It's not who he brought, it's the ratio. He brought 17 CEOs with him and three diplomats. So it feels as if America is just becoming an operating system for the wealth of the top 1% and they...
Flying billionaires on a plane to China to get [__] seems problematic.
Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
And I'm Scott Galloway. President Trump and Chinese President Xi have met for a little over two hours right now and attended a state banquet to start off their two-day summit in China. In Xi's opening toast at the banquet, Xi said achieving the great rejuvenation of the Chinese nation and making America great again can go hand in hand. He's snickering at Trump behind his back, though. The White House said both sides agreed that the Strait of Hormuz must remain open. Xi warned Trump that mishandling Taiwan would cause clashes and put the entire relationship in great jeopardy. Trump is joined in China by 17 American business leaders, including Elon Musk, Tim Cook, and Jensen Huang. A surprising lack of women on this trip everywhere. We also asked Alice Han, director of Green Mantle and co-host of Prof's own China Decode podcast, for her thoughts on the summit. Let's listen to what she has to say.
So, US President Donald Trump is heading to China. This is the first visit by a sitting US president since 2017 when Trump was last president. I'm carrying a three-point scorecard going into the summit in terms of rating it. Number one, will there be any indication as to tariffs and trade? Number two, will both sides agree to freeze or maybe even loosen certain export restrictions on chips and rare earths? And number three is a thornier geopolitical question. And I think both sides will have two very different readouts on Iran, but certainly both leaders will be talking about it and I believe that Trump will apply some personal pressure on Xi Jinping to help resolve it. Although I suspect the Chinese will be reluctant and push back on any kind of collaboration over Iran. I think this will be largely summitry without substance and it does pave the way for more summits to come with potential for two or three other meetings and a Xi visit to the US later this year. One concrete prediction I have for this summit is that China will increase Boeing purchases of aviation equipment. I think the fact that the CEO of Boeing is going there with Trump is an indication of that direction.
Interesting. Obviously, so she does. Summitry is a really good word. It's, you know, it's interesting because a lot of the coverage out of it is that China thinks we're a declining empire and, of course, who he brought was interesting. You typically bring business people on these things. It's absolutely true and he brought all mostly tech people or tech-adjacent people. I think most people feel that as she says nothing's going to come out of this and it'll be interesting to see what signals Xi sends versus Trump. I think he's the more important person to pay attention to. Your thoughts?
It's not who he brought, it's the ratio. He brought 17 CEOs with him and three diplomats. So, it feels as if America is just becoming an operating system for the wealth of the top 1% and they...
Billionaires on a plane like snakes on a plane.
Yeah. And what's the minimum amount of cheap calories and entertainment, you know, bread and circuses we can throw at the bottom 99 such that they don't, you know, revolt? And there's no policy. There's no prep. He sounds like an eighth grader with terrible, you know, who's had to take... he's failed English so many times he's going to have to take it as English as a second language. It's like Jesus Christ, can someone buy the guy Elements of Style before he gives a talk? I mean, he just...
I know the speech was in Chinese restaurants. I didn't even understand what he was talking about. They're laughing at us. You can feel it.
And I thought the most important statement because you can be clear. Well, he's sort of improvising with a mic. You can bet Xi calibrates every word. And the words that Xi said that I think should send a chill down everyone's spine is he said that he hopes that America's current approach, some of the effect of America's current approach towards Taiwan could result in a clash.
Clash. Yeah. And Trump hasn't really said a lot about Taiwan. He's not flying to Taiwan with Speaker Pelosi and publicly cementing our relationship with the ally there.
Yeah. Or not even a warning. It was more I saw it more as like a preview that we are going to start, we are seriously considering some sort of soft or not so soft repatriation, acquisition, invasion, whatever, use whatever word you want of Taiwan. And I think had Trump had more elegant diplomats with them, they would have immediately responded and put out a statement along the lines of, you know, we are all, both nations are committed to peace. And just as I'm sure we've witnessed the incredible fighting force of Ukraine when armed with technology, they can repel a much larger aggressor, which in my opinion would be an elegant way of saying stand the [__] down when it comes to Taiwan.
