. And the firm, for a modest dilution, three to five percent dilution, gets a branding event that they're in the news for the rest of the year is the best performing IPO of the year or a great performing IP of the year. So,

But they leave, quite frankly, SpaceX is going to leave them in the dust. They leave money on the table. And it's yet another transfer of wealth from the lower and middle class who don't have access to pre-IPO or to the IPO. Don't you think SpaceX will leave them in the dust? SpaceX, in terms of an IPO? Yeah. That'll get all that'll stuff.

That'll be, that'll all be about valuation. Because while SpaceX has the biggest moats in the history of business, as far as I can tell, they're talking about a one and a half trillion dollar valuation on 13 billion or 14 billion. I mean, that's 100 times revenue. So it's all about pricing. But anyway, so this, where I was headed is the following. It is a five car alarm and Sam and his board are smart. They are focusing.

First area of focus, Sora, we barely knew you, you're gone. The next area of focus, it won't be a headline item. It'll be euthanized slowly. It is I.O. and that is the $6.5 billion acquisition of Johnny Ives company to build hardware. This is the metaverse on a smaller level. This is Mark Zuckerberg's consensual hallucination costs meta-shareholders $70 billion. This is going to cost $6.5 billion to open AI. It was an all-stock transaction, but there is no way if I am on the board and I am Sam Altman and I'm like, okay,

playtime's order. I am losing my core business now, anthropic. We need to focus that they're not going to, they're going to decide to not play in the traffic of hardware. So there's been delays, technical difficulty, unclear product definition, high cost. I think I'd buy the Amazon phone first, so that's a bad sign because I wouldn't buy the Amazon. Brutal category. And then if you look at what's going on here, persistent technical problems, all right? Of course. Compute constraints. Ola's on. AI reliability, privacy concerns, interaction without screens. Basically, this isn't, right now, I.O. or the division of, quote, unquote, open AI's hardware products. It's not just about

execution risk. It's unsolved product physics. I love it. And the timeline, the timeline keeps slipping. I've been tracking this originally expected. You know what, Scott? Let me give you a piece of advice that I heard a long time ago. Hardware is hard. Well, it was originally, get this, Kara. It was originally expected around 2026. And now they're saying it's not. shipping before 2027. Guess what? It's never going to ship. Oh, all right. There's a prediction right there. All right. We'll see what happens. Anyway, great job on your prediction. I like this new one. And by the way, next week, I just wanted people to know, speaking in predictions, Jeffrey Epstein's lawyer and accountant just told Congress they were never interviewed as part of a

formal federal investigation. We're going to talk about this next week because we're not going to let Epstein out of the news either. Trump is making all sorts of hand-waving in order to pay it. But this to me was a malpractice on the part of federal investigators, any, you know, that they were not interviewed as part of a foreign. I mean, you might talk to the lawyer and accountant, seems to me. They might know a few things. In any case, we'll see where that goes. We're going to talk about it next week, so I want to get that back. So can I just have one addendum, the cloud and the silver lining of these Democratic wins?

What? We need a Nancy, a Speaker Pelosi-like figure who understands how to, tell the children what, okay, the grown-up is here, this is what you need to do. As good as things are for Democrats on a Senate and on a congressional election level, we are about to snatch defeat from the jaws of victory, and while no one was looking, we're about to elect a president of the fourth largest economy who's going to be a Republican. Because of the jungle vote and construct in California. We'll talk about that Monday.

We are probably going to elect. a Republican unless Democrats get their heads out of their asses and start dropping out. I'll do a little. I've been contacted by every one of those Democratic candidates and also Steve Hilton, who I know well, I haven't heard from Chad, the sheriff. Gavin Newsom and Chuck Schumer, you need to start promising these Democrats something and getting them out of the race. I literally almost tested. Getting them out of the race.

They also had to cancel a thing. The whole thing is a fucking mess. And it's suicidal. It's suicidal. It's really weird. And by the way, Governor Newsom, who I am a huge fan of, if you don't show some backroom dealing here and make sure that the next that your era parent isn't a Democrat, it's really going to hurt your chances of getting the nomination. It is. Okay, before we go, I just want to say my brother Jeff, who is a friend of our pivot, had emergency surgery this week, heart surgery.

He had a blocked, I don't know what, I'm going to say it wrong, but he had to have a stint put in. And it was because he was on Kaiser or something like that, and he went on Medicare. and the internist said to him, you should check your calcium levels. Turned out he had 80 to 90% blockage. It's called the Widowmaker, the issue. And he got it all cleaned out, and he's doing great. But one of the things he said for me to tell you

is make sure you all check things like that and get a checkup. I just thank goodness that this didn't have because he would have died of this very suddenly. So I wanted to give him a shout out in any case. That's the show. But thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We'll be back next week.

Today's show was produced by Lara Naman, Stoie, Markets, Taylor Griffin, and Brad Silvestor. Ernie Erichita, Engineer, this episode, Manola Moreno edited the video. Thanks also to Drew Bros, Miserva and Dan Ceylon. Nishakuro as Vox Media's executive producer podcast. Make sure to follow Pivot on your favorite podcast platform. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at NYMag.com slash pod. We'll be back next week for another breakdown of all things, tech.

And business care, I have a great rest of the week.