He really doesn't seem to have a plan. And he's the president, right?
He'll call you and ask you for your plan in about half an hour.
Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
So, I just flew in from San Francisco and boy are my arms tired.
I've heard that joke before.
I know. I don't know why I keep doing the night flights thing. I just keep — I think I'm getting too old for it. Um, but I had, as you can hear everybody, I have a cold. And I actually was there to interview Gavin Newsom for his book, Young Man in a Hurry, which is now, I guess, Old Man in a Hurry. And so I went in to do that and it was actually a fantastic interview. We'll talk about it.
That's got a lot of news.
Yeah, I did. I made a lot. I'm a newsmaker, my friend. I don't —
And just to be clear, to give you insight into our relationship, there was someone put out a thing saying that he was in support of regime change, and I wrote 'smart' and you berated me. So why don't you give us —
Not publicly. We're going to talk about it. We're going to — let's get into it. I didn't berate you. It just was inaccurately depicting the interview I had just done.
Because I wrote the word 'smart'.
No, because you were tweeting an inaccurate report. That's all.
What was — who put out the inaccurate report?
I don't know. It just was weird. It was weird because it was so not what he said. And so it just annoys me. It just annoys me. I mean, I definitely made a lot of news in that interview. By the way, we talked a lot about his book, which was interesting. We'll get to the —
But he's definitely not running for president because no president ever puts out a book before they run for president.
I know. Well, no, he kept saying that he wasn't sure. It was really funny. And then right afterwards, it's actually — I like the book. It's gotten some bad reviews, but I think they've just decided who he is and are reviewing it based on sort of that anxious toad slick image versus a lot of stuff that he's done that's brave. He's a very complex person like yourself, Scott Galloway.
I've heard it's actually pretty authentic.
I thought it was great and it was a lot about stuff. Let me just characterize this discussion. The book I really like, I have to say, and I think I found out a lot of things about him that I didn't know. About his mother — I knew a little bit about his mother's assisted suicide, but it was really interesting to talk about a lot about his own struggles. It wasn't the dyslexia part. We didn't talk a lot about that, but a lot about — I didn't know his wife had had a miscarriage, for example. They have — he has four kids. He almost had five. There's a lot in there. There was a lot in there. And one of the things that struck me, which brings me back to you, which I know how you like that, is he was the son of a single mom who was not wealthy. And he has a lot of resonances with your mom. You know what I mean? Like your story with your single mom who was struggling, father who was distant, and who he desperately wanted to be with. It really reminded me a lot of you, actually. It was an interesting discussion.
I think people underestimate Newsom and I think they underestimate DeSantis and Rubio. But I think right now, I think Governor Newsom hands down is the leading candidate on the Democratic side. And not only that, I think I know a little bit about his personal story and I actually think it's quite compelling.
And a lot of his personal failings I think will come across as a bit authentic. People know about them. And also I think California is going to begin not to peak but to recover at just the right moment for him.
Yeah, I suspect. Anyway, it was really interesting because I did feel like I was having the same discussion you and I have had about single moms.
Look, we're the same person except he's much more talented and handsome and higher character than me. Other than that, we're the same guy.
That's what he suffers from. Everybody is sensitive to you and not to him. He definitely played into it. We talked about that. It was a very personal thing, but we did get a lot of news in too.
Yeah. Reading about it everywhere. I know. Yeah.
I literally see Gavin Newsom and this 11-year-old boy on stage and I'm like, 'Oh, I know her.' And my voice is so — for those listening to it, I apologize. This is a good version of my voice. I was absolutely a dead horse three hours before and I thought I'd have to cancel, but I did all manner of things to my voice to allow it to work. And he got to over — and I said, 'You're lucky today. I've never had a man overtalk me, so you're going to get some chance to do that today.' Okay, which was funny. And he does talk a lot, let me just say. So, let's get right into it. President Trump says the US military intends to continue its assault on Iran for four to five weeks if necessary. He keeps changing his tune. We'll get to that in a second. The US and Israel began strikes on Saturday, killing Iran's Supreme Leader, the Ayatollah, as well as several senior officials. Trump has justified the attack on Iran, which did not receive congressional approval, by citing 'imminent threats,' though he had not provided evidence — it looks like he doesn't have any. Iran is retaliating all over the place with missiles and drones targeting Israel, the US bases in Gulf countries, Dubai, all manner of places. Four American service members have been killed, and Trump says there will likely be more, but quote, 'That's the way it is.' Kind of a callous way to put it. Three US jets were also shot down in a friendly fire incident over Kuwait. The crew members got out safely, thank goodness. These are $90 million jets. That's $270 million. Trump has justified the attack on Iran, which did not receive congressional approval, by citing imminent threats, though he has not provided evidence, and many, many people who've been briefed on it, including Republicans, said there wasn't evidence of that. That said, a lot of people are celebrating the death of the Ayatollah. Defense Secretary Pete Hegseth held a presser a little while ago. He said this is not a so-called regime change war, but a regime sure did change. Not clear if either of them is true because Trump has talked about regime change and it doesn't appear as if the regime has changed. Hegseth was also asked about the timeline. Let's listen to what he said if we can hear him directly.