Right. He doesn't sound like he was. And he would never, he doesn't think, he doesn't have the diplomats or the IQ to respond to what was really the only substantive statement made at this summit. And sending Xi or sending Huang over, Jensen used to have 90% share of trips over there, it's gone to zero.
Because China's figured out that if I provide my local entrepreneurs with the incentives to catch up, they just might. And our trade has gone from 23% of their exports used to come with us, now it's 17%. They have bigger trade with ASEAN, the Association of Southeast Asian Nations, and also they do more trade now with Europe.
So we showed up, you know, it looked less like diplomacy than sort of two casino owners trying to refinance each other's debt. But Xi is the house right now. Trump came in as a guy asking for an extension on his mark or his credit. We are mutually, each of us has a foot should we decide on the other's carotid artery. They own 70% of rare earth minerals and 90% of the processing. We own or control with Taiwan 80 to 90% of sophisticated chips, which is why Jensen was there to be able to sell. This is something Trump barred by the way and then now he wants to sell the chips into China.
Can I make a comment about all the business people as you said? I mean it really was, there's so many important issues like there should have been a discussion about global AI standards and warnings just the way with this group cooperating on scary [__] and this group is all in on whatever it's, there's nobody who is a, everything they do, nobody is a critic of it. This is like, you know, flying billionaires on a plane to China to get [__] seems problematic from a visual point of view.
You're exactly right. This should have been an opportunity to develop the modern-day equivalent of Interpol. We have cooperation even amongst Russia and China around nuclear weapons. We cooperate and we go kill people if we think they're trying to mix up a biological, you know, a bioweapon. We cooperate and we go find those people and we arrest them or kill them. We should be doing the same thing of cooperating around AI.
Publicly. Publicly. I suspect there's behind-the-scenes stuff happening, but of course there is. But at the same time with this gang, just like with the advisory council on AI, it has nothing to do with safety in AI or anything else. It has to do with let's do some business here and as long as it's good for us and my rich friends, I'll do it. But it was so, he looked tired, he looked old, he looked addled, he's all those...
And then he was tweeting his Truth Social out like with his apparently the piece in the Wall Street Journal. I don't know if you saw that piece of him.
Was a Truth, 200 Truths in a 4-hour period.
Whatever it's this lady who helps him, this young lady who has a startling resemblance to Ivanka who stays up with him late at night and does this and even the White House people don't know what to make of the situation and the journal was implying some stuff like they were trying not to but she facilitates him posting this crazy stream of lunacy.
When I'm old I just hope I have someone facilitating.
Anyway, you know, his name is Manny.
Okay. I know. I know. Manny is the soft hands. Manny with the soft hands. I'm going to, I'm looking for me. Anyone named Manny with soft hands, call me and I'm going to get you ready for Scott, which should be in about 10 years. Okay. Well, you should know that.
10 years. Don't you think?
I'm difficult, but I'm very generous in terms of competition. I know you. When do you think you'll be going down? Like going down to...
I think the correct term is went.
Went. No, no, but really going down like hard. Going down.
When you say going down, you mean needing help?
I mean like in the need for a Manny. In the need for a Manny. I'd say 82 for you.
Jesus. That early? I think so. My dad, I'm assuming I'll follow the pattern of my dad at about 93. My dad needed help.
93. Okay. Yeah. All right. Okay. Manny, get ready. So Manny might not be born.
But just back to for a moment back to the summit.
Trump doesn't recognize the evolution of China since the last time he was there. China's no longer trying to copy Silicon Valley. They're trying to replace it.
