Scott Galloway · 36:25
To any conservative
Kara Swisher · 36:27
No.
Scott Galloway · 36:27
Talk shows.
Kara Swisher · 36:28
He's he's sued the... He's he's investigating The View just on ABC for having Tony gone.
Scott Galloway · 36:33
The View and Colbert. The way,
Kara Swisher · 36:35
Colbert has had Jasmine Crockett on, has... And has probably asked right wing people.
Scott Galloway · 36:40
This is so ridiculous, but this is what has happened. There's a decent chance that FCC chair Carr has given representative Talarico a decent shot at being a senator in Texas now. Yeah. This has done nothing but bolster... Talarico raised $2,500,000 in the subsequent forty eight hours. The the big loser here is the FCC and Trump. This has backfired. This is blown up in their face. The Ellisons the Ellisons are now now sitting on top of a collapsing asset. And in addition, the other loser here, just quite frankly, is Jasmine Crockett because she she came out... Unfortunately, this has elevated Talarico and Colbert to hero status. And Crockett wishes she was the one that got, you know, that got sort of blacklisted. Right? Because they were running neck and neck, and the likelihood, according to the prediction markets, that
Kara Swisher · 37:40
Well, it wasn't quite neck and neck. It was, like, 60, 40, and now it's 70.
Scott Galloway · 37:44
Close, I think.
Kara Swisher · 37:45
No. No. The prediction markets were... He was winning quite substantively, but not as much as now.
Scott Galloway · 37:50
He went from 63 to 77.
Kara Swisher · 37:53
Yeah. Right. That's what
Scott Galloway · 37:54
I mean. That's 63
Kara Swisher · 37:55
is a lot. Right.
Scott Galloway · 37:56
That's... I mean, that's basically... When you're at 77, it's kind of sad, or it's getting to the point where it looks like the race may be over.
Kara Swisher · 38:07
There's also early voting going on, and Democratic voting is all time high. It's crazy high, and it's surpassing Republicans. I'm gonna link it, speaking of the Ellisons. One of... Two things. Warner Brothers Discovery... This... Let me just tell you, David, maybe this media thing isn't your best look. Warner Brothers Discovery is reopening negotiations with Paramount for the best and final offer, but the clock is ticking. Netflix has granted Warner a seven day waiver for these Paramount talks. The deadline is February 23. Zaslav wrote to Paramount's board that, David Zaslav, who's the CEO of Warner, welcomes the opportunity to see whether the company can expeditiously deliver a proposal that provides superior value, meaning he's not calling it superior value. Paramount has indicated it will raise its bid to $31 a share and has agreed to cover Warner's $2,500,000,000 breakup fee owed, to Netflix, which it should have done in the first fucking place. A lot of these things they just agreed to, they should have done months ago. Netflix c... Co CEO Ted Sorrento has explained why he agreed to this in an interview with CNBC. Let's listen.
Guest · 39:04
We've given the opportunity to give... Get those shareholders exactly what they deserve, which is complete clarity and certainty about what the value of these deals are. And what we're certain is is that the Netflix deal to acquire these assets is the best deal, creates... Generates the best value for their shareholders, and they think so too. That's why they recommend the deal and why they reiterated recommending that deal post this. So give them seven days to put their money where their mouth is.
