Transcript of Trump's Crypto Windfall, Dems' Anti-Establishment Wave, and the Supreme Court’s Big Week

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Release the dick jokes!

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, I think Mitch McConnell—

dead?

—might be in trouble.

Is this weekend at Bernie's?

Weekend at Mitch's? Feel like it. I don't know.

You heard the whole thing, right? Yeah. If they pretend he's— I thought they should have kept Ruth Bader Ginsburg on ice for a while. Oh yeah. Right?

What is going on in this country at our anniversary, our 250th anniversary? I think he was around for the first one, wasn't he? Mitch McConnell. Oh, there you go.

There you go.

I don't know why I'm thinking of him. I'm like, what's happening to him? Like, are they hiding him? Like, what is— so strange. It was because that other guy came back. It turned out he was depressed. The guy from New Jersey, Tom Kean or whatever.

So more importantly, I had the Chief Investment Officer of JPMorgan on. Oh. And as I do at the beginning of the show, I told a really crude joke, not while he was on. Oh no. And it ends up he's really offended. And he even put in a research note like 6 months later referencing, or I didn't read it 'cause I knew it would upset me, that he was upset. So from this point forward, I'm only doing dad jokes until Michael Cymbalis, Chief Investment Officer of JPMorgan, accepts my apology. Michael, we didn't mean to embarrass you. Oh my God. You have, you can't do that.

What are you doing? Stop being a dad. Being changed by other people. Be yourself, Scott.

Well, I also wanna, I'm also not a sociopath. I think if you upset people, it's okay to apologize. Okay. So anyways, I'm now doing dad jokes. Okay, so what do you call a fake noodle?

I don't know.

An impasta. Oh my God. So release the dick jokes. Michael, please forgive me. Otherwise everyone's gonna be forced to listen to my dad jokes. We all have a vested interest. And Michael accepting my apology. That was—

do not do a joke like that again, please. That's like a 4-year-old's joke.

Oh, okay. You tell me not to do something.

All right. I'm offended that you're not doing jokes. I'm gonna put it in my research note that you're not doing jokes.

Why couldn't we find the scarecrow? Okay, why? 'Cause he was out-standing in his field. Oh, no, no, please. I know, I know. He needs to accept my apology. It's only gonna get worse.

All right, Michael, can you please?

It's only gonna get worse. Let him off the fucking hook.

How you doing? What are you doing for the Fourth? For our anniversary? Our Fourth of July?

What did the curtains say to each other?

I don't know. What?

Pull yourself together! Please, Michael. Please.

Please. One is worse than the other. One is—

they're not even— What did the strawberry say to the other strawberry?

Oh my God.

Please. All right. If we weren't caught in the same bed, we wouldn't be in this jam.

That's a little sexual.

All right, you see the problem here, right? I see the problem. You see the sense of urgency.

I see the sense.

Do you know Jamie Dimon? Maybe ask Jamie to lean on Michael to accept my apology. I'll talk to him.

I bet he likes a good dirty joke. He seems like a fella who likes it. 100%. I could see him guffawing to that. He has a good guffaw. Anyway, um, where are you right now? What are you doing for the Fourth of July? Are you doing anything? I'm going to a tractor parade.

You too? Yeah. No, um, well, wait, no, I'm going on a big fat boat around Sardinia, so same same. Same thing. And find some DJ on Buena Facha or whatever it's called. And probably do X. Yeah, same thing. Same thing. Yeah.

I go to this annual tractor parade in Vermont where Amanda's family rebuilt a barn that was falling down that they had this sort of funky hippie barn and they redid the whole thing and it's beautiful. I have to say, it's really beautiful.

So I mean, you guys have an open relationship and you're both looking for lesbians? No. No, not at all.

No? No, that time has passed for Kara Swisher. You think? Yeah.

You haven't hit your midlife crisis yet. I had it. I had it. Oh, I saw you on one of my favorite guys' podcasts. I love Dan Harris. I saw you on Dan. Oh, that was good. Yeah. He's so comforting, isn't he?

