# AI CapEx Surge, IP Protection, and Market Reckoning

**Podcast:** Pivot
**Published:** 2026-05-01

## Transcript

This episode is brought to you by The Build Podcast, a new podcast from the guys behind Sincera, Mike O'Sullivan, and Ian Myers.
Mike and Ian built their company by figuring out clever solutions to a few important ad tech problems in their industry.
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Burn your five pound weights.
I'm Robert Arson.
I'm an athlete and fitness instructor.
And I am telling you, unless you have been limited to lighter weights by a medical professional, they're honestly inexcusable.
You need to be lifting heavy.
And I'm talking especially to the women out there.
F***ing toned arms.
What can your body do?
This week on Project Swagger, what heavy means and rules to bring into your routine.
Listen now.
more Americans are finding themselves taking care of their kids and their parents at the same time.
Well, you know, I joke that there's a dark game, which I was playing, which family member will disappoint today.
How to care for others without burning out in the process.
That's this week on Explain It To Me.
Find new episodes Sundays wherever you get your podcasts.
Have you ever pretended you're someone else?
Pretty much twice a week with you, Kara.
Hi, everyone.
This is Pivot from New York Magazine and the Vox Media Podcast Network.
I'm Kara Swisher.
And I'm Scott Galloway.
Scott, I was in San Francisco.
I did a lovely event with Gavin Newsom and Anne Lamott, an unusual pair.
And the crowd was lovely and asked me all about you in a good way.
In a good way.
They were asking upon you.
Can you help him?
No.
Well, every now and then I get that.
What was the event?
My sister-in-law has a thing called Refugia, which helps take these sort of empty public spaces to bring people together and uses native grasses that don't need a lot of water and create things for...
older and younger people to get together and like, you know, in public schools.
Where are you now?
You're in a hotel now.
Where are you now?
I'm in New York now.
Oh, you're back in New York.
Yeah, I'm interviewing.
I have three podcasts today and Mickey Sherrill tonight, the governor of New Jersey.
I'm also interviewing the Devil Wears Prada people today, the director and writer.
It's getting amazing reviews, just as I said.
Oh, nice.
But you don't like sequels, but this sequel is good.
No, I like sequels.
I just think Hollywood's running out of it.
Anyway.
When nine of ten top films are not original IP, I think Hollywood has a lack of investment in creativity probably.
Let me say this one isn't.
This one is worth the wait.
It's 20 years.
And one interesting one.
Have you heard about this book by Patrick Radden Keefe?
It's about a kid who lived in a pretty upper-middle-class family, but he had aspirations of more because he was in a private school with a lot of oligarchs kids, and he pretended he was an oligarchs kid.
And ended up dead, thrown out a window.
Yeah, it's an astonishing story.
And they're saying it was suicide, but maybe it was a homicide.
And he got all mobbed up with Russians and various people.
It's really something.
I read it on the plane.
I would imagine that took place a while ago, though, because most of the Russians have left.
Well, I don't know, I guess.
But I don't know.
Have you ever pretended you're someone else?
Pretty much twice a week with you, Kara.
No.
I pretend to be thoughtful and a good person.
There's definitely something interesting about the spectrum between, I mean, there's some truth to the fact that you never meet someone, you meet their representative.
And so I don't, like, there's a scale, right?
And the same is true of entrepreneurs.
At what point are you a visionary or a psychopath liar?
I think there's a lot of that in society, and quite frankly, some of it's a strategy.
Yeah.
But if you, like, said you did something else, I've never done that.
I'm exactly the same.
Oh, no.
I don't.
No, I don't.
Quite frankly, not because I'm ethical, but because I'm smarter to know in a digital world, they'll find out.
It is hard today to do it because everyone's searchable, right?
I mean, anyway.
Yeah.
I don't know.
Actually, a few times I've said I look good naked, so I'm guilty.
Who would you say if you could be, like, if you could pretend you are someone?
If I could, like, pretend I was him or switch places with him?
No, just like say, hi, I'm Scott.
I'm a blank fireman.
I don't know.
I've never thought of that.
Yeah, I've never thought, oh, I wish I was this person.
It's taken me a long time to like this one.
I know, I know.
It's interesting.
You want to be you.
I was on Outward Bound, and when you got there many years ago in my 20s, they said, do not say what you do for a living to anybody, like so that we don't know.
Right?
That you talk about anything else but your job, which is very hard, actually.
And I was just in my 20s, so I wasn't that far along.
But I was clearly a reporter.
And at the end of the, it was like, I don't know, two weeks or 10 days or something like that.
They said all the jobs of everybody.
And we were sitting in a group at the last session and, you know, talking.
And we got to really know each other, but you couldn't talk about what you did, which is really hard.
And it's actually...
A really good exercise, I have to say.
And they had all the jobs around the circle, and nobody got anybody's job right.
Everybody thought someone was, someone thought I was like a defense lawyer.
A mechanic?
No, a defense lawyer.
That I was like a killer, a killer lawyer.
That's what they thought I was.
A killer lawyer.
Well, you kind of are.
That's actually pretty accurate.
You know what did not get me late in 2000s New York?
What?
Roll up to a bar, finally get a rap going, order a drink.
What do you do?
I'm a teacher.
Oh, isn't that nice?
I got to go.
I got to find somebody who can take me to St.
Bart's next weekend.
I think that's sexy now.
I think today it's a cool job.
What you hear from a lot, what I can spot immediately though, I ask people what they do all the time.
I think it's interesting.
I'm not trying to...
sell or assess their importance.
I just find it really interesting because quite frankly, pretty much all I do is work and that's kind of my identity, which is pathetic.
But I find it really interesting.
The general difference between or a difference between the US and Europe is in the US people ask, what do you do?
In Europe, they ask, where are you from?
But what I find, what I'm running into a lot, a lot of young men come up to me when I'm out in New York and I'll say, what do you do?
And you can always tell the son of a rich kid because they go on for about a minute trying to describe what they do.
And it's clear like, okay, you do nothing and someone else is paying your bills.
They talk about some convoluted or they're trying to start a platform for creatives or artists or they're starting a membership club or it's like, oh, you have rich parents.
Anyways, I can sniff out Nepo babies pretty quickly.
All right.
Well, my kids all work hard.
They have good jobs.
Anyway, let's get to the news.
