# Paramount Wins Warner, NVIDIA Beats, AI Market Risks

**Podcast:** Pivot
**Published:** 2026-02-27

## Transcript

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When things get hard, how do you talk to yourself?
I'm Robin Edison, VP of Fitness Programming and Head Instructor at Peloton.
And this week on my new podcast, Project Swagger, I'm sharing my strategies for how to build better self-talk.
It's time to work on befriending yourself.
Follow Project Swagger wherever you get your podcasts.
I use it when I get like an ear infect.
Every time I get an ear infection or something like that, or clean out my ears or a cold or a fluke.
That's a little too much information.
Tell us about the air cleaning.
Hi everyone, this is Pivot from New York magazine and the Vox Media Podcast Network.
I'm Kara Swisher.
And I'm Scott Galloway.
Resistant on subscribe.
Why don't you give us an update?
Because February's coming to an end.
You've had over 20 million views across social media and over 1.5 million site.
Obviously, it has a lot of momentum.
People mention it to me all the time.
Your website tows $242 million loss in market cap.
Um talk a little bit about gone because we have something to announce.
But first give me a little update and then you can do the big announcement.
The honest truth is I'm struggling because it's taken a lot of time and a lot of effort.
And it feels as if it's the momentum is actually cumulative and building.
And I've had a lot of different kind of smaller, I don't know, resistance programs reach out and say, what are we going to do in March?
Should March be, should be meta March where we focus on one company or focus on open AI.
Right.
So and how do we keep it going?
Because it does feel like it's it's building momentum, and to just shut it down at the end of the month feels like a loss of effort and momentum.
So I'm quite frankly, Kara, and I want your advice.
I'm trying to figure out what to do with it going into March.
I think you should hire someone to specifically debt, not part of your team, but really hire someone to really keep it going.
And someone who wears Birkenstocks, lives in Brooklyn.
A lesbian.
Someone with rich parents, putting them putting them through nonprofits.
Whatever it takes, Scott.
Whatever it takes.
But I think it's important to have someone at the Do you drive a Subaru?
No.
That's my son does.
Um would be great at this.
What's Louie doing?
He's in San Francisco working for.
Oh, perfect!
No.
You're not.
He is a lesbian.
I know.
Perfect.
I don't know if you've heard, but I pay really well.
You have to put up a lot of dick jokes, but I compensate 50 to 100% above market.
True story.
The dick jokes and the compensation.
Well, I'll ask him.
He does have a job.
I will ask him.
I will ask him if he wants to help.
You know who you want is Alex, but he wouldn't do it.
Alex is so like he would engineer this the fuck out of this thing.
He's a Michigan.
He's taking like organic chemistry and computer science and working out and like lifting lifting buildings and the title that he has for this summer where he's working his advanced manufacturing product integration engineering intern.
That rolls right off the tongue.
I know.
I was like, wow.
Can he just say pole dancer?
The pole dancer, advanced manufacturing product integration engineering intern.
That is what my second son is doing.
Did I tell you when I was on uh the college tour with my son Alec?
The first thing the literally the first thing, the first impression we got of Michigan was Alex's fraternity, and we were both like just scared.
Scared.
Sticky.
Yeah.
I lived in a fraternity, and I don't I don't I it like brought back, I'm like, was it this bad?
Yes, and it smells like beer, old beer.
Oh, yeah.
Beer, beer and semen.
Um yeah, I know.
I know.
Yeah, it just uh Yeah.
Yeah.
He's he's gonna live in an apartment for his senior year.
But so he's leaving the frat finally.
And my little boy is on his way.
Yeah, and the house was clearly built like 200 years ago.
He looked like Gulliver roaming around.
Yeah, yeah, it's true.
You want to go back.
I feel like you want to go back for a party.
Oh, I'm in.
Okay.
All right.
I'm definitely that pathetic guy that shows up at the fraternity party when he's invited.
Yes.
No, that's so sad.
Um there was a Seth Rogan movie like that.
Anyway, listen, we are going back to the Midwest.
Let me just say this is not ending.
I think you should hire someone.
I think you should keep going.
But we are going back to the Midwest.
We're not going to Ann Arbor, but Scott and I are coming to Minneapolis.
We talked about it on the show, and then we made it so along with our great team here.
And you can see us live.
We're gonna celebrate Resist and Unsubscribe and keep the momentum going.
We're gonna do a live show at the Pantagus Theater on Sunday, March 8th.
We will be there.
A week from Sunday.
Minneapolis, here we come.
I want to meet Rhoda from Mary Tyler Moore.
That's why I'm going.
That's and you know what?
I hope she's wearing a raspberry beret.
That's right.
Get it.
Get it, Kara.
Little local, but local humor there.
You talk about the tickets.
They're not available yet, right?
They go on sale.
I think by the time that's there, is they're on sale.
We're gonna be donating all proceeds to the Minneapolis Immigration Center, I believe it's called.
But we want to do something.
Well, AI said this, you've been very supportive, and we've decided.
I've decided I want a fra I want my efforts off the fucking keyboard and off my to be a fraction of the virtue signaling and action I claim I claim to, you know, want to have.
And so I pitched you on this idea, and we thought, let's go to Minneapolis.
We want to bring some economic activity.
We want to salute them.
We want to basically say over and over that they fucked with the wrong cowboy when they came to Minneapolis.
Right.
It's gonna be a nice event.
You, of course, are totally well connected.
We're gonna have a bunch of fun and famous surprise guests.
Yes.
And we're gonna do we're gonna do a live show and basically nod to the to the incredible Americans known as Minneapolisons.
We love the Minneapolisons.
And l the the if you jump straight to the website, the the you can find a link to buy them when the tickets are available.
We think they're gonna be available on Friday uh at resist and unsubscribe.com.
We've got a thousand tickets.
Uh again, the money goes straight to charity.
Um we're gonna run this show on pivot too, so we'll talk about some current events, but we're gonna focus on what's happening here with resistant unsubscribe because we know we have a lot of fans there and we love Minneapolis.
We love what the city has done, and we wanna give back in some way, and this is one of the many ways because what happened to you was heinous.
And at the same time, tech companies have a lot to do with this.
Like, let's be clear.
Um, and so we really what Scott is doing here is giving you guys have resisted, and we are gonna do our little part.
And it's a little part compared to what Minneapolis has done.
But tech is not not it's not the only reason, obviously, but it's played a part in where we are today.
And so um we're gonna resist and unsubscribe.
And everyone's gonna unsubscribe.
Speaking of unsubscribe, Scott, I unsubscribed from One Medical, which is an Amazon uh product.
Um Did you have the 99 a year or 199 a year?
199 a year.
And then were you using it?
I a little bit, yeah, absolutely.
And I like I love the service.
I just hadn't used it in several years.
Yeah, I I I use it when I get like an ear infect every time I get an ear infection or something like that, or clean out my ears or a cold or a flu.
That's a little too much information.
Tell us about the ear cleaning.
Okay.
Tell us about the early colour.
I get a lot of wax in my ears.
And so I've unsubscribed our entire family from it.
And it's a lot of.
Yeah.
Um anyway, I'm I'm doing just fine, by the way.
Anyway, we've got a lot to get to today, but March 8th, Minneapolis.
Uh tickets will be on sale soon.
Please come.