Alibaba alone is going to spend $53 billion on AI. We're so focused on the hyperscaling and the capex here. You know, US hyperscalers are spending 650 billion, but 53 billion from one company, China usually typically has the ability to make their dollars go much further. And what they offer is the fastest zero to a billion dollar companies in history have one general business strategy and we like to think it's the innovator. No, it's not. The second mouse gets the cheese or specifically the shareholder value. And the most dramatic or the most accretive business strategy in history is to provide the following. 80% of the leader for 50% of the price. My first strategy engagement of profit was basically this idea and that was a lot of people couldn't afford the Gap in the 90s. A lot of people think of it as being a kind of a middle-ass retailer. The Gap is expensive for a lot of people. Most people can't afford $22 pocket tees. And the idea was let's tap into this huge population of single mothers who are very conscious about their children's confidence at school and offer 50% or I'm sorry 80% of the Gap for 50% of the price. Old Navy, fastest billion dollar retailer in history. Southwest is essentially when it started 80% of the majors for 50% of the price. China's entire strategy is we'll give you 80% of a Samsung phone for 40% of the price.
Yep. Yep. They're very innovative, too. Let's say, you know, this idea of what they're, they are a very dynamic autocracy. Let's just, they are a very dynamic and nimble autocracy.
Yeah. They have tons of problems. There was just an interesting, I mean similar stories. Decline in marriages, decline in kids. They certainly planned that for part demograph, I mean they have their own issues. Youth unemployment, demographics, real estate over real estate, morale stuff like that. Yeah. Which is more problematic in an autocracy but it's problematic here too. All right Scott, we'll see what happens. Nothing. It's a nothing burger. We'll see if they do more but I agree with you. Taiwan is where we need to focus. That will be a disaster, that will be our greatest crisis of this era, I think. Okay, Scott, let's go on a quick break. When we come back, Sam Altman takes the stand.
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Scott, we're back. It was Sam Altman's turn in the hot seat this week. At the Elon Musk OpenAI trial, Sam denied Elon's claim that he tried to steal a charity and said Elon supported OpenAI becoming a for-profit company as long as Elon had total control. That sounds pretty accurate as far as in my experience. Let's go through some of the other highlights from Sam's testimony. Sam described quote a hair-raising moment when Elon suggested control of OpenAI should pass to his children after his death. That is hair-raising. Sam said Elon's departure from OpenAI in 2018 was a morale boost for employees who did not like his hardcore management style. I was there during that time. That's exactly what they described. I have to say I heard from a lot of people he was like a big giant [__] baby. And he does that with all his companies. He comes and yells, kicks a can, and then leaves. And they can't wait till he leaves. When pressed on his OpenAI equity stake, Sam acknowledged he holds a passive stake in the company through Y Combinator. I also want to mention that Kara Swisher came up in the trial this week. I was surprised not more. While Microsoft CEO...
No because I was texting a lot with the most Kara Swisher thing. Kara Swisher surprised I wasn't mentioned more. I texted with them all during this time. The Microsoft CEO Satya Nadella was testifying. Elon's lawyers were questioning Nadella about the nature of Microsoft's relationship with OpenAI and pointed to comments he made during an interview with me after Sam's firing. He was all in for Sam during that period. Closing arguments are getting underway right now. So again, I don't think there's any more last-minute surprises. Elon was not supposed to leave the country by the way according to the judge but he did anyway. He was supposed to be, you know, on call essentially but he doesn't care. Any last-minute surprises? Anything. It seems like it's going the way we talked about. Thoughts with this jury?
I don't have any additional color here. Again, I think this is grievance cosplaying a legal argument. So, this is a traditional jury trial and the jury decides this.
It's a jury decision and then the judge will decide remedies. So, you know, if Musk wins, they might say, 'Well, we're leaving it as it is and going with the California thing and they can pay him money or whatever. We're not going to get rid of the CEO.' That's one of the things he's asked for. Brockman and Altman to be... I think this jury can't possibly side with him. I mean ultimately I don't think they proved anything and it's a sort of he said he said kind of thing and Elon's the most loathsome of the pair right by far by the country mile. So I think Elon's made a spectacle of himself. If he wins it would be something else like I'll tell you that. But I can't imagine the jury thinks this guy got the short end of the stick or that he's stupid and didn't know what was happening to him. I think that's really, he's sort of played this 'I'm a genius. Well, if you're a genius, how did this happen' kind of thing. You're not a dupe. And so, I think they probably think he's lying. And there's enough evidence that he is. Or just as you said, grievance theater, but we'll see. We'll see. I think it might be, it'll be very fast if that's the case. But I think, and also California has signed off on this and everyone else agrees. It's just Elon who's butt hurt. In any case, I have a feeling it's going to be quick, but we'll see. It would be a real shocker if he won.