The FCC, this story, Scott, has ordered Disney to file early renewal applications for its ABC-owned broadcast licenses.
These are affiliates in different cities years ahead of the normal schedule.
The commission is citing an ongoing investigation into Disney's DEI practices as justification.
More notably, it comes days after Trump and Melania renewed a push to take Jimmy Kimmel off the air after he made a joke about Melania being an expectant widow.
Disney is pushing back hard.
The new CEO is not.
And he's being supported by a range of companies and everything else.
This is a step too far for our good friend and moron, Brenda Carr.
I'm calling him Brenda, who is a moron.
He's a moron.
And he's just such a nakedly political, although I wouldn't want to say him naked, speaking of naked, political person who is just carrying water for the Trumps.
Melania doing this was, you know.
Fascinating.
But, you know, Kimmel's just emboldened and has put out a series of things.
And no one is putting up with this shit and they're going to lose.
The FCC is going to lose in court.
But what a harassment of an American company, a classic American company.
What do you think about this?
Well, I actually saw Kimmel's response.
I mean, the reality is late night TV is dying without the help of Brandon Carr.
Sure, exactly.
In a weird way, it kind of helps.
I think Jimmy Kimmel, all the late night people are extraordinarily talented.
That is to be quick on your feet, hardworking, come up with new material every night.
They're extraordinarily talented people, all of them across the whole spectrum.
And I'm actually trying to get Jimmy Kimmel to come be the interview for our Prop G Markets Live in Los Angeles.
And it was, Jimmy, call me.
So I think it'd be very interesting to have him talk about it.
I think, I don't think Jimmy should have, I watched it where he addressed it and said, of course, I think you should just.
double down and say, I stand by everything I said.
He has.
It's humor.
He has an ensuing skits are very funny.
He's done a series.
Okay, this is what's going on here.
Fascism.
So, who said they're poisoning the blood of our country?
Oh, that was Trump.
Who described political opponents as vermin?
Who told the squad to go back to where they come from?
Who said that Adam Schiff was guilty of a crime that is punishable by death.
That's treason.
The dehumanization, the delegitimization, the exclusion, the criminalization, the existential threat framing, no individual in public office has done more of this in the world than Donald Trump.
Can I interject?
One of the things that's incredible is that These are the free speech warriors, right?
And I'm like, where are, where's all those folk?
Where's the folk at the free press?
Where's the folk?
Where's Elon?
Comedy's illegal.
Remember that one?
Comedy should be legal again.
Where's Elon?
I know he's busy in court losing his mind, but, which isn't very far.
Stop.
But at the same time, former FBI director James Comey has been indicted yet again for making a threat against President Trump by photographing seashells on the beach that said, I think it's 86, 46, 47, whatever, whichever president he is.
It was funny, and he was just doing it.
And by the way, a lot of...
The right had done it to Biden, like 86, whatever number he is, 46.
I was a waiter.
86 meant we're out of pumpkin soup.
Yeah, that's 86.
We had a chalkboard that said 86.
Trump claims it's a mob kill.
He claims it's a mob kill name because he lives in the 70s of New York, you know.
But this is like his approval ratings are underwater.
It doesn't work because everyone's heard him talk.
And then the culture wars turning up the volume seems like, hey, dude, that was last year or two years ago.
That worked and doesn't work anymore because I think everyone's, I mean, Disney's pushing back.
This is just like an astonishing array of...
What I'm more interested in is like Brenda and this guy who's running the DOJ.
I thought Pam Bondi sucked, but Todd Blanche is trying to compete for suckiest suck-up.
The enablers of this guy that go for it are really quite astonishing to me even.
Yeah, but aren't we just disappointed?
I think we always blame our political leaders and he is the culprit here, but I'm shocked there isn't more.
pushback.
I just, people seem to be, I think we've become complacent.
I think we've taken a lot of our norms and our rights for granted and that people...
I think people are complacent, and I'd like to think that the midterms will show maybe that they're not.
Yeah, well, maybe not with the boating.
But I think people maybe errantly assume that things will revert back to normal at some point.
Oh, I don't think they're complacent.
There's been a lot of pushback to the Kimmel stuff and the Comey stuff.
I just think people are like, you know, enough of this fucking asshole.
Why is he taking up so much of our brain oxygen on this nonsense?
It's working.
I think it's sent to chill across all of cable TV.
Oh, I don't think so.
I don't think so.
Look how Disney has reacted.
They're like, no fucking way.
I know firsthand from a bunch of producers that the legal costs and the review of stuff has gone way up.
And anything that feels on the edge, they say, can we say something else or can we lighten the language?
I think this intimidation and this chill is working.
Well, I don't know.
I don't think so.
I don't think it is.
I don't think it's going to work.
And I don't think it works.
And, you know, these people, like, let me just tell you, Brenda, when you leave office, which you will at some point, I'm going to follow you.
Everywhere.
Everywhere you try to get a job, I'm going to bring up all your terrible things.
I'm going to make sure people know what you did.
I'm going to make sure people understand who Brenda is.
Because there's nothing we can do about Trump at this point.
I was just thinking that he is in our head so much, we have to, like, remove him from our head.
But it doesn't mean ignoring him.
It means removing.
We get so sucked into their ridiculous, comical.
toxically comical drama it's got to be time to say you're in our fucking rearview mirror old man old cankle you know man of cognitive questionability like and move him along you know just move him along you brought up an interesting thing and that is the media just doesn't know how to cover trump showing up dressed to the nines to have him say he's delegitimate in a windowless ballroom.
Okay, clearly the media does not know how to deal with this guy.
The idea I like is newspapers and cable news companies all do the following.
Instead of having four or five stories in a narrative about what he's done and interviewing people about how ridiculous it is, I think they should have a two-minute segment and one page on the back page that are the following.
This is what Trump said today.
And just really quickly outline it.
Today he accused.
Comey with the shells.
He said this about this person.
He said these people are animals.
He said the shell thing.
And just do it really quickly.
This is what Trump said today.
And sequester it and you can get it all in one place because what happens now is 22 of the 27 minutes or I'm sorry, 18 of the 24 minutes, whatever the actual content load is on TV.
is different stories that involve him.
I agree.
And he is like a Star Wars character or a villain, a Marvel Comics character.
He gains power from conflict and from controversy.
And what I'm saying is what I think they should do is I think they should do the news and they should just take everything Trump and go, he said this, this, this, this, and this today.
