Predictions on SpaceX and Cuba

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This week on explain it to me, how to stay ready so you don't have to get ready. New episode Sundays wherever you get your podcasts. Support for the show comes from CoraWave. Everywhere you look, AI is expanding what we thought was possible. And at the center of it all is Coreweave. Medical research and diagnosis, education, complex visual effects for movies, science and technology breakthroughs. Tech, building what's never been built before. CoreWeave is the essential cloud for AI. Ready for anything, ready for AI. To learn more about how CoreWeave powers the world's best AI, go to CoreWeave.com/slash ready for anything . Remember WeWork, its mission was to elevate the world's consciousness? That sounded grounded . Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. Scott, things are happening at Vox Media. We're gonna do something a little different today and start with a voicemail from a listener who's gonna explain the situ ation. Let's play a clip. Hi, after listening to Pivot today. I saw that James Murdoch is buying part of box media and I was curious how that might change the freedom you guys have on your various podcasts. Anyway, love your shows, just finish burn book and listen to all your podcasts. Keep up the good work. Jenny from Texas. Oh, that's a very good question, Jenny from Texas. So in case people don't know what she's talking about, James Maroc's company, Lupa Systems, is acquiring Vox Media Podcast Network, New York Magazine, and the Vox site. Um the other parts of Vox Media, including Eater, the Verge, SB Nation are becoming a a different company, uh a new independent company. The deal is expected to close in the coming weeks. There's a few legalities and this and that from what I understand. Lupassist The podcast network is the mo the more attractive asset, though we love New York magazine and it does rather well and love docs. Uh and so Scott, people want to know what we think about this because a lot of people have bad information. One first of all, Jim Bankoff is staying as CEO of this unit. Um it's a spin-off essentially uh uh of of these assets and which have been fast growing. So explain Mr. Business, explain the situation. Well about a decade ago, people thought wouldn't it be great to aggregate kind of this alternative media or build alternative media companies for a new world? And so BuzzFeed, Food Fifty Two, Cnet , Vice , was it called Mike? A mashable. And Vox. And back when they thought probably six, seven years ago that if we bring together sort of these good little media assets, some digital, some not , and group them together, we can spack it and it'll go public at one, two, three billion dollars. And so Jim , logically the CEO of Vox, thought this is a good idea, bought New York magazine, had a bunch of very, you know, fast-grow ing websites, Eater Ver ge, you know, uhul Vture , and then started some nascent podcasts, right? And then essentially what happened was uh the market never said, okay, there was never the bloom came off the rose. And basically they're competing against monopolies who extract rents, and then their margin was, you know, the margin of all these companies is Google and Meta and Amazon's opportunity. And they've slowly but surely sucked the oxygen out of the room. And BuzzFeed from peak valuation to sales price was off 86%. Food 52 lost 96% of its value. Vice was , I think, uh basically went bankrupt, but sold some assets, was down at least 93% . Uh Mashable off 80%. I mean, just on and on and on and on. Tumblr, my favorite, 1.1 billion to 3 million. Uh if you're an investor in Union Square Ventures, thank God that the guy with the Caesars haircut, I forget his name, was able to convince uh probably one of the weaker CEOs in digital history to buy his bag of shit for one point one billion tumbling. It was Marissa Merritt, yeah. Marissa Merritt, right. So effectively, this has just not worked out. Now uh Jim, our guy who we like has always said, Scott, be honest and always told us to be honest, so let me be honest. They spent a lot of money to create a company with negative synergy. There's some real assets there. New York magazine is a trophy iconic asset. The sites themselves, the digital assets, are actually do pretty well. But again, see above, they're in, they're swimming upstream against giants. And then the smaller division that started out as an afterthought has become the growth engine and the crown jewel. And Jim is a smart guy and realized that the whole was less than the sum of its parts and basically decided to break them up into what was going to be three buckets, but my understanding is, and I do not have inside information here and I don't want it, is that Jim Murdoch or James Murdoch, who wants to be in the media business, said, I'll take New York magazine because I think he likes it and it's an iconic asset. And what I really want is the podcast network which is growing. Uh I'll stop there. Where did I get that right or wrong? No, you got that all right. And I think Jim of all of them has cannily move that into a space, obviously BuzzFeed, uh just bought by Byron uh Allen. Um you know they've all Vice has had a much less happy situation. You know, Mike, I don't know where that went. Like there were a lot of them and it was very exciting. And the one of the reasons I sold my tiny little site to Vox many years ago, Re Recode, was because they were ridiculously priced and were sort of pricing me at. I was even a smaller minnow. And so when I got to Vox, um I I I understood the ad market was really a problem here. Although we did great let me just the only thing you're leaving out is so much great journalism by so many of these sites and so much really interesting independent media. Absolutely. And New York Magazine just won a the National the General Excellence Award and the National Magazine Awards. Wonderful under David Trevor Burrus, it was Punches Above Its Weight Class. Yes. It's like the HBO of magazines is the way I would describe it. Right, exactly. It's amazing. So anyway, so it it it's it's really nice parts. They're really nice parts. But what happened was exactly what Scott said and what I thought, which is one of the reasons I went to gym twelve years ago and said, I'm gonna start this little podcast called it was Recode Decode at the time, or it might have been something else. I don't remember what it was. And 'cause I really did have an interest in this area and felt it was shifting. And then they added on the Ezra was on there. Um there's a whole bunch uh Today Explained, a bunch of things. And what essentially happened after that, after that, I met Scott Galloway and the rest is history. Like we've done really well. James Murdoch. It just all makes sense. In the Murdochs. And I worked for Super Murdoch. How did this happen? I know, right? I know. People are thinking it's very funny for me, especially because I knew James from a million years ago when he was actually around for digital stuff um very early when I was covering the early digital industry. And he tried very hard to move his family's company digitally . But Rupert always did something idiotic, like whether it was the way they handled MySpace or Ba there was so many, I can't even tell you. I just there it like Disney, they had nineteen of these things and especially the iPad news thing that I thought was ridiculous. Um and so I wa I we left we left the Murdoch Empire largely over um Rupert, over problems. He was he was doing all sorts of nefarious things and we wanted to come out on our own. Um