Yeah. Yes. 100%. Yeah.

And he has, whenever I, let's bring this back to me. Whenever I'm mentoring young men, he has one of my favorite pieces of advice that I always give to people.

Which is?

Action absorbs anxiety. Oh, that's good. I love that.

Yeah, you have a lot of anxiety.

You're upset about something, you're anxious about something. Do something. Immediately start moving against it and addressing it and you start to feel better.

Or anything, do something else. Yeah, I think that's a really good one.

I'd like to adopt him as a big brother. Is he looking for a little brother? That guy is so comforting and smart and wise.

You're going to be gone next week. We have special guest stars.

Oh, who?

Do you know who the guest hosts are? I think Scaramucci is one. The Mooch.

Mooch is one. I don't like it when the Mooch comes on because the downloads go up.

And we also have Puck's Matt Bellany.

Matt Bellini from The Town. The Town. Yeah.

I like him a lot. I think he— there's a lot of, you know, media stuff. And actually, I have to say, he and Eric Gardner has been doing the best coverage of sort of media murders and things like that. Just smart. I just, you know, they did a great take on the Comcast thing. I just, I want to talk about— he's always smart. He's also snarky in a way I like, but does great reporting. That's my— he's accurate as a reporter. So I like that in him. So yeah. And then of course, Scott Free August. I've got a real lineup. To try to replace you and figure out my next act, essentially.

At some point we should have a recommitment ceremony. We should, we should.

That was us on the top of the Empire State Building.

Oh God. So I've got a lot to say about both those things.

Okay, hold on. All right, go ahead.

Those two are so obvious. Those people are narcissists who like each other but don't love each other. First off, if you do that for attention, you're really into look at me. Yeah, sure. If you're engaged to someone and willing to let them climb up the Empire State Building, it means you like them but you don't love them. It's like if they fall, it wouldn't be a tragedy, right? I don't know.

Some people chase that kind of stuff, don't you think?

Yeah, but people don't— people can chase that stuff and not risk their spouse's life. Would you let your wife do that regardless of how competent a climber?

I have friends who are in those relationships. They love to do like extreme sports. I have a lot of— I have— I know I don't have a lot of friends that do that, but I know a lot of people who do that and they're very into that kind of thing. So, you know, they like all that. Like, you know, surfing, like windsurfing in like very dangerous places.

Have you ever been to a recommitment ceremony? No, no, no. God, I've been invited to two. And you know what they mean? No, what do they mean? It is so obvious. They might as well put on the invitation when they invite you to a recommitment ceremony that he was fucking his secretary and got caught and doesn't want to lose his kids. So they have a recommitment ceremony, and the second thing it means is they're going to be divorced within 3 years.

Oh, okay. Never been invited.

I'm in such a good mood today. I know. Aren't I a bucket of sunshine today? I know.

So, oh, so if we have one, we should have a ceremony of some— We should climb something. I was thinking about us when that climb was happening. I loved it. This is what I love New York right now.

We look like Gandalf and Billy Barty ascending Mount McKinley.

I love everything about New York right now. These people climb the Empire fucking State, and then they put up that— You would've liked their message about love and power and stuff.

That was nice. I did like their message. Yeah, their message.

I just love— And then that picture of them looking hot as hot in the elevator.

Yeah, they're narcissists. I love that. Look at me. I know. Oh, you would know nothing about that topic. And I have an easier time recognizing other narcissists.

I understand. But the other part is, okay, first you have the Empire State Building, of course the Knicks and everything else, and the World Cup.

I can spot someone who does edibles from across the bar. I'm like, dude, you do edibles, don't you?

I wouldn't do that if I was climbing that fucker. I was trying to see if I could—

Oh, no, no, you don't need to be high climbing the Empire State Building.

Okay, all right. Anyway, and then like, A momdani jumping in the pool. I love that. And then Taylor Swift getting married. I love New York so much today for all these things.

