He brought 17 CEOs with him and three

diplomats.

>> Flying billionaires on a plane to China

to get [ __ ] seems problematic.

Hi everyone, this is Pivot from New York

Magazine and the Vox Media Podcast

Network. I'm Cara Swisser

>> and I'm Scott Galloway. President Trump

and uh Chinese President Xi uh have met

for a little over two hours right now

and attended a state banquet to start

off their two-day summit in China. In

G's opening toast at the banquet, G said

achieving the great rejuvenation of the

Chinese nation and making America great

again can go hand in hand. He's

snickering at Trump behind his back

though. The White House said both sides

agreed that the straight of her moves

must remain open. Xi warned that Trump

that mishandling Taiwan would cause

clashes and put the entire relationship

in great jeopardy. Trump is joined in

China by 17 American business leaders

including Elon Musk, Tim Cook, and

Jensen Huang. Uh a surprising lack of

women on this trip everywhere. Uh we and

also China experts. We asked Alice Han,

director of Green Mantle and co-host of

Prof's own China decode podcast uh for

her thoughts on the summit. Let's listen

to what she has to say. So, US President

Donald Trump is heading to China. This

is the first visit by sitting US

president since 2017 when Trump was last

president. I'm carrying a threepoint

scorecard going into the summit in terms

of rating it. Number one, will there be

any indication as to tariffs and trade?

Number two, will both sides agree to

freeze or maybe even loosen certain

export restrictions on chips and rare

earths? And number three is a thornier

geopolitical question. And I think both

sides will have two very different

readouts on Iran, but certainly both

leaders will be talking about it and I

believe that Trump will apply some

personal pressure on Xi Jinping to help

resolve it. Although I suspect the

Chinese will be reluctant and push back

on any kind of collaboration over Iran.

I think this will be largely summitry

without substance and it does pave the

way for more summits to come with

potential for two or three other

meetings and a she visit to the US later

this year. One concrete prediction I

have for this summit is that China will

increase Boeing purchases of aviation

equipment. I think the fact that the CEO

of Boeing is going there with Trump is

an indication of that direction.

Interesting. Um obviously so she does

summitry is a really good word. Um it's

uh you know it's interesting because a

lot of the coverage out of it is that

China thinks we're a declining empire

and uh of course who he brought was

interesting. You typically bring

business people on these things. It's

absolutely true and he brought all

mostly tech people or tech adjacent

people. Um, I think most people feel

that as as she says nothing's going to

come out of this and it'll be

interesting to see what signals uh she

sends uh versus Trump. I think I think

he's the more important person to pay

attention to. Your thoughts?

>> It's not who he brought, it's the ratio.

He brought 17 CEOs with him and three

diplomats. So, it feels as if America is

just becoming an operating system for

the wealth of the top 1% and they

>> billionaires on a plane like snakes on a

plane.

>> Yeah. And what's the minimum amount of

cheap calories and and entertainment,

you know, bread and circuses we can

throw at the bottom 99 such that they

don't, you know, revolt? And there's no

there's no policy. There's no prep. He

sounds like an eighth grader with

terrible, you know, who's had to take

he's failed English so many times he's

going to have to take it as English as a

second language. It's like Jesus Christ,

can can someone buy the guy Elements of

Style before he gives a talk? I mean, he

just

>> I know the speech was in Chinese

restaurants. I I didn't even understand

what he was talking about. They're

laughing at us. You can feel it.

>> And they I thought the most important

statement because you can be clear.

Well, he's sort of he's sort of

improvisation with a mic. You can bet

she calibrates every word. And the words

that she said that I think should send a

chill down everyone's spine is he said

that he hopes that America's current

approach, some of the effect of

America's current approach towards

Taiwan could result in a clash.

>> Clash. Yeah. And Trump hasn't really

said a lot about Taiwan. He's not flying

to Taiwan with Speaker Pelosi and and

and publicly cementing our relationship

with the ally there.

>> It was a warning.

>> Yeah. Or or not even a warning. It was

more I saw it more as like a preview

that we are going to start we are

seriously considering some sort of

>> soft or not so soft repatriation,

acquisition, invasion, whatever, use

whatever word you want of Taiwan. And I

think had Trump had more elegant

diplomats with them, they would have

immediately responded and put out a

statement along the lines of, you know,

we are all both nations are committed to

peace. And just as I'm sure we've

witnessed the incredible fighting force

of Ukraine when armed with technology,

they can repel a much larger aggressor,

which in my opinion would be an elegant

way of saying stand the [ __ ] down when

it comes to Taiwan.

>> Right. He doesn't sound like he was. and

he would never he doesn't think he

doesn't he doesn't have the diplomats or

the IQ to respond to what was really the

only substantive statement made at this

summit and sending she or sending Huang

over Jensen used to have 90% share of

trips over there it's gone to zero

>> right

>> because China's figured out that if I

provide my local entrepreneurs with the

incentives to catch up they just might

and uh our trade has gone from 23% of

their exports used to come with us now

it's 17% % they have bigger trade with

the with ASAN the Asian the Association

of Southeast Asian Nations and also they

do more trade now with Europe.