Kara Swisher · 39:28
He's so smart. Gotta say, the other part before you go in, they have to they have to... Basically, they have to give more money. Really, that's... If they give more money, they'll probably get it. That said, there's been really... You know, even though most of the narrative has been anti Netflix, with Paramount has done quite a bit of the making that happen, this idea that they will have to cut, Paramount will be disastrous because they're gonna have to cut because of the finances here. They will they will decimate employment in Hollywood, and Netflix will not. They're... Both of them face different challenges, both regulatory and what's gonna happen. Warner Brothers is scheduled to shareholder vote on the Netflix deal from March 20. We'll see what happens. David Ellison was at the White House last week, by the way. This after Trump said in an interview he wasn't involved in the deal. Who knows? And let me link this to Anderson Cooper. He's leaving sixty Minutes, which is a CBS property after twenty years. He's still at CNN, of course. He'd signed a big deal, an $18,000,000 deal with them recently. So if this deal works out for Paramount, they could take Warner's cable properties and just find himself back. The reason he did so was he said he was to spend time with his family. He didn't wanna work with Barry Weiss, but I know this to be true. He didn't like where sixty Minutes was going, and he he also didn't like what was happening to his colleagues. He's a he's a great journalist, and he just didn't wanna work with these people. So... Because he thinks... I I would assume he thinks they're lesser than, and and they are compared to him. So, another high profile exit, not just Anderson. Taylor Sheridan left, who does Yellowstone. A lot of messes there, both in the news division and, obviously, with Colbert. He's... He'll be leaving in May. Your thoughts on on these two things with the Ellisons? They seem to be really... They may still win it, but, boy, they look like idiots.
Scott Galloway · 41:15
Well, first off, the way this is supposed to work in a capitalist society is the person who shows up with the biggest bag of money gets preliminary approval by the shareholders, and then it goes under regulatory review to make sure that there's not too great a concentration of power. In my view, neither of these companies should be able to acquire Warner Brothers
Speaker · 41:34
because there's
Scott Galloway · 41:34
too much concentration of power. Having said that, this is the world we live in. One of them is gonna get it. What's interesting is that it's clearly now such a kleptocracy that on Calci, the likelihood that Paramount takes over WBD because it has become obvious that the president is doing the Ellison's bidding is now 53%, and Netflix's odds have fallen to just 36%. So
Kara Swisher · 42:01
It's neck and neck on polymarket, Justine. But I don't
Scott Galloway · 42:03
Paramount has sweetened the deal. They agreed to pay a 2,800,000,000 fee that w b WBD would owe Netflix if the merger agreement falls apart. They also added a ticking fee of 25¢ per share paid to Warner shareholders for every quarter that the deal isn't closed starting next year. And the total cash bid was raised to 78,000,000,000 back in December. Here's what I don't understand. The union SAG AFTRA and the Riders Guild decide to strike at exactly the wrong moment a couple couple years ago and basically took everyone's... Had everyone not worked for seven months in order to get nothing in exchange when they they decided to strike at a weak point. And yet now, you just referenced this. If the Ellisons own, they've already overpaid for Paramount, which looks to be through a series of
Kara Swisher · 42:56
Leaky yacht. I call it a leaky yacht.
Scott Galloway · 42:59
Which looks to be just one after the other creating self inflicted wounds that they just unforced errors, ungoals, whatever you wanna call it, that are substantially reducing the equity value and showing how much they did, in fact, overpay, whether it's CBS News going from 5,000,000 viewers to 4,000,000 in one week after the anchor transition. Sixty minutes might go away. I mean, these things literally Why
Kara Swisher · 43:23
would you stick... Why would you poke that in the eye? That actually was successful. So
Scott Galloway · 43:28
they've overpaid for Paramount. They're probably gonna have to overpay, and I understand why, the rationale for Warner such they can get something resembling consolidation. But hey hey, Writers Guild. Hey, SAG AFTRA. What the fuck do you think? Ellison, one of the largest providers of inference and compute for AI, what do you think their idea is going to be to rationalize costs and somehow get a return on investment here? What do you think is gonna... Say what you want about Ted Sarandos. He's a disciplined operator. He likes the old Hollywood model. Yeah. He likes
Kara Swisher · 44:04
Well, some of it. Some of it he likes. Some of he doesn't. Let's be sure.
Scott Galloway · 44:07
But he's not. Oh my god.
Kara Swisher · 44:08
He's They've got the theater owners in there.
Scott Galloway · 44:11
Compared to Larry Ellison
Kara Swisher · 44:13
Agree.
Scott Galloway · 44:14
He is in love with those make up artists and those actors.