To the media outlets and political left screaming endless wars, stop. This is not Iraq. This is not endless. I was there for both. Our generation knows better and so does this president. He called the last 20 years of nation-building wars dumb. And he's right. This is the opposite.
Well, it's nice to hear from a stooge who doesn't know what he's talking about. But I also want to note about this interview I did with California Governor Gavin Newsom over the weekend for the latest episode of On with Kara Swisher. It's really interesting because one of the issues was all the misinformation online. It was really quite — it wasn't just something you tweeted, but it was all over the place misreporting where he stands on all this. Let's listen to what he told me. And this was just a small piece of it because he went on for a while decrying Donald Trump's action. Let's go.
And that's Donald Trump, the chaos president, this wrecking ball president across the board. Destruction is not strength. And once again, we've seen him destroy not only our allies in relationship to the rest of the world, but we're seeing him destroy any capacity to explain fundamentally what the core American interest is at this moment — to declare war, to go to war with a regime. And all of this is playing out in real time.
Newsom posted on X over the weekend: 'The corrupt or repressive Iranian regime must never have nuclear weapons. The leadership of Iran must go, but that doesn't justify the president of the United States engaging in a legal, dangerous war.' Very similar to what Senator Warner said. All the senators pretty much said, 'This guy deserved to die, and at the same time, this seems like a chaotic mess.' Let's talk a little bit about it, and especially the economic impact that the fighting has effectively shut down the Strait of Hormuz, which carries a fifth of the world's oil supply. As of recording, oil prices are up about 7%, gas futures jumped as much as 9%. Spike in energy prices, supply chain strain, broader ripple effects across the global economy, especially because of the uncertainty. And the last thing I would note is that — and it's interesting because Trump does respond to this — is that there's much reporting, including in the Washington Post, about how he was convinced to do it through Mohammed bin Salman and Benjamin Netanyahu, and even JD Vance and General Kellogg did not want to do this, but here we are. So what do you — talk a little bit about where it's going to go from here and your thoughts?
Well, the honest answer is I have no idea, or I have a vision for where you hope it goes, but I'm sympathetic to Governor Newsom and Senator Warner. The notion that we're going to end up — after Trump is gone, we have to be thoughtful about how we improve the tensile strength of our democracy by stopping the slow but steady leak of power from Congress, which is the people, to the president, under the false comfort that they will stick to certain norms, because effectively a president should not be able to — military action you can maybe justify, but this is war. And I'm sympathetic to —
You used the word war. Oh, go ahead.
I know this is war. That it is war. And I'm sympathetic to the notion that the reason we have 535 members of Congress representing, you know, two per state in the Senate and one for every 750,000 people is the American people are supposed to have a say. But Democrats — it's 7% — are actually in favor of this. So there's going to need to be — the best thing we could do coming out, or one of the best things I think coming out of the Trump administration, and this highlights that, is to have structural reform around gerrymandering, Citizens United, and that Congress has to be involved or briefed, or that we have to go back to this notion where only Congress can decide if in fact we go to war. Now, where could this go? As you know, I'm in favor, loosely speaking, around this action because I always like to ask myself what could go right. Iran is 90 million people, sits on the second largest natural gas reserves, the third largest oil reserves, incredible science, incredible universities, incredible entrepreneurial spirit. Actually quite a non-secular —
Non-sec — well, I would argue it's anyway fairly non-secular, a lot less anti-West than people have been led to believe by what I think is one of the most oppressive, brutal regimes in history. So, what could go right? You could have one of the largest economies in the Middle East become more pro-West. It's been punching below its weight class for 20 or 30 years now because of poor technology and sanctions. You could immediately see it come up and be an economic power that is pro-West, pro-trading, pro-capitalist. What effectively might be one of the biggest tax cuts in history if you saw more consistent flows of oil and technology and a great trading partner. I actually think Europe would be the biggest beneficiary. And turn what has been the primary agent of chaos and terror in an unstable region into something resembling — I don't even call it pro-West, but neutral-West. So I think there's a lot that could go right here, and I think the risk assessment provided to the president, in my view, had a lot of asymmetric upside. Now, having said that, what they missed here was part of the Powell doctrine, and that is you have to have clearly articulated objectives —
Or plans for what's next beyond —
Well, they haven't — and to your point, they just haven't been able to articulate in the last 24 hours what is the off-ramp and the objective here. Is it regime change? Is it a more friendly regime? Is it — I mean, what exactly —
And all that — you're not going to get — this notion that all of a sudden we're going to provide air and the Iranian people are going to rise up and overtake 150,000 members of the IRGC who are deeply integrated into —
They have outside plans. There's some great reporting on this, by the way, by legitimate news organizations. They have contingency plans in place for what happens if he dies, and they're carrying them out.
