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- [00:01]
Scott Galloway
Support for the show comes from Attio. Attio is an AI native CRM built for the next era of companies. Its powerful data structure adapts to your business model, sinks in all of your contacts in minutes, and enriches your business with actionable data. Attio also allows you to create email sequences, real time reports and powerful automations, all to help you build what matters your company, join industry leaders including flat file, replicate, modal and more. You can go to attio.com pivot and you'll get 15% off your first year. That's attio.com pivot foreign.
- [00:37]
Kara Swisher
Comes from General Assembly Regardless of how up to date you are on AI, it's quickly integrating into nearly every industry. And while there's a lot of promise about the ways AI will innovate and optimize, the fact of the matter is that the tool is only as useful as the one who wields it. According to their data, General assembly found that 39% of business leaders say they don't feel confident in their abilities to vet and hire AI vendors, which means that you could be buying a fancy tool that no one will know how to use or missing out on the real innovation. Enter General Assembly General Assembly's AI Academy helps teams master AI by offering role specific real world training designed to boost productivity and accelerate transformation. You and your team can learn the in demand skills that can unlock the potential of AI at every level of your organization. Visit GA Co AIacademy to explore AI Academy training tracks tailored to your team's roles and goals. That's GA CO AIACademy to learn more. GA CO AIACademy General assembly real Skills, Real Impact.
- [01:46]
Scott Galloway
Support for the show comes from Intuit QuickBooks. Do you own a business that's ready to thrive? It's time to let Intuit QuickBooks take things like unpaid invoices and tracking expenses off your plate so you can take things to the next level. Intuit QuickBooks is a powerful AI driven all in one business solution that can help with day to day tasks like invoicing expenses and taxes. QuickBooks can help you unlock the growth in your business so you can get back to enjoying your business. Manage and grow your business all in one place. Intuit QuickBooks your way to money get 90% off for 3 months limited time only. Terms and conditions apply.
- [02:24]
Kara Swisher
Oh pillow. He's too short. You need a little pillow?
- [02:28]
Scott Galloway
I needed a pillow.
- [02:32]
Kara Swisher
Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher And I'm Scott Galloway. What are you drinking there? What are you drinking?
- [02:40]
Scott Galloway
I got a grapefruit juice, and I got a latte.
- [02:43]
Kara Swisher
Oh, nice. In Los Angeles.
- [02:45]
Scott Galloway
Yeah. I'm here at my second home, the Beverly Hills Hotel, where they greet me. They're like, hello, Mr. Galloway, it's so good to have you back.
- [02:52]
Kara Swisher
Oh, yeah, that's their job. It's called hospitality. You do know.
- [02:55]
Scott Galloway
Yeah. It's called $1,400 a night for people to be nice to you. Then I go down. Went down to the Polo Lounge right now. Made eye contact with a woman from Ukraine.
- [03:05]
Kara Swisher
Oh, great.
- [03:06]
Scott Galloway
Yeah. Hello. And, boy, did she find me charming. Oh, my God, she found me charming.
- [03:12]
Kara Swisher
Listen to me. Do you see any famous people in the Polo Ranch?
- [03:15]
Scott Galloway
No. It was pretty quiet last night. I actually ate outside. It was beautiful.
- [03:18]
Kara Swisher
I always run into Ted Sarandos there. Really?
- [03:21]
Scott Galloway
I love Ted Sarandez.
- [03:22]
Kara Swisher
Yeah. He's always there making deals. That's what I was whenever I was there. The seldom times I was there, I went with the Tinder guys.
- [03:29]
Scott Galloway
Once there, you know who I run into here? It feels like WME agents are crawling the halls to try and find deals, wondering if, like, a new miniseries is going to spill out of a room here or something. I ran into a guy, an agent named Sam the Elementary. Oh, I'm Sam. This lovely young man, all these, like, super. He's like, hi, I'm Sam Rabinowitz. And before he even said, I'm an agent at WME and love your work, I knew he was an agent from WME and loves my work. Wme. It's like their second. I think they've decided to go remote, and they just work out of the lobby here.
- [04:00]
Kara Swisher
Lobby. That's a great. That's a great idea. I'm actually in New York. I took a very early morning train.
- [04:05]
Scott Galloway
So are you at my house?
- [04:06]
Kara Swisher
I'm not. In fact, I didn't. I was trying to be nice, but I have to stay in Brooklyn this weekend. Cause I'm doing more secret filming.
- [04:12]
Scott Galloway
Oh, God, here we go. How to live Forever.
- [04:14]
Kara Swisher
I'm getting a full body scan.
- [04:15]
Scott Galloway
You've gone full. Like what? Isn't it? You've gone full Sumner Redstone. You've decided that you can beat life.
- [04:22]
Kara Swisher
I have, yes. I'm here in New York doing a new of things for my secret thing. And I would stay at your house, but I stayed at your house. I don't want to, like, you know, overstay my welcome, by the way.
- [04:32]
Scott Galloway
Oh, that train left the Station a while ago. Carol, I totally want to stay. That's hilarious. I totally. Amanda, are you self conscious about staying at my place?
- [04:40]
Kara Swisher
No, not at all. I'm going to ask you. Amanda bought glasses for your place. Actually, for the kids. That's how presumptuous we are.
- [04:46]
Scott Galloway
If they're not Rydell, I don't want that shit in my house. As you can tell, I'm very particular about my house. If it's not Austrian glassware, it does not belong in the house.
- [04:55]
Kara Swisher
But let me just say, we were gonna hide it. You wouldn't have found it. But I didn't let her keep it there. I was like, we can't presume. We can always stay there. And the galleries are moving back. Possibly. And so white.
- [05:04]
Scott Galloway
I'm sorry. She didn't buy me glassware. She bought her own glassware. It's just like she bought her own. I show up and you guys have your own toiletries there and you're like a girlfriend moving in. There's a drawer with your stuff.
- [05:15]
Kara Swisher
No, we use your toiletries. Let's be clear. I go into your things and use your toiletries. But the thing is, you have such a nice stuff, we're scared the kids are gonna break it. So we boug a plastic version for the kids so they could drink water and stuff like that. Anyway, we love staying at the galleries and we're excited to stay there. When you move back, that's when we're really gonna move in.
- [05:32]
Scott Galloway
It's gonna be great.
- [05:33]
Kara Swisher
We're gonna all like cuddle up. Anyway, we've got a lot to get to today, including Trump's latest tariff chaos and a major shakeup at Apple. But first, Scott, it's the day we knew was coming for quite some time. Linda Yaccarino is stepping down as CEO of X after two years in the job. Yaccarino announced her departure and post on X thanking Elon calling the job an opportunity of a lifetime. And he respond cold. Thank you for your contributions.
- [05:59]
Scott Galloway
Yeah, yeah. Clearly they're very warm. They clearly are very close.
- [06:03]
Kara Swisher
Yeah, it was like love, love all around. Let me just say that was gold. Like when we break up, can you write me thank you for your contributions? Just because. Thank you for your contributions. Anyway. She did not provide a reason for her departure, although we have speculated, especially when X&AI merged. The decision was reportedly months in the making. Of course it was. She was effectively demot back in March thanks to X's merge with xai. And you and I talked about this, that she was layered Essentially, and that she, she was a CEO in name only to start with. Now she really was layered and she probably was getting layered. Further. Current and former employees told the Wall Street Journal Yakuruna's position was tenuous. After clashes with management, he brought in someone from Tubi, which is interesting to be the cfo, and he. Of Xai, I think. And again, layering, layering, layering. And this is a woman who really wanted to be CEO. Of course, she picked the wrong person to do that. With her exit comes major problems with Xai's chatbot Grok. This week, the bot was spewing anti Semitic rhetoric, recommending a second Holocaust and calling itself Mecha Hitler. I don't know where that came from. I guess Mechanized Hitler, I don't know. So she's really leaving on a high note. By the way, Threads is about to catch up with X also. And what else? Probably she didn't want to get in the middle of the beef between she can't use lawsuits and threats of Trump retribution anymore since Elon's not friends with him anymore. I can't wait to hear what you think. But let's first listen back to what we had to say about Linda last July. Like, Linda, what are you doing? You're not running a company. You're running a. Like he's just using it for a political cudgel. That's it. That's it. That's all it's happening.