Kara Swisher · 44:18
Larry Ellison is gonna leave you Hollywood people naked without clothes.
Scott Galloway · 44:22
He's he's gonna say, I have an idea.
Kara Swisher · 44:25
He's gonna. I know him. He knows.
Scott Galloway · 44:26
Let's let's take the 40 movie release with an average budget of a $140,000,000, and let's do 60,000,000... Let's do 60 movies at 14,000,000 each using AI.
Kara Swisher · 44:38
That's right.
Scott Galloway · 44:38
Mhmm. And where do those where do those cost efficiencies come from?
Kara Swisher · 44:42
That's correct.
Scott Galloway · 44:43
Instead of having 18 costume designers on the fantastic five, they're gonna have one in an agentic layer.
Speaker · 44:49
Yep. And by the way,
Scott Galloway · 44:50
it'll probably be AI slop. I don't think it'll work. But you don't think they're gonna go through and say, okay. Warner Brothers film unit, you are now... You need to lay off 40% of your staff
Kara Swisher · 45:04
That's right.
Scott Galloway · 45:04
Or cut production costs by 40%, and it's all gonna come out of layer. And where the fuck are... I can't believe the unions aren't
Kara Swisher · 45:10
like They're so
Scott Galloway · 45:11
It's Netflix or we are not working with these folks.
Kara Swisher · 45:15
I think you're finally right about these unions. I mean, I I think it's not great. Listen. Listen. The theater issue is a big one, but you know what? Consumers don't like the theaters as much. Listen to consumers. It's not because that tech did something. They did. They gave them an alternative that consumers
Scott Galloway · 45:30
like that. We all have our own theater now. It's at home. What they should be caring about is the economic livelihood of the people actually producing the content.
Kara Swisher · 45:36
Correct. But the issue is the expenses. Like, I was... As I said, I did this heated rivalry interview. I mean, they made that show, which is an enormous hit for... Which is, by the way, on HBO Max, for $22,000,000 to 3,500,000 an episode. Stranger Things, 50 to $60,000,000 an episode. I mean... And the government helped pay for it. There's no way our government's gonna help pay for a gay hockey love story. But that said, it's... The the economics are changing so drastically. You don't even have to use AI to understand. You need to change the economics. And let me tell you, in no uncertain terms, having covered Larry Ellison for thirty years, he is going to do what it takes. He is... He has no sentimentality toward anything except making more money. And so he will do whatever it takes, and that includes squeezing all of you and Yeah. For his for his benefit. And I know David loves movies, etcetera, etcetera, but at some point, this is not a romantic fantasy of saving Hollywood. It's not... That's what kills me. And here's the here's the thing. I don't think the... I think the Ellsons have misplayed this so badly. They've taken too long. They should have done all those things they just agreed to months ago, to make it better. They should have increased the price if they really wanted it. They're they're being very cute here, and all they do is attack Netflix. They are very primed for attack. And then meanwhile, over at CBS, we're getting a preview of their shitty management and their shitty decisions, whether it's Taylor Sheridan, which I thought was in massive miss. Anderson Anderson Cooper, who you may end up buying... The Ellisons may end buying and being his boss. He cares so little for them. He's willing to quit sixty minutes, and he's gonna... Whatever happens, if they get... If they become his boss, that's how much he doesn't like them. He know he... They could they could end up being his boss in fifteen minutes. That that should tell you everything about it. It's quality people that wanna be affiliated with it. So, listen. I agree. Probably, this consolidation is a problem, and and there probably was a better... I don't know what the better deal here. I thought the spin off was the best idea for now, and then later, they could sell the film studio. That was my feeling. That was my feeling on the whole thing. But this is where it's headed, and the Ellisons are showing you exactly how they manage a property, and you should pay attention to it.
Scott Galloway · 48:00
I... For the life of me, I can't figure out why the unions haven't come out and said, if if if Paramount gets this, we're out.
Kara Swisher · 48:08
Yep. We're out. Yeah. Yeah.