But okay, but in Syria, Libya and Iraq, these were autocracies with a central figurehead. The IRGC is very deeply embedded into the economy.
So when your mortgage and your salary is being paid by the IRGC, it's not like, 'Oh, okay, the top guy Assad is gone and boom, it's a new administration.' So there's a lot about the ground game. There's a lot about intelligence assets. And if they had said, we are going to — for example, a potential off-ramp: we're going to neuter their navy, we're going to diminish their air defense capabilities, we're going to make sure for sure there is absolutely no ability to create or enrich nuclear stockpiles, and then we're going to leave it up to the Iranian people. That's technically an off-ramp. But I have seen in the last 24 hours them talk about regime change. No, this isn't regime change. So they haven't been able to articulate what is next.
Well, I don't believe they thought about it. I mean, one of the things that a lot of people are pointing out is the involvement of Netanyahu and the head of Saudi Arabia, who publicly had said he was against this but privately was quite for it and pressing for it. The linkage between the corruption with the Trump family and this coin-operated presidency that I talk about all the time is really very clear, because most — I would say they're trying to come up with a story after the fact. 'Oh, it hasn't worked. It isn't an endless war.' Although it feels kind of like an endless war. It feels very Bushian, right? You definitely had echoes of that. I think he thought it was going to be like Venezuela, right? That it was like just take that guy out. And by the way, he's in business with the Maduro administration. He didn't regime change that place at all. Like, speaking of regime change —
This is much more complicated.
I agree, but I think he thought it was like that.
No, I'm agreeing with you. This is not take out Maduro, and this is much more — he just has cowed the regime into it. But it's the same regime in this case. It's really fascinating how they have put themselves into this economy in a way that's very hard to get them out. Right. Exactly. You know, of course, this is their point of these very corrupt and I would say evil mullahs in Iran. But one of the things that's fascinating to me is, one, the continued corruption of Trump's family and Trump in this region, and second of all, that he keeps calling — have you noticed he's calling all — I'm waiting for a call from him myself. Like he called Jake Tapper, he called, you know, a bunch of — John Carl, he's called all the regular old media people essentially, or the people he decries all the time, and it seems like he's workshopping different reasons. Like it's — that's so —
He's trying to figure — but there is again what could go right here. The most powerful instinct is survival. And what we pulled off here — and when I say we, I actually think it was more the Mossad than us. We effectively — and I don't think people really register how profound this was — within about two hours we took out the equivalent of the president, the secretary of defense and the head of the joint chiefs.
Right. They were all in the same place. But yes. And what has got to be the strategic mistake of, I would say, the last five years, other than the decision by Hamas to go into Israel, geopolitically they started attacking civilian targets within the —
Fareed Zakaria noted that this mistake — I mean, that's just — okay, you want to isolate yourself from who should naturally be sympathetic to you. Now, going back to this notion of survival instinct, at some point you got to think the next level down, and I don't know if it's 1,000 or 10,000 or 100,000 or 150,000 IRGC say, 'Okay, we too really like our families in this thing called life. Maybe we need to come to some sort of accommodation with the US and the West.' So —
That would require, as you know, boots on the ground, and Trump didn't even roll that out. Again, like this — here's what really drives me crazy: this idea they're like, 'It's not endless war, the other presidents were just dumb.' It's the same thing. You know, they're just trying very hard to spin it. And by the way, you noted a poll that half of Americans support it. It's actually not the case. Many of the polls are showing 25%. You should —
I didn't say that. 55% of Republicans, and it's about 30% are indifferent. Now, amongst Democrats, it's 7%. And I'm amongst the 7% of Democrats who support this. But it's a little bit different because, okay, what they're hoping for — and maybe it's a hallucination — that it's not boots on the ground, that it's sandals and sneakers and slippers, that the Iranian people —
Based on — the problem is the 30,000 people that have been mowed down were the front lines. They were the Marines. They were the shock troops who were willing to risk their lives.
