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- [00:00]
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Foreign.
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Hello and welcome to the Bulwark Podcast. I'm your host, Tim Miller. Delighted to welcome back to the show, co host of Pivot, host of on with Kara Swisher, creator of the CNN original series, Kara Swisher Wants to live Forever. The only person producing more content than me, it's Kara Swisher. What's up?
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We are funny that way, aren't we?
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B
We are.
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A
We are.
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B
We should do less, probably.
- [00:27]
A
No, no, more. More, Yes. I feel like there's enough of us out there.
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B
I agree with that. Daviel is suggesting we do a spinoff podcast about coaching our children's sports teams. And I was like, do people want to hear my opinion about everything?
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A
That's a good one. I was a terrible coach, Jim. I was terrible.
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B
You were a terrible coach.
- [00:44]
A
You're probably good. It's probably the flip on the gay thing, right?
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B
I thought, well, the outcome wasn't that great this year, so talk to me next year. Okay. I felt good. I felt like we were improving throughout the year, but the end outcome wasn't great, so we'll see how it goes.
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A
I felt like it was herding cats and I just didn't like the entire experience. It just wasn't.
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B
Yeah, I don't. I'm surprised because I would have thought the opposite with the lesbian thing. The coach that was running circles around me in the youth basketball league, I thought she was a lesbian. My husband just thought she was a sporty straight.
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A
Oh, that happens. It's very confusing these days. I went to the Liberty game over the weekend and you can't tell. You can't tell anymore. It's just really hard.
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B
Hard to know. All right. We've got much to get into. I want to. Obviously, it's all the tech AI stuff. Elon Bezos. I wanted to just ask a big picture question to start, though, because Scott said on your podcast Pod the other day, we are in 1999. And you agreed with that. I thought that was provocative and I wanted more. And so give us a state of play.
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A
Yeah. I think one of. We were talking specifically about the SpaceX documents, the SEC documents, which are so bad, mathematically speaking, that it calls to mind a lot of stuff that we had previously seen at the height of the dot com bubble, where just everybody was like, yeah, yeah, right, yeah. Huh. And most of it was nonsense. Now, that said, out of it came Google, out of it came Amazon. You know what I mean? Amazon had been troubled at the time. So it doesn't mean that there's not going to be big, big winners here. It's that there are a lot of stuff that isn't going to exist and everything. I think 10% of the stock market, some number is predicated on a small number of companies. And so if one of. One of the struts falls out, say just this week, Uber, the CFO said, we're spending too much money on AI tokens and we don't know the efficacy of it. Like that's a statement. Like if that. If there's more of those statements where people are like doing all this AI spending and then not finding any good use for it at this moment, it just feels like that the cheerleader. Of course we need MySpace. Of course we need six search services. Of course we need whatever it happened to be at the time Friendster. But, you know, I'm trying to remember Mary Meeker was back in a toys.toys.com or eToys. Remember there was a bunch of them. And it has that feel and it doesn't mean it has to happen that way. And I. Doesn't mean I don't think there's not going to be big companies. It's. Everything is very fragile. And when you read that SpaceX thing, you're sort of like, you've got to be kidding me. That people are going to invest in this and then now index funds have to invest in it, Are forced to.
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B
Yeah. I want to come back to the AI stuff, so let's just sit on Elon for a second. Sure.
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A
Let's try not to gross. I mean, you can do it if that's your preference, but whatever.
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B
That's not my type. I'm not really into kind of like the, you know, looks like you're wearing a pillow underneath your shirt type vibe. Yeah. Who's the guy from Minions? Kind of like the bad guy from Minions isn't really my love. Yeah. Each their own, but on the IPO, I guess it's about a $2 trillion valuation.
- [03:56]
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Well, maybe.
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B
Well, that's what they're going for. Just run through it for like, what. What is this? I'm like, Starlink seems like a legit business.