We'll see you tomorrow night.
That's it.
Yeah, they make segments about it.
Yeah, they do.
We got it like, as Jennifer Welch calls him, kinks.
Ring fence it.
Ring fence him and be like, I was, you know what I did when I was coming back from San Francisco?
I walked into a store and I bought an actual book.
i was like that's enough i was like i'm gonna read a book not read not like participate in the social media around him i mean it's sometimes it's fun and i really have to say jimmy kimmel's actually doing a great job about he said he's finally brought milani and trump together he's using it as content which he should do um but in a lot of ways just laughing at this Poor, obese, old man is, I think, the way to go here.
Mock him relentlessly.
It's not ignoring it because I think that's a mistake.
There's a lot of people telling me I'm just not reading it at all, which could come off as I'm not engaged.
You know how on page three of The Sun, they used to have a naked hot woman?
Page three of every newspaper.
This is the shit Trump said.
This is what Trump said today.
Just list it all.
Two minutes every night, national news.
Cover the news.
Talk about what's going on in Iran.
Da, da, da.
And then.
last two minutes this is what trump said today and that does go through it all because he he is totally dominating the news cycle he gets energy from conflict people see it as authentic and and leadership and he so i i'm like I just get him out of my head.
There's so many idiot characters.
Like that smug piece and that smug deflection of Pete Hegseth is smirky.
Like literally on his like hearings.
He's so smirky and stupid.
It's really kind of like I don't like these characters anymore.
Representative Moulton was good.
Yeah, he was great.
There was some really good.
Crow, Jason Crow.
I'm actually, I feel bad.
I'm actually consistently.
impressed with some of our elected representatives.
Oh, I meant to tell you before I forget, I went and did something you would love.
Have you heard of Neko or Neko, N-E-K-O, Neko?
No.
It's this advanced preventive healthcare concept from the founders of Spotify.
So I just want to disclose, I got no compensation for this, that this is not, it's going to sound like an ad.
Okay.
You go into this place and they basically take your blood.
put all sorts of cuffs on you for blood pressure and measurement.
They have all these lasers and scans.
And then they take, you go into this tube and they take 2,400 pictures of you.
But here's the thing, it's amazing.
And then they do it all immediately and put you in a room with a doctor and they go through everything visually in a very user-friendly, feels like something out of the movie Gattaca.
And I thought, okay, how much?
I said, I need to pay because I don't want to be seen as, I don't like the whole influencer thing.
I'm like, I need to pay.
I have the money.
Do you know how much it was?
How much?
It was 300 pounds.
Oh.
I thought it was going to be 3,000 pounds.
Oh, wow.
Interesting.
And you get a baseline of all your good cholesterols, your bad cholesterols, your circulatory health, everything about it did change my behavior.
I have one of these ridiculously expensive concierge things.
This thing, and there was a line out the door to get into this thing.
It's a great idea.
This is what they do in Korea for everybody.
Everybody gets these tests once a year.
And it's the guys from Spotify.
And I'm such a huge, they're trying to democratize advanced preventive medicine.
It's called Neto.
I like that idea.
And you get a baseline.
If it's that inexpensive.
They did this thing with 2,400 pictures of, you know, basically you're naked to look at I'm very fair and I'm prone to skin cancers.
And they said, all right, you have 2,200 marks.
All of them are fine except for these 12.
Oh, wow.
300 pounds.
Anyways, I was blown away.
We should have filmed at this thing.
And also, you know what I've discovered by watching your show and going to NECO?
I try to run once or twice a week.
And I was always, I rode crew.
And one time I was in very good cardiovascular health.
I pushed myself running.
That's just the way I run.
And I time myself and I try and lower my times.
And I row and I try and get my.
That's not the way you should run.
A hundred percent.
I had, I just figured that out.
They're like, no, what's it called?
Zone two or level two, where you supposedly can have a conversation, but you can't sing.
So I, last night I ran slowly jogged for 40 minutes and that's supposed to be the way to do it.
But anyways, and unfortunately, unfortunately they say the same fucking thing to me.
I'm like, how did I change my diet?
And Dr.
Pramala and I asked her if I could use her name.
She said the same thing.
They're like, well.
They're also polite.
They're like, you may want to consider drinking a little bit less.
Yes, I think you may want to do that.
I think you may want to do that.
You may want to consider drinking a little bit less.
I feel like I'm affecting you.
This is so great.
By the way, this week's episode is about loneliness and connection.
You'll like it.
Did you see the data on marriage?
No.
Men who are married and women who are married are less likely to get advanced stage cancer.
Having someone else in your life nagging you, feeding you well, checking in on you, giving you a reason to live.
Nagging is good.
It's the ultimate.
It's the ultimate chemotherapy.
I would have never gotten a colonoscopy if I hadn't been nagged about it.
It wasn't something I was excited about.
Is that me who nagged you?
Or Katie Couric, one of us, or your wife?
No, it was my girlfriend at the time.
You had one recently?
Can you please go have one?
I get them every...
Oh, and by the way, have you seen?
Rectal cancers are skyrocketing among young people.
I think it's a pesticide.
Okay.
We're moving on.
No, it wasn't a joke.
I wasn't going anywhere.
I saw you seize up.
Okay.
I just was like, rectal cancer, and we're out.
No, no, no.
Okay.
No, no, no, no.
Because you're going to tell a rectal joke, and I don't want to hear it.
I don't want to hear it.
You say read a book.
I say go have a beer with a friend.
It's worth a beer.
I agree.
It's like six beers, Scott.
That's the issue.
All right.
Now we've got to get to a rundown of the latest big tech earnings.
They're all over.
All of these came out at once, and it was called Day of Reckoning.
First up, Alphabet.
The company reported a 22% surge in first quarter revenue with sales reaching around $110 billion.
What a number.
Net income was up 81% compared to the same period a year ago.
Shares for Alphabet are up 15% year to date at the time of this taping.
Microsoft, the company beat expectations with revenues increasing 18% year over year for the quarter.
Capital spending for the company will reach $190 billion though this year, a 61% increase over 2025.
Amazon.
Beat expectations, expanding revenue in its cloud computing segment by 28% year over year.
The company announced it expects to spend $200 billion on AI in 2026.
And finally, Meta reported lower than expected CapEx missed on user growth, which is interesting.