>> Yes, they do.

>> So we showed up you know it it looked

less like diplomacy than sort of two

casino owners trying to refinance each

other's debt. The but she but she is the

house right now. Trump came in as a guy

asking for an extension on his mark or

his credit.

We are mutually

each of us has a foot should we decide

on the other's corateed artery. They own

70% of rare earth minerals and 90% of

the processing. We own or control with

Taiwan 80 to 90% of sophisticated chips

which is why Jensen was there to be able

to sell. This is something Trump barred

by the way and then now he wants to sell

the chips into China. Can I make a

comment about all the business people as

you said? I mean it really was there's

so many important issues like there

should have been a discussion about

global AI standards in warnings just the

way with this group cooperating on scary

[ __ ] and this group is all in on

whatever it's there's nobody who is a

everything they do nobody is a critic of

it this is like you know flying

billionaires on a plane to China to get

[ __ ] seems problematic from a visual

point of view

>> you're exactly right this should have

been an opportunity to develop the

modern day equivalent of Interpol. We

have cooperation even amongst Russia and

China around nuclear weapons. We

cooperate and we go kill people if we

think they're trying to mix up a

biological, you know, a b, you know, a

boweapon. We cooperate and we go find

those people and we arrest them or kill

them. We should be doing the same thing

of cooperating around AI

>> publicly. Publicly. I I suspect there's

behind the-scenes stuff happening, but

of course there is. But at the same time

with this gang, just like with the

advisory council on AI, it has nothing

to do with safe safety and AI or

anything else. It has to do with let's

do some business here and as long as

it's good for us and my rich friends,

I'll do it. But it was so it was he

looked tired, he looked old, he looked

adultled, he's all those

>> and then he was tweeting his were truth

in his little heart out like with his

apparently the piece in the Wall Street

Journal. I don't know if you saw that

piece of him

>> was a truth 200 truths in a 4-hour

period

>> whatever it's this lady who helps him

this young lady who has a startling uh

resemblance to Ivanka uh who stays up

with him late at night and does this and

even the White House people don't know

what to make of the situation and the

journal was implying some stuff like

they were trying not to but she

facilitates him posting this crazy

stream of lunacy

>> when I'm old I just hope I have someone

facilitating

Anyway, um you know, his name is Manny.

>> Okay. I know. I know. Manny is the soft

hands. Manny with the soft hands. I'm

going to I'm looking for me. Anyone

named Manny with soft hands, call me and

I'm going to get you ready for Scott,

which should be in about 10 years. Okay.

Well, you should know that.

>> 10 years. Don't you think?

>> I'm I'm I'm difficult, but I'm very

generous in terms of

>> competition. I know you. When do you

think you'll be going down? Like going

down to

>> I think I think the correct term is went

>> went. No, no, but really going down like

hard. Going down.

>> When you say going down, you mean

needing help?

>> I mean like in the need for a manny. In

the need for a manny. I'd say 82 for

you.

>> Jesus. That early? I

>> think so.

>> My dad My I'm assuming I'll follow the

pattern of my dad at about 93. My dad

needed help.

>> 93. Okay. Yeah. All right. Okay. Manny,

get ready. So Manny might not be born.

>> Yeah.

>> Yeah.

>> But just back to for a moment back to

the summit.

>> Okay. where

>> Trump doesn't recognize the evolution of

China since the last time he was there.

China's no longer trying to copy Silicon

Valley. They're trying to replace it.

>> That's correct.

>> Alibaba alone is going to spend $53

billion on AI. We're so focused on the

hyperscaling and the capex here. You

know, US hyperscalers are spending 650

billion, but 53 billion from one

company, China usually typically has the

ability to make their dollars go much

further. And what they offer is

the fastest zero to a billion dollar

companies in history have one general

business strategy and we like to think

it's the innovator. No, it's not. The

second mouse gets the cheese or

specifically the shareholder value. And

the most dramatic or the most accreative

business strategy in history is to

provide the following. 80% of the leader

for 50% of the price. My first strategy

engagement of profit was the basically

this idea and that was a lot of people

couldn't afford the gap in the 90s. A

lot of people think of it as being a

kind of a middle-ass retailer. The gap

is expensive for a lot of people. Most

people can't afford

>> $22 pocket tees. And the idea was let's

tap into this huge population of single

mothers who are very conscious about

their children's confidence at school

and offer 50% or I'm sorry 80% of the

gap for 50% of the price. Old Navy,

fastest billion dollar retailer in

history. Southwest is essentially when

it started 80% of the majors for 50% of

the price. China's entire strategy is

we'll give you 80% of a seaman cell

tower for 40% of the price.

>> Yep. Yep. They're very innovative, too.

Let's let's say, you know, this idea of

what they're they are a very dynamic

autocracy. Let's just they are a very

like dynamic and nimble autocracy.

>> Just incredible.