- [07:43]
Scott Galloway
She's. She's the circus clown following around an elephant, scooping up his shit. She's constantly. She's basically the most overpaid apologist in history. Other than someone being in the Trump cabinet.
- [07:54]
Kara Swisher
I don't know what she's doing there. It's just I don't really care because I don't really care for her. But it's embarrassing. It's an embarrassing way to spend your life. If you want, if you're a real ad person, which you used to be, get a job at a real company. So she's taken our advice, I guess. But in any case, what do you think about what's happening here? And obviously the ad market is going to fall off drastically for this company because of the safety issues, for one, Nazis. It's now just not Nazi adjacent, it's full Nazi. And also the numbers are declining and now advertisers probably don't feel the pressure anymore. I doubt he'll bring in someone to replace her. I guess I don't think he really cares for the business. And talk about her ultimate legacy. I Think it's probably the same as you said. Correct?
- [08:39]
Scott Galloway
Look, it reflects. Linda, moving on reflects the tiniest thing you could say. It reflects a shift in strategy as opposed to a failed strategy. You know, Elon Musk, people don't remember, he offered $44 billion under what I assume was a ketamine induced mania and then did everything he could to try and back out of the deal. Basically sued the company, went all the way to the Delaware Chancery Court saying, I don't have to close on this deal. When he realized he was vastly overpaying for a subscale social media company. And the judge said, fuck you, you gotta close, boss. This still is a nation of laws. And the strategy was, you know, there were several pillars to the strategy. One was to dramatically cut costs. His must vision was I could have a minimum viable product or a similar product with dramatically less costs. And to his credit, he shocked everyone and was right. He laid off 80% of the people. And the bottom line is, I'm not sure you would know the product was much different three or six months later.
- [09:37]
Kara Swisher
Safety issues and the sort of the crap.
- [09:39]
Scott Galloway
But that was a strategic decision, not cost cutting. The reality is. So let's talk a little bit about that. Hate speech increased 50%. Transphobic slurs increased 260%. Homophobic tweets rose by 30%, racist tweets 42%. And engagement grew 70% for posts around hate speech. Meaning this wasn't a function of a lack of moderation or cost cutting. It was a function of the fact that Elon Musk, in my view, is. Is racist and anti Semitic. And let me be clear, everyone dances around rich people. I am calling Elon Musk antisemitic. When you're accidentally making waves that look like Nazi gestures. When you have decided that something our nation needs to be focused on is the white genocide in South Africa. And when there tends to be a preponderance of swastikas appearing on your social media platform, this creates a pattern. These aren't mistakes. So this quote unquote free speech strategy, which was part of his strategy, was not free speech. He was happy to regulate certain people. It was a belief that I don't know. Quite frankly, the guy, in my view, got something deeply wrong with him and is very comfortable with normalizing hate speech. That is racism. And we keep. Because he's so rich and he can land a rocket and scissors, we dance around it and say, oh, he has Tourette's. He's very disciplined about not saying outlandish. Provocative things about the Chinese. He's very disciplined about not saying things about, until recently what were very aggressive actions on the Trump administration. So this strategy of free speech was nothing but a false flag. He also recognized, I think, and the strategy, he, he said, okay, this is an advertising platform, so I'm going to bring in who is one of the most respected people in the ad world. And Linda was that, yeah, tough, a.
- [11:43]
Kara Swisher
Tough customer, but really well respected. Well, she was at NBC for people.
- [11:46]
Scott Galloway
Who didn't know, people hugely respected her. And what this represents is one, the strategy isn't working. The entity that has benefited most from the acquisition of Twitter by Elon Musk is in fact Meta. Meta is about to blow past Twitter because they, Twitter basically created an opening for a platform that was, quite frankly, had more adult management. And also Mark Zuckerberg, one of the most brilliant business minds of the last generation, saw that if he turned his fire hose of 3 billion users on a microblogging platform called Threads, he could take advantage of the fact that people were looking for something. Both of us are off of X. Yeah.
- [12:25]
Kara Swisher
And actually Threads is a pretty good experience. I am on both Blue sky and Threads. I like Threads for certain things. I like Blue sky for certain things. But it's the opening is what you're talking about, is that I would have stayed on Twitter had this not happened. Correct. You would have too. Correct, yeah.
- [12:40]
Scott Galloway
You had a couple million users. I had half a million. We were generating a lot of Nissan ads and we both liked the product and we both eventually just got off of it. And I think a lot of people feel that way. But what this represents something more meta. And you forwarded a really good article on this. This represents a shift and we should find the answer.
- [13:03]
Kara Swisher
I've got it right here, actually. I have it right here. It's Hen Innes. He put this piece. Let me just read one thing that I was going to read to you actually, which I think was, you know, it's a great piece, it's very long, you should read it. And he goes. X, under the stewardship of Musk, appears to have chosen a second path. This isn't a retreat, it's a strategic repositioning. It's a wager that the future of some social platforms lies not in renting out user attention to the highest bidder, but in selling intelligence, utility and commerce directly to the user. This is a story of why the long assumed marriage between social connection and advertising revenue may be headed for a messy, necessary divorce. And another thing you said, which I think is also the monolithic concept of social media splitting into two distinct business models driven by a simple brutal economic calculation. The cost of guaranteeing brand safety in the age of AI is becoming prohibitively expensive. This is forcing platforms to have a choice. Either become a fortified walled garden for advertisers or find a new way to exist entirely. I thought that was well said.
- [13:59]
Scott Galloway
He really that's an outstanding article and it convinced me that you asked what her legacy is. This is essentially signals a pretty dramatic shift and Elon Musk for his faults on a business side. I think people just have to acknowledge he's a brilliant businessman and he has decided, okay, this isn't working. I'm going to use Twitter as a body bag or as nutrition for an LLM that all the activity and all the information it produces will be fed into an LLM which will offer vertical, I believe services such as your travel or dating or figuring out subscription services. He's going to try and go AI and offer customized individualized premium content that.
- [14:47]
Kara Swisher
You pay for and answers and all kinds of things.
- [14:50]
Scott Galloway
Because the number four, the number five social media platform that doesn't have the scale to pay for the tech stack or the brand moderation and safety which is getting increasingly costly both economically and non economically, it's just not working.
- [15:03]
Kara Swisher
Can I ask you something? One of the things that she had talked about is like we made it into an everything app. She didn't actually it is not an everything app. The second thing is he signaled this early on with advertiser. The first thing he did was get into a beef with advertisers when Yoel Roth was still there and they had to have a meeting where he was nice to advertisers. And then later in that famous New York Times interview with our favorite Canadian, Andrew Ross Sorkin, he said to advertisers, go fuck yourselves. Remember that? And it was clearly something was on something and then insulted Bob Iger right there who was sitting in the audience, if you remember that, go fuck yourself to advertisers. And then they conducted a legal war on advertisers. So he never was going to be an advert. He didn't want it to be. He had no interest from the get from the first beginning of this company before Linda.
- [15:53]
Scott Galloway
But Linda, Linda's a trivia question. She's sort of unimportant in this. She was nothing but a figurehead who was there to be a professional apologist and hopefully renew some relationships on advertising. The two big things here from an industry impact is that the reason that Meta had what is probably the most seminal earnings quarter in history where they announced that their revenues were up 23% while employment was down 20%, leading to a explosion in earnings of 72% is because I do think the entire corporate world in tech looked at what Elon Musk had done and said he laid off 80% of his staff and maintained a minimum viable product. And I think everyone started thinking maybe we don't, maybe we don't have to grow our employee base while maintaining revenue growth. I think that was the biggest impact that X has had on the ecosystem in the last two to three years. And then quite frankly, the guy can see around corners. And this does potentially represent a shift from an ad based scale model of social media to trying to use social media, the data it produces, the tokens to come up with more AI driven offerings. I think those are the two kind of shifts.