Scott Galloway · 48:10
The whole managing Good this thing.
Speaker · 48:12
The whole thing.
Scott Galloway · 48:13
Day one day one after this closes, we're shutting the whole fucking thing down. No TV production. No movie production.
Kara Swisher · 48:19
Pay attention to people. You know they offered Anderson Cooper a fortune to run... To be the head of the... To be the face of sixty minutes, and he... Even he couldn't do business with them. So I'm just saying, a lot of money. You know? And by the way, he should spend more time with his kids, but that's not what happened here. Anyway, let's go on a quick break. When we come back, we'll talk about the Pentagon's fight with Anthropic. This is something else.
[Ad break]
Kara Swisher · 50:14
Scott, we're back with more news. There's so much news. It's all different. The Pentagon is considering cutting ties with Anthropic amid a dispute over how Claude can be used by the military. Anthropic wants limits on uses, like, for weaponry that fires without human input, and mass, dis... Domestic surveillance seems reasonable, but the Pentagon wants access for all lawful purposes. OpenAI, Google, and XAI have agreed to have models deployed in a lawful use cases in principle. Pete Hegseth is reportedly also considering labeling anthropic a supply chain risk, which could force contractors seeking to work with the US military to stop using Claude. Senior Pentagon officials said the change will be a pain in the ass, and the Pentagon would make sure Anthropic pays a price. Pete Heckness is a fucking idiot. He just actually let go of someone who is an incredible... He he forced out this colonel who had this incredible record because... Just because he's competent. Really interesting. There was just a picture from... I think it was India where the Anthropic CEO and Sam Altman wouldn't hold the hands for a second together, which was funny. They're in a big beef, but that's a separate beef. This is really interesting. I'd love to know what you think about this because they're not... They're standing firm. Looks like anthropic is like, we're not gonna be used, you know, to attack humans without a human intervention or domestic surveillance, etcetera.
Scott Galloway · 51:29
Yeah. So the the Pentagon, they're threatening to sever its $200,000,000 relationship with Anthropic.
Kara Swisher · 51:33
Not too big.
Scott Galloway · 51:35
Because the AI firm insists on maintaining limitations on how the military uses their LLM. Anthropic red lines are no mass surveillance of Americans and no fully autonomous weaponry. Right? So... But this is yet another example of a loss of capitalism. This is technically a very severe form of socialism, and that is the state has decided they control the means of production. Private companies are allowed to have their own guidelines. And if those guidelines mean they can't work with a military contractor, they get to make that decision. So this is... And them trying to shame them and threaten them economically is the worst type of socialism. So all of these, quote unquote, free market people claiming... This is private companies. Vox gets to decide if it doesn't want to work with the Pentagon. And so if they sign a contract, fine. They have to live up to their contract. But the fact that Anthropic has these guidelines, I again think this is a bit of a cold bear moment for Anthropic, and that is Anthropic starts their hat white in an environment where the majority of Americans feel really uneasy about AI. So Anthropic has sort of positioned itself as the clean, well lit corner of the bookstore here.
Kara Swisher · 53:02
Like Apple and privacy or Apple and not Big Credit. Percent. We're the
Scott Galloway · 53:07
We're the good guys. And so I I... As we sit here today, I actually think that Anthropic or in the next twelve months from this one of our predictions is gonna be worth more than OpenAI. But this is a win for Anthropic and another example of the government deciding they get to dictate. They're not breaking the law. The government gets to dictate vis a vis laws that, okay, you can't discriminate based on someone's sexual orientation, race, ethnicity, gender, whatever. They can enforce that. There's no law saying that if you're a company that doesn't want to engage in mass surveillance of citizens, that you have to work with the government. Is socialism gone awry. This is market intervention where there shouldn't be any. And when it comes from on Pentagon stationary, I mean, they might as well just have had Donald Trump sign this. Yeah. I think this is actually gonna It's be
Kara Swisher · 54:01
a text that says, well, you do what I say.