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A
Like in terms of. The Starlink business is really promising. Now, it doesn't mean to say that they're not going to have competitors and they are. Right. But right now, they're far and above the best product. They're just. Just about to be incorporated into American Airlines. So they're doing a lot of cool commercial stuff. They just got a giant Pentagon thing. Deserved or not, they're going to be they're doing a lot around, drones are doing, you know, Starlink is really, is interesting and that's a part of the business. It's the communications part of the business. And it's attached to SpaceX, which is a rocket company, which is a money furnace. Right. And it doesn't mean they're not far ahead and they really, really are, but it doesn't mean people are going to catch up and it doesn't mean it's ever going to make a lot of money. So that's another problematic thing. Now that's still a promising company, but it's just not making money and they're way ahead. And their products, they keep blowing up rockets, not necessarily a bad thing, but they're far ahead of most competitors. Except for state, state run enterprises, right. NASA or whatever China's cooking up. And then you have. They stuck Twitter in there, right? And that's supposed to be. It was supposed to be.
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B
How's that doing?
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Not well. But it doesn't matter because what it is is a data play, right? It's a data and infrastructure play. What happened is Grok, first they merged Twitter into Grok. I think, I think I'm doing this right because it was losing money. And then they just hit it and then everyone let him off the hook and all the other stuff because they wanted into this ipo. And then they, and then the Grok wasn't working out so well, so he sold his compute to Anthropic, which is doing well. So now he's renting out his seed corn because his own business in AI is not working and calling it data infrastructure. Sure, why not? Okay, you're just, you're essentially, you couldn't make it work and so you're selling off your compute to someone who's making it work. So that's. They're getting a billion dollars a month I think through 2029 for that. It's sort of like renting out. If you, you rent a too big an office for your startup and you start renting out pieces of it. That's what Scott was comparing it to. So that's another shitty business. And now they're thinking of shoving Tesla in here, which is a business on the decline. Even though the stock stays elevated, it has the Elon part of it in there. And so even though Tesla's business is declining pretty precipitously without a new product, which their last product was the cybertruck and we all know how that worked out. Not well at all, largely because it's a shitty Product and ugly and does just. Nobody bought them except for SpaceX bought Cybertrucks. So now there's all this self dealing happening, which is very typical of Elon. He does a lot of these things.
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B
What is SpaceX doing with the cybertrucks? Is it just like sending them up into space or are they using the outside?
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They need them for things, who knows? It doesn't matter because this is a board that lets Elon do whatever he wants, right? Doesn't matter. It's a self dealing thing. They don't. They're not doing anything with them. They're just sitting on lots. There were pictures of lots full of cybertrucks nobody wanted to buy. Except for people, straight men with, with a, with a middle age crisis like a midlife crisis who are not going to get dates because of this. FYI, men.
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B
Except who could go, who could get into the front seat of that car with any dignity.
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A
Well, ladies, who might like that? Sure, why not, right? Like let me just read you, Let me just find this one thing. Years ago I said, you know what he's going to do? He's going to put. He's going to shove that in here. He's going to shove that piece of shit in here because that's what he does. And I got attacked on Twitter like oh, how dare you. He's a genius. And I was like, I don't care. He shoves shit in places so he can hide it for other things. And that's precisely what he's doing because it makes sense. It also gives them a lot of data, all manner of things. Let me read this. SpaceX is like a 2008 mortgage backed security. But instead of an assortment of bad debt from people who aren't going to pay it back, it's an assortment of Elon's shitty companies. Bad debt from people who aren't going to pay it back. Give it an Elon premium because everything gets. No matter what people meme stock this thing and so double it. 1.2 trillion. How do you get to 2? And the reason he's merging Tesla and the other is because some of his payoffs result. If he can get the market cap up to 8, I think this gets him up to 3.5 trillion. So merging it helps him get to his payoff, his giant payoff. So it's all self dealing. It's all self dealing for Elon Musk to get richer in the middle of it. Some great products.
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B
And the smoking mirrors in the self dealing kind of works though, right? Because he's able to get capital to go out and do other cockamamie stuff and, you know, who knows, like something hits like Starlink does and it just perpetuates.
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It's not that much of a hit. It's a stock hit that the people seem to buy Tesla, even if it's declining. And so people are going to buy this. And now that they've had this new SEC trick where it has to immediately, pretty immediately, within 15 days goes into the NASDAQ index. That means all index funds have to buy it, therefore transfer.