- [17:12]
Kara Swisher
Well, let me push back on that. It's also Grok, he talked about that, that it's a long way from being a commercial product. That's one thing he did say. But he to take on the anti Semitic thing where it was Mecca Hitler and it was really. And also taught, but had a very descriptive and very detailed way to rape someone. Grok was too compliant to user prompts, too eager to please, to be manipulated. Essentially he just rolled out Grok for the latest iteration. The first, I guess the first ones were too woke. This one was to Hitler. And I haven't used Grok. I don't use Grok that much. It's certainly interlaced in everything in Twitter. If you go over there, I was there, I was like, it's every Grok is everywhere. So that should tell you everything. That has nothing to do with discussions. Right. It's always there asking you if you want help with something. So how do you push back? How do you do this if you're making a. You just said a minimally viable product is not really what makes money. Right. You have to have a product that people like. They don't feel that they're going to be assaulted all the time or, or in an unsafe environment for people. So what does he do with this kind of thing? Or he just walks right through it like, ah, he was Hitler yesterday. Now he's not Hitler. I guess.
- [18:25]
Scott Galloway
Yeah, but you said this early on. Twitter was always the subscale platform that could never kind of command the space it wanted to occupy. It had an amazing.
- [18:33]
Kara Swisher
Not in advertising.
- [18:34]
Scott Galloway
It had an amazing product. It could just never figure out a business model that scaled like the rest, and he was unable to. To figure that out. But I'll go back to my original insult of Mr. Musk, and that is of all the social media platforms, of all the individuals who are icons of technology. If I asked you, Kara, there's a product that is calling for a second holocaust, who would you say is most likely the person in charge of that product?
- [19:04]
Kara Swisher
Elon Musk.
- [19:04]
Scott Galloway
And then you have to say, okay.
- [19:06]
Kara Swisher
Second is Mark Zuckerberg. Yeah, go ahead.
- [19:08]
Scott Galloway
And then you'd have to say, well, is that of a function of his embrace of freedom, free speech, or is it a tolerance and a normalization of the type of hate speech that can take us to very dark places? And I'm kind of like, we just make all of the. And where do we go? I don't want an individual in the business community who does not want to put in the safeguards such that a quarter of a billion people such that we start normalizing the idea of a second holocaust. I have no desire to pay taxes that subsidize his products. If he can't figure out a way to not have his products recommend a second holocaust. I don't think that's a very high bar for someone.
- [19:51]
Kara Swisher
No, it's not. But this is typical of him. This is typical, you know, away from what he's.
- [19:56]
Scott Galloway
Typical is a scary word.
- [19:57]
Kara Swisher
No, it is normalizing it. But when he did the cars, he's always in the minimum viable safety of. Everything he does is minimum viable safety. Right. And so if the rocket blows up, what of it? If the car. I think it's more than that, but it's the same pattern, it's the same idea, I think that he does things. And so in this case it's just, it's speech, but it's moved. It had to get to Hitler. Right. And you know, he's always pushing back on this Hitler thing and then he just shows up with Hitler. Right?
- [20:26]
Scott Galloway
Yeah. And here's my wave that looks like a Nazi salute. And have you heard of the white genocide in South Africa? His ability, I mean, just trying to be a critical thinker. His most valuable company, I think is going to be SpaceX and his willingness to take enormous risks. The core competence of SpaceX is explosions, and that is NASA can't send up rockets that explode 15 minutes or 15 seconds. Musk can. And say this is part of innovation is we have to hit the outer ring of innovation and risk to make huge progress. That is because to a certain extent there's a real Genius in that. And SpaceX is gonna be worth more than Tesla.
- [21:07]
Kara Swisher
Well, maybe now that. Well, we'll get to the. You know, the head of NASA is gonna be one of his enemies. Sean Duffy, who's totally incompetent, by the way. Trump just named the Transportation Secretary who's incompetent.
- [21:19]
Scott Galloway
Yeah. Interim head of it.
- [21:20]
Kara Swisher
Yeah.
- [21:20]
Scott Galloway
But listen, just to put a bow on it, Linda's a trivia question. She'll go back to selling ads for. I hope. When she first signed up for this. When she signed up for this, we said the following. I said, I hope her lawyer spent a dramatic amount of time talking about termination or termination. What for? Cause meant what happened when she's terminated because she was fired. Here you can call it constructive termination. When you're just consistently layered. That's constructive termination. CEOs will put in clauses that say, if my reporting relationship differs and you put me in the corner and chain me to a desk and tell me I'm now in charge of snacks and not the CEO. That is constructive termination. Because we said there's just no way she. We said there's no way she's gonna survive here. People don't survive around this guy.
- [22:07]
Kara Swisher
Yeah, she'll go back to like a Paramount. Makes sense. She's close with Jeff Shell, who's gonna be now.
- [22:12]
Scott Galloway
And she's a global brand now. Everybody knows who she is. She has huge.
- [22:15]
Kara Swisher
She's got a lot of making up to do. She's still. If you talk to ad people, they really, at Con, they were like, I was surprised by the level of vitriol towards her. I was like, eh, whatever. She's, you know, I was nicer than they were. But of course they're advertising people. So she has a big job, though.
- [22:33]
Scott Galloway
She joins Paramount plus and throws everybody at a party at Cannes that has Kygo and all is forgiven. I mean, that's the bottom line.
- [22:42]
Kara Swisher
Go ahead.
- [22:42]
Scott Galloway
But X under his ownership did ignite a dramatic shift in the entire technology ecosystem where people woke up and said, wow, can we have the great taste of fewer employees. Right. Without the calories of reduced growth. He showed up to Twitter and said, I think I can do what you're doing almost as well on one fifth of the calories, on 1/5 of the people. And two, this shift is a shift. Zuckerberg and everyone I believe now is saying, okay, the age of social media getting 98% of its revenues as Snap, X and Meta do right now is shifting. It's going to move towards sort of a little bit the Model, to a certain extent is the YouTube model. And that is they still have scale, they still get a lot of money for advertising, but they also get a lot of money. And the fastest growing part of their business is the subscription side, where they say, we can serve you up just a really great product using AI and using data that you start to pay for. By the way, have you noticed how many ads are on YouTube now?
- [23:50]
Kara Swisher
They really are. But let me say they have to. Here's what they have to do there. They've got to make a great product. That's the issue. And we'll see if he can. In media, I think he's very talented in other things. Media is not one of them. Speaking of which, just two things. At SpaceX, they're planning to raise money and sell insider shares in a deal that would value at around 400 billion already. This would mark the highest ever valuation for a privately held US company, surpassing space his own record of $350 billion debt last year. Presumably there's gonna be an IPO, but I gotta tell you, there's gonna be some rough going there, especially with his relationships. As long as Trump's in office and Sean Duffy's in charge of NASA and areas where. And also he doesn't get to out of the Oval Office, get to shake down countries into taking Starlink, even if it's the best product that was happening there. So Tesla, on the other hand, is really problematic for him. Shares dropping nearly 7% after Elon announced this. New America. It's not rebounding. He's also focused on the Epstein. The focus is out once again. This board of directors, which we know is not really a board.
- [24:54]
Scott Galloway
Did you see his tweet about Bannon?
- [24:56]
Kara Swisher
Yes, Bannon. Yes. He's pointing the finger at Bannon and the Epstein. I'm waiting for him to say. Scott Galloway's in the Epstein files. Tesla stock's down 14% since early June and it's down 40% from their December peak. He got into a fight with Dan Ives, who I think is. He was been a longtime Tesla bull far too long. Says the company is at a tipping point.
- [25:15]
Scott Galloway
He has a price target on Tesla, 500 bucks. And he's insulting that guy.
- [25:18]
Kara Swisher
I know, but he's urging the board to set boundaries for Elon in both time at Tesla and his political activities. Elon responded to those suggestions on X, saying, shut up, Dan. He's so nice to his fans. It's not just political activities. Vehicle deliveries obviously fell.
- [25:33]
Scott Galloway
No. But Bannon is in the Epstein files. Was the tweet. He put out a quarter of a billion people. People.