Oh, God. Here we go. I'm just telling you.

Are you going to the wedding? I wasn't invited.

No, but I heard all her ex-boyfriends are showing up and doing a harmony of "Maybe It's You." I love that she's going over the fucking top.

I love someone— I like anyone who goes over the top. I love the Empire State Building people. I like momdani jumping. Momdani jumping in the pool.

That was brilliant. Him going to the pool was great. I just, I like it. At all. Bloomberg did the same thing, but no one criticized Bloomberg.

He's not as good looking. Well, that's the way it is. No, I agree. Yeah. I don't know. I just love the whole thing. I'm so excited for the girls.

He was doing water aerobics. Yeah.

This is why I had Matt Bellini on, because he wrote, he goes, "Do you think she's filming it for a Disney special? Really? Really? Of course she is." Like, I just love that. I love the whole thing. If you're gonna get married, make it a thing. We should have a ceremony. Let's do that on our tour, on our Pivot tour.

Are we gonna get married? Yeah.

No, we should do a ceremony of some sort. By the way, we just planned our new Pivot tour for November.

We did. We have a new city.

We're not gonna say? Should we say? You can say, go ahead. Say it.

We're coming to the great city of Denver. Denver. Yeah. Denver. Excited about Colorado.

And another one that we didn't go to, we've been to recently, but Minneapolis. We're going to Minneapolis.

Oh yeah, we're going back to Minneapolis to show Sick Pride.

Yeah, that was for the Resist and Unsubscribe, but now we're going for Big Sick. Those are the two 2 new cities, Denver and Minneapolis, and we're going to some ones we already went to. Anyway, we're very excited and we're gonna have ceremonies everywhere. We should get to the news actually. There's a big piece. Why not? Yeah, first let me just tell you, Donald Trump's embrace of crypto is paying off in a big way. Trump earned about $1.4 billion over the past year from crypto according to a new financial disclosure, which I think is undercounting all the grift he's doing. A big chunk of that came from sales of his Trump meme coin and digital tokens for the Trump family crypto company, which he gets paid no matter what, and everyone who's invested in it is losing. Just so you know, he got all this money. It's not just crypto. Trump pulled in at least $2.2 billion in total income for the year, up from $622 million in 2024 before he returned to the presidency. That includes more than $620 million in real estate, hotel, and golf-related income, which is almost nothing, um, plus $86.5 million from legal settlements from ABC, CBS, YouTube, Meta, and X.

This grift is just And it turns out we're paying for the East Wing, we're paying for the Kennedy Center, we're paying for all manner of things that he is up to, which he said the public wasn't paying for. So what— this is astonishing. I think they're undercounted. What did you— I mean, nobody's surprised, but the grift is really quite astonishing. I thought was, wow, that's a lot of money. Your thoughts?

Well, there's the grift and there's the— I mean, there's the micro, and that is $2.2 billion in personal income, you know, while sitting, as you're occupying the Oval Office, and $1.4 billion of it from crypto, a financial system that he now supposedly regulates. It's not a conflict of interest, it's a business model. And essentially what you have in America is slowly but surely we're monetizing everything. We monetize healthcare, we monetize education, We monetize enragement online, and now the president is monetizing the full faith and credit and power of the White House. And he went from $622 million a year in net worth before taking office to $2.2 billion after. He's essentially set up a toll booth for the American government. And the meme coin would've been a 5-alarm scandal for anyone else but him. Absolutely. Financial instrument with no underlying value that goes up when the president tweets about it, and that's securities manipulation with a big red hat. And the fact that he did it the Friday night before his inauguration under the COVID of dark, you know that he called people and said, "Thanks for giving me $10, $20, $100 million for my campaign.