>> Yeah. They have tons of problems. There

was just an interesting I mean similar

stories. Decline in marriages, decline

in kids. Um they certainly plan that for

part demograph I mean they have their

own issues. Youth unemployment

demographics real estate over real

estate morale stuff like that. Yeah.

Which is problem more problematic in an

autocracy but it's problematic here too.

Um all right Scott we'll see what

happens. Nothing. It's a nothing burger.

We'll see if they have do more but the I

agree with you. Taiwan is where we need

to f focus. Um, that will be a disaster

of that will be our greatest crisis of

this era, I think. Um, okay, Scott,

let's go on a quick break. When we come

back, Sam Alman takes the stand. Support

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Scott, we're back. It was Sam Alman's

turn in the hot seat this week. At the

Elon Musk OpenAI trial, Sam denied

Elon's claim that he tried to steal a

charity and said Elon supported Open AI

becoming a for-profit company as long as

Elon had total control. That sounds

pretty accurate as far as in my

experience. Let's go through some of the

other highlights from Sam's testimony.

Sam described quote a hairraising moment

when Elon suggested control of OpenA

should pass to his children after his

death. That is hairraising. Sam said

Elon's departure from OpenA in 2018 was

a morale boost for employees who did not

like his hardcore management style. I

was there during that time. That's

exactly what they described. I have to

say I heard from a lot of people he was

like a big giant [ __ ] baby. And he

does that with all his comes. He comes

and yells, kicks a can, and then leaves.

And they can't wait till he leaves. When

pressed on his open AI equity stake, Sam

acknowledged he holds a passive stake

through a company of in the company

through Y Combinator. I also want to

mention that Cara Swisser came up in the

trial this week. I was surprised not

more. While Microsoft CEO

>> was surprised not more

>> no because I was texting a lot with the

most Cara Swisser thing Cara Swisser

surprised I wasn't mentioned more.

>> I texted with them all during this time.

The Microsoft Satcha Nadella was

testifying. Elon's lawyers were

questioning Nadella about the nature of

Microsoft's relationship with open and

pointed to comments he made during an

interview with me after Sam's uh firing.

He was he he was all in for Sam during

that period. Uh closing arguments are

getting underway right now. So again,

your LA any I don't think there's any

more last minute surprises. Elon was not

supposed to leave the country by the way

according to the judge but he did

anyway. Um he was supposed to be you

know on call essentially but he doesn't

care. Um any last minute surprises?

anything. It seems like it's going the

way we talked about. Thoughts with this

jury?

>> I don't have any additional color here.

Again, I think this is grievance

cosplaying a legal argument. So, this is

a traditional jury trial and the jury

decides this.

>> It's a jury decision and then the judge

will decide remedies. So, it you know he

she if he lose if if Musk wins, they

might say, "Well, we're leaving it as it

is and going with the California thing

and they can pay him money or whatever.

We're not going to get rid of the CEO."

That's one of the things he's asked for.

Brockman and Alman to be I I think he

can't poss I think this jury can't

possibly side with him. I mean

ultimately I don't think they proved

anything and it's a sort of he said he

said kind of thing and Elon's the most

loathome of the pair right by far by the

country mile. So I think Elon's made a

spectacle of himself. If he wins it

would be something else like I'll tell

you that. Um but I can't imagine the

jury thinks this guy got the got a short

end of the stick or that he's stupid and

didn't know what was happening to him. I

think that's really he's sort of played

this I'm a genius. Well, if you're a

genius, how did this happen kind of

thing? You're not a dupe. And so, um, so

I think they probably think he's lying.

And there's enough there's enough

evidence that he is. Um, or or just as

you said, grievance theater, but we'll

see. We'll see. Um, I think it might be

it'll be very fast if that's the case.

Um, but I think and and also the

California has signed off on this and

everyone else agrees. It's just Elon

who's butt hurt. In any case, I have a

feeling it's going to be quick, but

we'll see. It would be a real shocker if

you won. Um, the latest inflation

numbers are out and the news is not

good. Consumer prices rose 3.8% last

month, the biggest increase in three

years. Energy costs obviously accounted

for more than 40% of the monthly

increase with gas prices up 28%. Grocery

prices, rent, and airfares also climbed

sharply. President Trump, however, does

not appear to be overly concerned. Let's

listen to how he answered a reporter's

question as he left the White House for

his China trip. When you're negotiating

with Iran, Mr. President, to what extent

are Americans financial situations

motivating you to make a deal?

>> Not even a little bit. The only thing

that matters when I'm talking about

Iran, they can't have a nuclear weapon.

I don't think about Americans financial

situation, I don't think about anybody.

I think about one thing. We cannot let

Iran have a nuclear weapon. That's all.

That's the only thing that

>> Oh, wow. That was that was some quote.

That was like an ad. Like they just he

cut an ad for them. It was that was

astonishing, I have to say. I mean, it's

what I it's what I think he thinks. And

this nuclear weapon thing, we're less

safe now than we were during the Obama

days when we had most of the enriched

uranium and a deal and the state of

Hermuz was open. So, any thoughts about

what he's doing here? Why? Or he's just

just an old adult man who just says

whatever's on his mind. I don't know.