We want a full house.
Um, and we're f super excited to see you.
We've got a lot to get to today, so we're gonna dig in.
Um first President Trump delivered the longest state of the union ever on Tuesday, one hour and 48 minutes, where he, of course, said Americans were telling him we're winning too much.
Uh did you watch, Scott?
Thoughts?
Uh it was on too late.
I watched I did what I did with almost all media broadcast on traditional cable.
And that is I watched it in bits and pieces on you know, TikTok and Reels the next day.
I felt like for Republicans, I felt as if they were attending their ex-wife's wedding when you're still on her health insurance.
And but he can but she controls the military.
It felt like dear leader in the Duma, where they thought, I better stand and applaud or I risk execution.
Yeah, totally.
So I found it, I don't know.
I I quite frankly, I thought it was a bit of a nothing burger.
I didn't know he didn't say a hell of a lot.
I thought he came across as quite robust to be fair.
He came across as robust, but he moved very quickly by the end into very deflated.
Like it was really, if you watch the whole thing, he started off real like energetic, and then he got mean.
He was normal-ish for him.
And um, that's a that's a very low bar.
But he, as you as the night progressed, he got super mean, calling the Democratics crazy.
And then that fucking idiot in the back, Joe JD Vance, was like, ha ha ha like he looked like such a dope.
He is he has no right being to be president.
Sorry, I'm gonna he's just such a dope.
Um the Supreme Court went and stony faced, and every time Trump did something like the Democrats are crazy, the Republicans, as you said, jumped up like a bunch of like like dancing monkeys, essentially.
The Supreme Court sat down, the military looked straight ahead, which was really interesting.
And of course, the Democrats sat down and they wanted the Democrats to have photos of the Democrats not agreeing with immigrants shouldn't kill American citizens.
They wanted photos like that.
I thought it was mendacious.
And if you look at any of the lie stuff, there's a lot of it.
I thought it was it veered into cruel as usual.
And then the worst part was it was dull.
It was actually dull.
And that's to me the worst part.
And of course, the numbers show much less people watch it.
28 million versus 36.
It's like um doesn't have any staying power, and he denied Americans were suffering.
That's one of the things, which I thought was a mistake.
I thought from a political standpoint, is it Abby Spanberger?
Is that her name?
Yeah, Abigail Spanberger.
Uh Abigail Spanger.
Governor of Virginia.
Um, I thought her rebuttal was outstanding.
And I I came up with an idea I want to pitch you, and I'm serious now.
And I actually called one of our favorite senators and I said, I have an idea.
Uh I think they should hire.
If you think about essentially the democratic response should turn into what the halftime show is to the Super Bowl.
And that is a halftime show had almost no relevance 40 years ago.
Now it's bigger than the Super Bowl.
I said, hire Jay-Z Rock Nation.
Oh, fill a stadium with 10,000 rabid Democrats.
Yeah, and then you get all music, cool, cool intro, amazing artists, uh, graphics, visuals, gray lighting.
Because the problem is the follow-up, whether it's Marco Rubio responding, the response always comes across as flat because it lacks the sex and the majesty of the body.
I agree.
The lighting wasn't good.
Let's sex it the fuck up.
Because if you listen to what she said, if you read her response, yeah, it was good.
It was outstanding.
The lighting was bad.
It's just they can't compare.
It's like going from the Greek theater to your, you know, you're watching something on laserdisc.
I hated it myself for thinking that, but I'm like, the lighting's bad and the setting is bad.
It's not good.
It was too far away, and it was too close.
When I was renovating a house in the Hamptons, let's bring this back to me.
Um, I used to go to the gat at the 7-Eleven and a bunch of guys uh uh would roll up and I'd say, okay, I need some guys to do stun studying or something like this in my general contract.
I would just sit in the passenger seat with a bunch of cash.
And I had no less than 12 or 15 workers at any time in my house doing shit.
And at night, I'd roll in and they'd all be in the kitchen with a VCR and a big like four pizzas and like 24 um was either Modellas or something else, and they'd have this bad black and white TV, and all these guys would just be sitting around watching porn.
Oh yeah, and I remember thinking this is odd.
This is odd, but go ahead.
This is odd.
No, that's it.
That's the whole story.
Okay, okay.
That's the whole story.
Don't do that, Democrats.
Do not have Modella pizzas and boards.
I had a this is what a douchebag I was.
I had a sand beach volleyball court.
Okay, okay.
You're losing the resistance on subscribe.
Oh, I was so optimized for the ladies.
All right, okay.
Let's move you have progressed to a better person, and now you're a lesbian going to Minneapolis.
I'd like you to wear Birkenstocks, by the way.
I think that would be great.
Um anyway, yeah.
It was a nothing burger, and he looked m mean.
And uh I I thought he got he real got de and and started doing the bludge uh at the end of the day.
I didn't say anything, and he didn't have a he teased tax cuts, which I was interested in to say, okay, how are you gonna pay for those?
Didn't talk about AI much, he didn't do anything forward to the city.
He didn't really talk about Iran much.
He didn't know.
The show is the show is winding down.
That's what I thought.
And reminded me at the end of The Apprentice.
It wound down.
It suddenly wasn't interesting.
And that's what I think.
He was mendacious.
It was mendacious and cruel, but that that's sort of table stakes with him.
Dull is what I thought.
Hi everyone.
Scott and I just recorded earlier today, but I'm jumping on because a major story just broke.
After a long battle, Paramount has won the Warner Brothers Discovery bidding war, at least for now.
Netflix has released a statement saying the deal is, quote, no longer financially attractive.
It never was.
And it was, quote, always nice to have at the right price, not a must-have at any price.
Paramount had upped its offer to buy all of the company for $31 a share and added all kinds of bells and whistles.
And Warner determined that offer was superior to Netflix, because it was actually.
I said this was gonna go on, on and on.
And it has.
It's really been a like since December.
I think we've been we're never it's sort of broke.
But talk a little bit about your overarching things and we'll talk about a few other things.
Oh, look, I think this uh Caro is the outcome that had to happen.
Uh, you know, uh whereas Netflix was saying it was nice to have at the right price, it was getting to be nosebleed territory.
Paramount, this is existential.
I mean, without this, they're just like uh an $11 billion dollar company, which once upon a time would be nothing to sneeze at, but now it was a pipsqueak in this landscape.
And so they needed Warner Brothers Discovery, all of it, to uh, you know, make what the Ellisons hope, you know, i if if if they hadn't done this, then their original premise for the Paramount deal wouldn't have made much sense and their equity wouldn't do anything.
So uh this was kind of existential for them.
They had to pay up, they had to win, and kudos to David Zaslov for running one of the best MA processes I've seen in a long time.
You know, for people who forget, uh um uh yesterday as I admitted that Netflix had to walk away from this because it was just ridiculous.
It was an insane price.
And Warner was at uh was that $10 a share recently, and it popped to $31.
Was there $21 of of excellence that had been created?
Not at all, from nothing, right?
It's like whipped cream or something.
Well, it it it actually got as low as seven dollars a share.
Yeah, yeah, remember?
Right, I do remember.
Um, people you know, buy at that price, but because I thought they would pay down the debt and make something of it.
But you know, he's, you know, ever since September 11th, when Paramount first began to hint that it was interested in buying this and it offered nine uh $19 a share.