FYI, the coin gets announced tonight. It'll go up, and then you can, if you dump it, you dump it." But on a larger level, I was thinking about our 250-year anniversary. And in, I mean, this is the reality that since 1991, childhood poverty has gone way down, crime has been cut in half. We have a, the number of people have gotten educations has gone up. We have a healthier, better educated populace than ever before. Crime is at its lowest rate ever in New York, right? But happiness, as Jimmy Carr says, or satisfaction, isn't a function of what you have. It's the delta between what you have and your expectations. And what's happened in America, because there's now a normalization, an algorithmically normalized 0.1% in terms of your expectations. I'll give you an example. From 22 to 42, I did nothing but work. And I think my first vacation, the only vacations I took with my mom, we went to Niagara Falls once. We used to go to Magic Mountain because we couldn't afford to go to Disneyland. And I remember going to Club Med in Mazatlán when I was like in my late 20s. I thought it was fucking, I mean, it couldn't have been any tackier.

Bad daiquiris, not a very nice beach, all you can eat, but that you wouldn't want to eat all of it. And I thought it was amazing. I just thought it was the most, I was br— I, I brought back Club Med shirts. I had a Club Med hat. I just thought Club Med was the most amazing thing. And I was talking about—

Did you pay by beads? Was it, didn't you have beads?

Yeah, you get beads for bars, for drinks. It's amazing. Oh, wow. And because here's the thing, I had never been to, nor was I being reminded 105 times a day as people vomited their experience at St. Barts and Mykonos. My expectations were dramatically lower. And then you combine that with the following, the people who are supposedly in charge, are exhibiting a level of corruption and depravity that just makes us feel bad about institutions. Right, exactly. So you have a coarsening of our discourse where quite frankly, there's an economic incentive to shitpost everything. It's happened a lot during the Biden presidency. It's also to a certain extent happening now. You have social media vomiting everybody's wealth in your face and giving you the impression that if you haven't made $3 million on Ethereum and your boyfriend doesn't have a six-pack, you're failing. And also the people in charge seem to be genuinely like low-character people.

Right.

Grabbing everything, all the good things. Yeah, and people don't trust the CDC. They don't trust the Supreme Court. It's like what William Gibson said, "The future's here, it's just not evenly distributed." Prosperity is here. They see it everywhere, but people don't feel like it's evenly distributed. So people, now a quarter of the people under the age of 25 feel good about America. It's three-quarters of people our age. So it's definitely like Kyla Scanlon coined the term vibe session, but the 250th anniversary, if you, if the, well, you're down there, what's the vibe like?

Well, you know, I think people feel like this, this guy grabs everything. Like, and what my worry is that it goes, we all hate everything because of these people, right? We think everything's on the take and it sort of makes you feel like nothing works or, or that there's no payoff or anything. And you know, I was really struck by a really interesting exchange this week between, you know, Elon Musk attacked Ro Khanna saying he's killed children with the cuts of USAID that he bragged about, you know, putting into a wood chipper, et cetera, without any care for the impact. And then Nick, he said, "Show me one person who's been killed." And then Nick Kristof, who does amazing reporting for The New York Times, he's like, "Oh, here's some names." And by the way, there's thousands and thousands and thousands and thousands more. And then instead of like actually engaging him, which he did exactly what Elon asked for, because that's his thing is like, "Name one person who's hurt." That's their little stupid trick. And he does. And then he's like, "Nick Kristof is evil." I was like, "You fucker." Like, what? It made me think.

It sounds really— including this crypto stuff, it's like, what is wrong? I wanted to fight the feeling of everything sucks. And it was really hard for the first time. I was like, these people have no care. The same thing with Stephen Miller spouting off about the— they won all these Supreme Court cases, but they lost the one that they really care about, which was birthright citizenship, right? And so, they just can't stop the hate. They just have endless pools of hatred and grift. And I wonder how you survive that, and especially if you're a young person looking at it, like, what is your reaction? I mean, that to me was like, I even feel exhausted by their enthusiastic villaining and stealing. Like, I find them exhausting. And I just don't know what I would do if I was a young person looking at all this.