and then ended up selling a Vox. And so everything comes around essentially I met Scott. We built pivot and we built each of our other stuff on and all the prof G stuff, which is wonderful. Um and over time in our recent renegotiation, we became partners with Vox and they sell our advertising, they help help us mount the events, which they're excellent at. And Scott has his has his has his own way of doing things. He just started a great sub stack. And so it's a really actually fertile time and but there's all these different configurations. And I would say for people to understand, they are I we we I have met with uh James Murdoch and his uh wife, um Catherine, who is also very involved in this. Uh I have uh nothing but good feelings for them. I don't have good feelings for his father, neither does he, um which has been well documented. Um and so we have complete freedom to do what we want. We own these podcasts that we have. Scott owns his, I own mine, and we own pivot together in a in a um in a death grip to the end for whoever which one of us survives. Um and uh and so we'll be keep doing what we want. And we really like working with Jim. We and now this other Jim and uh and the rest of it, and we hope there'll be more, you know, synergies between them. We're we're not like a total believer in all synergy, but they've got some cool uh things like Art Basel and um a number of numbers. Tribeca Film Festival Trabeka Film Festival, which I'll be at uh interviewing Mark Marin on stage. And so there's lots of opportunities here, but most of the most ly it's not gonna change. From you know, not gonna change our deal. We like the deal we got. Um we again own our things and so uh we're happy to take suggestions from you know, the same thing like Jim will suggest something. We will either ignore him or we'll not. Like he might have a g he just had a great idea to m this morning for me. Um and I'll take it. Uh so and I really do think of uh James Marnock has always been very smart digitally. I think. I we I like him. I he's not you can't just put Murdoch on it and say they suck. I I would agree about Rupert Murdoch. I would not be owned by Ruper Murdoch and uh and we're not owned by anyone. So I think that's it. What anything else? Well when Reuters called me, I said, look, we like the gyms and we have uh you know, we have a lot of power here and we didn't ask for anything. We just asked for everything to stay the same. I sell Pivot as a joint venture between Swisher, Galloway and Vox, you own Awn, I own ProvG, but both Awn and ProvG uses Vox for we do a revenue split where they sell our ads. And if we could have, I mean, this is going to sound self-absorb, but it's true, we could have killed this deal. And we didn't. And we just we didn't ask for anything extra. We just said, yeah, we just want things to stay the way they are. And Jim Bankoff has never once asked me to tone it down, to stop the dick jokes, to reconsider it. I have but doesn't No you have. But you're you're trying to save me for myself and you're also posing for your woke friends. Oh stop it. You're so much woker than I. No, no. I'm so much woker than you. I'm the wokest. But let me go to just some of the learnings here. Basically the business model for tech has been find have great technology, find a very compelling leadership team that's able to craft a narrative to raise more capital than anyone else, deliver an unbelievable product at below price, and then consolidate the market and then start sucking the oxygen out of the entire ecosystem. So let me give you an example. And then everybody else gets crushed. Google and Meta have been increasingly pushing users away from external sites in favor of their AI overviews, which they can monetize. So Huffpo . Between 2022 and 202 5, so basically the last three years that we have data on this, HuffPost's organic search traffic has been cut in half. The Washington Post down by nearly half. Business Insider has seen their organic traffic cut in half. NYT organic search is a sh as a share of their total traffic fell from roughly 44% to 36.5% . And the Wall Street Journal's organic search is a certain as a share of their total traffic fell from 29 percent to 24 percent. And let me just go back in history and pat myself on the back. In 2006, when I joined the board of the New York Times, in literally my first meeting, I said, they said, okay, you're the digital guy. What should we do? I'm like, shut off Google. Don't let them crawl your content. Because eventually they're going to commoditize your content, stop driving traffic to us, and all you're doing is building them into the ultimate toll booth. And they said and Martin Nissenholtz, who's a very smart guy, said, Well, if we can't figure out a way to compete against Google and we're making money from the traffic they send us, then shame on us. I'm like, yeah. Go to Murdoch, go to the new houses, go to the Financial Times and consolidate and turn off Google and then license your content to the highest bidder. And at that point, Microsoft had Bing and we would have been able to get a lot of money and say, look, if you if you want to crawl this gorgeous content from Thomas Friedman and from Vogue and from the FT, you got to pay us. But instead they said, no, we like the traffic, they were pursuing this eyeballs thing, and now it's way too late. And these companies are the internet . And very few people go directly to NYThenYork Times dot com They get served stuff on Meta. That's how they decide where they're going. Or the the the Google is now entirely, they don't take you to the best place. They take you to a place they can further monetize. And Jim , you know, Jim is managed to get on the last helicopter out of Saigon. Oh, wait, do you want to hear some of the threads I thought of? I was thought I'll be I'll test the limits of our new ownership. I was walking around Lisbon yesterday and it was beautiful and I was bored. So as soon as I saw the announcement, I thought I'm gonna test the limits of my freedom. My first thread, my first thread was alternative media is like a vegan restaurant, virtue signaling loses money and a billionaire bails you out. That was my first one. My second one was that that picture of Jim Bankoff and James Murdoch, where it looks like the 30-year reunion of Abercrombie and Fitch. They're both very handsome. They're very handsome. And I wrote Romeo Michelle's high school reunion 2, Post Transition. That one I'm especially proud of. Oh, okay. Last one. Oh God. I wrote something about I don't know, but it just big, you know, late, late stage capitalism. But anyways and and then I started doing it and I'm sitting there in the park and I'm like, do I really need to be an asshole? Yeah, tomorrow. Really Give them their moment. Give them their moment. We'll be an asshole later. Before we start making their lives difficult. two things. Jim Bag he said we don't we can say whatever we want. I don't see that problem from James Murdoch or Katherine Murdoch at all. They might be irritated by us, but n there's no gonna be no change in that. And let me be I I hate to say this, but Rupert Murdoch never asked me to change a thing. Like i that is one thing I never experienced when I worked at the walls. I just don't I think he's a heinous piece of sh well he I think he's heinous the way he he's done Fox News and the other stuff. But and has d degraded democracy quite a bit. But he's not James is not him. And so but but that said Murdoch never meddled in my stuff and and he certainly could have um for m for my entire time there. I just didn't like him. But one of