This is the first time, which attributed in part to internet disruptions in Iran.
They're blaming Iran.
I don't think so.
Daily active people was down over 5% over the fourth quarter.
In better news, revenue climbed 33% from a year earlier.
making it the fastest growing quarter since 2021.
So what jumps out at you about these four companies besides their enormous spending on AI, obviously?
I used to say this in the attention economy.
It's now the ketamine economy where it's dissociated from everything else but AI.
And I said yesterday on Prof G Markets that I thought these guys were going to blow away their expectations because what do they monetize?
They monetize spending around AI.
And up until today, or until AI came out, the driver was they monetized attention.
With everything that's going on in the world, are you less or more glued to your phone?
I can't stop looking at my fucking phone.
Like, okay, who did we bomb today?
So let's just go through the earnings, which were nothing short of staggering.
Alphabet's revenues were up 22% to $110 billion.
They'd be consensus.
Their consensus was $2.63.
They came in at $5.11, although some of that was an unnatural equity gain.
Google Cloud hit $20 billion, up 63%, with their backlog doubling.
Search revenue, $460 billion.
Jesus Christ, their backlog is a half a trillion dollars.
Search revenue, which was supposedly going away because of OpenAI, was up 19%.
Gemini paid monthly active users is up 40% quarter on quarter.
Gemini is really...
Doing well, I would say.
Full-year CapEx guidance went up.
The investors don't like that because as strong as their top line is, everyone's saying we need to spend more money.
Their stock was up 8% in after hours.
Let's talk about Microsoft.
Azure grew faster than anyone expected, but they had to boost their CapEx guidance, which investors don't like.
Revenue up 18% to $83 billion.
They also beat consensus wildly.
Azure grew 40%.
The AI business crossed.
37 billion annual run rate.
That's up 123% year-on-year.
Their commercial backlog is up to two-thirds of a trillion, 627.
Their QN CapEx was 32 billion, but it's been raised.
Their full-year CapEx, they've raised 190 billion, well above the 155 they'd expected.
OpenAI committed an additional quarter of a trillion dollars in Azure spend the day before the print, but the stock was down 2%.
Jesus.
Jesus Christ, Cara.
Meta revenue was up 33% to $56 billion.
Efficiencies of AI.
Earnings of $10.44, although a bunch of it was a tax benefit.
Ad impressions were up 19% and their average price per ad was up 12%.
Q2 revenue guided.
to 60 billion, which implies 25% growth.
Full-year CapEx, again, this is what investors don't like, they raised to 135 billion from 120, and then also higher component prices, and the stock fell 9% after hours.
Last one, Amazon, fastest growth in 15 quarters.
But free cash flow collapsed because of their capex.
Again, what the analysts love, they're blowing away their top line.
What the analysts hate is they're all saying we need to spend more money.
Revenue was up 17%.
EPS blew away, but a lot of that was because of recognition of a gain in Anthropic stock from their investment there.
AWS hit 38 billion, up 28%.
Advertising grew 24%.
Q1 capex, again, what the analysts don't like.
Billion.
Free cash flow fell.
See above.
They're increasing their capex.
OpenAI recently committed to consume two gigawatts of tranium capacity through AWS.
So all of a sudden, they're getting into the chip game and the stock rose 3% after.
All right.
Give me an overall.
What does this say to you?
Oh, my gosh.
AI is eating the world.
Yeah.
It is living up to its expectations.
But the capex required to live up to those expectations to deliver against the demand is sucking, is basically like taking all the juice out of the earnings.
The capex requirement to live up to the demand, the infrastructure buildup.
So when does that stop?
It's sort of like having a hot spouse that requires a lot of money.
for you to stay.
Yeah, trust me, I know that feeling.
What does it require?
What does it require for that to not happen?
Must work hard.
That's what I would say to myself, must work harder.
Well, they're doing that.
Must work harder.
What does it require?
When is the spending going to stop?
Well, when a big customer announces they're reducing their spend on AI or one of these companies announces, OpenAI basically said that they kind of shit the bed that their numbers, didn't meet expectations.
But the bigger guys, these players, are all just on fire.
I don't see it slowing down.
Yeah.
Can I note the OpenAI thing you just referenced?
There are internal concerns about the company's spending plans and its user revenue targets, according to the Wall Street Journal.
OpenAI missed internal goal of reaching $1 billion weekly active.
chat GPT users, by the end of 2025 has seen subscriber defections.
I think that's all due to you.
The company is also denying there's a rift between Sam Altman and CFO Sarah Fryer over computing resources.
And they're, of course, approaching their IPO, although we'll get to their trial next, this trial with Elon, which is also another distraction.
But they're seeing a lot of bumps as they go into it.
Is there like a reckoning moment or how do you look at it?
Just one big customer or?
By the way, I started on my next book.
That's the name of it, The Reckoning.
Oh, didn't I use the word reckoning?
I feel like I inspired that.
You liked when I said reckoning last week, but I was talking about the media.
I'm sure if, well, let me just say, if the book works, if it's a bestseller, it was your idea.
Okay.
I think there's a reckoning coming in America and I think there's a reckoning coming in the markets.
But keep in mind that this.
AI is now sucking so much oxygen out of the room.
I sit in a lot of VC pitches.
If you're not an AI company, you can't raise money right now.
I mean, it is very difficult.
And by the way, I'm on the board of an AI company that's growing 4x a year, and they're like, that's not enough.
Unless you're growing 10x a year as an AI company that's purely software.
This company called Rogo, it's a great, great little company.
that is basically AI for financial institutions, they just closed around at $2 billion.
Right.
No, it's not.
I think it's trading at 100 times revenues or something insane.
And they're going to get, they raise $100 million.
You literally, if you are not an AI right now and growing, you know, 5, 7, 10x a year, you can't raise money.
And this is, it is a, in my opinion, it's a, it's a kind of a, all of the GDP growth is coming from the CapEx and AI.
All of the earnings growth, 77% of the earnings growth is coming from the MAG-10.
We are becoming, and we've said this before, America is a giant bet on AI.
And people are wondering, and breakfast with the big tech CEO today, they kept, people are really, how is the S&P hitting all-time highs with such geopolitical uncertainty and oil at 110 bucks a barrel?
And the reality is, America is now a giant bet on AI.
And I, in a weird way, the war in Iran, Kind of helps these guys.