Uh we've gone from seven to thirty-one, and and it's uh and what?
Not not because the companies have uh performed uh particularly that much better.
I mean, they've performed fine, and the and Warner Brothers had some hit movies, but it's just because of the scarcity value, the fact that he ran an in Zaz ran an incredible auction process, kept them on both sides on their toes the whole way.
And uh especially this last bit of uh uh of of Jiu Jitsu was just beautiful to watch.
Yeah, yeah.
I I said he won the Jeff Bucas Award for turning chicken shit into chicken salad and feeding it to a Nepo billionaire.
Like that's you know, Jeff B Buchis was the last guy at uh Warner Brothers to s you know make a fortune selling the company to ATT, and now Zaz has done it again.
What when sold again.
So let's break it apart a little bit because one of the things that had begun to dawn on me, and you and I uh I always thought Netflix was the better owner in terms of taking these assets and doing something significant with them.
I felt like the purchase, the Paramount is not as good at gonna be as good at owner.
It's still too small instead of a leaking lumbering media ship, it's a bigger leap link, you know, lumbering ship.
I don't see how they're going to just because they're slightly larger, be that much better, unless they are run by someone who's more experienced.
Like I think David Ellison should get out of the way.
And you know, I know they have Jeff Shell, very talented, George Cheeks, many others, but they really they they don't have the executive fortitude, I think, to do much with this.
And Netflix later can come swooping in and take off parts.
So how do you look at it?
Look, I know they're very excited over at Paramount about winning.
I know they're very excited about their business plan and what they think they're gonna do with this.
You know, they're gonna have to combine CBS and CNN.
I can only imagine what the feelings are uh over there.
Bad.
Uh probably not great.
Uh, you know, there's a lot of bloat probably on the CNN side that's gonna once again come under the come under the axe.
You know, as we've discussed many times, Kara, I think uh, you know, David Ellison has blundered uh a few times already out of the gate.
Uh Taylor Sheridan losing that.
You know, that was a big big loss.
Bigger, you know.
Bigger than the CBS disasters.
Which are not nothing either.
Uh, you know, overpaying for, you know, UFC or whatever it is.
I mean, uh, you know, so uh I think there's you know, they've got a lot to prove is but nevertheless, uh they've got a lot to prove, but they also had this was existential for them.
They had to they had to win.
And for Larry Ellison, I mean if if it weren't for Larry Ellison, we wouldn't be here, we wouldn't be talking about this, we wouldn't have this discussion, they would never have been taken seriously.
They never could have done the deal.
So it's Larry's unbelievable amount of equity that that he's willing to step up just something like 45 billion dollars of equity, 25 billion fr from Middle Eastern private uh sovereign wealth funds, and and the rest from Larry and and uh you know Jerry Cardinal uh at Redbird Capitol, uh, with most of it coming from Larry.
I mean, this is an unbelievable amount of equity, an unbelievable amount of debt.
It's probably gonna be like the largest LBO kind of in history, except they're not taking the company private.
Uh they're, you know, it's remaining a publicly traded company.
Let me ask you in that regard, you know, would you compare it to what Elon did at Twitter?
Like that I don't know.
Someone was like, well, can't they do what Elon did mean the the bankers sort of gave up and he managed to get his money back because he squeezed it into a different company?
I don't think they have that choice here.
This is they're just to have the media company, correct?
Hey, well, you know, if they want to create PAI and create a AI company and have everybody go crazy for it and then have the AI company buy the media company and then you know, merge it with SpaceX.
Okay.
I mean, you can do you want to go do all those crazy things.
Maybe they can uh uh pass it off on to somebody else.
Maybe Elon will buy it.
Uh uh, you know, Elon could buy it out of petty cash.
Uh he could why did Larry Ellison do this?
Because he seems to me he's a smart customer about a lot of things.
This seems like buying a yacht or something.
Well, he has a yacht.
What am I talking about?
But you know what I mean?
It seems so unlike him.
Perhaps he's old, perhaps he wants to leave a legacy for his son who likes to make movies.
What what is because from a financial point of view, this is not a Larry Ellison move to me in my mind.
No, this is you know, they're gonna have 70 plus billion of debt here, Kara.
It's a lot of debt.
You know, maybe they have 11 or 12 billion of cash flow, maybe.
Um, it's a lot of debt.
Uh they're gonna have to make a lot of cuts.
Uh they you know, they believe they're gonna deliver quickly.
You know, every buyer, every buyer who puts together a leverage company thinks they're gonna delever quickly.
Uh sometimes they do, sometimes they don't.
Uh maybe Netflix will get another chance at this when the thing flounders.
But why did Larry do this?
I think it's edible.
I mean, I think he wanted to do this for his son, and he started down the path to do it.
It, you know, it went it went from 19 was their first bid to 31.
Uh, I think he felt like you know, this ego was involved if he didn't do it that that he, you know, he'd have egg on his face kind of thing.
And he's got now Trump expecting him to, you know, change the dynamic of the two companies in terms of the politics.
And so I think he felt like he had to do it, and once he'd started it, and you know, he basically caved and gave Zaz everything he wanted, every little detail.
Correct, which is so unlike Larry Ellison.
I was like, sort of like, what a chump.
I never called Larry Ellison a chump before, but I feel chump that that's Aslov rent circles around them.
Uh yeah, he got into deal heat and gave his Aslov everything he wanted.
I mean, they're happy over there.
Yeah.
They're excited.
I know because they're like, they're like, you know, they're pumping fists.
But right honestly, I was like, oh dear, oh, oh dear.
That's what I guess.
There's gonna there's gonna be a hangover for this.
There's definitely gonna be a hangover.
So two more questions.
You mentioned Trump.
One of the things that everyone's worried about, of course, is Larry Ellison owning TikTok.
He does an Oracle owns 15% of TikTok, which isn't a huge amount, it's it's a significant amount, but it's not the most amount.
Um, and owning CBS, which I think was a falling knife, so I'm not really clear why everyone's they're obsessed with it because it's a good story, but it's not a I would say, you know, we just did an analysis of pivot, and we have more people in the demo advertising than C, you know, all of these companies do, all these cable companies.
So it's not that it's the news organization, and CNN has been declining.
Like let's be clear.
Like the numbers have been declining.
All of cable has, not just CNN.
Um what do you think it's a political thing or or what?
Or or and also lastly, Trump's running out of time, right?
Trump is absolutely running out of time.
So look at address the political issue.
And then secondly, the regulatory issue could still get very ugly with Democrats attacking this if they get back in the in control of the legislature, correct?
Presumably.
Uh, you know, first, they uh made a big deal of them getting through Hart Scott Rodino that is a little deal.
There wasn't going to be uh deep dive into this by the DOJ, although they could still come back and take another look at this now that it's a kind of a different deal, a new deal.
They could, they probably won't, but they could.
They got the EU.
They were definitely working the EU.
You know, David and Jerry Cardinal were over there working the EU.
They think they're in good shape with the EU.
So they think between uh the DOJ, the EU, and Trump being on their side because he's gonna, you know, give them the political uh, you know, format that he wants and be supportive of him, which, you know, whatever.
Uh it's ridiculous if you ask me.
But um uh, you know, that they they think they've got the regulatory situation in hand.