Scott Galloway · 54:03
It's a Colbert moment. Dario Amodi is being like Colbert and sticking up the middle finger. Yeah. And a lot of enterprises and a lot of consumers are gonna go, you know, I like a company that refuses to engage in mass mass surveillance of its own citizens.
Kara Swisher · 54:17
Yeah. I think this is a good... Anyway. We'll see. Pete Hagg says, you're also a moron. Anyway, one more quick break. We'll be back for predictions.
[Ad break]
Scott Galloway · 55:15
With the score tied
[Ad break]
Speaker · 55:40
Visit blinds.com now to save up to 50% off-site wide during our annual fall blowout sale.
— Predictions segment begins —
Kara Swisher · 55:50
Okay, Scott. We're gonna talk about predictions. But first, I have one prediction I'm gonna make, but I wanna do this first. The US military is moving into place for a possible Iran strike, probably because this Webstein stuff is getting hot again for Trump as early as this weekend. Scott, let's hear what you said in January.
Scott Galloway · 56:08
Bottom line is my prediction is that I think we're about to see The US conduct a military strike on Iran.
Kara Swisher · 56:17
Now you thought it was pretty quickly, but but it's happening possibly this weekend. There's... They... They've they've amassed an enormous amount of military might in the region. I think more than when they were doing the last war, they were over there. So it's... The the things are in place. The battleships are in place. You you wanna talk about that, or do have a different prediction?
Scott Galloway · 56:35
Oh, no. I I think it's on. And and let me be clear. I like this. I would like to see... I think the Islamic Republic is one of the most misogynistic brutal regimes in the world right now, and I think Iran has the cape... The potential, to be an outstanding ally. And I think if... And there's a lot of unknowns here. Regime change, you know, brings its own risk.
Kara Swisher · 56:58
And why he's doing it at this moment. But go ahead.
Scott Galloway · 57:01
But he can be doing it for the wrong reasons and can still have a good outcome. I'm I'm absolutely a 100% in favor of this. And I think that Iran being quote unquote just less oppressive, less brutal will be really good for the region and really especially good for the women of Iran.
Kara Swisher · 57:17
If they can complete what they need to complete. If they just don't and they just beat them up again and then leave, it's a different I
Scott Galloway · 57:25
think the regime is hobbled, and I think this could tip it over. I... And not to get into too much diseases, I think they need to coordinate with a Mossad and have agents on the ground and do a series of targeted executions, quite frankly, or assassinations. Execution is the wrong word, assassinations. But I'm a huge proponent of this. If you look at troop movements, whether it's refueling planes, supply chain cargo, aircraft carriers, specialized operations troops, they are either playing serious poker, or they are about to do this imminently.
Kara Swisher · 57:59
They kinda have to. Right? And Trump's probably in the mood. I think the I think the other factor here is he has a state of the union on Tuesday. I think he can't complete a state of the union. I just Well,
Scott Galloway · 58:09
he also wanted distracts from the Epstein files.
Kara Swisher · 58:11
Epstein files.
Scott Galloway · 58:12
He loves the macho flex of what happened in Venezuela. This he thinks is gonna be part two. Right? And, also, Rubio positions himself for president with these types of actions, and Rubio is probably whispering in his ear this would be a great move for us. I'd be very curious how our allies in the region, what they think of this, but I I think it's on. And I have I have thought... If you just look... If you just track troop movements, ship movements, supply chain movements, I mean, we are moving a lot of stuff to the region, and we are sort of we are ready to go. We are at the starting line
Kara Swisher · 58:51
now. He'll cancel the state of the union, would be my guess, if this is happening.
Scott Galloway · 58:55
Anyway thinking I thought
Kara Swisher · 58:55
of that. And I don't think he can complete one. I don't. I think he is quite losing it as... You know, in some fashion. I'm not so sure he's he's... I think I know he seems vibrant, but I I suspect that there's problems around that. That's just me. One... What the only prediction I would say is today, wired published a story about, the gay mafia in Silicon Valley. They They had written me about it, and I was like, there's no such thing. There just isn't. Sorry.