the things we have to say. We we get to do what we want. We will do what we want. And also just I know Scott was sort of putting a sort of an ugly picture on it, but actually New York magazine is uh profitable. So are the pod the podcast networks are doing great and very profitable. Uh a lot of these websites are. So it's not like it's just not a like a it's not a crazy business, but it's not these are not suffering properties. And last of all, a lot many of them, most of them provide amazing journalism. Uh and I I think uh David Haskell deserves all due credit for New York magazine winning that award. And awards are one thing, but they certainly they were up against some amazing uh journalism this year from the Atlantic and from ProPublican Wired. Uh so uh they're very good property. He's bought some good properties here in that regard. It's not they're not falling knife properties. Trevor Burrus They make money, but the the crown jewel, shockingly, of all this, is the podcast. New York Mazagine is a vanity asset. Trevor Burrus It is, but it does okay. It doesn't it's not it does fine. Trevor Burrus You become one of the sexiest men in Soho when your rap is I own New York Magazine. It's very it does great journalism too. Trevor Burrus Okay. That's uh great. So so is NPR. It doesn't make any money. So anyway, let's speaking of not make any money, let's talk about some IPO news, some really not any money. SpaceX has filed an IPO prospectus, and it is revealing. Well the company brought in $7 91 million in profit in 2024. It swung back to $4.9 billion in losses in 2025. For context, 200 companies in the SP $500 had more revenue than SpaceX last year, including Tesla. Also revealed in the five by the way, they buy a lot of stuff from Tesla, so there's a lot of round tripping happen at the at these companies, all controlled by Elon Musk. They also revealed in the filing, Anthropic is paying SpaceX and thank God for it one point two five billion dollars per month through uh May twenty twenty nine as part of the compute deal the two signed, meaning Grok will not be using that space in Colossus One and 2. SpaceX is reportedly targeting a $1.7 trillion valuation. I mean, it goes on and on and on a lot of these, a lot of words like um uh human, I don't know, cut like connection. There's l AI mentioned a lot. Just it's this business is not economically and mass speaking, it's not worth one point seven I mean it's just the Elon. That that guy gets a lot of uh credit for for for using this number um because even the stuff they're promising seems problematic. But he's done he's he hasn't done it before. He just moves from one lily pad to the other in terms of uh from Tesla to this, but the big the big winner in this in that I read is uh Starlink does great. The others Grok and um the Rocket Company is not so much. Go for it. I got a lot. Okay, good. I can't wait. I'm excited. Yeah. Spit it out, Scott. What were you doing? So first off, I have some notes here. The first fourteen pages of the S one are pictures of rockets . AI is mentioned twelve hundred times in the S1. There are two hundred and seventy-seven pages of the perspectives for context. It's longer than the great Gatsby and the Catcher in the Rye . And some direct quotes from the filing. These are direct quotes . We do not want humans to have the same fate as dinosaurs. Well thank God you're here, Elon . For decades, a reality where humanity travels between the planets and the stars has felt tantalizing Would you mind if I ate my protein bow where you do this? Because I'm hungry and I also am fascinated. but still locked in the pages and screens of science fiction. The sun contains approximately ninety-nine point eight percent of the solar system's energy and as a result, we believe it is the only truly scalable solution to terrestrial energy constraints Oh Jesus fucking Christ. All right, hold on. Talk about woke. We believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding, spacefaring civilization. Ultimately ultimately preparing us to Kardashev type two status, defined in the filing itself as a civilization that harnesses the full energy output of the sun. Remember WeWork, its mission was to elevate the world's consciousness. That sounded grounded. Yes, no, this seems like he sounds like a Mayan. He sounds like a Mayan, but go ahead. So let's talk about the numbers here. Headline valuation one point eight trillion. He they're whispering they can go out at two. That's roughly the GDP of Canada. So let that marinate. The core business is genuinely an excellent business. Starlink generated $3.26 billion in revenue in a single quarter with $1.2 billion in operating income. That's 36% operating margin on a monopoly satellite internet business internet business with no serious competitors in sight. It's a great business. If this were the whole company, it would be one of the great businesses of our era . And then but the problem is it's not. Stapled to this rocket ship is XAI , a business that is clinically speaking a money furnace. In 2024, XAI lost $1.6 billion on $2.6 billion in revenues. By 2025, losses ballooned to $6.5 billion on $3.2 billion in revenue. So revenue rev revenue went up twenty percent, but losses went up three hundred and ten percent. Can I ask you quickly, w these revenues don't seem like killer. It's thirty percent. It's not like wow. It's they're not wow growth, right? Is it's sort of good, solid. Am I wrong there? No, it's well let's just let's just talk about SpaceX, the best business. It's growing twenty percent a year and is trying to go out at 100 times revenue. When Google went public, it was growing 2 40% a year and went out at 10 times revenues. So just back to back to XAI. XI is losing money on the way to losing more money. And in Q one twenty twenty six alone, the net loss of four point three billion on four point seven billion in revenue, total cap ex, ten point one billion in ninety days, seven point eight billion of that uh for AI. Cash on the balance sheet um cratered from $25 billion to $16 billion in just three months. They burned $9 billion in cash in a single quarter. That's $100 million a day. That's not investing in the future. It's it's the future building you in advance. Right. This anthropic thing is critical. Do you think he's moving into being the infrastructure player rather than the AI player here? No. It's it's it's him having spent too much capex thinking that XAI, his AI would need it and he woke up and realized he didn't be it's like this has happened to me a million . Every time I start a company, I raise too much fucking money, I go get a giant office base in Soho, and before I know it, I'm renting it out to a bunch of shitty startups to try and recoup some of the capital. That's what happened here. Total debt on the balance. Thank goodness for that, right? Presumably from the anthropic market. Total debt on the balance sheet is $29 billion. So just for context, that's more debt than it's on the Delta Airlines, United Airlines, and American Airlines combined with all their planes. And those they carry passengers. SpaceX has Starship, which has cost over $15 billion in development and is still on its 12th test mission. So look, the bottom line, you're being asked to pay $1.75 trillion for a great And a CEO who and this is my favorite part of the filing purchased $131 million of his own recalled cyber trucks with company cash. He's propping up Tesla. Propping up Tesla. That's right. So in sum, Starlink is the golden goose, an amazing company. Everything else is Elon's hobbies. And at this valuation, you're paying full