Um, you know, politicians make a lot of noise about these mergers, but they have no say in the approval of them.
Um so even if the Democrats take the House in uh uh uh uh uh you know November, I'm not sure what the uh uh this you know this is gonna be this could very well be over by then.
You know, they put in uh the so-called ticking fee.
If it's not over by the end of September, which is obviously before the elections, they're gonna owe uh uh uh Warner Brothers shareholders another 50 cents a share or six hundred and fifty million dollars.
So um they can't.
So the impetus is to do something quick to get it quickly done.
They some things they can't control, but I mean, uh they obviously are very con they're highly confident, Kara, they're gonna get this through the regulators.
And uh, you know, they'll give Trump what he wants.
And I'm not sure the Democrats, even if they take the House, can do anything about what CBS and CNN broadcast.
Mm-hmm at all.
It's up to the FCC, and that's still in Trump's pocket, and you know, Trump blithering away, you know, asking for them to give him favors and bend the knee.
Or get rid of Jake Tapper or whoever they want to, whoever he's mad at at the moment.
Yeah.
So when you think about where the where Netflix goes from here, I think it was the smartest move.
The stock is gonna soar.
They have plenty of money to do things.
They're so innovative.
They're such great operators, right?
They're sort of it it's not a bad thing.
They could do a distribution deal for some of this content and then later just wait until the knife falls, right?
Presumably.
What would you do if you were uh Ted?
So I thought this is exactly what he was gonna do.
Right, and this is what I wrote that exactly he should do yesterday, and then I don't know whether he reads it or listens to me or whatever, but he he did exactly the right thing.
Um he he he looks smart.
Stock is gonna move up after moving down like 30 percent.
He takes his 2.8 billion dollar breakup fee and uh builds out his new movie studio in New Jersey and gets content deals and you know, looks smart and disciplined, and that's what investors like.
Looks like the good guy.
He does.
He looks like the he looks like the good guy, and he can move on from this.
It was gonna be a headache for him if he got this.
Sometimes the smartest thing you can do in a deal, Kara, is to walk away.
And he did the smartest thing.
So he's gonna get plotted all around.
He, you know, he could read the tea leaves.
He wasn't, it was gonna be a regulatory nightmare for him to get this through.
Trump was not gonna make it easy for him, he already bloviated about firing Susan Rice, and Ted didn't do it.
And so, you know, who knows what was gonna be in store for Ted?
But uh he he did the smart thing here.
So, very last question.
When you think about what happens next for for consolidation, this is uh it's obviously Comcast has got to be like going, what do we do?
Disney's gotta go, what do we do?
Netflix now looks like it's willing to play at least it because it wasn't an acquire, very much like Apple, but it is.
These they're very opportunistic now.
Um and in good now they've had this, they've never done this before.
Now they know, right?
They've done a they've worked on a big deal.
What do you see next if you could make a prediction?
Well, I mean, it it's it's quite, you know, uh a lot of people have been thinking that um Comcast would, you know, uh spin off NBCU and maybe uh, you know, Netflix and NBCU get together.
Um, but I you know, I don't really think Netflix needs to do any of that.
I don't know.
Now they got a little taste of it.
Maybe they thought, well, they walked around the the you know, the Warner Brothers lot, that was kind of fun.
And now I guess maybe they could walk around the universal lot.
They're building their own lot.
I I'm not sure they need to do it, but if they want to do it, I think there would be opportunities.
So, you know, there's Amazon Prime, there's uh not gonna do anything with Disney, I don't think, but NBCU, there's some smaller studios they could get you know get their hands on, they could, you know, AMC and things like that.
I I don't really see that they have to.
I think Ted sort of had fun here.
He showed his medal, he showed he can be a deal maker, he got a merger agreement.
Uh, and he showed himself to be disciplined.
And he comes out when is he the big winner in all this?
Him and Zaz, of course.
Right, absolutely.
I swear this guy, this guy, Mr.
Discovery, yeah, Mr.
Mr.
Diners Drive-ins and he ran the MA deal of the Century.
I I gotta give it to him.
Yeah.
I gotta give it to him.
I always run him down when I see him.
I joke with him.
I say he looks like a lesbian.
But he I have to say he he did a great job here for his shareholders, right?
For the I mean, literally seven to thirty one share.
Amazing.
Amazing deal.
And good luck, Ellison.
Good luck on catching a car.
Good luck.
Well, we're sequel.
All right.
The other winner here is you.
You've done an amazing job in covering this, and I like debating with you.
And uh it's really helpful because it's smart and it's clear, and uh, and you're you're non-romantic about any of this.
Anyway, uh I appreciate it.
Go to Puck to check out Bill Cohen's reporting, and we'll take a quick break, and Scott and I will be back with NVIDIA's earnings.
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Scott, we're back with more news and video reported better than expected fourth quarter earnings with a profit hitting 120 billion.
Only a handful of other companies, including Alphabet, Microsoft, and Apple have made over $100 billion dollars in profit in a in a year.
Net income for the company doubled to $43 billion.
Revenue in the data center business rose 75%.
Talk about that because Wall Street was also rattled this week by a viral memo from market and analysis firm Citrini Research, very good research group.
The memo laid out a scenario where the AI systems trigger mass white collar layoffs, push unemployment above 10%, and ultimately lead to a stock market crash.
Citrini said the post was designed to prepare investors for potential uh left tail risks as AI makes the economy increasingly weird, stressing that it's a scenario, not a prediction.
Even so the SP dropped 1% on Monday, though some of it was of concerns about tariffs.
But companies specifically named the memo included Uber, Doordash, American Express, IBM, all saw steep declines.
Um it was an interesting memo, and I thought it was a thought experience.
And the markets were already rattled by Blue Owl Capital, a major private credit lender, announced its halting of quarterly redemption for one of its funds and selling uh $1.4 billion in loan ads as the company's stock fell.
We'll get to that in a second.
I'll talk a little bit about that more.
But stick with the first, the first with with the Citrini and um and the NVIDIA earns.
Well, I'll talk about NVIDIA before I talk about Citrini.
Revenue, uh $68 billion versus $66 expected, up 73% year on year, up 20% quarter on quarter.
Non-gap earnings, buck 62 versus $1.53, up $82% year on year.
Data center revenue, $62 billion, up $75% year on year.
The gross margins, 75%.
Yeah.
Their fiscal 2026 revenues.
Margins were crazy.
216 billion up to 65%.
I think that's that may be more revenue than like every streaming media company and movie studio combined.
Since the launch of ChatGPT, Nvidia has grown its data center business roughly 13 fold.
And this quarter marked the best revenue growth rate of the entire fiscal year.
So it's revenue growth on the law of big numbers, it seems to be more like network effects.
It keeps getting better.
It's scaling.
Q4, 73% year-on-year growth, beat Q3 at 62, Q2 at 56, and Q1.
As they get bigger, they're growing faster.
They're literally defying gr you know gravity.
Notably, they're leaving out China from its future guidance according to the CFO.
While small amounts of H200 products for China-based customers were approved by the US government, we have yet to generate any revenue.
And we do not know whether any imports will be allowed into China.
China was previously 20, almost a quarter of Nvidia's data center revenue, but that's now gone.
It doesn't seem to have hurt them.
And the thing is, it's still not expensive.