- [25:37]
Kara Swisher
I know, but.
- [25:38]
Scott Galloway
But let's just go product by product. X. X is definitely. They've given away the microblogging business to. To Mark. Mark Zuckerberg. So that means the product is severely diminished. The Tesla product is, at best, sideways. A lot of people would say it needs. You use the word fresh or freshening. I still think it's a great car. He. He absolutely ignited the EV race. He deserves a lot of credit for that. SpaceX. On the plane yesterday, I took from Spain. The Starlink product is incredible. I did a podcast for my plane yesterday and quite frankly, it was near the sun.
- [26:20]
Kara Swisher
Can we do that? Can we fly around and do. Okay, okay.
- [26:25]
Scott Galloway
What he has pulled off with Starlink is nothing short of. Of remarkable.
- [26:31]
Kara Swisher
But great product. As opposed to X. X is not a great product.
- [26:35]
Scott Galloway
Oh, yeah, No. X has fallen off a cliff in terms of.
- [26:38]
Kara Swisher
Same thing with Tesla in a lot of ways. No new products and what we get is the cybertruck. So it's a mixed bag.
- [26:45]
Scott Galloway
Scott, what's happened with Tesla is, quite frankly, he made a mistake. Everyone wants the great taste of lower manufacturing costs in China. Apple did it and gave rise to Xiaomi and a bunch of other tech companies. Tesla, quite frankly, probably had a lot of its IP stolen that ended up at byd. BYD has innovated on it and quite frankly, BYD is now offering a Tesla product that is equivalent, maybe even better, for half the price we have given away anyways. And then these ridiculous tariffs and all this shit. Essentially, China has essentially usurped global leadership in the automobile industry because of poor public policy internally. And two, I do think they have taken a lot of IP from Tesla and have scaled it.
- [27:34]
Kara Swisher
Yeah, he let it happen, right? He let it happen. He could have done something to prevent that. In any case, Tesla's in a much more precarious place. I think we both agree. And he's got to get back. Interested in it. He doesn't seem interested in it. And what he seems interested in doesn't sell to consumers.
- [27:51]
Scott Galloway
Saying that Bannon is in the Epstein files.
- [27:53]
Kara Swisher
Yeah, and Bannon is in.
- [27:54]
Scott Galloway
I mean literally. Literally, Kara. It's as if he's on drugs.
- [27:58]
Kara Swisher
Anyway.
- [27:58]
Scott Galloway
We'll see. As if he's on drugs.
- [27:59]
Kara Swisher
Linda, we wish you well. Give us a call. Actually, do we want her to call us? Yes, we do. Yes, give us a call.
- [28:05]
Scott Galloway
You should interview Linda.
- [28:07]
Kara Swisher
You think I haven't already contacted? What are you talking about? She won't do it. Linda, come on. Come on. We'll have fun. Linda, you can yell at me.
- [28:14]
Scott Galloway
Come on, Linda, come on in, the water's fine.
- [28:17]
Kara Swisher
Linda. Linda, we will have fun. You can yell at me all you want. You can scream at me. You can call me the C word. I don't care. Just come on. We'll talk about it. By the way, all those celebrity deals she did, you remember? And she was announcing Don Lemon.
- [28:31]
Scott Galloway
How long Was he there?
- [28:32]
Kara Swisher
Five minutes.
- [28:33]
Scott Galloway
Like, 72.
- [28:34]
Kara Swisher
No, but there's others. They announced the Serena Williams thing at Cannes just two weeks ago. She was announcing that. I'm sorry, Serena, looks like you're shit out of line.
- [28:43]
Scott Galloway
If you're gonna call, can. Can. I'm gonna say it's Serena Williams anyways.
- [28:47]
Kara Swisher
In France. Underpants. Okay.
- [28:49]
Scott Galloway
That's right. They did a deal with Serena Williams in.
- [28:52]
Kara Swisher
I mean, seriously, it's like, you know. Anyway, let's go on a quick break. When we come back, tariffs galore. You're going to get to tariffs.
- [29:04]
Scott Galloway
Support for the show comes from ZBiotics. For many of us, Friday night is a time to unwind with a drink or two. But let's be honest, bouncing back the next morning isn't always easy. Zebiotics is here to help you wake up feeling better. According to zbiot. Here's how it works. Zebiotics pre alcohol probiotic drink is the world's first genetically engineered probiotic. They say it was invented by PhD scientists to tackle rough mornings after drinking. According to the company, when you drink, alcohol gets converted into a toxic byproduct in the gut. And they say it's a buildup of this byproduct, not dehydration, that's to blame for rough days after drinking ZBiotics. Pre alcohol produces an enzyme to break this byproduct down. Just remember to make pre alcohol your first drink of the night. Drink responsibly and you'll feel your best tomorrow. So this is the part where I'm supposed to give a personal experience or an anecdote. I am trying to reduce the amount of drinking I'm doing as I get older. But I still love to drink. And I have tried Zebiotics and I now use it regularly. Go to zbiotics.com pivot to learn more and get 15% off your first order. When you use Pivot at checkout, Zebiotics is backed with a hundred percent money back guarantee. So if you're unsatisfied for any reason, they'll refund your money, no questions asked. Remember to head to zbiotics.com pivot and use the code pivot at checkout for 15% off. Blockchain is reshaping every aspect of society, starting with finance. It's happening across industries, across sectors and across the world. And it's happening with Ripple. With more than a decade of blockchain experience, over 60 licenses and strong institutional trust, Ripple provides financial institutions with blockchain and crypto powered solutions across payment and digital custody applications. This means secure 24. 7 transactions moving value across the world faster. Find out more@ripple.com.
- [31:02]
Kara Swisher
Support for this show comes from Upway. If you're stuck in traffic again or frustrated with rising gas prices races, there's a better way to get around. Commuting by E bike isn't just great for your health, it can be a game changer for your wallet and your time. Here's a tip. Head over to Upway Co to find E bikes from top tier brands like Specialized, Cannondale and aventon up to 60% off retail. Whether you're into mountain bikes for weekend adventures or Fast City E bikes for your daily commute, Upway has you covered. You can join their community of fans and ride with confidence knowing that they've got your back every step of the way. So head over to Upway co and get $150 off your first ebike purchase of $11,000 or more with a code pivot150. That's upway code pivot150. You can thank me later. Scott we're back for a quick rundown of latest news on terrorist which is exhausting in and he was supposed to do 90 deals in 90 days.
- [32:06]
Scott Galloway
90 deals in 90 days since we.
- [32:08]
Kara Swisher
Spoke, President Trump has though sent a letter to over 20 countries, including mostly countries that aren't really high on our our list and in some cases we have surpluses with he announced terrorist rates between 20 and 40%. I think like the Maldives or something like there's countries Moldava I think was in there but anyway Moldova, those rates might be adjusted.
- [32:27]
Scott Galloway
That's where that's where Khan is.
- [32:32]
Kara Swisher
Can Fine, I'll give in if you'll shut the fuck up. The rates may be adjusted according to each country's relationship with the US threatened 50% terrorism against Brazil, suggesting the decision was partly in response, not partly in response to the prosecution of former President Bolsonaro for his alleged role in the plot to overturn the 2022 election there. It feels like maybe he's trying to help a friend, a similar friend. He announced a new 50% tariff on all imported copper and threatened to impose up to 200% tariffs on imported pharmaceutical products. Markets have stayed relaxed that the news. They're just ignoring him. Partly in part because as President Trump labeled his Aug. 1 deadline as a firm, but not 100% firm. Taco. Taco. Trump always chickens out. Is actually maybe working in his favor. He gets to continue with this nonsense and not worrying about the markets. Cause nobody believes he's gonna do anything. Cause he doesn't do anything. And the Brazil one is just beyond. And they just sit and wait him out. They're not rushing to make deals. Obviously, the Brazil thing. We are in a trade surplus with Brazil. It's so ridiculous. And at the same time, in our own labor markets, they're telling Medicaid recipients to go work on a farm. I guess I don't need to happen. I don't. I don't even. That poor. I feel bad.