price for all of them. So you know Snow White is fucking hot, but you gotta if you marry her, you're taking on these little nonvalue add weirdos . Uh this is so this company, you have an amazing company buried in all of these other money furnaces. Right. And he's asking you to pay essentially a hundred times revenue stuff. And people will. So talk about that, because look, it is not I I read it, I'm like, wow, this is not a th there's one good business in there, right? Really good business. And and by the way, easy to disrupt that business, by the people will come into this business and there'll be more competitors. Um and uh and so that that's my worry about Starlink is like sure he has the win for today. It doesn't mean he will have the wind forever. Just like Tesla. Um the second thing is it doesn't matter because people will just buy into this and run it up 'cause it's him and th th these promises that you which you left out a little bit here is there's gonna be all these robots in your home, there's gonna be he he made a lot of promises in in this this prospectus too about the future. Like you have to assume he's gonna kill it in robots. And by the way, I have heard from many people his robot technology is really advanced, but it has to get t to people , right? It's gotta it's gotta get to people. It's gotta become a product. Um and so just hand it feels very hand wavy this entire thing, but I don't think it's gonna matter. I mean be be a Wall Street person and say, you know, what would you do as an investor here? You might want to play it for the POP, but I actually think that there's going to be a ton of people and analysts that will look at this thing. The more scrutiny on this thing, the the worse it's going to be for the IPO. And does it go out at one point eight trillion? I wouldn't be surprised if the bankers try and manufacture scarcity and it gets a small pop. But I think by the end of the year it's well below a trillion dollars. There's just no there's no way to justify this thing as a cash inciner ator. And also certain components of the business feel very we-working the fact that as they grow, they burn more cash. There's no operating leverage. Trevor Burrus Even with this enthropic deal, because that's all he can sell. That's right. It's like he's selling the chair Aaron Powell Yeah. Right, exactly. And he's got it. He's got this colossus. And of course he's facing lawsuits all over the place because he's going to buy Aaron Powell I won't tell you what to do because I have been wrong about Tesla. I thought Tesla was a cell in twenty seventeen and it's gone up eight X and No you were right, but you were wrong about what people were I think we have to squarely say I was wrong. So uh the I would probably say sure and I'd sell it on the first trade. They will manufacture scarcity. Goldman and everybody will tell him, Okay, this is what it looks like. Put out press releases saying you're thirty times oversubscribed. It'll get a pop and then get out. Because again, look out below an amazing business can be a shitty invest ment even at some valuation. And a shitty business can be an amazing investment at a certain valuation. This is an amazing business surrounded by businesses that are not scaling where he's trying to play catch up , and at a valuation that makes just absolut no sense. Glombing XAI in here was a way to save his ass, his own ass, correct? So it's it's the cheapest form of capital he could find by attaching it to an amazing business such that he could try and catch up. And even the business even the amazing business on its own, which is doing sixteen billion in top-line revenue and eight billion in EBITDA. This is Starlink. Yeah. Give it twenty-five , you know, give it a hundred times EBITDA, it's worth eight hundred billion. A hundred times zebita is no, you know, no one trades at that. But you not only are trying to get it out at one and a one point seven to two trillion, you've attached onto it, all of these business es that look to have negative leverage. So I look ed Andy's using the business to help Tesla out by buying shitty cyber trucks and everything. Well that was the most that was the most eye popping thing in the whole thing. I know, I agree. Was that it reminded me of and this is the argument against when corporate or when governments decide to get start cosplaying business. The the Irish government or the UK government said DeLorean is the future and, they gave them a bunch of loans. And then these pictures came out of a ton of DeLorean sitting in a warehouse in Ireland unsold . So the worst product, the arguably the worst tech product other maybe than the Oculus or Ciri, the worst tech product of the last decade is hands down the Cybertruck . So he went out, a bunch of them recalled and he used money from this organization to buy back cyber trucks. You're not supposed to do that. You're supposed to say, okay, Tesla, Tesla has a a turd of a product and we're going to take a write down and you just take your, you know, you take your pain. This is Elon brings a level of awareness, magic. People have done investing with him. He is an unbelievable visionary. But uh, you know, this goes to something broader, and that is, this is all part of an entity that will cement where I believe we are now. And that is, I finally believe we are squarely in 1999. Trevor Burrus Yeah, I would agree with you. That's what I felt after looking at. I didn't look it over as carefully as it but I thought, oh no, no, no, this is not good. This is you know, all I don't really care about the luminous humanity bullshit and flying to the stars and the sun is going to power our world. Like that's all he's I I I've had to listen that n toons ense from him for many years and great. I'm glad you think that. I mean I don't really care if everyone if that's what turns him on, that's great. But it was the the Tesla thing, there was a c several things in here that were very speaking of late stage capitalism, I felt it was late stage Elon, right? That's what I that's what it felt like to me. possible. He's going to do that. I think it's smart for him to do this. But I think investors, in some, if you look at what happened , so there was a really interesting analysis done in the FT, and that is at the peak of the dot-com boom, about sixty percent of GDP growth was coming from CapEx related to telco infrastructure and the Internet. It's now ninety-three percent is coming from AI, including in I'm loosely and also these companies will be grouped into that. In addition, the total cap ex inflation adjusted was about 850 billion in 99 up until that point. Now we're at about one and a half trillion. And every time you have over two or three percent of GDP going into the build out or capex of something, whether it's railroads or highways or the telco infrastructure of the late nineties, two years later, there's a crash. Two to three years later, there's a crash. Railroads, all of it. We are there. And in one of these companies or more of them is going to experience what every big tech company has experienced when they're get out over their skis, and that is you're going to see a 70 to 95 percent decline in the value of one or more of these companies. NVIDIA, I mean, all these companies are there's the the expectation of they're increasing their capbacks tw enty percent a year while increasing their revenues optimistically fifteen percent a year. That's negative operating leverage. And eventually the music's gonna stop here. Yeah, I felt drunken sailors had a feel of this. I don't know. it just like that And it will affect very good