It trades at roughly 24 times forward earnings, which is only slightly higher than the SP.
So you have a company that's the most dominant, arguably the most dominant company in history at that moment, is trading what the SP is trading at.
And because of the fears around AI, and maybe because of the stock acceleration, it's only up.
It's basically flat.
It's up 4% this year.
And then you have all these companies announcing they're spending two-thirds or three-quarters of a trillion dollars on CapEx this year.
And most of it's, or a lot of it, is going to Nvidia.
Alphabet is flat.
Amazon's down 7% year to date.
Meta's flat.
Microsoft is down 15% year to date.
But big tech is getting punished for spending money.
And Nvidia is getting punished for collecting it.
Or NVIDIA is on the right side of that capex.
So one of those, one of those must be wrong.
Either these companies are making good investments, or I guess maybe the thesis is they're overspending and it'll slow down.
Should we talk about Citrini?
Yeah, Citrini was interesting.
I I, you know, there was the other one a couple weeks ago that was another thing like everything's gonna change.
That one, Schumer, Matt Schumer, whatever his name is.
Um there's been a couple of these that have actually had real impact um as they've been written.
So because people they're thought experiments in many ways.
Um, but they are interesting.
But go ahead, Citrini.
Well, essentially I would describe it as an A-plus creative writing project from a super bright high school student.
And it is really, it's written in the past tense.
It says, okay, this is how we hit this massive recession and the market lost a third of its value.
And I think it's a really interesting thought experiment.
What they're essentially saying is that AI is going to create this negative feedback loop where it makes white-collar workers so much more productive so quickly that companies can do layoffs and hire fewer workers, which results in an unemployment spike, less consumer spending.
And because companies fall under revenue pressure, they're forced to cut costs.
And how do they cut costs?
More AI, and it creates this downward doom loop.
Now you can make the same argument for any technology, right?
At one point 90% of us working in agriculture, now it's less than 2%, but that happened over 200 years.
These guys are saying this is going to happen over over two years, uh over 24 months.
And what's happened is it's really cut, obviously, we talked about last week, it's gone after the SaaS companies, the software companies, who they believe you'll be able to replace uh Adobe, Figma, or Salesforce just with thoughtful internal prompts.
And they the it's really well written and it's got great branding.
They coined the term ghost GDP, and that is economic output can grow while the benefits of that growth never actually reach most people.
The other surprising victims here, and this will uh come back to my prediction, is a lot of publicly traded PE or private credit companies, whether it's Apollo or TPG or Blackstone have been their stocks are down 20, 30 percent because they own a lot of software companies, and there's a fear that as private credit lenders, basically they act like banks to companies who are non-traditional borrowers, that a lot of those companies might not be able to make good on the money they've borrowed.
Let me just throw in some stats for the this is you're talking about Blue Owl, which is a major private credit lender.
The company stock fell 10% on the news last week because of of the these these sell-offs.
Shares are at a 52-week low.
The sell-off did then rippled across the whole private credit sector, which probably wasn't fair.
Apollo, Aries, Blackstone, and others sliding.
Um Blue Owl said it is not halting investor liquidity, it's accelerating the return of capital.
I love how they do that.
Um Mohammed L.
Arian, former CEO of Pimco, suggested this could be a canary in a coal mine moment, comparing it to the early warning signs for the 20, 2008 financial crisis.
Um so there this is all linked together, this this idea of worries, uh worry for all of these things, especially private credit lenders.
Um are not as concerned, some are more concerned.
Um it it it we've got a lot of letters from people saying what should they be concerned and what's going on here.
But they are definitely, as you're noting, they're linked, correct?
All this is linked to this spending, this massive spending by the tech companies.
The way I would try and describe the dynamic here and to understand if you're a risk and where you want to think about investing your own human capital, your own financial capital is the following.
My mom used to run the secretarial poll at Southwestern University School of Law in downtown Los Angeles, where I actually worked in the mail room in high school.
And she oversaw 20 secretaries who would write up the exams and the the legal research of all the professors.
That's gone.
Word processing has taken that away.
At the same time, my mom then became an executive assistant because she has good EQ and she's smart and reliable and can write well.
If you look at truckers, that AI will be a substitute for truckers.
Truck drivers via autonomous are in real trouble.
At the same time, accountants, you're going to see a lot of their rote accounting work go away, but they there are now more accountants than ever because they move upstream into things like tax wealth planning and estate planning.
So the question is Which presumably AI eventually be able to help you with that.
I call my accountant Mamie, who's amazing all the time for little and big things, right?
So presumably at some day I won't be talking to anybody but it seems like very artisanal on my part.
It seems like a lot of work by Keras.
It's like pumping gas.
I kind of like having that's the right example.
I used a lot of lawyers.
I used to send every agreement I did, you know, advertising contract, whatever it was, an employment contract I send to our lawyers.
They charge me a thousand, two thousand, three thousand dollars to have an associate review it.
Now I said to now I say to our chief growth officer, no, use AI, review it, and you do it.
I trust you more than with AI, you're as smart as a as a low level lawyer.
At the same time, I'm spending dramatically more on a very talented lawyer at a firm that's actually called Citron, uh, on this incredibly smart woman named Lucy Lee, who figures out everything from immigration to tax strategies to my estate plan, because that shit is complicated.
Because you want her to be using AI for on your behalf, right?
Because presumably she's also in using the city.
Yeah, but she can call me and say, Scott, have you thought about turning this company into an S-corse so you so you can in five years qualify for 1202?
She's incredibly strategic and smart and charges 1,500 bucks an hour.
So the bottom line is wherever you are in the world, do you have an opportunity to use AI to go upstream?
Or is AI basically going to take everything you're doing and you have nowhere to go upstream?
But the story of technology disruption is the same.
And I don't think it's any different here.
In that is it will take out the boring rote work, and you either take that additional margin and go upstream and invent new jobs, new higher-paying jobs, or you get outsourced.
The V here or the correction might be more severe, and America is bad at taking at taking care of those people.
Again, we spend 0.2% on retraining.
We also don't do it well when we try to do it.
It doesn't quite work.
Right.
But look at what we're we're in the business.
I would have thought, so for example, I've been writing books and I thought in my latest book, I'm starting my newest book.
I thought, oh, AI is going to play a huge role.
It plays a role in research, in improving and in fact checking, but the writing is still.
Yeah, I agree.
I've been trying to make it.
Fetch is not happening for me on AI and writing.
It's not.
It just isn't.
But even look at our business.
I would have thought, okay, AI can produce the scripts.
AI could edit.
Edit.
And it doesn't.
We we're hiring, I know you are at Prof2 Media, we're hiring more people.
It so I don't, and we use AI.
What we might do, we might launch two podcasts instead of one because AI will help us produce more, produce more data sets that we can talk about.
Yeah, we've got it, we've got to figure out one of the things I was talking about this morning.
We got to figure out how to make fetch happen with it, right?
And that's sort of a slower process, as you know.
One of the things someone was like, oh, is it all gonna be over?
I'm like, imagine at 2000.
I went to see a Hollywood executive, big name, and when the thing crash happened, he goes, I'm glad that's over.
And I'm like, what?
You have no idea what's coming, right?
So I think we're in the it doesn't mean that all of them are gonna survive, but several will, and it is a significant change.