So the reality is kind of what the off-ramp will be or how this plays out probably plays out in the next week in terms of the Iranian populace's ability to foment and change on the ground, because the American public does not have any appetite for boots on the ground. But what I — I talked to a senator this morning, I'm like, isn't a reasonable off-ramp that you would say, 'Okay, we're going to diminish their ability to wreak havoc to a point, you know, 0.1. We're going to control the skies. We're going to diminish their navy. We're going to clear out their minesweepers from the Straits of Hormuz. We're going to absolutely ensure there is zero capability nuclear. And then we're going to declare —'
You said it was obliterated in June. Just let's point that out.
Fair point. Why did — again, more inconsistency. Why did we need to go back in to diminish their nuclear capacity when you said it was done seven months ago?
So there is inconsistent messaging.
But I think the — in my opinion, the opportunity here is to diminish the capacity to continue to levy this depravity and oppression amongst its populace and potentially liberate one of the great cultures in civilization's history that sits on unbelievable economic potential, economic prosperity. There is a real potential upside here.
You know where else there's a potential upside is Ukraine. Same thing like this. So what's really interesting to hear is he yells at Europe for not pulling their fair share in defense. Fine. I can see that argument even though he makes it in the crude and repulsive way. Why isn't Saudi Arabia and Israel paying for this? We're doing their cop duty and we happen to have a corrupt cop on the beat.
Oh, Israel sacrificed — I'm talking about — you don't hear the same language, right? Saudi Arabia — if Saudi Arabia wanted this to happen, they should pay for it. Like, if that's really the thing, why do I have to pay as an American taxpayer $270 million for three planes? Like, that kind of stuff. And so — and why isn't this money deployed elsewhere that I think isn't our — not me, I'm not running this show, but like why isn't Ukraine the same thing? Like that's what's really interesting because there's a country that is full of like economic — talk about economic opportunities. Same thing.
Let me focus you on the toll on the US economy because all these — like a free — well, first of all, every attempt at regime change in the Middle East has failed almost miserably for the United States, or a version of regime change — Afghanistan, everywhere we go.
Well, I did — to be fair, I did work in the Balkans. We have had successful interventions in Kuwait. We successfully repelled — the difference there is we did it multilaterally, which —
He's stupid to do here. Already Britain, our closest ally, is hemming and hawing about letting us use their airfields.
He wants to go it alone, which is stupid. Anyway, I interrupted you talking about the economics here.
So I want to know about the effect on the economy because one of the things — because these — when people start a war, it tends to be in the 60s period, right? It's 25, and I get that the Democrats don't like it, but a 25 is a bad place to start when you're doing a war, which if you remember — remember the Scud and everyone being vaguely excited when they were doing the — I mean, even myself, which is grotesque because I now have children, I'm like, 'Oh, no, no, no.' But talk about the toll in the economy because every — and the MAGA people, Green, Carlson, more even more heinous people are talking about this is not what we voted for, right? This is not — and they're trying very desperately to pretend it's not an endless war. It's whatever word they're going to use is not going to work with these people. He's already struck seven countries, seven events. Like he's done more war — like they — it was interesting because Hillary Clinton was so prescient about exactly what he would do here. He seems to like and have an appetite for military action because everything's going so badly for him. So talk about the effect on the US economy, oil prices, right? Inflation, more danger for the US in terms of attacks on our own soil from the Iranians. The — I mean, if you back these Iranians into a corner, they may do something really dire here in this country. What is the toll in the US economy? And let me add in that people were using this war to cash in on online betting markets, which was repulsive. Kalshi reportedly saw $36 million in bet volume related to whether or not there will be regime change in Iran. On Polymarket, $529 million was traded on contracts tied to the timing of the strikes, and some of them seem rather suspect. Polymarket defended its decision to allow betting on the strikes, saying it's an invaluable source of news and answers. It feels like profiteering to me. But talk a little bit about the impact on the economy. What's next? Think of three, two scenarios. What's next for the economy?