>> Yeah. So, look

with this administration. So the the

quote unquote objectives of regime

change. Oh wait, no nuclear weapons. Oh

wait, unconditional surrender. I mean

there there really isn't it's so back

and forth and you know erratic that it's

difficult for him to outline or be taken

seriously.

Having said that, I do believe that

loosely speaking, the way what he said

there is how presidents should approach

wars. Wars are more than gas prices.

Wars involve killing people and putting

our own men and women at risk.

>> Sure. And I think and he's not the guy

to do this, but I do think the president

should be willing to have an adult

conversation with the American people

and to say that the reason we have

decided to put our own men and women in

harm's way and commit this type of

treasure and talent and potentially kill

many of their citizens is because we

think it's worth it. And this is why we

think it's worth it. And quite frankly,

we don't go to war unless we as your

leaders have decided that the American

public are going to have to sacrifice.

George Bush told us we could go to war

and cut taxes and Americans believed

him.

>> So I think an adult conversation with

the American public around we have

consulted with Congress, we've consulted

with our allies and we believe whatever

the objectives are are worth some

sacrifice. I think that is the right

thing for a president to say,

>> right?

>> But this requires an adult conversation,

more leadership, more gravitas, and

clear objectives. And none of those

things are, you know, evident with this

president. But again, I think the

president should be the person to say to

the American public, I'm not going to

take you to war unless I think it's

worth it and also unless I am willing to

ask you to sacrifice.

>> That's not how he asked it. He's like, I

don't give a [ __ ] He doesn't have any

objectives. It's worse than before. He's

made it worse. And it's not a war. Like

it's not it's He's kind of right. It's

not It's something else where it's just

a disa. It's just a big [ __ ] mess.

The same his casinos and you know,

everything he touches turns to this in

some way. Just even the even the New

York Times story about the reflecting

pool. What a mess. He gave it to some

group of people who can't fix it.

There's already leaks already. It's

being painted a color that's not going

to let it reflect. It's going to the

non-reflecting pool. Everything he does

is shoddy and haphazard and unplanned

and with a huge whiff stink of

corruption attached to it and you know

and then telling them I don't really

care about you is really I think

disastrous. It's why his numbers are

going down is nobody believes him about

anything that he says except that he

doesn't care about you. And I think

that's a I I agree that president should

say things honestly but I don't think

this is honest. I think this is just he

could give a [ __ ] is what he's saying to

you and doesn't have any plan except for

disaster.

>> Well, there's the perception and there's

the reality and I think that I think the

perception after kind of eight or 10

very bad weeks for the president, I

think he's actually had a good couple

weeks. I do think he looks presidential

with Shei,

although nothing got accomplished other

than some saber rattling from Shei. Um

the Virginia

I think Virginia is a big deal. the

Supreme Court rejecting the attempt to

redistrict. I think he's had actually a

a decent couple.

>> I actually don't. I think the Supreme

Court is going to give it to Virginia

because he gave it to everybody else and

I think it's gonna I'm sorry. Can they

give it to

>> It's going to the Supreme Court. That

decision is going the Supreme Court has

to

>> Oh, you think you think the

redistricting will be allowed?

>> Yes, I think it'll be allowed and

because he's they've allowed it

everywhere else. It's very hard not to

allow it if they've allowed it

everywhere else and they Texas. As we

said last week,

>> he can do whatever he wants cheating,

but polling doesn't lie. And polling is

showing that you he can't outrun the

polling no matter how many times he

cheats. I think he has had a bad couple

of weeks actually and he looks older and

more adult than ever. I just I think

that this was a typical He's just saying

whatever is on his brain. He wasn't

doing it to be, you know, tough with the

American. He didn't do it with care. I

don't care what anybody's like. I don't

think about anyone's financial Americans

financial situation. I don't think about

anybody. That's ridiculous. And he, you

know, we were safer before and we're

less safe now. Anyway, um it was

interesting.

>> When's the last time you think he had a

good two weeks here?

>> Uh when he won.

>> Okay.

>> When he won. I don't think it's this is

I think this has been I that part of his

first term some of the stuff was okay.

Um

>> so it's been 78 weeks of constant. No, I

do think No, I think when he won I think

when he won and he had a real

opportunity

>> was a year and a half ago.

>> Yeah. I think it's been like a series of

like the one forgets the immigration

disasters, the shooting of US citizens,

the um all the stupid people he's hired,

the drunken Cash Patel, the lunacy of

RFK. I don't think there's any

>> Well, we shouldn't have dyes in our

food. Yes, sounds good. Like, I don't

know what to say. I think it's very

small little wins.

Um, and I think the stock market's done

well, but I don't think it's I think

it's detached from everyone else's uh

experience. Um, and you know,

billionaires have had a good time.