And the question is, was it fair for Apollo to get dragged down in this blue awl thing?
Probably not, but that's how Wall Street reacts.
So you may opportunity.
You may see an enormous decline in NVIDIA or any of these tech companies, but are they really going away?
Are they is this really gonna decimate them?
What it's gonna do is have every company refigure where this cost structure is.
That's what it's doing.
You're going, do I need all these lower level lawyers?
And that is a significant problem.
And one of the things that it creates is if we throw all these people out of work, they're gonna be mad.
And there's all kinds of social issues there and political issues.
And the question is, what do we do about it?
And that's that's hard because we've tried retraining and it hasn't listened it hasn't always worked.
And we spent a lot of money on retraining.
It can get sucked up into political bullshit, which is let's give everybody jobs.
Then at other times it works, like during the depression.
We have wonderful things that they did during um high-speed rail up down the west and eastern seaboard.
There's a lot of infrastructure.
But look, the both Andrew Ross Orkin and Josh Brown, who I've had on property markets a lot, said something that really impacted the way I process and how I approach markets.
And it's the following, and they're right.
The optimists have beaten the shit out of the pessimists.
So the key question you gotta ask yourself in something like this with respect to the markets is ask yourself what could go right?
Because there's a temptation by academics and thought leaders to catastrophize because you sound too.
Well, you sound smarter when you catastrophize.
It sounds scarier and more interesting, and you put some bar charts around you talking about the zombie apocalypse and a downward spiral doom loop.
Well, okay, the doom loop around m moving from agricultural to manufacturing to service, it wasn't a doom loop, it was a job creator.
So let's talk about what could go right here.
And this is from a guy named uh uh I think his name is Zavie Mashowitz.
In quote open quote, actually, the scenario does involve massive job creation.
Starting a new business, creating a new product, or providing a service is now a turnkey thing you can launch with an agent.
All sorts of barriers and costs involved are gone.
Marketing costs drop almost to zero because their agent finds you.
Logistic costs are almost zero.
Transaction costs are almost zero.
Wages for anyone you hire are down and their productivity is way up.
The cost of living is way down, which creates more margin, more opportunities for new businesses.
I've been struck.
When I got out of business school in 1992, there were two people that started a business, and the other was my business partner.
It was only two of us.
Now, I would bet a third of the grads from Stern are gonna try and start some sort of AI company.
Anyway, we have to move on, but it's it's a really we should keep this discussion going.
Because I I think you're right, it's easy to catastrophize and you should be thinking about those things.
It's just a question of what's the other side of that?
What's the where are the opportunities?
Just like we were talking about Netflix.
All right, Scott, let's go on a quick break.
When we come back, we'll talk about Pete Hegh threatening anthropic.
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In the wake of the release of millions of documents related to the Jeffrey Epstein case, the rich and famous are finally feeling some pain.
But even with corporate resignations here, and with former Prince Andrew being arrested in the UK.
Every weekday and now on Saturdays.
Scott, we're back.
Anthropic has rejected the Pentagon's demands for unfettered access to Claude, as we thought they might.
Defense Secretary Pete Hegzett had given the company a deadline to roll back certain safeguards or risk losing a $200 million Pentagon contract.
Anthropic CEO Dario Amoti said in a blog post that the quote threats do not change our position, and that the company, quote, cannot in good conscience accede to the request.
Good for you, Dario, not to a cede to a moron.
On the other hand, the AI company that's been all about safety is dropping its core safety pledge, too.
It announced this week that it won't stop training uh potentially dangerous AI models if a competitor releases something comparable or more advanced.
They're doing other things, but they they say the move reflects the speed of AI progress and the lack of federal regulation, not a political pressure.
Thoughts?
The best reforming organization in history is the U.S.
military.
I close second is the U.S.
Corporation.
It's created more wealth in the last price.
In the last 17 years, U.S.
corporations have created more shareholder value than all of Europe.
Um is since probably the 60s.
Well, one company, Nvidia, is worth more than every publicly traded company in Germany and Spain.
Now, why is that?
One, we have incredible research universities.
We have a very risk-aggressive culture, and we have the deepest pools of capital in the world.
We have $5 million per startup versus $1 million per startup in Europe.
And why do we have such deep pools of capital?
Because when people invest here, they know the rules that that company will have to play by.
And when governments start interfering and picking winners and losers and saying, oh, the rules have changed, you're gonna have an absence or a flight of capital, which by the way, has happened.
And this bullshit, sclerotic, blood sugar level socialism where the government is deciding who should get to acquire Warner Brothers, or that we should own a share, a golden share in a steel company, or which microchip companies the governments can invest in, because a failed casino owner and talk show or radio reality show host seems to believe he understands business better than the private sector.
And we are already, this isn't this isn't a theoretical lesson in why I hate Trump, reflecting my biases.
This has already happened.
They point to year over the last year, the SP is up 14%, but it's not.
On a dollar-adjusted basis, the dollar has weakened so much, it's more up mid-single digits.
And by the way, Europe is up more, as you know.
Every single major market, from South Korea to Germany to the FTSE to the Cosby in South Korea, has massively outperformed the SP.
And one of the reasons is when you now invest in a U.S.
company, there's unnecessary risk from the government if you, for whatever reason, the Pentagon decides that we don't like you.
And guess what?
Andural and Palantir are working very closely with the government to help them track down spies, to maybe even track down immigrants using social media.
A lot of people would say that's a violation of privacy rights.
A lot of people don't want to work for a weapons company.
Well, guess what?
I love your saying.
You don't like chick Chick-fil-A, you don't have to eat a Chick-fil-A.
Maybe you don't work there, maybe you don't invest there.
But guess what?
They get to do what they want.
Regulated competition.
And you get to decide what business you're in or not in, just as anthropic might decide that we are not comfortable working and providing data and computing power to help surveil U.S.
citizens.
They get to make that decision.
That's right.
And they get to make, by the way, I think they'll do better.
Like everyone's like, oh, they're gonna get like blacklisted.
I'm like, I think this is good for them.
It might be good branding.
It might be good branding.
It might be good.
By the way, that they can do what they want and decide what they want to do on everything.
And then you, the consumer, as we know, decide what you want to do.
And one of the things that Higgs has always like he's either doing like pull-ups or they're this nonsense.
Another person never run a successful business, just so you know.
A lot of these people in the Trump administration never run a successful business, including the president himself.
Really, really has driven so many businesses into the ground.
Let Dario Modi do what he wants.
And if but to like threaten him, it's called the private regulated competition.
And everyone has to play by the everyone gets to and has to play by the same rules.
Elon will take it for you.
Just go to Elon.
And by the way, the reason why it's a problem is because most of the people in the Defense Department think Claude is better, right?
That's the issue.
They don't want to give their better product to do what they want.
This to me is ridiculous.
And by the way, the on the safety thing, you know, all these people are going to do whatever it takes, and they may be more safe, anthropic, but they will do whatever it takes to compete, right?
Correct?
Look, I I think the reality is, and this is the danger, and this has been my one of my core theses all along, is that we have fallen under the assumption that every breakthrough in technology results in a small number of companies that are able to ring fence distribution capital or IP and create trillions of dollars for their shareholders.
I wonder if AI is more like jet manufacturers or vaccines, and that is it will be in an enormous innovation that'll change society for the better, I'd like to think.