First off, none of these guys are affected by.
None of it.
Tariffs or any of Trump's.
They were all at the White House last week with this week with King Charles.
Every one of them was there again, by the way.
And then, by the way, the high oil prices, that money, the additional cost circulates within our economy.
It hurts consumers.
But Chevron and Halliburton are making a shit ton of money.
Right.
So it's oil moguls and tech moguls.
We're a net.
That's right.
We're a net exporter.
And there's a very unhealthy thing.
And I'm writing a thing called the ketamine economy.
And that is ketamine supposedly is the power to dissociate.
And you can see your issues and your addictions and your problems and forgive yourself and have a better handle on stuff.
And people say it's a world breakthrough.
The most dangerous thing I think about the world we live in in America right now is that if you live in America and you're in the 0.1%, you are not invested in the well-being of America.
Why?
Do you care about infrastructure?
You don't care about TSA.
You don't care about airports.
You go to Teterboro and you're flying your own plane.
Do you care about the fact that 40% of third graders can't read?
No.
You have your own private schools where they spend $75,000 per student.
Do you care about policing and safety?
No.
You live in a doorman building in a neighborhood that is so over-policed and has so many cameras.
You're just fine.
Do you care about the health of America?
No.
You have concierge medical services.
that give you everything you need the wealth the people who control our government or have a disproportionate influence have totally dissociated disassociated from america's interests and even more frightening is that america you could argue has disassociated from the global interest do we care about high oil prices not really do we care about hiv infections in zambia not really We have two oceans protecting us from chaos and disease.
I'm not so sure.
You could argue eventually it hits our shores, but right now the markets.
No, the markets, the rich people.
I get it.
It's a Pierre don't care economy.
Do you know the book Pierre doesn't care?
I don't care.
It's a wonderful.
children's thing, where he eventually gets eaten by a lion because he doesn't care.
He always says, I don't care.
But that's what they're like.
It's a peer, I don't care group of people.
We have to figure out economic policies that give the wealthiest people in our nation a vested interest in the success of America again.
You know who cares?
The people.
I'm telling you, there's an anger.
You can feel it.
It's palpable that they do not hear.
Hope so.
They have gone from, they have literally gone from heroes to villains.
Let me say, I get it everywhere I go, everywhere from, and it's not, you know, like, oh, it's the, you know, it's the people, you know, the working class.
It's everybody who's not like them.
And it is angry.
It is deeply and profoundly angry.
And even more so than, at Trump, they sort of have.
It's all figured in.
He's a terrible person or if they don't like him.
And even there was just a really interesting story about all the people that voted for him are like, we're very disappointed and we now regret our vote, which you're sort of like, okay, fine, whatever.
But there's a growing anger that I think they do not understand of them being villains and they're behaving like villains.
We have to move on, but we'll see where this goes because if they're the only ones that benefit and all the other companies don't, there isn't.
As you say, a reckoning.
It's a great word.
It actually is from the Middle English.
I'll just read this to you.
From narration accounts, settling accounts.
And it's about the act of calculating, estimating, or settling accounts, often carrying a connotation of judgment, retribution, or facing consequences.
It's the act of setting accounts and consequences.
That's right.
Scott's going to have a...
to give you a reckoning.
Anyway, let's take a quick break.
Speaking of reckoning, when we come back, Elon takes the stand.
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Scott, we're back.
Elon Musk took the stand this week in a trial against OpenAI.
Let's go through some of the things he said.
He was a, quote, fool to provide OpenAI's early funding.
He discussed his concerns about AI and not wanting to have a Terminator outcome.
He accused OpenAI's lawyer of trying to trick him.
When asked why he brought the suit, Elon said it's not okay to steal a charity, warning if he loses it, it would give license to looting every charity in America.
By the way, Elon is not charitable at all in any way.
FYI.
The judge pushed back, reminding jurors that Elon's claims and his opinions have no legal value whatsoever.
As I predicted, a number of prospective jurors had thoughts about Elon, with some calling him a greedy, racist, homophobic piece of garbage and a world-class jerk in questionnaires.
I think this has not been good for Elon.
One of the things that Ellie said when he gave us that video last week was that they're not used to being challenged.
publicly and he is losing his brain on, he looks terrible and he needs to control himself, which speaking of ketamine, he cannot.
He has no ability to do so.
I'm going to be fair to him.
He was the first person who did talk about this Terminator outcome 15 years ago to me or something, maybe 10.
And he was the first person to be very worried about it.
He shifted, becoming less worried over the various interviews.
At first it was Terminator, then you were a house cat, and then we were like ants that are just going to get covered by a highway, which isn't mean or anything.
But one of the things I would say is he started off that way, and then he immediately lost his mind because he...
He tipped out of OpenAI because he thought they couldn't make it.
And these emails talk about that.
And he signed away his rights.
He did give them $38 million, not $100 million, as he's claimed in other depositions.
So he keeps changing the number, which isn't good when you're under oath.
But one of the things that is very clear here is that he shifted to being a greedy hypocrite and started his own company that includes non-consensual.
sexual images and child pornography.
So it's not like he's here to save us.
And he's trying to put himself off as someone who's worried about AI and is fully participating in the damage it does.
So what I have heard, how this went down, very like broad brush actions that kind of give a sense of what went down here, and tell me if you've heard different, is that Sam actually tried to raise $500 million when it was a nonprofit for the nonprofit and was unable to do that.
Yeah.
Elon showed up and said, this needs to be a for-profit company and I need to control it and own 80% of it.
After he had given the money, yes.
That's exactly what happened.
And the people there said, no, we're not up for the for-profit Elon controls part of the game.
Which is his brand.
He does that on every company.
But go ahead.
So he said, I'm out and he signed paperwork.
Yeah.
This is literally the biggest example of seller's regret in history.
And then the other fact pattern here about his quote unquote trying to pretend he's more noble than he is and he's really worried about AI.
Who went on to develop an LLM that most experts would say has the fewest guardrails?
Yeah.
Elon with XAI.
So the fact pattern here, the narrative, and this is my prediction.
I don't think OpenAI, I said last week I thought they were going to settle.
I don't think OpenAI wants to settle.
I think their attitude is, I think Elon's either going to drop the case or lose.
Well, it's a jury trial and then the judge decides on the referee, whatever the remedies are.
But if they're found, if OpenAI is found not guilty.