That's for sure. Tech billionaires. Um,

but this rise in inflation to me is the

only thing that matters at this moment

for most people.

>> What people miss, we're very focused on

unemployment. We think that unemployment

causes unrest. It's actually not

unemployment that causes the greatest

levels of unrest. It's um what really

upsets people and moves them to

political action and sometimes even some

form of revolution which I think we're

already in is not people who aren't

working. It's people who are working and

yet still hungry. And that's what's

going on here. The unemployment rate is

4 and a.5%.

That's not what ails America. What ails

America is that people have two jobs and

can't afford healthare.

So when and when now we have inflation

or prices outpacing wages that just

translates to the following the quality

of your life goes down.

>> Yeah.

>> And the problem is America and I lay a

lot of this Trump doesn't have the IQ or

the integrity or the honesty to do this

or the the confidence around him. But I

would also argue that America isn't

ready for an adult conversation because

if you're going to be serious about

inflation, it's very long-term difficult

things. It's there's a relationship

between essentially the economy breaks

into three buckets. There's labor that

is the earners, there's shareholders,

the owners, and then there's consumers.

And because of a lack of antitrust,

because of tax policy, we have decided

to massively transfer power and economic

well-being from consumers and earners or

laborers to shareholders.

And everything we do, every tax policy,

keeping minimum wage low, uh riding off

all capex, subsidizing certain uh

certain industries, everything is about

how do we consistently take money from

earners who minimum wage was 725 years

ago. it's still 725 the NA despite the

fact that the NASDAQ has quadrupled and

push more and more money into

shareholders and also the most boring

thing that no one wants to talk about is

that when you go from 12 chicken

companies to three when you go when you

let pharmaceuticals consolidate when you

let health systems consolidate when you

let healthcare verticalize when you let

one company control 90% of search 50% of

e-commerce 78% of social media they will

extract greater and greater rents from

consumers and earners and transfer it to

owners. It requires antitrust. It

requires uh really interesting uh or

more severe quite frankly entitlement

policy where we reduce our entitlements.

You're going to have to reduce the

military budget. You're going to have to

increase taxes, 40% AMT across

corporations and millionaires, and then

slowly but surely create more

competition, lower rents on consumers,

and a transfer of capital back from the

owners to the earners. But the American

public doesn't have a political election

cycle that that creates a serious

conversation around these things.

>> No, I get that. I get that. I'm talking

about people feeling it like at all

levels. And you do you do when you when

you go out. I mean, I I was I know it

sounds dumb, but I do I do do Amanda and

I split the grocery shopping, but I went

to get a quart of milk and I was like,

"What?" It was like $6 or $7 and I was

like, "Are you [ __ ] kidding me?" And

it's not just looking at the gas pumps

or there was something I was in a

airport and there was a sandwich and

they were like,

>> " $14." I'm like, "What?" Like, it was

it was, you know, I I I didn't get it. I

was like, "Well, that's a lot of money

for a sandwich." like kind of thing. And

so I don't begrudge them having to raise

prices. It's that it was it's just I

think people who are price resist like

price insensitive are noticing it. Like

that kind of thing.

>> You can't help if unless you're just

holed up in your house, you can't help

but notice things have gotten a lot more

expensive.

>> Yeah.

>> But there's there's shock and there's a

reduction in the quality of life and

then there are threats to your own

personal safety. Correct. And those

>> when you see um affordable care act

subsidies go away, you have someone

who's literally dependent upon diabetes

medication for their life see their

insurance bill go from $178 a month to

1700.

>> Yeah.

>> And it's as if the government has said

to them, "We don't care that you're

working hard. We've decided that you're

going to die."

>> Yeah.

>> And those are the I think those are the

kind of what I would call You're going

to have I I think we have bad economic

policy. that results in inflation and a

decline in prosperity. What is

unacceptable is that someone is worried

when someone starts rationing their

prescription medication. That just that

just that should not happen in

>> or cuts off. You know, there was a

really upsetting story in the New York

Times, a woman writing about her kid who

died of cancer, but like they've cut

cancer, pediatric cancer things, and so

these you can't get in these studies

because they don't ex they suddenly

disappear these advanced studies and

everything cuz you know he doesn't say

we're not going to help pediatric cancer

anymore. What he says is we're cutting

all over the place. So in essence,

that's what we're doing. Anyway, the

rise of inflation comes as Kevin Walsh

takes the reigns as Fed chair. Worsh was

narrowly confirmed by the Senate this

week in a 54 to 45 vote. It's usually

unanimous, which is where we are. Um

he's certainly qualified. The question

is most people don't think the rates are

going to be cut. And so juggling this

inflation with Trump's demands to lower

interest rates. Most people think he

will not be lowering interest rates um

at this moment given the inflation

numbers are so high and there's no signs

that they're going down. Just thought

very quick thoughts on that. We like to

simplify things in the media that this

guy's going to come in and cover rates,

but people don't want to actually pay

attention to the mechanics of the

Federal Reserve and that is the Federal

Open Market Committee is the one that

decides whether to cut rates or not. So

while the Fed chairman has the bully

pulpit and sets the agenda, he's one of

12. He's one of 11 or 12 votes

>> and Powell is still there as you say.