But there aren't going to be a small number of companies that capture a ton of value that the real winners will be stakeholders, but those stakeholders will be citizens.
I think we have massively benefited from vaccines.
Moderna is now 90 down 90%.
There's no one company that's made hundreds of billions of dollars from vaccines.
If you added up all of the share all of the profits and losses of all airlines and Boeing and Amber and Airbus, it's barely even a break-even.
And yet skirting along the atmosphere at seven-tenths the speed of sound is, in my view, from my life, the brightest greatest breakthrough in history.
Now, I my general impression is people ask me all the time, which LLM do you like?
I have favorites, but it only lasts for two weeks.
I think AI is putting AI out of business, and that is if you look at the data, they're all getting to technical parity.
It is so hard to maintain.
You know, Jan Lacoon said this exactly.
He says they're all the same.
The commodities, they're commodities.
I I I use both ChatGPT and Claude.
And then for like 72 hours, I'll be like, oh, ChatGPT is better.
It's less politically correct.
And then I go, wait, Claude is better at editing.
And then I go back and forth.
And here's the thing AI is reverse engineering every other LLM.
So it's going to be about things like UI.
It's going to be margin compression.
And I wonder if we're going to be the big winners.
And these companies are these companies are going to spend a massive amount of capital.
I know, I agree.
We're getting a lot of free.
We're getting a lot of free.
100%.
All right, we do have to move on.
We'll see what happens here.
But Pete Heggs said you're a moron.
Um, okay.
This is a story.
I just want to say again, I knew this had legs.
Dozens of uh of FBI witness interview summaries appear to be missing from the DOJ's latest Epstein files release.
Some of those are missing interviews that are tied to a woman who accused Donald Trump of sexually assaulting her decades ago.
The DOJ said in a statement that the only materials we have been withheld were either privileged or duplicates.
This is nonsense.
Democrats in the House Oversight Committee are now investigating whether DIU purposely withheld materials.
The New York Times followed this.
So did NPR broke it, and and an independent journalist broke it.
New York Times has followed.
This is really a bad cover-up.
What they've done here is kept uh they should just put it out there or go out, investigate Donald Trump.
One of the others, he's certainly not exonerated.
By the way, other people are taking uh a lot of fallout from Epstein this week.
This is not stopping folks until it it's not over till it's over.
Bill Gates apologized to the Gates Foundation for his ties to Epstein and also to affairs he had.
He talked about them publicly finally.
Um he kept stressing they were older, uh just old enough at least.
Um Larry Summers is resigning from Harvard over his Epstein connection.
The World Economic Forum president is also resigning.
Peter Mandelson, former UK ambassador to the U.S.
was arrested over allegations that he shared confidential government information.
The former Norwegian, I think, prime minister was hospitalized with suspicion of suicide over it.
There's a Columbia professor who's who's who very prominent neurologist, I think.
Uh all these people are paying the price, let's just say, either related or nearby.
Um Trump obviously didn't say anything in the Epstein files in the Lanxi State of the Union.
I don't think he can ignore this.
I think this is not going away.
It is chasing him.
And it will not happen until they do, as you say.
They have to be repercussions for everybody in this world.
It's just there just is one of them, he he has he has the right to be investigated, and he should be investigated.
So should all of these people.
You know how I feel about this, and it's an unpopular take.
I don't think the file should have been released.
I think the agency that aggregated the information should have reviewed it with the help of outside uh litigation counsel, and they should have communicated in one way to the general public, and that is with the grand jury indictments and announcements at the end.
The administration wasn't gonna do that because their own president was.
And so what have they done?
They've created weapons of mass distraction.
I don't know.
I think there's repercussions here.
I don't gonna go the same.
Because you're focused on it.
There the reality is the following.
There appears to be enough evidence that the that warrant an investigation by, and again, to your to to your point, unfortunately, we don't have the institutions to do this correctly.
But the way this should play out is the following.
Like I said.
Of rape against several people, including the president of the United States and all this other bullshit.
Larry Sumner's sending stupid fucking emails because he's pathetic to Jeffrey Epstein.
I think that's a distraction, Cara.
Uh again, I I know.
I know you do.
I don't.
I think it shows about judgment, and we can decide who we want to affiliate with.
I think it's fine with the case.
Okay, so and and if if I had AI go through every one of your attacks and emails, I couldn't reflect you as having poor judgment.
Jeffrey Epstein's a unique figure here.
You know that.
And he represents something bigger, which is Did they commit crimes?
I get it, but I'm not going to be able to do that.
By going after everyone that hasn't committed a crime because America loves to shame people, we are losing focus on the people who raped children.
Yeah, but you know, we all kinds of people got in trouble because of shaming things.
And some people got in trouble because of of whatever.
We've had a history of this.
Like ac actors like back in the 50s lost their jobs.
Like, that's fine, but that wasn't the FBI investigating going on a fishing expedition for real crimes and then shaming.
This is what's gonna happen.
This is TMZ's wet dream.
And unfortunately, we're not creating the incentives such that if you're a single mother and your daughter ends up on an island, that there's less there's there's less chance she'll be raped.
That is the same thing.
I think it's part of a every celebrity is just gonna start using signal now.
No, uh I don't know.
I don't know about that.
I don't know about that.
I think it it is linked to the feeling that the rich are have no impunity.
You talk about it.
And that's part of a trend.
And it's okay to have these other things, but they should do I agree.
I've said special counsel over and over again, but they were forced into it by Thomas Massey and Rokana because they wouldn't do their job.
And they they didn't do their job because they're under the thumb of Donald Trump.
And so if they're not gonna do their job, this is the only way.
This is my I get it, but this is what's happened, unfortunately, because our institutions are no longer have any independence or credibility.
They have released nude photos of underage girls.
They have doxxed them, listed their names and their addresses without their permission, and redacted and confused information around the actual people who have evidence that they're pedophiles.
I mean, this just couldn't be.
But they're not getting away with it, as you can see.
They got caught in the city.
Well, I think they're see, I disagree.
I think they're mostly getting away with it.
I think the wrong people are being prosecuted and shamed and in voted off the island, and the criminals are loving it because there's a ton of confusion and distraction.
I think they're going to get the question.
The one thing, and you'll agree with this, I was thinking about it the other day, is if we asked the general public to name five billionaires, I think three of them would be the first one would probably be Elon Musk.
The second would probably be Jeff Beza.
See, I think it would be, I think it would be Bill Gates.
He was sort of the original billionaire.
And then the third would be the president who calls himself the billionaire president.
So three of I bet I bet those three would be the three of the first five that people said who are billionaires.
They're all in the fucking Epstein files.
So, anyways, the my point is you can understand that the public has decided that once you get to a certain point of wealth, you engage in a level of depravity and feel that again, I love the saying, you're you're protected by the law but not bound by it, versus the rest of us are bound by the law but not protected by it.
So you can see that there is a real populist uprising here.
But again, I I think the Department of Justice is there to serve justice.
It's not this Department of Justice.
If there was any other Department of Justice, you might expect a little bit of decency.
This is not, this is the all of the things.
You know what we should have?
Wait, and I was gonna do this, but maybe we do it on pivot.
I wanted to get pre-Berar on to talk about the process of document collection, investigation collection, and then how that information is properly disseminated to the public and in what format.