You know, yeah, it's like there's a lot of issues. I mean, the number of people in the middle has gone away, and young people have a rational reason to be upset. The traditional means of building a life, finding a mate, developing economic security, advancing up the ladder, which is typically some sort of certification, either vocational programming or a college degree, and then buying a house. The incumbents have weaponized scarcity to make it more expensive for them to get those things such that the people already own them, a college degree and housing, can see the value of those things go up. And also our tax policy, which continues to transfer wealth from them to, to the incumbents, right? Loosely speaking, our tax policy over the last 50 years has taken $50 trillion and transferred it from the bottom 90% to the top 10%. Rich old people. Yeah. Yeah. So they're, they justifiably can be very, you know, very upset. Having said that, if you actually look at the data, things aren't as bad as you would believe in terms of the vibe. But again, and this is the great Jimmy Carr, your happiness and your purpose isn't a function of what you have.

It's the delta between what you have and your expectations. And the downside of a meritocracy, and especially when social media speedballs it, is everyone believes if they're not in the top 1%, they're failing.

Except when they're looking at the president just stealing, stealing, stealing. Agreed. 100%. That's really it. Like, there's just no even pre— Like, look, grift has been around.

It's not fair. The game is rigged.

Grift has been around forever from the beginning, right? From every country, every historical thing. But this is grift on a very explicit scale. And also, like, yeah, that's right. I'm taking it. That's right. I'm cheating. And let me tell you, let me put out another story that came out. Politico is calling this week's Democratic primaries in Colorado an anti-establishment avalanche. Obviously it was happening in New York, which is no surprise with Mondani getting, you know, backing a bunch of people, one of whom is really problematic. Colorado Attorney General Phil Weiser, though, upset longtime Senator Michael Bennett, who you and I both have a lot of regard for, who looked like a lock for the nomination a year ago. We thought he'd be governor of Colorado. And then 29-year-old Democratic Socialist Mayla Quiroz unseated a 15-term congresswoman, and Manny Rutinel, a progressive state representative, defeated a moderate Democrat. The results add up to a string of progressive anti-incumbent— I think that's actually— Steve Bannon was very canny on this stuff— victories, notably with what happened in New York. And there are a number of primaries still to come over the next few months. All this as a New York Times/Siena poll showed Democrats within striking distance of putting the Senate majority back in play.

Don't go— I want you to not go negative yet because I want you to understand. Talk about these victories and what they are. And let me read something that Robert Reich wrote on Substack about these elections. Pundits eager to declare a new movement or sound the alarm about socialism are having a field day, but they're wrong. Voters who have supported these candidates haven't done so because they've been particularly attracted to the idea of democratic socialism. Most even don't know what democratic socialism is. In reality, voters— Yes, that's right. —have been attracted to vigorous young people who are committed to getting stuff done. Steve Bannon said nearly the same thing, which was really interesting. And I would agree, talking to, like, Louie, like, he's just sick of people not getting stuff done. Like, and looking for something else, which is interesting. What are your thoughts on this? I think Reich and— I hate to say it—

Bannon are correct. I think that's exactly right. The establishment didn't lose on policy here, Kara. They lost on energy. And look, I've been calling for disruption in the Democratic Party. I think Leader Jeffries and Minority Leader Schumer are absolutely the wrong people to provide the kind of robust, energetic pushback that the Trump administration warrants. But here's the thing about disruption, is you don't get to pick the exact calibration of your disruption. So for example, I consider myself a moderate, and I'm convinced that the true litmus test of someone who's truly a moderate is everybody hates you. But you don't get to— so think about the senators who are moderates, like Fetterman and Manchin. Everybody hates them. So people claim they want a moderate, but when someone actually shows up and occasionally agrees with the other side, they become an apostate. At the same time, guys like me claim we want disruption, we need to disrupt the Democratic Party, and then when it happens, we freak out about it. Yeah. But here's the bottom line. There's a lot to like here. And I say this, full disclosure, I have given money to Senator Michael Bennet for everything he has run for for the last 10 years.