The latest inflation numbers are out and the news is not good. Consumer prices rose 3.8% last month, the biggest increase in three years. Energy costs obviously accounted for more than 40% of the monthly increase with gas prices up 28%. Grocery prices, rent, and airfares also climbed sharply. President Trump, however, does not appear to be overly concerned. Let's listen to how he answered a reporter's question as he left the White House for his China trip. 'When you're negotiating with Iran, Mr. President, to what extent are Americans' financial situations motivating you to make a deal?'
Not even a little bit. The only thing that matters when I'm talking about Iran, they can't have a nuclear weapon. I don't think about Americans' financial situation, I don't think about anybody. I think about one thing. We cannot let Iran have a nuclear weapon. That's all. That's the only thing that...
Oh, wow. That was some quote. That was like an ad. Like he just cut an ad for them. That was astonishing, I have to say. I mean, it's what I think he thinks. And this nuclear weapon thing, we're less safe now than we were during the Obama days when we had most of the enriched uranium and a deal and the Strait of Hormuz was open. So, any thoughts about what he's doing here? Why? Or he's just an old addled man who just says whatever's on his mind. I don't know.
Yeah. So, look with this administration. So the quote-unquote objectives of regime change. Oh wait, no nuclear weapons. Oh wait, unconditional surrender. I mean there really isn't, it's so back and forth and, you know, erratic that it's difficult for him to outline or be taken seriously. Having said that, I do believe that loosely speaking, the way what he said there is how presidents should approach wars. Wars are more than gas prices. Wars involve killing people and putting our own men and women at risk.
And I think, and he's not the guy to do this, but I do think the president should be willing to have an adult conversation with the American people and to say that the reason we have decided to put our own men and women in harm's way and commit this type of treasure and talent and potentially kill many of their citizens is because we think it's worth it. And this is why we think it's worth it. And quite frankly, we don't go to war unless we as your leaders have decided that the American public are going to have to sacrifice. George Bush told us we could go to war and cut taxes and Americans believed him. So I think an adult conversation with the American public around we have consulted with Congress, we've consulted with our allies and we believe whatever the objectives are are worth some sacrifice. I think that is the right thing for a president to say, right? But this requires an adult conversation, more leadership, more gravitas, and clear objectives. And none of those things are, you know, evident with this president. But again, I think the president should be the person to say to the American public, I'm not going to take you to war unless I think it's worth it and also unless I am willing to ask you to sacrifice.
That's not how he asked it. He's like, I don't give a [__]. He doesn't have any objectives. It's worse than before. He's made it worse. And it's not a war. Like it's not, he's kind of right. It's something else where it's just a disaster. It's just a big [__] mess. The same as his casinos and, you know, everything he touches turns to this in some way. Just even the New York Times story about the reflecting pool. What a mess. He gave it to some group of people who can't fix it. There's already leaks already. It's being painted a color that's not going to let it reflect. It's going to the non-reflecting pool. Everything he does is shoddy and haphazard and unplanned and with a huge whiff stink of corruption attached to it and, you know, and then telling them I don't really care about you is really I think disastrous. It's why his numbers are going down is nobody believes him about anything that he says except that he doesn't care about you. And I think that's a... I agree that presidents should say things honestly but I don't think this is honest. I think this is just he could give a [__] is what he's saying to you and doesn't have any plan except for disaster.
Well, there's the perception and there's the reality and I think that I think the perception after kind of eight or 10 very bad weeks for the president, I think he's actually had a good couple weeks. I do think he looks presidential with Xi, although nothing got accomplished other than some saber rattling from Xi. The Virginia... I think Virginia is a big deal. The Supreme Court rejecting the attempt to redistrict. I think he's had actually a decent couple.