Scott Galloway · 59:22
The gay mafia.
Kara Swisher · 59:22
Yeah. I know. It's the... It's a story that they wanted to work on. They contacted me years ago about it, and they're like, let's talk about you and the gay mafia. I'm like, there is no... I don't have friends with Kim Cook. There's no gay mafia. There's... I mean, sorry. But I thought it was a silly idea, and I still think it is. And I have to say, I think they're gonna get a lot of pushback for the illustration, which shows, two hands coming out of two crotches, one with a with a rainbow, you know, Apple watch on cup... But the penises are hands, and they're shaking. So I thought that was so fucking insulting to gay people. I'm sorry, guys. That was a terrible illustration. Like, I don't usually... I usually laugh at most, like, jokes about gays, but oh my god. You don't have to have, you know,
Scott Galloway · 1:00:04
penis no gay mafia, but it's obvious that Jews run the world.
Kara Swisher · 1:00:07
I mean What the fuck? But why do you
Speaker · 1:00:11
have penis hands? We don't need penis hands.
Scott Galloway · 1:00:13
Yeah. Just speaking along those lines, George Hahn pointed out something that really struck me as very insightful.
Kara Swisher · 1:00:17
I think they're getting in trouble for it. That's my prediction because it's stupid, and it's really offensive. And I don't usually get offended. So that's my meter. But go ahead.
Scott Galloway · 1:00:24
We referenced heated rivalry before, and he said the thing he loved about heated rivalry, and it just struck me so true, is that he felt it was the first time that not one, but both gay men were depicted as just incredibly high performance, good looking, functional, impressive men. Agreed. One wasn't neurotic or very flamboyant or one wasn't struggling with some. They're just both really impressive men. And I I literally tick through every depiction of gay romance, and he's right. There's usually one person that
Kara Swisher · 1:00:57
feels have gotten a better shake recently.
Scott Galloway · 1:00:59
Cagney and Lacey?
Kara Swisher · 1:01:00
No. The l word and things like that. But, yes, I agree with you. I agree. There's a great book that I recommended. Vito Russo, the celluloid closet is a history of how gays were depicted, and it it it continues to stay. And for gay men, they do not get as much complexity as these two. I'd agree with you. Yep. Absolutely.
Scott Galloway · 1:01:18
Well, to a certain extent, the Epstein the Epstein class has sort of diminished the comfortable notion that gay people are more inclined to be pedophiles. No.
Kara Swisher · 1:01:26
Yes. I
Scott Galloway · 1:01:26
It's rich white dudes that seem to be more inclined. Rich straight white dudes.
Kara Swisher · 1:01:31
Yeah. And let me tell you, go straight to hell for doing... Anyone who did that should go straight to hell. Anyway, on that note, no more penis penis handshakes. Anyway, we want Wired. I love you, Katie. But I
Scott Galloway · 1:01:44
don't get a prediction.
Kara Swisher · 1:01:45
You're just rolling my memory. Dead. No. No. Go ahead. No. Now you have another one. Go ahead.
Scott Galloway · 1:01:49
What was my prediction? I
Kara Swisher · 1:01:50
Military. Iran.
Scott Galloway · 1:01:52
Well, I made that one a month ago.
Kara Swisher · 1:01:54
Alright. Okay. What's your new... Y'all wanna see? Just No.
Scott Galloway · 1:01:56
I feel hurt. I feel shamed.
Kara Swisher · 1:01:57
Okay. Go ahead.
Scott Galloway · 1:01:58
Okay. Fine. We're bombing around. Never mind.
Kara Swisher · 1:02:00
No. Go ahead. No. What's your prediction?
Scott Galloway · 1:02:02
Well, I don't know if you've noticed, but about $1,000,000,000,000 in value has been destroyed amongst the biggest AI players since the beginning of the year.
Kara Swisher · 1:02:11
As you were noting they would.