businesses. And then along with the tariffs and all the other corruption around Trump, it just gets to be a real problem. NVIDIA's an amazing business. SpaceX is an amazing business. They should oh my God, they should be worth they should be worth a trillion dollars and three hundred billion respectively. So down about fiftyy to eight percent . And uh the technology, I think the technology will live up to its expectations more on the optimistic side than the pessimistic side, but the valuations won't. All right. Well speaking of which, OpenAI is preparing to confidentially file a draft of its IPO perspective as soon as Friday. I expect you to read it over the weekend and tell me about it next week. Um as you're listening to this, the company is valued at over eight hundred and fifty billion dollars by private investors. The things I'm looking at there is all the cross investments with Altman involved. I'm probably interested in that, where the trends are in terms of their subscriptions and where their spend is. I think those are the things I'm I'm I'm looking at. What are you look Well just to distill it, to justify the one trillion dollar valuation that OpenAI is pursuing at its IPO, it needs to grow from thirteen billion in revenue to the to the size of today's Microsoft and four So they're saying they're going to be the size of Microsoft in four years. And I just don't think revenue did triple to thirteen billion, but the company burned 9 billion. And right now it has negative momentum relative to anthropic . And what they have said is get out right away. We need the perception that we're the leader. And also Sam Aldman looks at SpaceX and says, there's not room for there's only so much retail money that's going to come into the ecosystem. Get out because it's going to dry up. Because if SpaceX goes out of pop and comes down, retail investors are going to start to get queasy. And then when you have these enormous IPOs, in other words, at some point retail investors are going to run out of money to invest in these things. So he's like, get out. And the CFO, Sarah Fryer, who I'm shocked still has a job because she's not towing the company line, she worked at Goldman and McKinsey, has reported previously to colleagues at OpenAI saying, we're not ready for an IPO because the risk from its spending commitments and the company is committed to spending six hundred billion. I know her. She's a very she's like that. She's like a Ruth Ferrett. She's an adult. Yeah. The company is committed to spending six hundred billion over the five years across vendors, and their Oracle deal alone requires sixty billion a year starting in twenty twenty seven, nearly five times OpenAI's entire twenty twenty-five revenue. Again, this is uh we are squarely in ninety-nine. All right. Well we'll go with that. All right, Scott. Let's take a quick break. When we come back, Jeff Bezos. So good God. Speaking of billionaires behaving badly speaks out on all sorts of things . Support for this show comes from ShipStation. As much as we talk about AI, it's only as smart as how you use it, and real breakthroughs happen when the AI is built to tackle specific problems. That's why ShipStation's AI isn't a general purpose tool. It's specialized, trained on decades of real shipping data and billions of actual orders. ShipStation is an end to end-to-end order fulfillment platform for e-commerce businesses. 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Hi, I'm Maria Sheripova, host of the Pretty Tough Podcast. Each episode, I sit down with high-achieving women to discuss the pursuit of excellence without apology. This week on the show, comedian and best-selling author Chelsea Hamler gives her tips on inde pendence and aging gracefully. I would argue that 50, now that I am 50 and I understand life more than I did when I was 30 or 40, is that you get so much more wisdom and you get so much more experience that you actually feel like you're beginning again. Check out Pretty Tough, new episodes on Wednesdays. You can watch it on YouTube or listen in your favorite podcast app. Scott, we're back. Just Bezos sat down for an interview with Andrew Ross Sorkin, our favorite Canadian on Wednesday. Let's talk about some of the things he said. First up, Bezos said that Trump was more mature and more disciplined in his second term. Bezos also backed the idea of eliminating income taxes for the bottom half of U.S. earners. Let's hear what he said to say about his own taxes. So true, I pay billions of dollars in taxes. And it's a perfect again, if people want me to pay more billions, then let's have that debate. But don't pretend, you know, that this that that's going to solve the problem. You could you could double the taxes I pay, and it's not gonna help that teacher in Queens. I promise you. Let's try. Let's try. Let's try. Let's see what happens. Let's see what happens, Jeff. If we take his effective tax rate from sixteen or seventeen percent to thirty-two or thirty-four, like First up, the more mature. Come on, Jeff. Like , seriously. Like, I get that there's a lot of facework going on and a lot of other enhancements, but it's gone to your fucking head. Like, I get what he means. It's good for me. Instead of saying more mature, more disciplined, as he's more focused on giving me the shit I want. That's I I I would just prefer that if he wouldn't mind like saying that. Whatever, he can say what he wants. He's never been a particularly liberal person, but now he's just he's just now being just disingenuous. The Washington Post thing drove me crazy because he's the one who kept the same management in place, then hired a an incompetent like Will Lewis, uh did nothing that the New York Times took m moves after Trump left office to do something. He he created all manner of situations where people just l just left, cut their subscriptions, which were which were s slightly growing, but they were definitely stabilizing and then after he put his dirty little fingers in the editorial process, he messed it up. A huge exodus of talent, blaming the talent, which Len went to successful properties like the Atlantic and many other and the Wall Street Journal and other places, which are doing okay. They're doing they're they're making businesses. New York Times, Wall Street Journal, The Atlantic, everything else. So every time he says this, I'm like, why don't you look over at Lorraine Powell Jobs, who's managed to do a very nice job over there at the Atlantic by sh not meddling and supporting and not losing money. Um the income tax thing, I'll let you take, but it was so full of disingenuous stuff. And again, let's try, Jeff. Even if you pay billions, you have billions. And you pay the fact that I pay more of a percentage of my taxes than you. And then the corp uh don't even get me started with corporations. So anyway , uh the uh the whole thing was and also he didn't look well, pr in my opinion. And since he spent so much time on cosmetic stuff, I feel like I can comment upon this. Go ahead. Jeff Bezos pays himself eighty-two thousand dollars just enough such that he can claim a child tax credit, which by the way he takes. And then he puts all of his additional money in such that the value of his shares go up, he borrows against those shares, not at not triggering a taxable event , likely has a lot of those shares in a trust. And then after leveraging the unbelievable infrastructure and culture of the great state of Washington, he then post office everything. Takes his hundred and twenty million dollars in shares and moves to Florida to spend more time with his father and then starts selling