Just to go in reverse order, I actually would argue that we have diminished — I mean, you have what was the superpower in the region with their proxies, Hezbollah, Hamas, the Houthis, wreaking havoc economically and in terms of oppression of different people in the region, and their organizing principle was 'death to Israel' and 'death to America.' And I would argue that even if we don't have the regime change or a quote-unquote liberated, capitalist, West-friendly Iran, that their ability to strike at us and our proxies overseas and our bases has actually been diminished. That they're not — now we need to be more worried. I think we need to actually —
Be less worried. There are two scenarios here. One scenario is we end up in another forever war that explodes our deficits and we keep incrementally making excuses for, you know, trying to impose democracy, which is an oxymoron, and oil prices — the Strait of Hormuz gets blocked off and oil prices skyrocket. Now, to a certain extent, if you wanted to be really Machiavellian, that doesn't hurt us that much because we are energy independent. Who this really is hurting, both Venezuela and Iran, is China. 80% of Iran's oil was going to China, the same with Venezuela. So we can survive an oil shock, but you could have an increase in deficits of a forever war, disruption in supply chain, straining our relationships with the allies. I personally think there's more asymmetric upside where we unlock stronger oil flows, better technology, a potential trading partner for Europe and the US. And I would argue — I would bet that I believe in six months that oil prices will be lower than they are today. Now, to your point about cost and economics, I am sympathetic to the left's view, many people on the left, that these forever wars and foreign intervention and imperialist imposing our own values on other cultures and other nations is not only wrong, it is just really expensive. I'm sympathetic to that. What I'm not sympathetic to —
Can I make a correction? It's Charlie Kirk talked about this. The right — this has been an animating issue. I was just about to get there, Kara. The right has a very strong isolationist bent. What is inconsistent for me — it is consistent to say, 'Let's focus on our problems domestically. Let's spend money domestically. Let's not run up deficits with tax cuts and forever wars in a macho military, and let's stay out of other people's knitting, recognizing that we respect their right to govern themselves and shape their own future.' What is totally inconsistent is the far right or the right's isolationist rhetoric while approving a $1.1 trillion military budget. Because my view is the only rationale for having a $1.1 trillion military budget is, quite frankly, if on a regular basis you're going to go on your toes. Because if we don't want to get involved in this kind of foreign adventures or misadventures, whatever you want to characterize it, there's no risk of Canada invading us. Let's take our military budget down to $300 billion and pay off our deficit. So I've never understood the right's fascination with ridiculous military spending and then this isolationist complexion. I personally think the upside over the medium and the long term here economically with a peaceful Middle East once its primary sponsor of terror is neutered here — I think this over the medium and the long term could be really good for Europe. And if we could figure out a way to end the war in Ukraine, figure out a way to have a neutral-West Iran, I think you're going to see the largest tax cut in history because I think the flows of oil will cut oil probably in half and you'll have an incredible trading partner with what is one of the most productive capitalist, in many ways, societies in history, and that's the Persian people.
Yeah, that is true. I understand one of the things that troubles me is this — one is that he really doesn't seem to have a plan, and he's the president, right? And that people within his administration —
He'll call you and ask you for your plan.
My plan is for you to step down, but then I would get JD Vance, but that's my suggestion. And you should go off and spend all the money you've stolen from the American people. But one of the things that I think about a lot is that this is done in such a haphazard way without the involvement of Congress, right? That really is troublesome. And that these Republicans who were against these things immediately get in line. Now look, Lindsey Graham, that southern belle, has always been wanting to do this, right? And now he wants to go from —
And he's wanted to do this. He wants to do Cuba next. Let's do Cuba next, right? That's the whole thing. This is also — he just in his mistaken —
Cuba isn't blinding its women. It's not hanging teenage girls and then sanctioning rape of them.
He said Cuba. He did. And —
Yeah, I agree. No, I'm saying that makes, in my opinion, as much of a war hawk as I am, I see no logical reason to invade Cuba.
Well, I think that's next. It seems like they're just going to get bored over here and come over here. But this is something Lindsey Graham has wanted forever in his endless and sad attempt to be more masculine in some fashion. So fine, fine, Lindsey. That's fine. But one of the things that really drives me crazy is these people are so — they shift. These people say one thing one week and then shift it the next week. Like look, I know you like to attack the left, but they're sticking to their guns on these kind of things. They're still —
Oh, the left a lot. But the right just shifts it. Like it's like, 'We're against it. We're against it. We're against it.' Charlie Kirk said, 'Let's not be dragged into this by so and so. Let's focus here.' Okay, then let's cut our military budget to $300 billion.
I get it. I get it. But I just don't see why they don't — they shift this way. It's really — it's sad because I like when there's argument over what we should do here in a way that everybody gets — and it's meant to be a discourse in the Congress. I agree with that. Barry Goldwater called this in the '70s. He said that we have become dangerously used to a slow leak of power from the co-equal branches of government and Congress to the president. And what kept that mostly in check was a series of norms where the president would go and inform the Senate Intelligence Committee or the defense — you know, the people on the defense committee — that he would give them a heads up. He'd invite them to the White House and say, 'This is what we're thinking. What do you think?' Those norms are gone. And so there's got to be — unless there is structural reform around what it means to have co-equal branches — Republicans are resigning from Congress because they're like, 'Why the hell am I here?'