>> Yeah. So, no interest rates. Kevin

Walsh, while you know, a really

disappointing testimony at a Senate

confirmation hearing, he's not stupid

and he doesn't want to go down in

history, is the guy that ignited an

upward spiral of inflation. So, there's

there's not going to be a rate cut. And

and as a matter of fact, Khi says

there's a 72% likelihood there's no rate

cuts for the rest of the year because

you still there these Fed governors

don't want to be known as the people

that that created bread lines.

>> Yep. Depression.

>> And when you have when you come off a

print of 3.8%.

There's no [ __ ] way. If War started

making noises that we should cut rates,

those guys would go on background to

journalists saying this guy's [ __ ]

insane in threatening a Weimar Republic

like inflationary economy here.

>> Yeah. I mean, I think it's it's the

deficit and everything else. Maybe they

should consult Zoran Mandami, who

balanced the New York budget.

Interesting.

>> What did he cut? I'm curious. I haven't

been following it.

>> Uh, some consultant stuff, a bunch of

things. He's doing a rather good job

with services. He opened the streets for

um the soccer the FIFA matches. He in

front of schools, he closed off streets

so kids could play soccer, like learn to

play soccer, and brought in all these

soccer players and stuff. He's very good

at services, this guy. I'm just saying.

I think Trump's got to focus in on

providing services to citizens. That's

what you're talking about. The idea of

that people get something out of

government and it's not to be kicked in

the [ __ ] teeth. And I think that's

really the the difference between lots

of cities and a lot of both Republican

and um Democratic Sen governors and

mayors who are providing people better

services uh in a smarter way. Anyway,

that to me is the goal for everybody.

Anyway, we're going to go on a quick

break. When we come back, we'll talk

about the biggest donors uh for the

midterms.

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Scott, we're back. The biggest donor for

the 2026 midterms may or may not

surprise you. It's Andre Horowitz. The

VC firm and its co-founders Mark Andre

and Ben Horwitz have already spent more

than $115 million this election cycle

outspending both George Soros and Elon

Musk. Uh much most of the money is spent

on the right. It's Musk, Jeff Yas, and

uh these two. Um Soros is is the is the

opposite but much smaller in comparison.

A major chunk of that money is going

towards pro crypto and pro-AI super

PACs. What a surprise. It's where their

investments are. Trump and the GOP are

also benefiting. Uh Andre Horowitz and

his founders have together donated

roughly $12 million to Trump's super

PAC, MAGA, Inc. and a trust linked to

Mark Andre gave nearly $900,000 to the

Republican National Committee and Mark

um you know, not a surprise. I mean, not

that this guy has moved, you know,

firmly. It's mostly Mark, but Ben is

right along with him as always because

he's this little follow little little

follow puppy. Um just typical. Just

typical. I mean, this is not a surprise.

And then he tells nonsensical stories

about how he went right, none of which

are true.

>> Um, uh, your thoughts.

>> It's smart.

>> Yeah.

>> Uh, it's wrong, but it's smart. It's the

greatest ROI any firm can get right now.

>> I think he's figured it out. Yeah.

>> This is pay for play. And by the way,

Horowitz used to give a lot of money to

when he thought Kamla was going to give

money to

>> Kla. He did. Mark used to be a big Gore

person as I recall a long time ago. He

wasn't ever. People are like, "Oh, you

used to be Democratic." I was like m not

if you were if you spent any time with

him he was certainly wasn't he certainly

was he was Mark is one thing which is

self-interested in the most extreme way

you're ever going to meet someone he's

very

>> called the corporation

>> I agree but I'm saying it's really quite

it's really quite he doesn't even

pretend he's really the most selfish

person ever Scott I get it but I mean

it's about incentives it's just

>> if the greatest ROI if you're the CEO of

a company or the head of a venture

capital firm and the greatest ROI on any

spending. It's not hiring more people.

It's not investing in planned property

and equipment. It's to give money to a

president who will who will pass

legislation or block legislation that

takes the value of your portfolio

companies up 10, 20, $30 billion. That

$115 million investment is the best

money you can invest.

>> Absolutely. So, I agree.

>> Again, it's the boring [ __ ]

Term limits on the Supreme Court. No

gerrymandering.

get rid of Citizens United. Until we do

those things, you're gonna have strong

men or women or or fascism from the far

left or the far right. It's you're

right. You're always going to have it.

And we're outraged at Andre Horowitz.

Soros. Okay. There'll be Democrats

that'll do it. I bet Jensen Hang is

about to write a $300 million check to

somebody.