I hosted a fundraiser for him for president. By the way, if you get money from me, it's not a good sign. But I think the world of Senator Bennett, former school superintendent, one of the most credentialed people in the Senate. Inqualify. Lost to a state AG nobody had ever heard of a year ago. But here's the bottom line. If you want disruption, you don't get to pick your form of disruption. And these candidates, they are, there's a lot to like about these candidates. They're young. They're energetic. They're unafraid. They don't have a bunch of blather about how you would go about universal healthcare. They're just like, "Medicare for all." So there's a lot to like about them, but the reality is for those of us in the center, we don't get to pick our flavor of disruption. What I would say that bothers me is that democratic socialists effectively want socialism through democratic means. The reality is if you really look at history, socialism just doesn't work, folks. And they will always point to, well, what about Northern Europe? Northern Europe is actually more capitalist than we are right now. They just have a social safety net and they spend—

They call themselves that though, don't they? I mean, you always, you always threat about Sweden, for example, or the Netherlands or—

Yeah, but they're, but here's the system that's worked. Democracy, individual rights, and capitalism. Call it what you want, but when you start— when you don't— when you start believing that you should have government-sponsored grocery stores or that you shouldn't have border— I mean, that shit, quite frankly, it just not only doesn't make sense, it threatens our ability to win the midterms. Rahm Emanuel had a fantastic statement in the thread we were on, and he said it publicly We have to stop arguing and atomizing ourselves between blue and cobalt blue. So I'm more focused on my energy on the grift and corruption and just stupid decision-making of the Trump administration. The thing, so there's a lot I like about this disruption. You don't get to pick your flavor of disruption. And you know what?

Young people just want change. They just want change. Interestingly, I was just on Scaramucci's podcast and he said he actually been impressed by Mondani, and he was very against him. He was sort of where you are, right? That kind of thing. And he's like, "I have to say he's effective." And I do think they're not looking for necessarily just upsetting the incumbents. They want people who do shit. Do shit. One of the things about Weiser, and I was watching this thing, is he was just a more energetic campaigner. He wanted your vote more. And he wasn't necessarily much more liberal. It wasn't that, because Michael's pretty liberal, relatively speaking, right? Especially in Colorado. Yeah, he just looked like he could— like, he, like, he just was energetic. And not just fake, fake energy. It's not just fake energy. Maybe like what Kennedy felt like back in the '60s. It was like, I, I literally just want you to do your job. Like, I want— and, and I do think— I think you're right about capitalism. I agree with that. But it needs to have everyone gets health care. That is not— I So that's a really good message of the Democratic Socialists and everyone else.

Everyone should get good healthcare. Everyone should get a good minimum wage. Everyone should get, you know, and what's incredible, I'll tell you what really absolutely struck me and I finally realized that the Republican Party is fucked in 7 ways to Sunday. What's coming next, not, I mean, post-Trump was Mondani said, can we, can everyone, like we have an electrical grid problem probably coming up with this heat 'cause there's a huge heat wave. Heat warning all over the East Coast, including in New York. And he said, if you could put, you know, your air conditioning to 78 versus 74, that would be great. That's all he said. Immediately Ted Cruz and Nikki Haley— I told you she can't help herself— said communism, right? Or social— this is what socialism is. And immediately there are tweets from many years ago where when she was governor of South Carolina, and he— the same thing in Texas where they asked people to put their put their air conditioning down, surfaced. "What is wrong with them?" Like, he was asking a normal thing that they themselves had asked for. The minute they jumped on it, they were trying to do socialism.

They look like idiots, and everyone can see it. And that's why I told you Nikki Haley is impossible. She's never gonna win anything 'cause she's so— such a suck-up in so many ways. It was so not sensible. He was saying something sensible, and everyone sees it. And did not immediately think communism about the air conditioning, even though I love air conditioning. And so that to me is— they're vigorous young people who want to be effective. That is what I think is attractive.

