Scott Galloway · 54:12
And it's literally a symbol of when an economy is about to move to an authoritarian state, which is really bad for innovation, for attracting outside capital. When you're thinking about investing in Turkey and all a sudden they start locking up journalists, does that thing... Does that does that... You're Google, you think, yeah, I'm gonna start... I'm gonna open an office in Istanbul. You think, you know, I'm gonna wait and see if they sort that out. If you're one of the brightest PhDs in the world and you're doing research on authoritarian governments, you're doing research on innovation, and you're worried that your research might contradict something that the leadership is espousing to, you go teach at those universities? No. You go somewhere else. So this is... Look. China is not, you know, is not a model for... But having said that, I was just supposed to be on with Don Lemon who got arrested.
Kara Swisher · 55:11
Yeah. Exactly.
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Scott Galloway · 55:12
they arresting Don Lemon?
Kara Swisher · 55:13
Don Lemon. Like, give me a break. They shouldn't be arresting any journalist like this. It's just ridiculous. I would agree. Anyway, Jimmy Lai, let's get him out. Let's let's get him out. He's a hero. I'm gonna finish up with something that just happened. Gail Slater, who had hugely respected lawyer... Antitrust lawyer who was running antitrust at DOJ just announced she's stepping down. It follows, the the resignation of a guy named Mark Hammer, who was one of his... Her top deputies. She's had clashes with Pam Bondi over the Hanley antitrust investigations. I have heard she was in a real bind over the Paramount thing. They're trying to, like, shove through things that are friendly to the Trump administration, and she just can't do it. She can't do it during eleven months on the job. She found herself in this bind caught between the Trump administrations. She was close to J. D. Vance. This is a very respected and well regarded antitrust person. This should be an enormous signal that Gail Slater is stepping down. I'd hoped to talk to her, but everyone had told me they didn't know what she was gonna do about the the Netflix Paramount thing. You cannot be against the Netflix thing if you're not against the Paramount thing. I'm sorry. Like, and, of course, she's being... You know, she she she had a... She's been put in a bind all over the place. A talented and and well regarded person has put into a bind, and so she's stepping down. I just don't know who... They'll put in some idiot, like a Brandon Carr type of person who will just do what they say, but it really brings it down rather significantly. Even even, making Delrahim who works for Paramount actually now, very well regarded. Like, they're they're gonna have to put in it in a village fucking idiot in the Pam Bondi mode. So not a good sign. Not a good sign. Anyway, one more quick break. We'll be back for predictions.
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— Predictions segment begins —
Kara Swisher · 58:21
Okay, Scott. Let's hear a prediction.
Scott Galloway · 58:24
I think that what was supposed to be the most anticipated IPO, maybe with the expect... Exception of kind of SpaceX AI, Tesla, the
Kara Swisher · 58:33
Whatever. Tesla's not in there yet.
Scott Galloway · 58:35
Probably the most anticipated was the IPO of OpenAI in 2026 sometime this year or early twenty seven.
Kara Swisher · 58:41
Mhmm.
Scott Galloway · 58:42
I don't think that's gonna happen. Oh. I think that... Yeah. I think this company is is now... Has gone into full, I don't call it panic mode, but it feels as if the momentum has a habit of creating more momentum, and I think the momentum is really negative around this company. What happens to that?
Kara Swisher · 59:01
Where does it go? What does it do?
Scott Galloway · 59:03
Well, though, I think they'll substantially scale back there. I mean, have you already seen the war? Have you ever seen Jensen Huang and Sam Altman who were, you know, bud buddies are already shitposting each other? Yeah. Blaming that the $100,000,000,000 agreement that would... Was a framework, and they're actually not gonna... The $100,000,000,000 investment?
Kara Swisher · 59:22
May I just say, you said that.