>> Who knows? Who know? I You know, it's

interesting because look, they they have

shifted, right? But I I my point is Mark

was never never liked anybody. Like

that's all I'm saying now. He likes

himself and his things and that's it. I

It's very I agree with you. It's the

right corporate thing to do. I've never

met someone who is so anti-

people in my life. Like just has such

disdain for humanity in a way that's

really remarkable actually. Just doesn't

like anybody like essentially. And he

would do it to the left or right

depending on what suited him. What what

someone was asking me, well, there are

left-wing people are going to give

money. I'm like, I don't want who knows

what they're going to be next week, and

I don't want any like individual rich

person, left or right, to be able to

take advantage of this way. It seems

unfair. Other people don't get an

audience with the president. And they

have an un unnecessary advantage based

on money. And that's kind of gross in

some ways.

>> Gross. Elon Musk after the SpaceX IPO

might be worth between 700 billion and a

trillion dollar.

>> Trillion dollar. Yeah.

>> If he takes 1% of his wealth or 10

billion

>> with his command of technology,

>> he can decide who the next president is.

>> He can. That's what I mean.

>> Is that what you want? Taxes are our

Kevlar and our vaccine

from power.

We need to stop thinking about taxes as

something that is inherently evil and

slows down the economy. That's bad

taxation. Taxation protects us from I

don't want to call them billionaires

because I don't want to demonize them.

Taxes protect us from an unhealthy

aggregation of power.

>> Mhm.

>> Due to money

>> 100%.

>> We shouldn't have any individual I don't

care if it's Soros. I don't care if it's

unions. I don't care if it's Lauren Pal

Jobs, although I think she's a wonderful

woman and I'm not, this isn't a

character assessment,

>> right?

>> You can't have an individual with this

much power and taxes are the only way,

our only protection, our Kevlar against

the aggregation of this type of power

and Citizens United.

>> Yeah, I got to get rid of it.

>> Speaking of which, all my friends have

decided you've become a lesbian because

of Per.

>> Really?

>> They were like, what? Like they were

like, "Huh?"

>> They weren't expecting that.

>> No, I was not.

>> Oh, by the way, a lot of my friends are

like getting sending me messages like,

"What the [ __ ] Shut up, buddy."

>> Pit Scott is a lesbian from San

Francisco. Now, speaking of virtue sign,

>> I go issue by issue.

>> I get it. I get it. Speaking of, I get

them getting more money. Besides Elon

becoming a trillionaire, Anthropic is in

talks to raise new funding that would

value it at up to $950 billion. uh if

completed, the company's valuation be

2.5 times what it was just 3 months ago

and higher than OpenAI's valuation of

852 billion. Of course, there's the

overhang of that trial with Open AI

right now. Um it's a huge thing,

overinflated. Uh I don't know. I don't

know.

>> Uh look, we've never seen a company

scale like that. Um so, and we've also

never seen Pepsi overtake Coke or or

Avis overtake Herz as quickly. We've

never seen this type of of transition or

pivot or reversal in fortunes. And and

also I still think OpenAI's valuation uh

IPO is probably going to be a hit. So

get this. In March of 2025, Anthropic's

valuation was 61 billion. So it's up

15fold. It's up 15fold in the last year.

>> A lot of parties in Silicon Valley.

>> Well, okay. It was 9 billion in annual

recurring revenue in December. Last

month it was 30 billion. and they think

this month it's on track to reach 50

billion. Um, for the first time more

businesses are using Anthropic than Open

AI, 35% versus 32. Anthropic's business

adoption quadrupled over the past year

while Open AAI has grew is basically

flat. And so a board decision on this

financing is expected later this month

with the and they think the IPO might

happen as early as October.

And Cali is saying it's a 70% chance it

goes public this year. Um and then

there's also

um a 60% chance that they have the best

AI model at the end of the year. I don't

know what that means. Look, I don't this

company is

>> it's just absolutely firing on all

cylinders. Having said that,

>> yes,

>> my thesis is that go long GLP1 and short

AI because I don't think I think it's

impossible to maintain a lead in AI with

AI and that is if you look at the

technical specifications

it's moving more towards par than

differentiation and I think it's going

to be difficult for any one company to

maintain a technical lead here and that

that will drive down margins and then

when these openweight AIs when she

starts engaging and AI dumping, which is

what I would do if I were him. I think

it's going to drive down their margins.

And the good news is, I think, similar

to vaccines or PCs or jet

transportation, the winners will be us,

uh, not these companies. But I'm

>> Yeah, there'll be one or two companies

that will dominate. Probably Anthropic

is one of them at this point.

Interestingly, probably Google is the

other.

>> We have become used to any innovation

resulting in a small number of companies

capturing trillions of dollars in

shareholder value. Again, my thesis is

that AI might be more like jet

transportation, vaccines, and PCs, and

that no one companies share.

>> So, it would be funny if Apple spent

nothing and ends up benefiting the most,

which is

>> Yeah, it'll be it'll be

>> 100%.