shares. Now, granted, uh just as every prisoner has an obligation to escape, I think every individual has an obligation to avoid tax es. I don't blame him for tax evasion. I blame our government for letting him engage in it. But quite frankly, Jeff, when you start trying to wallpaper over the tax avoidance of billionaires by claiming you care about nurses. Teachers. Sit the fuck down. Just sit down. This is a misdirect. And it's like when Jensen talks about, yes, tax me more. Okay . I f thanks guys , but I just don't think they're in a position when a guy has when a guy has so optimized the dynamics of supply and demand of labor such that his delivery drivers have to pee in bottles to make their quotas. You're just not the person to pretend to have empathy for that nurse and queens . So I'm not even going to I'll talk about his idea, but give me the mother of all eye rolls when, Jeff Bezos uh claims to be concerned about the tax rates of the nurse in Brooklyn. What I when I've advised or when I was talking to Andrew Yang when he was running for president and mayor, I said you fucked up. It shouldn't be universal basic income. It should be basic income. And to get Republicans on board, you need different frame it. Don't call it universal basic income because it sounds like socialism. Call it a negative income tax. Republicans love tax breaks. I do believe there's something to the notion of saying anyone who makes below fifty thousand dollars should not only not get taxed, but maybe get a tax credit in the form of serv ices or maybe just cash, quite frankly, because most of the studies show that when you create a government infrastructure to deploy social programs, they're inefficient and never go away. Just give them the money. Just cut 'em a check. You're in a household, you have kids, whatever. They did a bunch of studies in Africa, and quite frankly, I'm gonna be a sexist here. When they give money to the men, the prostitutes in the bars do well, when they give money to the women, the kids get taller and fatter. You couldn't do that in America and just give money to single mothers, which is what I would like to see happen. But if you gave just gave money, nationalized healthcare, there's a lot of good taxation ideas. What he said was very accurate is that if you had a tax holiday for people under the age of 30, he didn't say this, but if you gave a tax holiday, which is what he's saying, or cut the taxes of people making less than $75,000, you don't lose that much tax revenue. Because it is true that only 1 percent, the top 1% in New York pay 48% of the taxes, and the bottom 25% really don't pay much. So he's right, they wouldn't be giving up much. But he is just not we need an alternative minimum tax on people like Jeff Bezos of I believe 60% . Because the earner that's making two million bucks working her ass off as a baller partner at Scatonarps in Manhattan is paying fifty-four. And fine, maybe she pays, maybe the person making 10 billion or 10 million a year pays makes 60%. Because here's the whole objective of taxation . You want the least tax ing tax. If you start a taxing education and food and housing, you end up with homelessness, less educated people, people who put off their mammogram and die of metastatic breast cancer. Those are taxes that are too taxing. An alternative minimum tax on corporations making above a billion dollars and people say making over three million a year, they don't lose any happiness. The Bezos and also do away with the estate tax exemption. If the Bezos children inherit 20 billion instead of thirty , no loss and happiness. But that 10 billion that could potentially be divided amongst the million, the ten thousand dollars to the million poorest households, a lot of incremental happiness. You know what the the contrast was his ex-wife? Like she doesn't say a word. My hero. She doesn't do an interview. She gives money No ribbon cuttings, no cosplaying, no whatever weirdness you're doing to your body, Jeff. Uh just and doesn't lecture us. That's the tone was what was crazy. Know I got like Ben Annoche about the post stuff, but all of it had this tone. The post stuff was disingenuous in the extreme. He's the worst media owner of any media owner, and it's a low fucking bar, let me tell you. I take Rupert Murdoch twice every day of the week and twice on Sunday to Jeff Bezos. At least he understands media and likes it. You know, this the the tone was so obnoxious. And this is why this general, you know, he talked about people demonizing billionaires. Well stop stop talking. Stop appearing. Like I I honestly, it it the the the damage these people are doing to the brand of capitalism, brand capitalism and brand AI and brand tech is so vast that you can see why these polls are showing up like this way. I know my own sons who both are incredibly hard work ers, and it has nothing to do with me. They, you know, they often don't listen to me. Um they don't listen to anything I do, at least. And and I'm fine with that. But they have these feelings, right? It's just it I don't know. It just and then it gives rise to too much demonization, right? Because of the way these people behave. So I don't know. So uh I have stories about Mackenzie Scott and Melinda French Gates. I'm involved in two nonprofits. I'm involved in something called the JED Foundation that tries to train high schools around how to identify what is kind of normal, strange adolescent behavior and adolescent behavior that should raise red flags around depression and suicide. And they leverage the infrastructure of public schools and educate them. And they are they are amazing. We started by a couple that lost their son, Jed. It's run by this wonderful management team. They do a great job. I got right after right after I sort of got involved, they called me and said we they did a big thing event and they got they go, we got great news. I'm like, what's that? And they goes, we got a 10 million dollar wire yesterday and we're trying to figure out who it's from. McKenzie Scott didn't didn't want an RFP, didn't want to meet with them, didn't want her name on anything. She just wired 10 million bucks. And then another association I love, the American Institute for Boys and Men, which focuses on the struggles and mental health of young men and boys run by one my role models, Richard Reeves. Melinda French Gates, ten million dollars. Recognizing the majority of her funds are focused on the struggles and gender equality and struggles of young women, but she she said, without thriving young men, women aren't going to continue to flourish. And she just sends 10 million bucks. And then someone who shall remain nameless contacted the firm, and I get it. He's trying to be or contact one of these companies and said, can I meet with so-and-so and Scott? I want to hear about the strategy. And I'm like, typical fucking rich dude. We got to go sing for our supper. We got to like go talk to him as if it's a business and return on investment. Whereas these these women are just like, you're doing good work. Here you go. Get back to work. You don't hear from him. They definitely check you out, but it's not didn't Sork impressed him hard enough on this stuff and let him get away with some stuff that I wish he had. But I it that said, we got to see him the way he is, and that is the way he is, folks. So let me go to the other let me let me make the conservative or at least give some sunshine the conservative part of this. I can't stand when people on the far left say Jeff Bezos didn't his money. Oh he did. Because he was born to a single mother at the at the age when