Scott Galloway · 59:24
Well, that was ridiculous. These circular deals, I'll give you a 100,000,000,000. I'll invest a 100,000,000,000 if you invest a 100,000,000,000 on our chips. And now and now, quote, unquote, Jensen's backtracking and saying, well, it's just a framework. They couldn't justify it. NVIDIA stock has gone down because people are worried about exposure to OpenAI. So what does OpenAI do? They start shitposting NVIDIA and saying, no. It's because their chips didn't live up to our expectations. When when the biggest player in the space, Jensen Huang, and kind of the young gun, OpenAI, start shitposting each other and and they back out of this $100,000,000,000 investment framework, that is a really bad sign.
Kara Swisher · 1:00:04
Yeah. Means kept using... What was the word? We're honored to be invited. What was he saying? It was so funny.
Scott Galloway · 1:00:09
Yeah. But they're both going on background now and blaming each other.
Kara Swisher · 1:00:11
Totally. Utterly. Like, can I just give people a lesson? When you hear sources close to the situation, if they're any closer to either of them, they'd be on the other side of them.
Scott Galloway · 1:00:20
That's them. Right? So I think I think the momentum... The the worm has turned. And it's not that OpenAI isn't an unbelievable company that could go public at, like, a $50,000,000,000 market capitalization. But the problem is when you sell some investors in at $2.50, $4.50, and then if he's able to close this round at $8.50, they're not willing to go public or let you have a liquidity event that cuts there. What happens in an IPO... Say he went public at 300,000,000,000 next year and said, okay. The market isn't what we thought. Unless there's a couple years where the latest round of investors get so fatigued, they're willing to take a 60% haircut, all of your shares, the last round of investment has a preference. Meaning, they... They're the first money out. So the 50 or 100,000,000,000 going in at $8.50 doesn't wanna give up their liquidity preference and let them go public if they're going public at less than $8.50, which I think they would. So your last round of investors become a veto block for going public unless you're gonna go public at a valuation greater than $8.50.
Kara Swisher · 1:01:18
So what do they do? You haven't answered my question.
Scott Galloway · 1:01:20
They'll dramatic... In my opinion, they'll dramatically scale back their capital... Their CapEx. Mhmm. And they'll end up with a much smaller, much less ambitious, amazing company that's only worth 100 or 200,000,000,000. It's only one of the 30 most valuable companies in America, not the
Kara Swisher · 1:01:35
Get bought? What... Well, that means everyone else will get collapsed, right, or not?
Scott Galloway · 1:01:39
I think the whole... My opinion, if you look at... And I look at weird signals, the percentage of ads at the Super Bowl.
Kara Swisher · 1:01:44
Right? I know. Yeah. You suck.
Scott Galloway · 1:01:46
If you look at all this, I think there's a ton of anecdotal evidence showing that while AI may live up to its potential, the market cap of the biggest players this year is about to throw up, which isn't to say that similar in 2000 when the market cap of Amazon went down 95%, it's still not gonna be an unbelievable company. But I think we're about to see a dramatic recalibration in the markets, which includes OpenAI's IPO plans getting queered. Now who's gonna take their place? And this is the prediction. The most impressive numbers, hands down, that no one... I wasn't expecting, Kalshi. Kalshi's
Kara Swisher · 1:02:22
saying Kalshi.
Scott Galloway · 1:02:23
Year on
Kara Swisher · 1:02:24
not Polymarket. Right?
Scott Galloway · 1:02:25
Well, Kalshi's a Kalshi is actually, of the two, the clean, well lit space of this
Kara Swisher · 1:02:31
I see. Okay.