>> That's sweet. Uh, just last thing,

Google, speaking of Google, is in talks

with SpaceX for a rocket launch deal to

put orbital data centers in space. The

deal is based on currently unproven

technology that Elon said is the next

frontier for his rocket company. I I

kind of like this idea. It's totally

unproven. And Google has a history of

investing in wacky schemes. At one

point, they had um they were investing,

this sounds like a Sergey Bin thing

happening here. They used to beef over

some girl, but now they're getting

along, I suppose. Um uh there's uh

anyway, this is something Google has

done this. They had wind they had wind

up in wind kites at one point. They were

going to do a chairlift in San

Francisco. They had a a a ship, an

energy ship parked off the uh the city

in San Francisco. This is nothing. This

is feels smells like Sergey Brin to me.

And so he would try anything and this

would seem cool to him. So sure, why

not? Why not invest in it? What's the

difference? If it works, it works. If it

doesn't, it doesn't. Any thoughts?

>> I think these guys, they want to put

chips down and options on anything they

don't have insight into so they can get

investor updates, have a chance to work

with them.

>> It's smart. Everything is so

interconnected. Those graphs that look

like, you know, a god's eye. Remember

those in the 70s where everyone is

invested in everybody else and

everybody's suing everybody else.

>> Yeah. Just like Anthropic is doing a

deal with Musk. Not everyone was like,

"How dare you, Dario?" I'm like, "Are

you kidding?" Of course he did. Of

course they do. They don't. They like

beef and then they hug. It's like the

mob. Anyway, um one uh one more quick

break. We'll be back for predictions.

>> Support for Pivot comes from Mint

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>> Okay, Scott, let's hear a prediction. I

will note that people should something

we have talked about and have been in

our predictions. A New York Times

investigation, which you should all

read, found that over 80 poly market

users have placed bets with suspicious

characteristics and won money across

nearly 30 topics. There the insider

trading stuff of this stuff is just

getting started on all these predictions

markets. So, we we thought this might

happen, but that just just please go

read that because it's a really

interesting piece. Go ahead, Scott.

Prediction. Speaking of predictions.

>> So, my prediction, Chipmakers, Sarah

Bros, Cerebras, Sarah, I don't know.

Chipmaker Sarah Bros went public today

at a $40 billion valuation. And that's

up from its $23 billion valuation.

Um, uh, in February and 8 billion in

2025. And, uh, I believe it's over. I

believe it's playing into this massive

historic runup in chips. And after an

initial pop, I think it'll fall. Since

last year, its revenue has increased

less than 2x while its valuation has

increased uh sixfold. And the $40

billion valuation implies a 76 times

revenue multiple. In other words, it's

this shouldn't be a public company. It's

it's it's drafting off of what has been

an unprecedented increase in value in

the sector. So, as an example, Nvidia

trades at 26 times revenues and still

controls 85% of the AI chip market and

is growing faster. Cerebrush tried to go

public in 2024, but withdrew their uh

filing at the last minute over intense

scrutiny of its heavy reliance on a

single customer, the Emirati AI firm

G42. I don't if you remember these guys.

It's basically like actual giant big

chips, physical giant big chips. It

strikes me as quite frankly a shitty

company. And this is this is simply u

massively benefiting from an

unprecedented updraft in chip stocks.

And anyways, my prediction is that the

initial pop, this company, which I think

is actually a fairly mediocre chip

company trading at 78 times revenue is

not going to sustain. And

>> I like a highly specific stock. And then

that that same customer which makes up

the line share of the revenue, group 42,

accounted for 24% of revenue last year

and uh stateowned UAE University

accounted for 62% of revenue. Given

what's going on in the UAE, given their

dependence on one customer, given the 76

times revenue, this feels like one of

those bad Chinese firms that could just

go down 95%.

>> Yeah. Yeah. Well, it's a good warning

for people. Anyway, there's a lot of

froth happening for sure and and so

there it's hard to separate the good

from the bad. Anyway, we want to hear

from you. Send us your questions about

business, tech, or whatever is on your

mind. Go to nymag.com/pivot

to submit a question for the show or

call 85551 pivot. Elsewhere in the Karen

Scott universe this week on Profit

Markets, Scott spoke with Aswath

Deodorin, a professor of finance at

NYU's Stern School of Business, one of

Scott's favorites to break, and he's

terrific. I think so, too, to break down

what's standing out to him in the

markets so far this year. He shared his

thoughts on how the conflict with Iran

could ripple through the economy. Let's

listen to a clip. The catastrophic risk

here is not that oil gas prices stay

higher than they were before the

conflict is whether they'll go even

further up because there is that chance

of that happening. I think if uh you

know in many ways what the market seem

seems to be building in is the economy

can survive with gas prices being 450 or

five depending on what part of the

country you're in and that it might not

be as robust as you thought it was 3

months ago but it's okay but I think the

the the worry still remains that this

crisis while it's in a slow boil at any

point in time could become a fast boil

at which point you could say what what

happens to earnings now.

>> Yeah, that's interesting. Four 455. I've

seen 67 now. It's really across lots of

cities. Anyway, uh that's the show.

Thanks for listening to Pivot. Be sure

to like and subscribe to our YouTube

channel. We'll be back next week.