- [33:49]
Scott Galloway
What you have cerebral policy. We know. Pick crops. Pick almonds.
- [33:52]
Kara Swisher
Like, the whole thing is insane. Just the way they're talking about it, like, oh, we're going to replace them with medic. The fact that they merged Medicaid and farm workers. I just don't even understand. They must sit there in a room and go, yeah, yeah, let's get the Medicaid workers. Anyway, anyway. Tariffs. Go for it, Scott. Tariffs.
- [34:09]
Scott Galloway
We are living in such a simulation of idiocracy that it just wouldn't shock me if I see a headline that Linda Yaccarino is the new Secretary of Commerce. I mean, you use the correct term with Brazil. We have a trade surplus in Brazil. Meaning.
- [34:27]
Kara Swisher
Explain what that means for the people. Thank you, Scott.
- [34:30]
Scott Galloway
Meaning, first off, they buy more of our ships. Right. Than we buy of theirs. So if they do what they're going to do, and that is, they'll say, okay, 50% tariff on Nvidia chips and on F150s. Then we're going to reciprocate. Or I'm sorry, if you want to charge us for whatever our Embraer planes or our bananas or whatever Brazil imports in, other than like, can you tax supermodels. Jesus Christ. Have you been to the south of Brazil, Tara? I go surfing every year in Floripa. It's not for the waves. It's not for the waves.
- [35:08]
Kara Swisher
The Argentinians. Brazilians are handsome people. It's a handsome.
- [35:12]
Scott Galloway
Oh, my God. Scorching hot. The dudes, the women. Hello. That's an export we should pay for.
- [35:18]
Kara Swisher
You know, it's like the World center for like, Plastic surgery. Anyway, sorry, go ahead.
- [35:22]
Scott Galloway
Anyway, so they will reciprocate. They will have reciprocal tariffs, which means we'll be more fucked than them. And this is what this guy can't get his head around in terms of basic math. Let's talk about and I'll weave in another story here. Nvidia became the first company in history to hit a $4 trillion market cap. Let's take Mercedes. I think Mercedes is an incredible company with incredible products, amazing brand, amazing manufacturing, amazing value proposition marketing products. You sell $100,000 Mercedes and bring it into the U.S. they have an operating margin of about 9%. So they get about $9,000 to the bottom line. Nvidia Mercedes buys trying to figure out a way to have AI or autonomous driving, whatever. They buy $100,000 in Nvidia chips. Nvidia has approximately. What do they have? They have 60% operating margin. So they get 60,000 to the bottom line. When Germany buys $100,000 of American technology products, or Nvidia does, they get, let's call it 10,000. Nvidia trades at a PE of like 33. So that $60,000 ends up being approximately $1.9 million in shareholder value. Mercedes, when we buy $100,000 of their product, gets at a PE of say 8, gets about $80,000 in shareholder value. And that in a nutshell explains what has happened to America. Embracing only trade more. We get much greater shareholder value because the products we tend to export and other countries purchase are much higher margin. That then have this chaser effect of a higher multiple making Americans, making employees, investors, housing prices, new hires out of school. It's a chaser effect. Global trade is like champagne. Then we speedball it with cocaine for a fantastic high in America. And this guy wants to go. Every reduction in trade hurts us more. Every increase in trade from free trade agreements benefits us more than the other party.
- [37:46]
Kara Swisher
Well, one of the things, there are trade imbalances and tricks and everything else that should be reformed. That is one thing which I think correctly. There are all kinds of things that need to happen in terms of giving advantage, specifically with China. But all countries do that. They play the games that they do. And the US should address that. But the way he's doing this and especially focusing on Bolster. Did you read that letter? It was insane on Bolson. Stop the trial in Brazil. I was like, it's Brazil, it's their business. And that guy tried to take over the government illegally with a military. I mean, and he wasn't successful. And the fact that, well, of course, Trump would know a thing or two about that.
- [38:24]
Scott Galloway
Brazil has a stronger democracy than us right now.
- [38:27]
Kara Swisher
Right. I know. It's just crazy that he would demand another. Can you imagine? You must stop the trial of, I don't know, Diddy Combs, or we're not gonna do a deal. It's just like, nuts. The other thing is, what's fascinating to me is how someone who I. What I. Look, Howard Lutton is as dumb as a box of hammers, but Besant seems very smart. But now, because I think he wants to be the head of the Fed, he's been sucking up to him and pretending this is real and not plaguing. It's really interesting. I'd love to actually understand the dynamics when they're not talking to him, when they're talking amongst themselves. Because the whole Ukraine thing is another example where Petiteg says, apparently, stop the things, and then Trump restarted them or somehow got alerted to it. And to his credit, Sean McCreesh, who writes mostly features for the New York Times, asked, did you find out who did this stoppage of weapons to Ukraine? And he said, I don't know, maybe you can find out. And he goes, well, doesn't that say something about you that you don't know. Know how it happened? And he's like, I know everything. And the whole thing was. That was a moment where, like, someone actually said, what is happening here? Which is this man doesn't know what's going on. Like, I don't know how these people internally do this. I mean, maybe you can explain. I don't know. I'm just. I can't believe this is going on.
- [39:50]
Scott Galloway
The legacy of this tariff war is that Trump's tariff war has, in fact, inspired a massive amount of deal making. But here's the issue. It's inspired deal making amongst other countries. The EU and Mercosur are talking. The EU and India, Japan, South Korea and China are having trade talks for the first time in a while. Europe is having very serious talks with countries in Brazil. They've all said, let's use this as an excuse to figure out how we can just. Basically, I mean, the way I would describe our trade talks right now is where the drunk uncle, shirtless at a barbecue, trying to show off his karate moves. And the whole family, the whole family, the whole family has decided to get on a WhatsApp and not invite this guy. Let's be a family. Let's talk to each other and just don't invite the crazy fucking uncle. Yeah. At one point, he had a lot of money at one point we thought we could count on him, but he's gone batshit crazy.
- [40:48]
Kara Swisher
Why are the markets yawning? Why are the markets. Markets just yawned?
- [40:52]
Scott Galloway
Because I mean the reality is the US is actually quite trade independent. We're actually quite self sufficient and that is other nations can hurt us. But we're energy independent, we're food independent. And also because of Taco, the market has said, I mean literally when he announced these 25% tariffs on Japan and South Korea, saying this will force them to the table, the market said okay, let's look at the actual throw threat. They're excluding certain products because these guys don't have the balls to actually come after our real products. So the actual tariff rate was going to go from 15 to 16%. And guess what? The Cosby or whatever it's called and the Nikkei were both up that day because they said if this is his biggest threat, one it's not going to happen because he keeps, he keeps extending the deadlines. This is literally I'm leaving you this time. I mean it. You know, 40 years into the marriage. Right, right. I've had it. I'll be at my sister's. And what do you want for dinner just in case I swing by the grocery store on the way home? Nobody takes this guy seriously. The markets have basically said just yawning. The world is going to continue to churn on. America will lose some business. American consumers will have some inflation that disproportionately hurts lower and middle income people. But the Dow and the Nasdaq which would become a wealth index for the top 10%, they are just fine. The markets are yawning.
- [42:15]
Kara Swisher
Yeah. And they, and they did get the tax break they wanted. So that's. They're happy with that for sure. When does it start to really hurt or doesn't it? Doesn't it? Because these farm workers thing just keeps me thinking is like hospitality farm workers with doing these crazy raids that they're doing. And by the way, there's news stories showing up that a lot of people inside ICE aren't happy with their jobs because they're hated. They don't, they think it's, they have the Trump people on their ass. They don't think they're doing a good job. They feel kind of sick to their stomach about what they're doing. Some of them, they'll find brutal people that continue their behaviors. But it's a really. When is it gonna like crack or. Not necessarily. I mean the only thing that seems certain every time one of these deals goes down or something else is that someone knows about them ahead of the deal, like something happened with Brazil Futures or something. And someone new and made a ton an investor. All these investors seem to be getting information from the White House before things are announced and make money in the interim. But when does it crack? When does it crack? Or maybe it doesn't, I don't know.