Scott Galloway · 1:02:32
Of this marketplace. Right? It's a little... Kalshi is CFTC regulated. It's also in The US. It's peer to peer trading. It's federally regulated. I have some... I don't have moral clarity around these issues because I do think they tap into the dopa of a young, more risk aggressive male brain. But just let me go straight to the numbers here. In 2026 or in this Super Bowl, right, over $1,000,000,000 in trading volume on Cal sheet. That's up 2700%. It was up 28 fold this year. And you know who's getting absolutely the shit kicked out of them? It's Flutter, it's the gambling sites. They're killing these guys. The sports market accounted for about 90% of Calshoe's activity this month, and it's it's having an incredible impact on traditional gambling and sports book. Analysts have noted that Calci's rise coincides with the underperformance in major sportsbook stock prices, DraftKings, Flutter as traders shift some activity towards prediction markets. And with a venue that sees it access nationwide, which Calci is, even in states without legal sports betting, the firm is attracting bettors who might otherwise have used traditional sports books. So this is... This company... And my my prediction is the following. OpenAI, way to the downside, doesn't get public. Kalshi is about... Is gonna be, in my opinion, the kind of IPO we're all trying to get into in q two of q three of this year.
Kara Swisher · 1:04:05
Kalshi, it is. Alright. Well, that's interesting. You've been sounding this alarm for these companies. Interesting. Fascinate. That's a big one. Scott, that's a big one.
— Predictions segment ends —
Scott Galloway · 1:04:13
We'll see. Right?
Kara Swisher · 1:04:14
That's a big one. Yeah. Anyway, we wanna hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com/pivot sort of question for the show, or call 85551 elsewhere in the Kara and Scott universe, this week on Prof G Markets, Scott spoke with Eswar Prasad, professor of trade policy and economics at Cornell University, to discuss why he thinks economics, domestic politics, and geopolitics are stuck in a doom loop. Doom loop. Let's listen to a clip.
Guest · 1:04:43
Globalization used to be seen as a positive sum game where countries could benefit mutually from trade, and that would be an offset to what is intrinsically the zero sum game of geopolitics where one country can gain influence only at the expense of another. But now even globalization has become seen as a zero sum game, so it isn't offsetting the zero sum game of geopolitics. And worse, some of the negative dynamics of globalization have started infecting domestic politics, not just in The US, but in many other countries.
Kara Swisher · 1:05:16
God. I feel smarter already.
Scott Galloway · 1:05:18
Professor Prasad, one of the things that struck me when I said this, we graduated the same year from undergraduate, me from UCLA, him from the University of Madras. I graduated with a 2.27 GPA with an incredible ability to make bongs out of any household item. Uh-huh. He won a scholarship in India that identified, like, one of the 50 smartest kids of a billion kids. Yeah. And so what what what does a guy who's one of the 50... Like, he... This guy could walk into the Rose Bowl and take the average IQ of those 80,000 people up a couple points. That's how smart and hardworking this man is. So what are we doing to... What are we saying to these people now? Can you imagine a kid coming out of the University of Mabras right now in 2026? Is he gonna go to Brown? No. He's gonna go to McGill, or he's gonna go to Instituto Embraca, or he's gonna go to INSEAD, or who knows? Maybe maybe the University of Cordoba in Argentina. I mean Speaking
Kara Swisher · 1:06:12
of doom loops, academic doom loops.
Scott Galloway · 1:06:14
Yeah. We're the sports team that used to have access to the number one draft Yeah. At any college in the world, and we've said, no. We don't
Kara Swisher · 1:06:21
want that. We just have professor G coming back to the.
Scott Galloway · 1:06:25
That's... Talk about a bad trade.
Kara Swisher · 1:06:28
He is repatriating himself in the summer. He's coming back. Anyway, it's... It sounds like a great interview. I'll be listening to it. Anyway, that is 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 · 1:06:43
Today's show was produced by Lara Amon, Zoe Marcus, and Taylor Griffin. Intertodd engineered this episode. Manola Moreno edited the video. Thanks to Austin Duberos, miss Severo, and Dan Shalon. Nishat Kurra has Vox Media's executive producer podcast. Make sure to follow Pivot on your favorite podcast platform. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com/pod. We'll be back next week for another breakdown of all things tech and business.
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