That's it.
Then it's over.
Oh, he could, I bet he could appeal.
He can always appeal.
He's got so much money.
I mean, Trump's going to appeal the E.
Jean Carroll thing to the Supreme Court now that he's lost in the appeals court, the $83 million.
I'm shocked he wants to keep bringing that up.
Well, he doesn't want to pay $83 million.
He'll have to pay that if the Supreme Court doesn't bring the money down, presumably.
He wants to get it to $10 million.
He's going to have to pay her something.
Anyways, back to the OpenAI case.
Everything I've seen fits this narrative that Elon...
Once this thing became commercially viable, he wanted it to flip to for-profit and he wanted to own it all and that he legally gave up his ownership and his governance rights.
Yeah.
Well, one of the things, he was concerned.
And one of the interesting things, I love them being under oath because now I finally hear the things I thought were true.
Like that Larry Page and he got into an argument because he was a doomer for sure back then.
And Larry Page called him a speciesist.
for being concerned, be overly, overly negative, which I'm like, yeah, we like the human species, just sorry.
You know, these people, these people, I can't tell you, I'm so pleased for people to see them as they are, right?
You know, when someone said greedy, racist, homophobic piece of garbage, I'm like, you see what I'm saying, like jerks, don't care about people.
This whole thing is, because they're under oath and they have to show themselves.
And they also have to show how they're trying to present themselves, like Elon is the savior of the world when he is decimated.
He's responsible for the millions of these deaths that are going to happen because of USAID.
He's responsible for all manner of stuff that he's been doing on Twitter.
And he wants to present himself as...
It is like Thanos in the Marvel movie.
Remember how he was trying to present himself as a good person?
Thanos has an idea of himself as a hero when he's the villain because he's helping the human race and he talks about it.
To me, this defines Messiah complex, full stop.
He's the guy to colonize, to turn us into an interplanetary species, only him.
He's the one that should control AI.
Literally, I'm Jesus Christ.
I would agree.
I don't know.
I don't think it's good for him.
And I don't think him getting agitated, this lawyer actually worked for him at one point and then worked against him.
So he's familiar with this firm and he's just losing it on the stand, which is just what he should not do.
He should be as calm as cucumber and he can't be.
And it'll be interesting the contrast with, I think Sam will be smooth as silk.
I think he's not going to, online, he's kind of sad over on Twitter.
Sad Sam.
And Elon's crazy.
Elon, and by the way, an increase in white supremacist posts too.
But Sam has got to hold it together during, and so does Greg Brockman.
And so does Satya, which will help anchor open AI quite a bit, as you said.
You know what I thought about doing, Scott?
I thought about going down to the courtroom when I was in San Francisco.
Because I had some free time and just sitting and waving at him.
Just to get him even more riled up.
Like, hey, girl.
Does he show up?
Does he go to court?
No, he's in court.
They're all in court.
They're all there.
They have to go, I guess.
Because I thought about going and just waving at all of them.
Going, hey, girls.
What up?
Can we all get along?
That kind of stuff.
And I didn't.
I hung out with Louie.
Okay.
Scott, let's go on a quick break.
When we come back, Taylor Swift fights back against AI.
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Hi, everyone.
Kara Swisher here.
We just won the Webby Award for the best interview show in news, business, and society.
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Here are some you don't want to miss.
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Scott, we're back.
Taylor Swift has filed a new trademark application for two voice clips in one image that are likely an effort to protect her voice and image from AI misuse.
This is something a lot of celebrities are doing, but she's probably the biggest one.
The voice clips are sound trademarks covering Swift's voice with clips of her saying, hey, it's Taylor Swift and hey, it's Taylor.
Registering a celebrity's spoken voice is young.
been tested in court.
Matthew McConaughey has also trademarked his use of his images and voice in January.
It's an interesting strategy.
And she did an really interesting interview with Joe Casarelli, who I love at the New York Times, called The 30 Greatest Living American Songwriters.
Really wonderful story.
It does a range of people and it's really terrific.
Let's listen to what she had to say.
If there's any way we can make confessional songwriting a little bit more of something that isn't like...
People take that as sort of like you were being messy or whatever.
You have to be fair to everyone then.
Are like, are rap beefs messy or are they confessional?
Like we've got to just like, let's make it a music conversation rather than just like ganging up on the female artists.
And I think the more male artists that are messy or emotionally complex or confessional or upset, the happier I am.
She likes confessional songwriting, Scott.
And then thirdly, this Universal deal is going to trigger something in her contract that's going to force Universal to pay out all its artists, even if they gave them advances, if it sells.
She put it in to protect herself, but it also...
The way she wrote it, everybody who is at Universal will have to be paid out.
So she's getting enormous payouts for all the artists in this possible deal for Universal, which I think will endear her to many artists.
What do you think here about any of this?
I know you don't like her, but she's a tremendous business person.
I never said, I don't like her music.
That's not fair to say I don't like her.
Okay, not her, her music, excuse me.
Yeah.
uh so i'm a fan of erring on the side of protections around people's ip and essentially google coming in and crawling every media company um people using people's likeness their voice i i believe jensen huang said it everyone should own their digital twin and that's not only the physical rendering but also your voice your likeness people spend a lot of time and energy trying to develop IP that they own that they can decide to give to their heirs or sell their catalog or their likeness or their image, and they should own it.
And so I'm a fan of these cases.
And the fact that she's doing it on behalf of other artists is really wonderful.
And she's very high profile and people have enormous affection for her.
So she's immediately going to get public support for whatever she does.
So I'm a fan of this.
I'm a fan of how she's handling it.
And we need these companies.
I think you said it or you're your partner, Walt Mossberg said it, these guys are pickpockets.
And just going in.
Rapacious information thieves is what Walt said.
Yeah.
And now they're feeling likeness.
And I think the solution here, again, they'll come up with the illusion of complexity in that is they can calibrate how close they get to her voice without it triggering an IP.
But I think it's pretty simple.
I think someone should be representing authors and artists.
past celebrities, and they or their heirs or their estate can either license it into a giant pool or not.
And then every time it is used and you have an AI crawl it, every time an AI takes a sentence from your book or lets someone speak in your voice, you are entitled to X percent.
Music artists have been doing this a long time.
But what do they do?
Let me ask you.
Diplom that.