- [43:24]
Scott Galloway
When you say when does it crack the tariffs?
- [43:26]
Kara Swisher
No. When does it count? When does the economy start saying no? Or it just doesn't. It just doesn't. Could the economy stay?
- [43:34]
Scott Galloway
Well, the economy it appears to grind on. I think unfortunately a lot of these effects. When you're talking about turning off the tap of an inflow of the best and brightest through kind of new age gestapos with wi fi ice, when you're talking about not letting in the most talented young people in the world are PhD students, when you're talking about reducing funding through universities that create everything from DARPA to diabetes medication, it's long term. Yeah, that starts to haunt you. But it's a poltergeist that kind of rises slowly, slowly. So unfortunately he's the mother of all deficits and that is the deficits. Right now it's champagne and cocaine with the tax cuts this year because it will be stimulative to the economy. But then in 10, 20 years our kids have to pay it back. And he's doing exactly what the government is not supposed to do. The government is supposed to be making hard decisions to create long term prosperity and emotional health for Americans. And they're doing exactly the opposite. They are planting landmines where which will detonate 10, 20 years from now, long after he's gone.
- [44:36]
Kara Swisher
Also too which is amazing. But the Trump family will go on. All right, let's go on a quick break. When we come back, we'll talk about the shakeup at Apple and some other stuff. Support for this show comes from Intuit QuickBooks. Are you a business owner looking to grow your business? You did what most dream of doing, starting your own business. Now you're faced a with reality of how to make your small business run smoothly. Intuit QuickBooks can help. QuickBooks is a powerful AI driven all in one business solution. That means those day to day tasks, invoicing expenses, taxes, can be done effortlessly. But here's where it gets really good. You don't need to hire a team of analysts to find growth opportunities hiding in your business data. QuickBooks can help with cash flow optimization, profit and loss analysis and it helps you see how your business is doing and uncover new ways to be more profitable. QuickBooks can help you unlock the growth in your business so you can get back to enjoying your business. Manage and grow your business all in one place. Intuit QuickBooks your way to money get 90% off for 3 months limited time only terms and conditions apply.
- [45:47]
Scott Galloway
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- [47:00]
Kara Swisher
Advertiser Content from Adobe as the head of marketing for a big box retailer, I track a lot of moving parts. In addition to our online presence, we have hundreds of locations in dozens of countries. We're about to launch a full refresh of our brand. The new look and feel is a lot bolder and brighter. With all of the changes, our teams still need to create content fast and follow the new brand guidelines. That's why I chose Adobe Express.
- [47:24]
Scott Galloway
For members of the marketing team like me, this brand refresh means we have.
- [47:28]
Kara Swisher
To work together to create a ton of content for different channels. We need to be consistent, but also fast and flexible. Adobe Express has us covered. Generative AI that's safe for business lets us create new content in seconds.
- [47:43]
Scott Galloway
Brand kits let us centralize our design.
- [47:45]
Kara Swisher
Assets so we can always access or share the latest and greatest. Collaborating with my team members has never been easier.
- [47:53]
Scott Galloway
And you know what?
- [47:54]
Kara Swisher
We're having more fun too. Adobe Express, the quick and easy app to create on brand content. Learn more@adobe.com Express Business Scott we're back with more news. Apple COO Jeff Williams will retire from the company later this year. The company says the move is part of a long planned succession. Sabi Khan, Apple's VP of Operations, will take over The COO role later this year while Williams continues to oversee design and health initiatives until retirement. Williams first joined the company in 1998 and had a hand in introduction of the ipod and iPhone and led the effort on the Apple Watch. The CEO was seen as a potential successor. I think one of the top ones along with Craig Federici and John Ternus. And there's an outside chance there's a woman candidate, Deirdre o' Brien who's been doing a lot of the jobs Tim Cook has been doing, a very close associate of Cook and nobody really pays attention to the that issue at Apple even though it's probably pending relatively soon. And the next CEO is going to have their hands full with a lot of challenges. Tim has sort of ridden this high, high up but they've got a lot of challenges coming up including in AI and elsewhere. They just lost an AI head to meta. Any thoughts on this?
- [49:13]
Scott Galloway
I think, look, I think this is an incredible company. The announcement I saw that I wanted to get your viewpoint on is they say they're going to shift their production of iPhones from, from China to India and they claim they could do it in like two years. And I'm like that's going to take 10 or 15 years. But to your specific point about succession planning, Apple just has an incredible bench and really deep talent and they don't have defections. It's not a revolving door. I think they are very good about. I just think they have just an incredibly deep talent pool and I would imagine, you know, people go to, they have a pipeline of incredible human capital. And also Tim Cook, Tim Cook strikes me as the kind of CEO, kind of the first tell of a CEO from a board member in my view is good public companies demand that once a year they spend some time on succession planning. And if the CEO is obviously spending time, time trying to figure out how to mature, hold on and compensate and put in front of the board at least two or three people that could take, they could slip into his or her shoes. If they're not doing that, that means they're like many CEOs you can understand, self absorbed, a narcissist and not thinking about shareholder value. Really good CEOs. I mean the CEO. I remember the first thing I thought the CEO at the new York Times when I was on the board there. I'm like she's not a good CEO. She's not. She's shooting everyone that gets close to the iron ring. She's not, she's not maturing successor and really good CEOs make an effort to bring in other people and give them exposure to the board, such that there are like five, I bet. I bet at Apple there are literally five or six people that could do a reasonable job of being the CEO of that company right now.
- [51:06]
Kara Swisher
Let me go through them. Hardware engineering chief John. I think it's turned. He's a younger guy. He's apparently very dynamic. I've never met him actually, but he's moved up pretty quickly. Obviously. Craig Federici has been around forever and very competent. And you see him at a lot of the events. He's the head of software engineering. It's done a lot of Jobs. This Deirdre o' Brien has run retail. She's done all kinds of things and a lot of logistical stuff that Cook did. She has the most similar pattern to Cook. And what was interesting about Jobs is nobody thought that it was Cook that was gonna get it. And Jobs was very good CEO and was also bringing people along. There was another more flashy person they thought might get it. But Jobs anointed Cook, which I think has turned out to be one of the best decisions. Speaking of which, from a CEO, from a CEO's point of view, he really set it on a course of real explosion and value and everything else. So there's a lot and then there's many others. And one of the things that struck me when I was looking at this list is among the people on there now, a lot of them are older, but not all of them are. Is that everyone on that list when people were. When Walt retired, the Apple who had been. Who had covered a lot, gave a little. His last Apple event gave him a little cocktail party. All those same people were there. I was like, oh, look. And I went. And I didn't really mix with Apple executives that much. I mean, I know them, but even among the ones that aren't on the top, they're all really competent. Eddy Q. Et cetera, et cetera. So, yeah, you're right. It's a very no draw kind of group of people. So we'll see. I don't know. What do they need to focus in on the next Apple CEO? If you had to pick one critical thing going forward, say Tim retired tomorrow, what's the biggest. I guess AI would be my choice.
- [52:52]
Scott Galloway
That's a really interesting question. I think you invest in your opportunities and I've always thought Tim, sort of he'll be remembered, I think, is a guy who was able to take the innovation and the marketing genius of Steve Jobs. And what he did was so Steve Jobs kind of branded or set or lionized or canonized. The great marketing age. He was just such a showman, right? And also the decision to take $6 billion out of advertising and create 550 temples to the brand called Apple Stores and go vertical, in my opinion that was almost the same level of genius as the iPhone because other people had as good an iPhone. No one has Apple Stores. There's just no. What distribution and templates, tech, Microsoft. Do you want to go hang out in a Microsoft store?
- [53:38]
Kara Swisher
Let me tell you, people laughed at Jobs back then, if you remember. Do you remember that? People don't. Although it was a big opening. I was there actually. But people laughed at him for doing that.