The speaker of the house —
Is not Mike Johnson. He's the speaker of the White House. He's there to run roughshod over people in the minority party. They're used to getting run over. They're used to having no power. But Republicans are like, 'Let me get this. I stuck around to be in the majority such that I could represent my people and get policies through, and I'm not even being consulted on this.'
No. And on the Democratic, I'd say centrist conservative — I have never seen Senator Warner, who I consider pretty moderate — more than — I mean, I think he's often — we often disagree on a lot of stuff. He was incandescent. I — you know, because he sees these things. He knows — he has so much experience in Senate Intelligence, etc., etc. And to watch people who had said the very opposite shift was really something because at the very bottom of this, it puts people's lives at risk unnecessarily. And not just American troops, which is terrible. It's people on the ground there, Iranian citizens, which American troops — and I worry about American, you know, people attacking here. And it just creates a situation that when you — there's just a — this guy's got to have a better reason than to call someone and have a different reason every minute. And we'll see its effect on the — the stock market's not loving this at all. But we'll see. We'll see where it goes.
But you brought up Kalshi.
And what's fascinating about these things is they tend to be right, that there's a wisdom of the crowds. And when you have Senator Warner, who has just had a lot — this is not his first rodeo — has had a ton of presidents and joint chiefs come before him and explain their plans. And when you have Senator Mark Kelly, who's actually flown these missions, if you don't take advantage of the benefit of their insight, even if they don't agree with you, you're not taking advantage of the greatest depth of knowledge and experience in military history. And that's amongst, quite frankly, many of our members of Congress. If you're not bringing Representative Seth Moulton in and saying, 'Hey, when you were on the ground in Iraq...' I mean, instead we're consulting with a senator from Florida, a former Fox TV host —
And a reality game show host. They're making these decisions.
And the FBI is being run by a guy who likes to party in the middle of a possible terrorist action in this country. We're — they're just going to make — and this is — I always like to try and reverse engineer to a personal learning here. One of my biggest flaws as a man is I thought that masculinity and leadership was making a quick survey of the situation and then making a decision and then it was my job to talk everyone into my decision. No, it's not. Leadership is listening and occasionally going, 'Oh, I got it wrong. We need to switch course.' I don't make — now, I didn't learn this until I was literally 50. I don't make a big decision personally, financially, professionally without talking to three or four really smart people because you can't read the label from inside of the bottle. And the US Congress is full of some of the most impressive, experienced, smartest people in the world.
And beyond that, there's people — and also they have this incredible task of representing their constituency. To not check in with them — I think Senator Warner is apoplectic because he's like, 'For God's sakes, we can save you from yourself.'
That's right. That's right. He wasn't out of ego. I just — I've never seen him do that. It was really interesting. Anyway, we have to move on. This is a developing story. We'll see what happens. This seems like a very, as Gavin Newsom said, a chaotic White House. It might be trying to get us away from the Epstein files or other issues at home. We didn't even talk about the distraction, but we need to move on. We'll go on a quick break. When we come back, Trump targets Anthropic, another incredible tech company, in what former Trump official calls attempted corporate murder.
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Scott, we're back. President Trump ordered federal agencies to stop using Anthropic after it did not come to a deal with the Pentagon on safety. The Defense Department will phase out the use of Anthropic products over the next 6 months, which will, I will tell you, hurt national security. Anthropic plans to challenge a supply chain designation in court. Good for them. When it comes to the App Store, Anthropic is winning. Claude is the number one spot in Apple's free apps as we tape. Anthropic also faced a major outage on Monday with the company saying it's been dealing with, quote, unprecedented demand. Meanwhile, OpenAI, of course, Sam ever the opportunist. OpenAI's Sam Altman reached an agreement with the Pentagon. The company claims it found a way to ensure its technologies would adhere to its safety principles by installing technical guardrails. However, when Sam Altman was asked whether he worried about there being future disputes with the Pentagon over what's legal, he responded, "Yes, I am." "Oh my god, Sam, I got to tell you, you need to stop talking." A former Trump official called the Anthropic order attempted corporate murder. It's the backdrop of OpenAI raising $110 billion in its latest funding round, including $50 billion from Amazon and $30 billion from both Nvidia and SoftBank, in these continued round-tripping kind of deals. I read a lot this weekend about this and one of the people involved was a guy named Emil Michael who used to be an executive at Uber who was possibly one of the most bullying and awful executives and full of all manner of bad behaviors. When he left the company, we wrote some stories of this thing he was involved in that was just so not good behavior, I would say. I have spent time with him. He was the one that was negotiating this. Not a surprise. He kept calling Dario Amodei from Anthropic godlike, god. He thinks he's god or whatever. I've never met anyone who thinks he's god more than Emil Michael. And he's usually a toad to more powerful people. In this case, Pete Hegseth. Anyway, it seems a ridiculous overreach on the behalf of government. Probably Anthropic will win. I think it probably will benefit from this, as you've noted many times. Any more thoughts on this? I don't think we're any safer as a people for having done this.