When Anne Lamott was on stage with me this week, she talked about how she got the AI to write something in her voice.
And she said it was actually better, but it wasn't her.
But they had crawled so much of her stuff.
So are they making her?
or a facsimile of her.
And what happened to your Google thing that you did?
Was it Google when they did the Scott Galloway teacher?
What happened?
You never said what actually happened.
You took it down, right?
Yeah, I started working on it a year ago.
So I was getting a lot of emails from people, young men and mothers asking for advice, and I couldn't keep up with it.
So I said, upload.
And a former student of mine who's a Google product manager came and said, we have something called portraits.
We're doing it with a bunch of...
doctors, we're doing it with a bunch of historians.
We upload everything you've ever done, and someone can come to an avatar and ask questions, and it'll give something resembling a reasonable fact, some way of the answer you would give.
And I said, that sounds great.
And I started working on it about a year and a half ago.
It took them about six or nine months.
And I tested it, and it actually did.
If it said, should I get an MBA or not, it asked good questions and gave it a reasonable answer.
And then you actually fucked it up.
for me.
You did that interview with those parents of the kid who had committed suicide.
Oh, I made you upset.
And I thought, okay, am I going to be part of the problem here where I inadvertently sequester young men from asking their parents for advice, finding real people, finding mentors, finding friends?
And it came out.
The day it came out, I started testing it, and I just felt really uneasy with it.
So instead of saying I fucked it up, I showed you a better way to live.
You illuminated me.
You illuminated.
You saved me from myself yet again.
Let's try to work on our words with Kara, okay?
Okay.
All right, go ahead.
Better words.
Better words.
And then I called to Google's credit.
I called them, and I said, I got to be honest.
I just feel really uncomfortable with this.
I can see how it might be helpful, but I can also see how, Some young man doesn't ask a friend or his dad for advice and instead says, well, Prof T said this.
And it's just, anyway, so they took it down.
And by the way, I think it's gone.
You can't find it.
Yeah, they took it down.
We'll see.
Except when I go, or my understanding is they took it down.
It's in some vault, like a mummy.
Okay, go ahead.
But you can say in the voice of Kara Swisher, Please write this thing.
And my view is they should be able to do that.
But only if you have agreed to have your stuff crawled.
And the more people who ask, say this in the voice of Kara Swisher, you should get a royalty check.
Similar to the way artists do it, music artists do it.
When you listened to KROQ, Rock of the 80s, in the 80s, and they were constantly playing B-52 songs, at the end of the year, they would send a check to Warner Brothers.
B-52s would get a check.
I don't, this has been done before.
It is interesting because I did that Simpsons thing and I got an enormous check the other day.
And I'm like, they can do it.
And they, Hollywood sucks, right?
Like it's astonishing.
And it goes way back when I was with the Google twins where they were stealing books and were, Kara, what is the difference if we take their books?
I was like, you shocking shoplifter.
And are they?
take television their mentality is to take it from you which is interesting so I'm glad someone like Taylor Swift is really pushing back it'll be interesting to see if it could apply to all of us because I think it will benefit because you you you are easily this would work really well if someone just didn't work with you to do it but just did it So in an upcoming episode of my show, I make one of these and it's really frightening.
And I don't like it.
When you say one of these, what is these?
I made the karatar.
I'm going to give it to you for Christmas.
I made a digital 3D version in a box of me.
And it looks like me sitting in a chair, like 3D version.
And it speaks, it talks like me.
It's me.
And it's like a facsimile that's not quite.
me, but it is.
And I'm sending it to you for Christmas, the whole box.
It's great.
But again, I like the idea of this, as long as you sign up for it, because you might decide, have at it.
Or if you're like me and you think, once you're gone, I would like my heirs to get a check because people say, in the voice of Scott Galloway, write about income inequality, whatever it is, right?
And I think a lot of artists...
And a lot of writers and a lot of singers would agree to this.
There's a model for it.
Yeah, absolutely.
Well, we'll see.
But you're getting that for Christmas, the carot tar.
It's great.
We'll have it forever.
And it will add to things right up until my dying breath.
Anyway, one more quick break.
We'll be back for predictions.
He's a Democratic senator from Arizona, and he's been thinking openly about running for higher office.
But he's recently run into some hot water because of his connection to Congressman Eric Swalwell.
I have to learn from this, and I will learn from this.
But, you know, for me, it's not a 2028 question.
It's about what it means to be a better first boss in my office and also a better senator to my constituents.
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Is the U.S.-China rivalry ultimately a race to build the future?
The United States and China are the two countries that are really inventing the future.
The future is being financed by Wall Street, invented in Silicon Valley as well as Shenzhen.
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Okay, Scott, let's hear a prediction.
I'm going to go first.
I do think The Devil Wears Prada is tracking to be like a $200 million movie its first week.
I think a lot of these movies, whether it's Project Hail Mary, this movie, There's a lot of love for movies that are just well made by Hollywood and good and fresh that feel fresh.
I think people are waiting for human stories.
So I think these movies are killing it at the box office because people, and they're actually watching it in theaters too.
They're not just waiting till it goes to digital.
They like the community experience of it.
And so it's a really interesting thing that a lot of these are hitting that are very human centered.
And I like that.
I like that.
Yeah, I'll see it.
So your win is The Devil Wears Prada?
No, the idea that these movies are going to dominate.
Like, just after Hail Mary, it's that Prada has the same feeling of Hail Mary.
It feels like real people made it.
It's like when you eat a meal that's sort of fake, and then you eat a meal that's homemade.
It feels like real people made it who thought about it, who care about standards and quality.
It didn't feel like AI made it.
I don't know what else to say.
Well, the rumors of creativity's death at the hands of AI were greatly exaggerated.
So there was a moment about 24 months ago where everyone thought all music is going to be generated by AI, that you'll just give it a good prompt and it'll come up with new songs that are better than Kanye's.
And that just didn't happen.
The muscle between your brain, the...
The creativity of a young brain, the creativity, that still has tremendous moats around it.
And even in design, like look at Sora being shut down.
The graphics you get back, the design you get back, the percentage of people in design working at tech firms has actually gone up as a percentage of their employment base.
Artists, you know, no AI is going on tour right now.
But as far as I know...
They're not going to Taylor Swift the situation.
They certainly are.
Where I think you're being a little bit nostalgic is I think The Devil Wears Prada and Hail Mary are great movies and will do well at the box office.