- [53:47]
Scott Galloway
They're incredible. I mean it really is going vertical. He revolutionized technology and what it meant to spend money on marketing by controlling your distribution. You go buy an Android phone, you walk into a place with bad carpeting and a guy living in his parents basement with a name tag and you think, Jesus Christ. And then you go into an Apple store and you're like, do they serve lattes here? Because I'd like to take a date here. I mean, think about those places, right?
- [54:10]
Kara Swisher
Yeah.
- [54:11]
Scott Galloway
So he kind of marked the branding age, really. Tim Cook marked the supply chain age. And that is he built the most complicated, robust supply chain in the world and basically said, I can give you what would have cost you a million dollars 10 or 15 years ago. I can produce it for a thousand bucks using the most complex robust supply chain, mostly out of China, that brings together 1600 parts and produces a million of these things.
- [54:37]
Kara Swisher
A down side, they trained up China, but go ahead.
- [54:40]
Scott Galloway
Yeah. And also, quite frankly became very subject to sort of the political machinations of a fucking weirdo with his head up his ass called the president. So the question is, when they think of the next CEO, I don't think it's going to be a branding person. I don't think it's going to be a cmo. Is it going to be someone who tries to take them into the AI future or do they say we're still a hardware company and it's about supply chain? I don't know. What do you think?
- [55:02]
Kara Swisher
I don't know. I think they're all qualified, they're different. I think they have, if I had to guess, this hardware engineering chief, he's younger, I think they need to go younger. And I know it sounds dumb, but these guys, I think the world of someone like Craig Federici, but he's Almost too old, right? You just saw a departure from Amazon, too, of someone who'd been there 17 years. I mean, at some point, Apple reminds me of the Rolling Stones. They still can really do a really good concert. But at some point you're like, okay, okay, like it's enough, right?
- [55:34]
Scott Galloway
At some point you're JLo.
- [55:35]
Kara Swisher
Yeah, exactly. Like, stop. It's okay. You know, it's kudos to you. I think about that a lot because, you know, we don't think about leaving right now, but at some point, it's like, I've done enough now. Everything else is great. And I think this group of people is like that. I think probably how to deal with AI and more software and services is where I would focus.
- [55:55]
Scott Galloway
Typically, the person who gets the CEO role is not. Not the best person. It's the person who happened to oversee the unit that at that moment is growing the fastest. And that's not to say, like Andy Jassy is, my sense, a very competent person. But you just knew the head of AWS was going to be the new head of Amazon.
- [56:14]
Kara Swisher
Yes, absolutely. Yeah.
- [56:15]
Scott Galloway
So I remember when I was at Levi Strauss & Co. And talking to the CEO then about succession planning when I was a consultant there, and I'm like, well, I know who the next CEO is. I'm like, which region is growing the fastest? That'll be your next CEO. So if you looked at which part of Apple, whether it's their services unit, I don't know, their lap, whatever it is, maybe the person in charge of the iPhone, the person who's usually the CEO is the person who is lucky enough. And also the fact that they're appointed to the most important region or group in the company says they're very good. But it's easy. I mean, I'm going way back to my. In the 90s when I was consulting Levi Strauss and company, when you were the head of Levi's in Europe, and you got to get. You got to charge $140 for a pair of 501s in Germany that you were only getting 30 bucks for in the US it was really easy to look really fucking smart.
- [57:05]
Kara Swisher
Yeah, yeah. True, true.
- [57:07]
Scott Galloway
So which group. Which group at Apple is growing the fastest? That's what I'd want to know.
- [57:11]
Kara Swisher
Probably software and services software. That would be Craig Federici. I mean, it just would be. It wouldn't be the new era. That's all I'm saying. And again, totally competent and probably do a great job. Anyway, we'll move on. One last thing. Shein, one of your favorite companies, has confidentially filed an IPO in Hong Kong 18 months after filing to go public on the London Stock Exchange. The company has struggled to receive regulatory approval in London and is attempting to put pressure on the UK the company's been pushing back against UK regulators who want more transparency about its labor practices in China, which is no surprise. Shein was valued at $100 billion in 2022, but that dropped to 66 billion in 2023. Any predictions? I'd love to hear what you think. I know you think the world of this. Well, a lot of people don't, by the way. This sort of fash fashion thing, et cetera. But what should happen here? What do you imagine? It'll just go public in Hong Kong? Correct. I mean, that would be my guess.
- [58:04]
Scott Galloway
What this reflects is the following 200 companies have filed for an IPO this year. The bottom line is the Hong Kong market is on fire. The London IPO market. With the loss of this ipo. I mean, I love. I really have. I'm starting to get sentimental about the UK because I've been there three years. I'm going to move back to the US And I love it there. And they have all of the underpinnings of an economy that should be booming. Great intellectual property, an incredible culture that attracts some of the best and brightest in capital. Really, really aggressive, smart people they can't get out of their own damn way. Way. And for them to have Sheena will probably be one of the biggest IPOs of the year. They should have done anything they could to try and breathe new life into their IPO market because as of now, the is it the LSE or whatever it is is basically done. It's out of business. The UK might as well close shop in terms of IPOs. And what's interesting is actually the London Exchange would say it wasn't our fault they couldn't get Chinese approval. But anyways, that's another. Another talk show. Meanwhile, while you were sleeping, the Hong Kong market market is on fire. And so Shein is just going to where the money is. They're going to where they can a have the most seamless path.
- [59:21]
Kara Swisher
Right. Without being asked too many questions, too many thorny questions.
- [59:25]
Scott Galloway
Sure. And so one, they deserve to have scrutiny. Fast fashion raises a lot of very troubling questions. But two, what Shein would say is, okay, now do Nike, now do Apple. And a lot of the people pushing back on this, this company are people, are organizations sponsored by incumbent retailers who would rather just Keep selling you cashmere sweaters for $200 versus 40. So. But I do think they're going to get out in Hong Kong, but they're just going to where they're. Where there's. Where it's a seamless route to an ipo and the Hong Kong market, who would have guessed it is on fire right now.
- [60:01]
Kara Swisher
Yeah. Well, that's interesting. You're sad about leaving London. How cute, how cute. It is true. When I go to London, I think, look at all this creativity. Why isn't it more. More dynamic? Like, you know What I mean?
- [60:12]
Scott Galloway
70% of the companies have gone public in the last 10 years are below their offering price.
- [60:16]
Kara Swisher
I know, it's really fascinating to me.
- [60:17]
Scott Galloway
Anyway, name an important tech company in the uk.
- [60:20]
Kara Swisher
You can't. I have had this debate with people in England a lot. I told you this years ago. Reid Hoffman and I did a debate there and I think it was at Cambridge and we debated and Reid and I had to argue in the next. And this was 20 years ago at this point in the next five years, which country was going to have the most billion dollar companies? And Reid and I had to argue us and the British people had to argue London. And we gave all these. We did a really good job, but we lost because it was a British audience. But I remember thinking, there's no friggin way this group of people is going to be able to be as dynamic. And at the time we said, google da da da da da. And I said. And we were like, england zero. It was like there was one company, the one, the guy who died in that sailing accident, that guy, he had a company that got all messed up in controversy, but that was still. There was one UK company that had dynamism and it was just interesting. Anyway, I will be sad you're leaving there. I didn't come and stay with you there. I need to do that quickly.
- [61:24]
Scott Galloway
Oh, trust me, you will. The house will be there.
- [61:26]
Kara Swisher
I know you'll be away.
- [61:27]
Scott Galloway
I'll see you pretty soon. Pretty soon you'll be on podcast, drinking tea, like yelling at my dogs your socks off.
- [61:35]
Kara Swisher
Yeah, yeah, yeah, I will. I'm going to plan on it. All right, Scott, one more quick break. We'll be back for predictions. Hey, it's Ryan Reynolds here for Mint Mobile. Now, I was looking for fun ways to tell you that Mint's offer of unlimited Premium Wireless for $15 a month is back. So I thought it was, it would be fun if we made $15 bills, but it turns out that's very illegal.
- [62:02]
Scott Galloway
So there goes my big idea for the commercial.