I don't disagree with any of that. And the thing that Mamdani and some of these people are doing— the most admirable thing about Donald Trump, President Trump, is action orientation. It's ready, fire, aim. It's like, no, I'm going to do this. We're doing it. And the courts might challenge it. We might have to roll it back. But Americans really respect that. And Mondani, to his credit, immediately imposed certain taxes, certain policies. And I think young people think, well, at least he's fucking doing something. Now, the glass half empty for me is the following. Whenever the far left and the far right agree on anything, it's a really That's a tell. It's a really bad idea. I believe they both— the far left and the far right come together on what I believe are anti-Semitic themes. They both come together on an isolationist foreign policy. And what I see here is they both come together on a certain— on socialism as an economic policy. Donald Trump is investing in Intel. Donald Trump is entertaining the idea of investing in OpenAI. Donald Trump believes that the government should have a golden share in U.S. Steel. All that happens when you do that, all that happens when you do that is you end up with warehouses in Ireland full of DeLoreans and Air France.

And you see a lot of that rhetoric from the far left. We absolutely need a more progressive tax structure, but here's how you get to a progressive tax structure. The thing we spend the most money on is not the military, it's not our debt, it's not even Social Security. The thing the American government spends the most money on, we spent $2.2 trillion on givebacks from the tax code in the form of loopholes to corporations and the wealthy. We need to reduce spending on tax loopholes and givebacks to the wealthy and corporations. And if you look at Northern Europe, they're very capitalist. They let companies go out of business. They don't take stakes in Spotify. Their tax rates are either the same or a touch higher than ours, but what they do What they do is they enforce them and they say, Spotify, you don't get to write off your jets, your plant, property, and equipment. And the richest people don't get to have donor-advised funds where they get to write off donations they haven't made yet. So, but what I don't like about, I mean, quite frankly, there's some things that really bothered me about the wins in New York 'cause I felt like being anti-Israel was a litmus test.

Obviously as a Jew, that concerns me.

Well, there was one, there was one, the other Lander is not. Chevalier. Yes, Chevalier is the problem.

Yeah. By the way, she's gonna be the poster child. She's about to become the poster child for Republicans in 2026. She's problematic, no question. Anyways, but let me circle out to where I started. I don't get to pick the calibration and the color and the flavor of disruption. Disruption, they're youthful, they're energetic, they're unafraid. And that for me is 70 or 80% good. Do I worry that they're embracing a form of socialism that has never worked throughout history? Yeah, I trust there'll be modulating forces from the center on both sides on that. But the reality is we need— the Democratic Party needs to shed its skin. Leader Jeffries and Schumer are getting clear signals. No one gives a fuck what you think. You have become— institutional endorsements have become a liability. Just as we thought US bases in Gulf states would provide a veil of protection, they've become bullseyes. You're gonna start to see Democratic candidates say, "Senator Schumer, please do not come to my rally." They are, they are actually.

They're like all talking about whether they'd vote for him. He's gotta go. I've told him that to his face. He thought I was kidding. I was like, "No, you need to step down." It was like, he's like, "Hahaha, Kara." I was like, "No, time to go. Time to move along." I mean, we don't want a Mitch McConnell situation.

These guys cling to power like an African dictator, which I'm sure is a hate crime.

Yeah, yeah. I was like, "We don't want a Mitch McConnell situation here. We wanna move along." Anyway, I agree with you. It's exciting. I find it exciting.

We needed disruption. Yeah. Good for them. Youth energy. Have at it. I think it's a good thing too.

I like non-cautious people. I do. I think the Democrats have played it too cautious. Anyway, let's go on a quick break. When we come back, the Supreme Court finishes its term with some major rulings. That was something.