she was seventeen. I believe he deserves to have earned $120 million . I think we deserve to elect people who have the backbone to tax him at sixty or eighty percent. Yep. Mm-hmm. But don't slow him down. Right. He's not a bad person. He's doing he's doing what we all do. He's optimizing for his own self interest. You may s you may just you may say he's more self interested than some people. Fine. We're not doing our job. Elizabeth Elizabeth Warren and Bertie Sanders, you've been in Congress for fucking ever and the tax es keep going down under your watch. Yeah. Let's do something. You want to demonize him? No. Tax him. Tax him. That's the best way. Like take look, you whatever you want to do. Now let me switch to another billionaire because this was something that happened. I've we have not said a lot. Our list some of our listeners are not gonna like what I have to say here, and I don't really care, but I do care, but I don't care. Um unexpected sighting in DC this week. Mark Cuban standing alongside President Trump. Cuban endorsed Kamala Harris was a big supporter in 2024 and has been one of Trump's most vocal critics, but the two appeared together as the Trump announced a major expansion of Trump RX's administration's online drugstore. The site is adding more than six hundred low cost generic medications through partnerships with Cuban's Costplus Drugs, Amazon Pharmacy, and Good Rx. At this event, Trump was asked about his new alliance with Cuban. It's only on this issue, just for people to be clear. Let's listen. Well, he made a mistake. But what does this say about what you two are building here? Well it says we love people. We love our country. He wants to he's got a a good company and he's gonna do a lot of business with this. And uh I'm gonna get drugs out through Amazon through the whole group and we're gonna get drugs out. And uh Mark wanted to be a part of it. Later posted on X, if anyone thinks I'm gonna put politics ahead of helping Americans reduce their cost of health care and pharmaceuticals, they're a fucking idiot. He took that down because he thought swearing undercut his argument. He's probably right. Um let me just say a few things. The stuff out there about him making a bank or he's mobbing up with Trump is just not true. You don't have to like that he stood there. I get it. I get it. I get it. But he this this business is to get drug prices down. He does not make a ton of money here. He this is more it's not a charity either. He's trying to build a business, but this the the stuff that's out there about what he's doing is just inaccurate. And it's not if you don't like him standing there and you think he betrayed you, and I saw a lot of these, I now d can't like him. I thought he was a good guy. He is a good guy. He is doing something that I'm sure it makes him deeply uncomforta ble for a very good thing, which is to bring lower prices. He's got to get in this Trump RX. He essentially took control of Trump RX in a weird way because you've got to get these things. If Trump is doing this site, and I hate that Trump's name is on it, I hate it, but look, he's an ego mana who puts his name on every fucking thing. And there's nothing we can do about it. And if he he sat up there with Biden, you'd love him for it, or whoever, a Democratic president , he would sit up with anyone. The only thing I would say was that I'm not sure he got Gretched. I sent him a note. I said you just got Gretched. When he when he first he started talking about this this one point seven seven six trillion dollar slush fund for people who at who criminals who attack the Capitol. I don't know he got Gretched. He was sitting there when Trump was going on about something that's obviously illegal or I don't know what would he should he walk out? Should he leave? I don't know. He did laugh at the you voted for Kamala Harris. I'm not sure what you do in situation. Should he have sat there and said I still would? I don't know. He would have gotten lost out this deal. I don't know. And it's not great to have to stand with Trump. We get it. We get it. I wouldn't do it, but if I had something that mattered a lot, I might. And the only other thing I would say is Zorin Mandanmi went there and stood right next to Trump and everyone praised that. And I the difference was is but he didn't insult Trump and he didn't like slap him or do anything rude. He also didn't say much and he didn't get Gretsched. And so he he needed something for New York and he got it from Trump. And so I'm not quite sure what the difference here is because that's what I think was happening here with Mark. And you can hate on me all you want saying I love the billionaires, but I think what he's doing is an important thing for bringing drug prices online. And you cannot wait for three years to do so. Your thoughts, Scott. If your emotions and political partis anship trump the health of Americans, then the problem is you, not Mark Cuban. Yeah. We'll unlock cheaper prices for millions of Americans. Uh this week's expansion adds six hundred generics, nearly seven times the previous catalog. They'll be available to anyone regardless of insurance status and in many cases the cash price through cost plus is actually lower than what insured people pay at the pharmacy counter after cop ies . Cost plus drugs sells the cancer drug, I believe it's called etanaminib , for $17 , the same drug runs over two thousand dollars in conventional pharmacies. Three PBMs, um uh Optimum RX, CBS CareMark, and Express Scripts control roughly eighty percent of the U.S. drug access and are untouched by this deal. It look, something has to change. And I I respect and the US government has a scale and capital that no one can match. And if you have something that's good for America that requires that scale and that capital . You act like an adult and you go there. So if you think that Mark Cuban sold out, then all right, you go buy people's cancer drugs. I this it uh I can't imagine Mark enjoyed this, but helping people get access to life-saving drugs at a reasonable value is more important than him getting dragged Right. I would agree. You just didn't have the right information. The inaccuracy is what dri i you as always inaccuracy deserves me. And to say that that he's gonna make bank at this is just not true. It's just absolutely not true. And and you again, I I wouldn't wanna have to do this. I don't know if I could stand next to him, but he's there for the next three years and it w if someone needs these drugs now and he he has to take the reputational hit, that's fine. I guess that's fine. The fact that you're dragging him is a pro I g I understand the the and I don't want to s in this case for the first time I thought derangement. Don't be so fucking deranged that you don't understand what Marktus did, which is he had to like put his like ego in a in his pocket. He remains by the way, Mark is not I would say he's liberal or conservative. He's quite i it it can vary all over the place. But there is absolutely no way Mark Cuban would vote for Trump I d at this moment in time or support Trump in the it politically. So I don't know what you want from him, but to me I thought it was just a bad a bad um look for the left. I th I really did. I just was sort of disappoint very disappointed. So but they're gonna drag us for it. So too bad. I don't care. All right, Scott, let's go on a quick break. When we come back, we'll talk about NVIDIA's latest earnings. Support for this show comes from NPR. NPR understands your curiosity is boundless, but your time isn't. That's why they made Up First. Up First is a podcast that covers the three biggest news stories of the day with reporting and analysis to understand them in under fifteen minutes. 