Scott Galloway · 1:02:13
And what's interesting about it is, I mean, a few things needed to happen. Either revenues needed to, like, even jump more to justify the massive CapEx, and that didn't happen. So their stocks have come down. What's really interesting, in my opinion, is that what also happened, though, is that people still think these technologies... I mean, just an example. Amazon's off 14%. Microsoft's off 17%. Bay... Apple Apple has dropped. Amazon's had its worst couple weeks in a... In several years.
Kara Swisher · 1:02:43
Yeah. They've lost... Poof. Huge. 500,000,000,000?
Scott Galloway · 1:02:47
They've lost a lot. So... But what's also interesting is there's been a trillion dollar wipeout. With SaaS companies, and that was when Anthropic unveiled its Claude Cowork legal automation tool. It triggered what traders at Jefferies immediately christened the SaaS apocalypse, erasing approximately 285,000,000,000 in market cap in a single trading day.
Kara Swisher · 1:03:09
The software companies. Yeah.
Scott Galloway · 1:03:11
The general notion is that people aren't gonna need... That, basically, you're gonna be able to write a prompt, and you'll be able to replace Adobe, Salesforce, ServiceNow, and that these companies have been fat and happy for thirty or forty years. And these companies
Kara Swisher · 1:03:26
This one I agree with.
Scott Galloway · 1:03:27
Well, it's interesting because Salesforce is off 25%. Adobe is off 25% to 30% this year. Intuit is now down 34%. It's lost a third of its value year to date. Now, my view, and this is my prediction, is that these companies are much more deeply integrated into their corporate customers than people believe. And even if you can write the code really efficiently and quickly without their technical staff at these companies, Their technical staff is only 10% to 20% of their employees. So they have really powerful UI. They have client service. They have client management. They have integrated billing. They are so deep into these companies that I think rumors of the death of these companies have been vastly exaggerated. And as a multiple of free cash flow, these companies have never traded at a lower multiple. In addition, if you actually look at
Kara Swisher · 1:04:27
the Opportunity is what you're saying.
Scott Galloway · 1:04:29
100%. If you actually look at their revenues and their margins, there is absolutely no evidence whatsoever that AI is hurting them. None whatsoever. So my prediction is that a basket of stocks, Adobe, Figma, ServiceNow, Salesforce, that they're gonna have great returns from here on out.
Kara Swisher · 1:04:52
Especially if they integrate the AI features in in a way that's helpful to people. Right? That's what it... It... Find them... Like, what... What's interesting is... And I think we should talk about this Monday, this fight between open... OpenEye just hired a very significant person from Yeah. Instagram. Instagram, Charles Porch, who's really talented talent relations. Figma did a deal with Claude. You know? OpenAI got ahold of OpenClaw. Right? It's really interesting what's happening. It starts to become what's actually useful and who takes advantage of the utility. Correct? And some of Adobe could do it. Right? They could easily make their product a 100 times better.
Scott Galloway · 1:05:32
Well, just looking at it operationally, say they spend 10 or 20% on programming, and that's no longer a a moat because AI can come in and write the code just as easily. These companies themselves could reduce their cost by 10 or 20%, shed that technical staff, quite frankly
Kara Swisher · 1:05:52
things.
Scott Galloway · 1:05:52
And then pass on those savings to their end consumer while not giving up any EBITDA or margin. In other words, 8080% of their CapEx goes into things that or their expenditures goes into things that AI is not challenging. AI is challenging their technical moat, but AI is not challenging the fact that even my shitty small companies were all on Salesforce. The idea of someone coming in and saying, we'll give you 50%. We'll we'll charge you 50% less. I'm like, are you kidding? I just spent the last fucking year training everyone how to use Salesforce. We're all on it. And and I get invited to cool Salesforce events, and they give me research. And the nice attractive dude who used to play football at Cornell shows up, and he's our Salesforce represent. These these companies are much more deeply integrated into their client base even if if there's a widget on Anthropic that helps you build the code that they offer. It's just not that.