- [62:04]
Kara Swisher
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- [62:46]
Scott Galloway
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- [63:20]
Kara Swisher
Okay Scott, let's hear a prediction. Actually, can I do one really quickly?
- [63:23]
Scott Galloway
Of course.
- [63:23]
Kara Swisher
Okay, so OpenAI is getting close to releasing an AI powered web browser. According to Reuters, the browser is slated to launch in the next few weeks and will be competing with Chrome, giving OpenAI a way to access user data. Perplexity just launched its AI powered browser Comet this week. I don't know who the winner of the browser wars could be, but I couldn't be more delighted that there is now competition in this area. Microsoft tried very hard. Netscape was the original one. It got ran over by Microsoft, which then got ran over by Google. And I'd love to see what the next generation of browsers brings. Not that I use a browser that much anymore, but it should be smarter. It's so dumb when I use it. And so I think It's I suspect OpenAI will have the most popular one given they're the most popular. Everyone I talk to uses ChatGPT. It is the Kleenex. It's the Google of the situation. That doesn't mean it's gonna last forever cause I think Claude considered better by many people. Perplexity has interesting things, but I'M really excited about this thing and I suspect the winner is going this. I predict the winner will be OpenAI and not Google because they haven't innovated enough on this. And so the people with an interest in winning are the most innovative.
- [64:38]
Scott Galloway
So I think that's interesting. Look, I'll be quick. These new tariff threats, 90 deals in 90 days. It's going to be what I'm predicting is the mother of all robovans. Remember when.
- [64:48]
Kara Swisher
What's that?
- [64:49]
Scott Galloway
Well, the Rebovan was that ridiculous van and distraction when Tesla had their last autonomous vehicle launch. They're like, oh shit, we have nothing here. Let's drive up a big bus and say that we're launching a van and let's have robot. Let's create distractions. You're about to see the Trump administration go into panic mode when all of these countries that they keep extending the deadline and keep sending out threatening letters, just say, sorry, boss, we. Where we're not showing up, we're not, you know, you can threaten us all you want. They'll they. You're going to see the most ridiculous jazz hands in the next three weeks claiming victories. First off, these two quote unquote trade deals between the UK and Vietnam aren't even deals. They're agreements to talk about a new deal. And you're going to see them start to announce the most ridiculous hollow victories to try and, you know, turn chicken shit into chicken salad, put lipstick on a pig. I mean, this is just, it is just so. It is going to start to get comical. The shit they're going to announce and pretend is a victory.
- [65:58]
Kara Swisher
It's incredible. It is an incredible thing. It doesn't really work either. That's what's interesting about it. Does it?
- [66:03]
Scott Galloway
Well, what they would never do is admit defeat or just move on. They're going to say, okay, Paraguay has said that they're going to talk to us about a new tax credit if Ford opens more dealerships here. And they're like, okay, put out a press release that we have a new deal with Paraguay. You're going to see the most ridiculous announcements claiming victory in the next few.
- [66:32]
Kara Swisher
Weeks because Moldova is sending us a box of nuts. It's going to be great.
- [66:36]
Scott Galloway
I do have a number of friends who work in the State Department or work in the equivalent of the State Department in other countries. And, and they're like, yeah, we're not doing anything. We're not responding. We're being polite, but we're not doing anything. They're like, we don't Wanna piss the guy off, but we're not coming to the table.
- [66:55]
Kara Swisher
Yeah, but it's so interesting. When is the point where they're like, they don't care about pissing him off. Cause the lying is really one of my favorite lies. Well, okay, I'm gonna say I don't know what she's doing, but Susie Wiles gave this interview. She doesn't usually come out behind the woodwork where she is usually living at the White House where she runs things and. And was like, I don't know what happened to Elon and how the falling out happened. I'm like, there's a knife in your hand, honey. Like, it was really kind of funny. But they do manage to just prevaricate almost all the time. It's really something. And everyone knows they're doing it anyway. Hopefully it won't hurt the economy too much or people's livelihoods. Anyway. Those are really good predictions, Scott. I think you're 100% right. We wanna hear from you. Send us your questions about business, tech or whatever's on your mind. Go to nymag.com pivot to submit question for the show or call 85551 pivot elsewhere in the Kara and Scott universe. This week on Profke Conversation, Scott spoke with Heather Cox Richardson. Fantastic for you to talk to her. She's a historian and author of Letters from an American. Let's listen to a clip. But that idea that patriotism belongs to a certain party has turned out to be, you know, really quite poisonous. And you see now the elevation of partisans citizenship over our country, even in things as recently as the budget reconciliation bill. So there is a perversion of patriotism that we see going on around us, but reclaiming a broader patriotism that shows an allegiance to the country rather than to a political party. You know, we've done that repeatedly in the past. And the answer to that is simply to return to the foundational principles of the American democracy. The idea that we should be treated equally before the law. We have a right to a say in our government and we have a right to equal access to resources. Good. She's great. Did you enjoy that?
- [68:42]
Scott Galloway
It's funny, the emotion I felt, it was a really. In addition to her being so impressive, it was a nice lesson for me because I was actually quite insecure during our conversation because she kept putting questions back to me. And it was quite humbling because what I recognized is that she gave me the sense and this is important. She helped me know how little I know about certain topics. She has such deep domain expertise. She is so forceful, yet dignified. And I thought I really should be more measured about some of the shit I speak about, because this is what a real expert feels like. And I asked her to talk about to equate 30s Germany and what's going on there to some of the attacks on democracy here. And she said, you know, that's not my area of expertise. And I remember thinking, she has more knowledge about that in her fucking finger than I have. But she doesn't want to talk about it because she takes her role and her expertise and where she has expertise seriously enough to say, I don't know enough about that to comment on it. And I thought that is a good lesson for a lot of us.
- [69:44]
Kara Swisher
Yes, it's true. It's true.
- [69:44]
Scott Galloway
But she is really impressive. She's a badass. Oh, my gosh.
- [69:48]
Kara Swisher
You know, she lives in Maine. I think she's married to a lobsterman. There's some, like, really interesting personal story that I think she told me something like that.
- [69:56]
Scott Galloway
So impressive. So humble.
- [69:58]
Kara Swisher
I love an academic like that.
- [70:01]
Scott Galloway
Yeah, really good. I've always said that I work one of the best faculties in the world. Half of them should be put on a fucking ice floe. They're doing nothing but causing problems.
- [70:10]
Kara Swisher
Well, focus on the ones that shouldn't be, Scott.
- [70:12]
Scott Galloway
In a guild, in a union, that translates to student debt. 30 or 40% of them are doing their job. And a good 10% of academics are literally some of the most impressive people you're ever gonna meet.
- [70:23]
Kara Swisher
Okay.
- [70:24]
Scott Galloway
And she's one of them.
- [70:25]
Kara Swisher
Yep, she is. Okay. And you are, too, Scott. You were a very good teacher.
- [70:29]
Scott Galloway
Go on.
- [70:29]
Kara Swisher
So you're still. I think students would really like to see you back in that. And when you go to New York, I think you should do a class. That's my opinion. You're an excellent teacher. That's what I'm saying. Okay. That's the show. Thanks for listening to Pivot and be sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, read us out.
- [70:44]
Scott Galloway
Today's show was produced by Lara Naimon, Zoe Marcus, Taylor Griffin and Kevin Oliver. Ernie Andrew Todd engineered this episode. Thanks also to Drew Bros, Mia Sivero and Dan Shalon Nishak Kurua. As Vox Media's executive producer of podcast, 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@nymag.com pod we'll be back next week for another breakdown of all things tech and business. Support for the show comes from Intuit QuickBooks. Do you own a business that's ready to thrive? It's time to let Intuit QuickBooks take things like unpaid invoices and tracking expenses off your platform plate so you can take things to the next level. Intuit QuickBooks is a powerful AI driven all in one business solution that can help with day to day tasks like invoicing expenses and taxes. QuickBooks can help you unlock the growth in your business so you can get back to enjoying your business. Manage and grow your business all in one place. Intuit QuickBooks your way to money get 90 off for 3 months limited time only Terms and conditions apply.