I don't. I think what people miss is that over the last 12 months, out of 23 markets, we're the 21st best performing or the third worst.
Yep. And what has changed? We've had incredible innovation.
We've had inc. We still have incredible innovation. We dominate the most tectonic shift in technology. The thing that's changing is I believe we're experiencing a rotation out of US stocks and a compression of multiples. And the reason why is the following. The underpinnings of why so much capital flows into the US from every other market in the world is our incredible IP developed mostly through funding of research at universities. An incredibly risk-aggressive culture based on immigrants who take huge risk to get here. And also I think more than anything probably, it or chicken and egg, it attracts the deepest pools of capital in history. There's $5 million in venture capital for every startup in the US. There's only $1 million for every startup in Europe. Anthropic started six years ago. If it was in Europe, it'd be one of the 10 most valuable companies. But when government starts selectively punishing and rewarding companies based on political favoritism, that capital gets scared and starts withdrawing. Because why do you invest in OpenAI or Anthropic if you don't know who you're waking up next to in terms of its ability to raise capital based on the blood sugar level of whoever's president? So this is not only the wrong thing to do and makes us feel less safe and is probably illegal, it's going to hit your 401k, folks. Even in places like the Gulf that are run by autocracies, they have a real respect for systemic laws in the market because they recognize the moment they start with companies based on their own who's in or out of political favor, it's Russia, which has no stock market because nobody wants to invest and then find out the CEO got a call from the wrong person or pissed off, got on the wrong list and is all of a sudden out of business. So even in China, people, I think they learned their lesson a little bit with Didi where they got angry at Didi and basically crushed Didi. They're now, you know, they have a lot of respect for essentially government regulatory bodies, consistent application of rule of law, trying not to play favorites. So this will, the immediate reaction will be, okay, they're wrong, this is illegal, fine. And also from a commercial standpoint, I've been saying for the last year that someone has an incredible commercial opportunity to say enough, right? We're the good guys. We do not buy into this. If this costs us money in the short term, fine. But the very American values that gave us so much opportunity are under attack and we're just not down with it. And I don't know if you remember me saying this. I said six months ago the biggest opportunity for Nike, which is trading at a 10-year low, was to run a bunch of ads saying we're about American values and that what's going on here is wrong. What's interesting is corporate America needed a hero and it looks like it's Dario.
I know, it's interesting.
What's really interesting here is I think, and it's finally happening, they're shaping up to be Joe Frazier and Muhammad Ali here. And I think that Dario is being very smart. And I think it's up to us and the media or progressives, and I'm obviously stitching this into the resist and unsubscribe thinking. I think it's time to start figuring out if there's a way to be more commercially supportive of Anthropic and less supportive of OpenAI. Basically, OpenAI has decided to enable and be complicit in the Trump administration's efforts and Dario and Anthropic have said, "No, we're not going along here. We're not going to be intimidated." This is quite frankly, Kara, I have been waiting for this matchup for years.
I know. Yeah, I know you have. Let me say I don't know Dario Amodei. I don't actually. And he might be arrogant, which is in line with most people in tech. That may be true, but I do know Emil Michael who did negotiate this. And I do know David Sacks and both of them are Aryan operators, ceaseless bullies, and anxious toadies to the powerful in my experience of covering them. Sam Altman is a little more complex, but he's a gifted opportunist, which doesn't make him that different from anybody in Silicon Valley. And he has made his choice here, right? That's he wants the business. And so it's really knowing the characters involved here. And then on top of it, you have an idiot like Pete Hegseth who doesn't know what's happening, communicating to someone who's even more moronic on these issues, which is Donald Trump, who I suspect Sacks is whispering in his ear and Emil Michael's whispering in Hegseth's ear. And this is all a Silicon Valley beef right between and among these people. Emil was let go, had to leave Uber under very not great circumstances, was pushed out. I think all these people is payback for other people. It's just there's a lot of Silicon Valley drama happening here and I don't know Dario. I really don't. It's unusual that I don't and I've asked for interviews with him. He has not agreed to do an interview with me. Thanks, Chris Nelly. But he did a very good interview with CBS News actually, which I thought was interesting.
He handled himself really well.
He handled himself really well.
He starched his hat wide in that interview.