- [08:55]
B
Can you explain that to the tric? The new changes?
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Well, it used to be they'd include large IPOs into the NASDAQ index and then index funds are forced to buy them because they have to buy a market basket of stocks. This will go in much faster and with lesser rules. Right. There used to be profitability rules. This is not making money, et cetera, et cetera. And so every pension fund, every index fund, you must be an index fund. I'm an index fund. They're going to have to buy it. And therefore our money is being transferred to Elon and his friends. Right. And then they'll cash out and we have to stay in it because we're in the index funds. And so OpenAI is going to take advantage of this. So will Anthropic. They're big giant IPOs and so they'll land in here. And the question is, shouldn't there be better standards for what lands into the market basket of stocks that index funds are forced to buy because they're index funds? And so again, it's another gimme. And that just happened for Elon, so good for him.
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B
I think it's obviously working for Elon. Maybe not to the degree that he thought in 2024, given how Doge flamed out, et cetera, but just on balance, it's working for him. The last time you were on the thing, I always ask folks who's kind of who are in tech world and who associate at various degrees with the big tech guys that kind of went from being basically capitalist Democrats to being all in with Trump is how they feel their deal with the devil is working. And you know, and it's like it seems a lot worse than it did six months ago now.
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A
Yeah, because it's working. I don't think they were ever Democrats. I, I never agreed, I never. I thought the people below them certainly were very liberal, like the people who work for these companies. But these people, I would say I
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B
didn't know Zuckerberg you know Andreessen, like
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these guys were Andreessen, he was, he, he helps whoever helps Trump in 16. Yeah, right. But he helps him. Who helps him? Like they're all self. Whoever can help them, they go towards, I never really knew their politics very much liberal or Republican. I, you never heard it like it was never an important part of their thing. You know, even Zuckerberg, I, I, he complained about regulation, but not Democrats in particular. I think Elizabeth Warren sent him around the bend. That, that's my impression is he was really irritated by her or scared of her, whatever. But I think they, I think this is a coin operated presidency and they have coins and they figured it out. Used to be disdainful of politics. Now they're like, oh, it's cheap, it's cheap to buy, it's cheap to manipulate, it's cheap to hide things. We can use all manner of our power to do so and buy our way in. And I think they just, from a logical point of view, it makes sense if you have money and they'll, you give them money and they'll do what you want, you'll get the contract back. It's a very cheap thing to start a pack of $100 million because you'll get what you want from these, from these politicians. And so to me it's kind of like we're in the Jimmy Stewart days. Like that's who's gonna win is the influencer.
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You don't see any looking at it and thinking, God, look what happened to anthropic and like geez, he seems pretty erratic and look what's going on with the broader economy and Iran and maybe this isn't, this was a risky bet.
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No, I don't think they care. I think they actually have become true believers. Like you have a David Sacks with all, you know, the only person who stands out is the ant CEO and the founder who is just with the Pope. And they have a very different point of view, but they left OpenAI over safety issues. So this is at the heart of their, their feelings. Right. And so there are quieter people. The Reed Hastings, you know, Reid Hoffman's been a lot quieter lately because of the Epstein stuff obviously, but because they try to drag he's, they really tried to drag him in a way that I think is probably unfair. And you know, there's, there's quieter ones that are just sort of sitting by the sidelines, but there's no pl in. If you want a thing, look at Tim Cook. He showed up with the gold statue and went to the Milani pros next to Brett Ratner at the Melania premiere. Did he have to do that? You don't see Satya Nadella doing that, do you? Like, they're quiet, the ones that are objecting to it, just like the Republicans. Suddenly Thom Tillis is a critic.
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B
Like, give me a break. He was before.
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He was before, off the record, but he wasn't.
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Now he's cowardly, though. It's like, oh, and he even says it. It's like, I don't know. How do you have any dignity as a man by saying that? Which is like, the freedom to do that, to say that.
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What I think now, I called him too late, Tom, and he got real mad about it. But I. Listen, I'll take it. I'm fine.
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Here's another one of your old Silicon Valley friends. That feels like the deal with the devil's been pretty good for him. Jeff Bezos was on Squawk Box the other day, and I just want to play a little clip for you.