Because that's what we're talking about here.
You're right.
You're right.
You're right.
It's bit it gets pruriant, but at the same time, it's the only way given Pam Bondi's the most another moron.
Yeah, but Kara, the Dow is at $50,000.
She'll never live that one down.
Anyway, let's take a quick break and we'll be back for predictions.
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Okay, Scott, let's hear a prediction.
Uh, so I just like to I I wrap my predictions in what I'm doing personally in terms of my own finances, and this is not financial advice, I'm just telling you what I'm doing.
I think that just as SaaS companies have been oversold, uh, some of these PE or what they call business development or private credit companies have been oversold.
So just some of the ones, again, I'm gonna create a basket because I'm about diversification at this at this point.
But for example, Apollo, which has taken a huge hit, is trading at 14 to 17 times earnings.
So a company with double digit earnings growth and double digit uh assets under management growth, which is the capital they deploy and how they make money.
Uh the SP is trading at a P of 20, and Apollo's trading at 14 to 17 times.
TPG is trading at about a one-third discount, but uh uh to fair value estimates.
It's got unbelievable fundraising and it's expanding their fee earnings.
And again, the price reflects pessimism uh more than growth trajectory.
And by the way, there's absolutely no evidence other than creative writing that any of these companies are experiencing a I work or coinvest with some of these companies.
They're fucking juggernauts.
They're raising more money than ever.
But it's public feeling about it, investor nerve.
Sentiments.
Yes.
But over well, I there's narrative in their numbers, and I believe over the medium and long term, the numbers went out.
It's an opportunity is what it is.
These companies have shed between 20 and 40% of their value in the last 12 months while continuing to grow their AUM and their fees.
Blue Owl, um, it's got a seven to eight percent dividend yield.
And you know, this because of market discounting private credit fears.
So there's a growth versus valuation, in my view, mismatch in that all of these companies are growing their assets under management and their fees, which is what essentially is their revenues.
And the sector has had multiple contraction or compression due to private credit liquidity fears because of some of these creative writing projects.
And the in my view, the market pricing risks are more the market is pricing risks more aggressively than current earnings trends justify.
That's my that's my thesis.
So let me I'll just wrap it up.
My my one line thesis is the following compressed multiples and durable fee growth plus strong fundraising.
And I know these companies, they're they're really well run.
In my view, all adds up to potential relative undervaluation versus the broader market.
All right.
I like it.
That's a yeah, it's the same thing you were talking about last week.
Okay, look for opportunities, including you, Netflix.
That's right.
Um just so you know, next week we'll we'll be talking about Hillary Clinton's testifying for about Epstein.
Anyway, we'll we'll be talking about that.
But I'm gonna actually get our our listeners to write us in, give their own prediction.
Jeff Bayes and Lauren Sanchez have been named honorary chairs of the year's MetGal.
They essentially are paying for it, and that's how that happened.
The dress code is fashion is art.
Uh I want to know what you think Lauren and Jeff will dress up as.
What art thing will they dress up as?
There's two things I'm certain about their wardrobe.
Boobs.
100%.
Whatever she's wearing.
Both of them.
She's not wearing an outfit, her breasts are.
And I'm here for it.
I think she's a I think she's a beautiful woman.
And uh uh, but let me be clear.
Let's be fair.
He's he's been improving his boobs too.
But go ahead.
Let's let's be clear.
There is uh look, Vogue and Condonast, they're smart people, they invested in cable companies.
Those assets, the magazines have literally been just like a slow burn to irrelevance.
Hearst is invested in all these incredible data companies like Fitch and this airline data company.
They've actually grown their revenues.
Condonast has not.
But the reporting I wanna see, the only thing I know is that is that Lauren's gonna have her girls in the window, and I'm here for it.
And two, somehow, indirectly, there is an exchange of money here.
There is.
They're paying for it.
Oh, yeah, no, they're pay they they're they're like back.
They're paying for it?
Yeah, Anna Winter chucked them down.
They turned them upside down, got their wallet, put them on the cover.
They're paying for the whole thing.
Put them upside down and certain things moved and certain things didn't.
That's correct.
The money moved out of their pockets.
And now they get the king and queen.
Good for them.
We would like, I feel good about it.
I'm here for his midlife crisis.
I like, I can't help it.
I don't know.
What are they dressing up?
I want listeners straight in and we'll read them.
What what what art will they dress up as?
We need specifics.
Sexy moments.
I hope we get invited.
I'd like to go to that.
Do you think they'll invite us?
No, I don't think they will.
All right.
We want to hear from you.
Uh send us your questions about business tech or whatever's on your mind and whatever you think Lauren and Jeff are gonna wear.
Go to ny mag.com slash pivot to submit a question for the show or call 8551 Pivot before we go.
Uh as we said, Scott and I also, besides Minneapolis, uh, we're both returning to South by Southwest in Austin for three shows on the Vox uh Media Podcast stage.
It's a total South by Southwest takeover, because we are the king and queen.
Speaking of which, we stopped will have his boobs out, just so you know, on a platter.
First, I'll be doing a live taping of Property Markets with Ed Elson on March 13th, where every person over the age of 40 will come up and go, I love your pocket.
Is Ed single?
I have a daughter.
Literally, I'm so sick of people trying to set Ed up.
Well, he's more handsome than you are.
He's very handsome.
He's a nice kid, too.
I mean, it's a low bar, but um and then on March 15th at 10 a.m., I'll be doing a live taping of on with two special guests I'm really excited about.
Finally, we'll take the stage together on March 15th at 11 30 for a live taping of Pivot.
You can touch Scott's you can touch Scott's body parts.
Stop there.
Scott Barry, yeah, anyway.
Uh last year's pivot Taping at South by Southwest featured whiskey shots, partial nudity, IPO predictions, and some smart questions from our audience.
Love it.
So we will we're gonna double the fuck down on it on that.
And and you don't want to miss it.
I love iSouthWest.
Aren't you excited?
Yeah, I'm excited.
I'm excited to hang out with you.
I'm uh I'm excited.
We're doing a lot of traveling together this year.
Oh, it's part of the Vox Media Podcast Stage presented by Odook.
The stage also features sessions from Brene Brown and Adam Grant, uh Marquez Brownley, Esther Herndon.
As long as it's stare Perel is there to tell me that I'm okay.
I don't know if she's gonna be there, but nonetheless, uh learn more and get a special discount on your innovation badge at voxmedia.com slash SXSW.
That's voxmedia.com slash SXSW.
We will see you there.
Okay, that's the show.
Thanks for listening to Pivot and be sure to like and subscribe to our YouTube channel.
We'll be back next week.
Today's show is produced by Lara Neyman, Zoe Marcus, and Taylor Griffin.
Ernie Todd engineered this episode, Manola Morano edited the video.
Thanks also to Drew Burros, Mia Severa on Dan Shallon.
Nashak Cara is Vox Media's executive producer of podcasts.
Make sure to follow Pivot on your favorite podcast platform.
Thanks for listening to Pivot from New York magazine and Vox Media.
You can subscribe to the magazine at NYMag.com slash pod.
We'll be back next week for another breakdown of all things tech and business.
One of my role models, Sam Harris, said that if you have economic security and people who love you, and I'm blessed with both those things, you have a an obligation to speak your mind.