Yeah, it was a good interview. But one of the things that I know is the people on the other side of him are very people I covered for years who are just not good. Not, how can I say this nicely? They're the worst of the people I had to cover over the many years. I have to say they're literally the worst. And to see them in these positions of power is making these decisions and hurting a company that just doesn't want to do business with them. And actually Michael tweeted out against Amodei weeks ago. You know, it's so unprofessional as a government, like it's such based in beefs that were happening elsewhere. And Emil, I ended up having drinks with him after he was sort of drummed out of Uber and he said something to me. It was so strange. He goes, "Well, I'm so glad we can be friends." And I remember saying to him, "We're not friends. I think what you did there is terrible. I don't know where you operate, but let him just do what he wants. And don't bring your stupid insecure beefs out on the thing." And it will benefit Anthropic. It will. I think he's handling himself. And he may be arrogant. He may have a god complex. I don't know. But he's certainly not like these people. And in that case, the bar is low. I've had my say.
I think it's a big opportunity. I think Americans and consumers are so ready to vote with their pocketbooks. And Sam, I don't think Sam has acquitted himself well. I'm not going to have advertising. We would never do porn. Well, I need to raise money. Never mind. And the largest customer in the world, which is the US government, needs to have a series of systemic laws that these are the rules you get to play by. And full stop. Everyone is entitled to and obligated to the same set of rules, not who you like or who you don't like. And which kind of leads into our next story, which is Netflix and Paramount.
Right? Netflix. Speaking of that, Scott, let's take a quick break. When we come back, Netflix emerges as a winner after losing the Warner Brothers battle.
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Scott, we're back. Netflix may have lost the battle for Warner Brothers, but it's looking like a winner. The company stock surged 14% after it formally exited the bidding war. It also now has $2.8 billion in the bank after Paramount paid the Warner Brothers breakup fee. The plan all along was to saddle Paramount with debt, drive up the price, and walk away with more money. Ted Sarandos said there are easier ways to make $2.8 billion. Very funny. He's also trashing it so beautifully. I have to say what a pro. The way like it's ridiculously expensive. He's dropping all sorts of bone. That Bloomberg interview you did. I'm hoping to do an interview with him relatively soon. He noted the Paramount deal is dependent on cost cutting leading to less production, less people working. He's 100% right. On the Paramount front, CEO David Ellison, who got strafed by Barry Diller as a stunt pilot in a speech, another thing, just announced that Paramount Plus and HBO Max will be combined into one streaming service. He also said there would be a lot less, I think, a lot of cuts, $6 billion in cuts, that he can quickly delever it. Nobody believes him or thinks he's capable of doing it. Sarandos had talked more about $16 billion. Let me just tell you, Hollywood, look out below. This is, look, I don't think Ellison means to be incorrect, but he is incorrect about what's about to happen here because the pressures on this much debt. I talked to, as you know, Bill Cohen went because you weren't around last weekend, but this much debt is enormous amounts of debt. It's like crazy. They don't have enough income, they have barely enough income so they can't grow. They have to cut. There's going to be, there's obvious duplication that they will cut. But even more than that, anything they say at this point is just absolutely untrue. It's just, and again, I don't think they mean it that way. I think they believe it that they can turn chicken into chicken salad. But most smart math people don't think they can do it, especially with competitors like Netflix breathing down and YouTube breathing down their neck. Your thoughts?
Well, I think I've been consistent on this. The biggest losers are the creative community.
I don't know. Half a million of them just got lined up and shot.
Yeah. Yeah, I mean, the amount of AI slop we're going to see come out of Paramount and Warner trying to pass for, you know, great breakthrough content. It's just going to be, like I said, you know, in space, no one can hear you scream. Oh, trust me, you're going to hear a lot of people scream. And the biggest winner, hands down, um, and I told Ted this. I said, if you walk from this, you realize your stock's going to go up 10%. I was wrong. In the last five days, the stock's up 30%.
Yeah. Back to other levels. Yeah.
Okay. So, let's look at it this way. They quote-unquote technically save $120 billion by not acquiring it and their stock's up $100 billion. Kara, they could go buy Disney right now.
For walking from Warner Brothers. So, and if I were them and I was Ted and I'd be pissed off, I'd be firing up my lobbyists and my lawyers and be like, delay an obvious, make it, create so much havoc for this deal to close. And by the way, every studio, every creative, they're all going to want to go to work for one place. Okay. Do I want, if I'm pitching, I just had my latest book optioned for a series and for a documentary, which means absolutely nothing I've figured out in Hollywood.
Your man, your notes on being a man.
Yeah. For an original scripted series and a documentary. Anyways,
Think of it as an R-rated Wonder Years is how I've been pitching it.