I actually don't. I think the Supreme Court is going to give it to Virginia because he gave it to everybody else and I think it's going to... I'm sorry. Can they give it to...
It's going to the Supreme Court. That decision is going, the Supreme Court has to...
Oh, you think the redistricting will be allowed?
Yes, I think it'll be allowed and because they've allowed it everywhere else. It's very hard not to allow it if they've allowed it everywhere else and Texas. As we said last week,
He can do whatever he wants cheating, but polling doesn't lie. And polling is showing that he can't outrun the polling no matter how many times he cheats. I think he has had a bad couple of weeks actually and he looks older and more addled than ever. I just think that this was a typical... He's just saying whatever is on his brain. He wasn't doing it to be, you know, tough with the American. He didn't do it with care. I don't care what anybody's like. I don't think about anyone's financial, Americans' financial situation. I don't think about anybody. That's ridiculous. And he, you know, we were safer before and we're less safe now. Anyway, it was interesting.
When's the last time you think he had a good two weeks here?
When he won. I don't think it's this is, I think this has been, that part of his first term some of the stuff was okay.
So it's been 78 weeks of constant.
No, I do think, no, I think when he won, I think when he won and he had a real opportunity.
Was a year and a half ago.
Yeah. I think it's been like a series of like the one forgets the immigration disasters, the shooting of US citizens, the all the stupid people he's hired, the drunken Kash Patel, the lunacy of RFK. I don't think there's any...
Well, we shouldn't have dyes in our food. Yes, sounds good. Like, I don't know what to say. I think it's very small little wins. And I think the stock market's done well, but I don't think it's, I think it's detached from everyone else's experience. And, you know, billionaires have had a good time. That's for sure. Tech billionaires. But this rise in inflation to me is the only thing that matters at this moment for most people.
What people miss, we're very focused on unemployment. We think that unemployment causes unrest. It's actually not unemployment that causes the greatest levels of unrest. It's what really upsets people and moves them to political action and sometimes even some form of revolution which I think we're already in is not people who aren't working. It's people who are working and yet still hungry. And that's what's going on here. The unemployment rate is 4.5%. That's not what ails America. What ails America is that people have two jobs and can't afford healthcare. So when and when now we have inflation or prices outpacing wages that just translates to the following: the quality of your life goes down.
Yeah.
And the problem is America, and I lay a lot of this on Trump, doesn't have the IQ or the integrity or the honesty to do this, or the confidence around him. But I would also argue that America isn't ready for an adult conversation, because if you're going to be serious about inflation, it's very long-term, difficult things. There's a relationship between — essentially the economy breaks into three buckets. There's labor, that is the earners; there's shareholders, the owners; and then there's consumers. And because of a lack of antitrust, because of tax policy, we have decided to massively transfer power and economic well-being from consumers and earners, or laborers, to shareholders.
And everything we do — every tax policy, keeping minimum wage low, riding off all capex, subsidizing certain industries — everything is about how do we consistently take money from earners, where minimum wage was $7.25 years ago and it's still $7.25 despite the fact that the NASDAQ has quadrupled — and push more and more money into shareholders. And also the most boring thing that no one wants to talk about is that when you go from 12 chicken companies to three, when you let pharmaceuticals consolidate, when you let health systems consolidate, when you let healthcare verticalize, when you let one company control 90% of search, 50% of e-commerce, 78% of social media, they will extract greater and greater rents from consumers and earners and transfer it to owners. It requires antitrust. It requires really interesting or more severe, quite frankly, entitlement policy where we reduce our entitlements. You're going to have to reduce the military budget. You're going to have to increase taxes — 40% AMT across corporations and millionaires — and then slowly but surely create more competition, lower rents on consumers, and a transfer of capital back from the owners to the earners. But the American public doesn't have a political election cycle that creates a serious conversation around these things.