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I'm Midge First, two-time Individual Cell champion, championship MVP, and forward for the US Women's National Team. Before I went pro, I graduated from Harvard with a degree in psychology. Which comes in handy more than you think. Any athlete pursuing greatness knows there's a certain mentality you have to have. What people don't know is what that costs. In my podcast, Confessions of an Elite Athlete, I sit down with the best athletes in the world and explore the psychology, mindset, and unseen battles on the path to greatness. So take a seat and learn from the confessions of an elite athlete on YouTube or wherever you get your podcasts. Okay, so today we're driving to southern New Jersey and heading to a data center. Couple weeks ago, I read a story in NJ.com and it was all about how there's a data center going up in Cumberland County, the poorest county in New Jersey, that's receiving some community pushback. And this immediately got my attention because data centers are going up all across the country. I feel like we should be hearing politicians talk more about this, but we haven't really heard a consensus. This is technology we've never seen before. Right. Experiment. We're gonna experiment down here with it. And we're the guinea pigs. Right. And we're the guinea pigs. Exactly. Exactly. One thing that happens in this country is there's no plan ning for the future. Is it benefiting people or is it benefiting the elite and the money that's going into their pockets? This is not about abstract politics, it's about people's everyday lives. That's this week on America Acts Willie . Scott, we're back with more news. Let's talk about Nvidia's latest earnings. You just call them a casino. The company's profit for the quarter was over fifty eight billion. They're benefiting from what's happening now, which is up two hundred and eleven percent from a year earlier. That is a number. It's not thirty percent. It's a lot. Three years ago profit was two billion. NVIDIA projected sales in the current quarter would reach ninety-one billion as spending on AI infrastructure would reach two to three trillion in twenty thirty. This is an insane growing streak, but like you said, they're benefiting from this huge spend by all these other companies uh thoughts very quickly. Well uh not a casino. They're the house. Okay. And all of these all of these companies spending uh just a crazy amount of money on $1.6 trillion on CapEx are kind of drunk gamblers, is the way I would describe it. And they're benefiting from it. They're the house. They're the house when billionaires show up, sharks who are drunk and have unlimited credit at the casino. That's the way I would describe it. But just in terms of the earnings, the revenue was 81 billion up 85% year on year, which was a beat. Earnings per share was a beat. Data center revenue $75 billion up 92%, as you said year on Their Q2 guidance, 91 billion, above the 86 billion expectations, another beat, and their shareholder returns. Dividend was raised twenty-five X from one cent And he he's like it he he really looks at his stock price and thinks I have got to continue to be at. And the only thing that's I found really interesting here was despite beating on every every conceivable metric, the stock was flat, uh which says to me that some the expectations of the stock price are so enormous now that they don't they people don't expect NVIDIA to beat. They expect them to massively beat, which says to me that the first time NVIDIA even whispers things might be slowing down. It it craters. So uh unbelievable company, fifteenth beat in a row, but I just think so the expectations that are built into this valuation, I think it's the most valuable company in the world now , are pretty significant, as evidenced by the fact that it beat on every conceivable metric and the stock didn't move. Right. Right. That's interesting. That's a really good point. Anyway, we'll see. We'll see what happens. There's a lot, it's it's precar it feels precarious is what I've fragile. By the way stocks off two percent today. Yeah, but let me see a lot several different uh Wall Street people call me and they said everything feels so fragile. So we'll see. All right Scott, one more uh quick break.' Well be back for predictions . It's the family and friends event at Shoppers Drug Mart. Get 20% off almost all regular priced merchandise. Two days only . Tuesday, May 26th, and Wednesday, May 27th. Open your PC Optimum app to get your cou pon Why is this it's still like burning inside of me that I feel like I am missing something. I prayed so hard for my girl. I prayed like every night, prayed, prayed, prayed, and when I lost my babies, it was so hard. So that when I had them, I thought that was gonna be the thing. Like I am finally getting the thing that I prayed for and it's going to fulfill me and this is everything I want and more. And it was, but it was also somet hing missing . I'm Raven Addison, and this is Motherhood the Remix from Project Swagger. This series is about defining our own versions of motherhood. I am bringing in a mama I adore and admire. My friend fellow Peloton instructor Kirsten Ferguson listen now at Project Swagger . This week on Networth and Chill, I'm telling you my entrepreneurial origin story, how I went from working a nine to five and making internet videos on the side to walking away from a $6 25,000 a year job to take Yuri HBFF full time. I'm breaking down exactly how I knew it was time to make the leap, how I set myself up financially so I wasn't just winging it, and what it actually takes to survive and thrive as your own boss. From cash flow to taxes to, building multiple income streams. Because let's be real, becoming an entrepreneur sounds amazing until you realize you have to figure out all of this yourself. I did, and now I'm giving you the blueprint. Listen wherever you get your podcasts or watch on YouTube.com/slash your rich BFF . Okay, Scott's brandy predictions in a second, but we're gonna be off on Memorial Day. Uh for Tuesday. We'll not be we'll be taping a show on Memorial Day for Tuesday. But uh we'll talk about these um laws banning prediction markets and the Trump administration is suing Minnesota after Minnesota became the first law banning prediction markets from operating in the state. But we'll talk about that all next week. Go ahead. We talked about late state or ninety nine, but I I'm I just can't help it. I don't think SpaceX is going to price near two trillion dollars. Okay. The financials suggest otherwise. Well you're gonna have so many people pouring over this S one and it's just pretty ugly. You just read this thing and you start thinking, okay, uh this feels this feels a little bit, you know, ayahuasca. It just i it's a lot. And if and if you take each of the three business lines, space, connectivity, and AI, and apply a comparable price to sales multiple to each, Rocket Lab for space, VSAT for connectivity, and Anthropic for AI, which are very generous, you know, health healthy valuations, and you add them up, you end up with a valuation of five five hundred and forty seven billion. My my hero on this stuff, Aswat the Motoran, valued the thing of one point one trillion. And if you double each of those price to sales multiples, um, you assume that each business will command a valuation that is two times as typical market rate, you are still about $750 billion away from SpaceX's projected valuation.