Kara Swisher · 1:06:49
There has to be an alternative stack is what you're talking about that matches customer.
Scott Galloway · 1:06:54
Did that. It... What it'll do, though... These companies are smart. What it'll do... First off, I think these companies are really fat and happy, and there's a lot of expense cutting that they could all endure. So anyways, my prediction is the following. I think the sale or the decline on these companies, Adobe, Salesforce, ServiceNow, I think it's been overdone. And that a basket of the companies that have endured this SaaS apocalypse are to do really well. I think it's a great investment. Because if you look at their multiple on free cash flow, they've never been lower. They've never been cheaper. And I see absolutely no evidence whatsoever that AI is reducing their top line or their bottom line.
Kara Swisher · 1:07:31
Reports of their death are greatly exaggerated.
Scott Galloway · 1:07:34
That's exactly right.
Kara Swisher · 1:07:35
Alright. So, anyway, that's a great one. I love that one. I think you're right. I think you're 100% right. We wanna hear from you. Send us your questions about business tech or whatever's on your mind. That was useful for our listeners, Scott. Thank you. I'm almost there. Nymag.com/pivot to submit a question for the show or call 85551 Elsewhere in the Karen Scott universe, this week on Prof G Markets, Scott spoke with professor Aswath Damodaran, professor of finance at NYU Stern School of Business, to discuss why he's concerned that the market is ignoring catastrophic risks. Oh, no.
— Predictions segment ends —
Guest · 1:08:06
After the second world war, we put together an economic order centered around The US and the US dollar, and that's coming apart. And the market seems to essentially be blowing by saying, it doesn't matter. We're going to figure out a way. And just like we did on COVID. And maybe that's part of what's going on here is people are saying markets are resilient enough. They're going to find a way even through this dramatic change in how the global economy is run to find the other side. There seems to be too much of an acceptance that we'll figure a way through this without serious pain.
Kara Swisher · 1:08:40
Oh, that's what they're like, whistling past the grave. That's great. He's so smart. Othwa is so smart. We obviously didn't talk about RFK junior and Kid Rock's exercise video.
Scott Galloway · 1:08:49
I don't know how to feel about that.
Kara Swisher · 1:08:51
We don't.
Scott Galloway · 1:08:52
I just don't know how feel about I feel like if I watch that and then watch heated rivalry, I might just explode into an orgy of,
Kara Swisher · 1:08:58
like He said the worst the worst season
Speaker · 1:09:00
of heated rivalry was those two.
Kara Swisher · 1:09:02
Oh my god. Ugh. God. Rage against the vaccine.
Scott Galloway · 1:09:05
Every time I see Kid Rock, I immediately think how much Sudafed can I buy to CVS?
Kara Swisher · 1:09:12
There's so much good stuff on the Internet about it, but remember, it's your taxpayer dollars at work. Oh my god.
Scott Galloway · 1:09:17
There's That's that's the workout.
Kara Swisher · 1:09:19
In a hot tub. That's all I have.
Scott Galloway · 1:09:20
That's the workout video for single dads who fight for child custody and then never see their kids.
Kara Swisher · 1:09:25
Thank you. Let's end on that. 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 Galloway · 1:09:33
Today's show was produced by Lara Nayman, Zoe Marcus, and Taylor Griffin. Ernie Intertide engineered this episode. Manola Moreno added the video. Thanks also to Drew Burrows, Mia Savary, and Dan Shalon, the Shah Kuraz, Vox Media's executive producer of podcasts. Make sure to follow Pivot on your favorite podcast platform. Thank you for listening to Pivot from New York Magazine and Vox You can subscribe to the magazine at nymag.com/pod. We'll be back next week for another breakdown of all things tech and business. Kara, have a great rest of the week.
[Ad break]
Scott Galloway · 1:10:55
With the score tied
[Ad break]
Speaker · 1:11:20
Visit blinds.com now to save up to 50% off-site wide during our annual fall blowout sale.