But box office is still down 30% post-COVID.
Content, original content that breaks through will find a way to monetize and be successful.
But this collective nostalgia for the movie theater...
Oh.
I pick as going bankrupt where I live in Florida.
No, I get it.
I'm not talking about the movie theater.
I'm talking about freshness in movies.
Fresh creative.
Fresh creative.
And I'm saying it does, actually, these movies are showing big pickup in movie theaters.
I don't, overall, downward trend.
It's really interesting that people are, these movies are scoring well in theaters.
Like, that's what I'm saying.
Not all of them.
Well, it used to be that All of that type of long-form content ran, snaked through a theater, and we went to the movies.
I remember, I mean, I don't know about you, when I was a kid, I used to go to the movies two or three times a week.
Yeah, at least once a week, yeah.
Yeah, it was just what you did.
It's what you did on a date.
It's what I did with my mom.
It's just what you did.
Granted, I lived in Westwood, and they had the best theaters in the world.
But, God, I just tried to think the last time I took my kids to a movie.
I'm glad you liked it.
So my prediction is much more boring.
So I think, so Intel is up fourfold and I think it's up, I'm sorry, it's up fivefold.
It's quintupled over the last year.
And I think it's about, my prediction is it's going to shit the bed because Amazon is now- Trump was bragging about it as you noted.
Yeah, I know.
I think it's- I think it's a great short right now.
Amazon now sells both GPUs, what NVIDIA does, and CPUs, what Intel specializes in.
And Amazon's chip revenue is growing 150% every three months.
If it were a standalone business, it would be generating $50 billion in annual recurring revenue.
That's more than AMD and about as much as Intel.
And OpenAI and Anthropic use Amazon's chip for their AI work.
So Amazon, interesting.
That's interesting.
Well, it's weird.
I think quite frankly, I think NVIDIA has its own.
has much stronger modes.
The vulnerable company here is the one that's the latest meme stock, and that's Intel.
Meta and Anthropic have signed deals to use Google chips called TPUs.
TPUs are two times cheaper than NVIDIA's GPUs.
And Intel looks just dramatically overvalued and I think will be the victim of this increased competition.
The stock, again, up fivefold.
Get this, Intel now has the highest forward PE of any large cap chip stock trading at 118 times forward earnings.
Oh my God, such a loser company.
Why?
AMD at 50, Amazon at 32, NVIDIA at 26.
And at the same time, its business is expected to grow slower than peers.
Anyways.
The most overvalued stock right now.
Why is it memed?
What is the meme?
Explain the meme for the people.
Well, Intel was beaten down.
Now it has a great story.
Now it has the backing of a guy who's willing to use the full faith and credit of the government.
It's the chip.
Everyone thinks the chips are the bottleneck in the AI boom.
It's not actually.
It's actually power.
And the stock's up fivefold.
And now, again, see above, it's trading at a forward earnings of 118.
Wow, I didn't realize.
And it's growing slower than everybody else.
And Amazon and Google are coming for their lunch.
So anyways, my prediction is you're going to see this thing is going to look like a giant hill.
Oh, I love it.
That's a good one.
And Intel is going to be one of the worst performing stocks in the tech sector over the next six to 12 months.
Trump's going to be mad at you.
He's going to come after you instead of Jess.
That's really good.
There you go.
Yeah.
Well, Intel has the look of an expectant widow.
Anyway.
That's really funny.
Amazon is doing it as interesting, although I have to say I've given the heinous of the week award by them leaking that they're going to make The Apprentice again with Don Jr.
Oh, God.
Did you see that?
I know.
They're such suck-ups.
And Jeff was with the King Charles thing.
Let me just say, you don't have enough.
There's not enough budget for a cocaine budget for that.
Oh, that should have been our win.
I know.
King Charles?
How good was he?
We didn't do win, but go ahead.
Go quickly.
Do a win.
King Charles was fucking fantastic, I have to say.
No one can thread the needle around a thoughtful, intelligent, stab in the heart like the British.
And when the king delivers it, you know, I just loved, I loved the king saying, you have often stated that without us, we would speak in German.
I'd just like to remind you that without us, you'd be speaking French.
He is.
He is so good.
Whoever wrote his speech, A, he delivered it perfectly.
He actually studied drama in college.
I was so happy because I do think he stated what we need to know, and that is the alliance between Britain and the U.S.
I would like to think is unshakable.
Also, the king has been sick.
It's a really nice moment for him.
He did a good job.
He did his kingly duties.
I like the monarchy, and I always got the sense that he's a really decent man.
And so I just loved seeing kind of his time in the sun and just how good he was.
I thought that was wonderful.
He did good.
And the thing is Trump doesn't insult him because he loves the monarchy.
So he insulted Trump and he's the only one who got away with it.
So elegant though.
The Pope didn't get away with it.
It was so elegant.
It was.
Yeah.
I don't even think Trump understood.
Honestly, they just wanted to meet the king, all these people.
Anyway, and those tech people sucking up to the fucking king was just like, oh my, you guys, you are bigger than Britain.
And you could get a meeting with him anytime, give money to his climate change thing.
Anyway, I love that the Republicans even cheered for climate change, help with climate change, because that's his big, that's King Charles.
I keep calling him Prince Charles because he was prince for so long, but very nice.
I love that, Scott.
Anyway.
We want to hear from you.
Send us your questions about business tech or whatever's on your mind.
Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT.
Elsewhere in the Karen Scott universe this week, this week on Prof G Conversations, Scott spoke with Ian Bremmer about how the Iran war, fracturing alliances, and rising global tensions are reshaping the world order with no clear winners.
Let's listen to a clip.
whether it's Epstein or whether it's Iran or whether it's the economy or whether it's extraordinary corruption, Trump has gone against all of the things that got him elected.
And I don't, I certainly think, okay, there are some MAGA supporters that act like it's a cult and they'll support him literally no matter what he does.
But that's not even all MAGA supporters, not at all.
This is not a...
These people are not brainwashed automatons.
They're not idiots.
They ultimately see when their leader is screwing them and it matters to them.
And some of those people, they may not vote for Dems, but they'll stay home.
Interesting.
He's absolutely right.
That's what Estet Herndon said too.
Anyway, that's the show.
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We'll be back next week.
We'll be back next week for another breakdown of all things tech and business.