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No one could blame you if you thought this Men's World Cup was going to be a disaster. The President of the United States isn't exactly a welcome mat for the world, and there have been plenty of embarrassing stories for the country. There was the mom of Cape Verde's goalkeeper who wasn't let into the United States to watch her son play until the until the team started doing well and people clamored for her entry. The team from Dr. Congo hadn't made a Men's World Cup in 52 years and hardly made this one because the United States was supposedly worried about Ebola, even though no one on the team had Ebola. If you were watching Senegal-Norway last week and were wondering where all the Senegalese fans were, they weren't let into the country, but you probably noticed we let in like a million Vikings. I wonder what's different about their fan bases. Oh, and who could forget we're literally bombing one of the countries that, up until Friday, was playing here. "Missiles aren't the problem." But, but, somehow the vibes at this World Cup are mostly positive. The World Cup might just be healing us on Today Explained from Vox.

Is Donald Trump still cool?

Well, at first, it was what he was promising to America.

He was promising change. Yeah, promising a big change. Has he lived up to that?

No, no, I wouldn't say so. I would say so. I'm disappointed. We're in Washington, D.C.

for one of the events that Donald Trump is throwing for America's 250th anniversary, and it's UFC night.

Proud to be American. We got free tickets. It's just going to be a great time.

That's about it. It's an opportunity to talk to a group that was central in the 2024 election, young men. Why do we think Trump and men seem to have a connection?

I feel like he just knows how to advertise identifies himself with the younger crowd. It aligns with masculinity, I feel like, to a certain extent.

But if they don't like Donald Trump, what do they prefer politically otherwise?

I care about my family, I care about my country, I want people to be safe and happy where they live.

I care about my wallet too, man. I'm Estet Herndon, and this is America Actually. Catch us every Saturday on YouTube or wherever you get your podcasts.

Scott, we're back with more news. It's been a big week for the Supreme Court as it wrapped up its term. Let's go through a round of some of the cases the court ruled on. Uh, court struck down a federal law that bars the president from firing members of the FTC, so he— no more independent agencies essentially. They lifted limits on how much political parties can spend on advertising and other expenses with candidates, a problem and more, more Citizens United. Upheld two state laws barring the participation of transgender female athletes from girls' and women's sports teams and upheld called birthright citizenship, striking down an executive order. Let's hear some thoughts from Leah Littman, who co-hosts the podcast Strict Scrutiny, which breaks down all things Supreme Court.

Hey, Kara and Scott. Here are some quick thoughts on the most recent Supreme Court term. We came within a single vote, one vote, of saying the Constitution doesn't mean what it says on birthright citizenship and nullifying a constitutional amendment that is the foundation of our constitutional order of multiracial democracy after the Civil War. They have also been systematically undermining our democracy, killing the Voting Rights Act, enabling partisan and racial gerrymandering. They've also just killed campaign finance regulations that were designed to prevent political corruption. As a result, the super-rich will be able to effectively funnel more than $500,000 directly to candidates in the upcoming election. And they have been killing Congress's capacity to govern and expanding presidential power against a backdrop of a president who has been engaged in corruption and pay-to-play. And that is just the start of it.

Yes, I think she's sort of articulated it. I— the ones that really upset me, and I'm— the birthright citizenship was far too close. Far too close. Agreed. That was disturbing. And by the way, a lot of the Trump people have to go back home wherever they come from. The two that really upset me, to me, is this— the Voting Rights Act, obvi— Voting Rights Act, absolutely. But the finance— It's, to me, it's all the money, the finance regulations designed to prevent political corruption. That was more, more Citizens United was the last thing we need. And then secondly, the ability of the no independent agencies on things that deserve independence like the FTC. And you've seen what Brandon Carr has done, although one of the justices did say Brandon Carr is a moron. And part of his essentially said that in his ruling, I think it was Kavanaugh. Could have been Gorsuch, whatever. They look the same to me. So those two were like giving more power to the president in general, which I think will be just as bad with a Democrat and as terrible with Trump, was two problems. But the money to me was the focus, the focus I had.

What about you?

Yeah, Citizens United is arguably one of the worst things that's happened in recent history to the US because of the 900 billionaires, they make up a third of political giving. It's probably more than half of influence 'cause they can be much more targeted. You know, unions just give money to whoever's the union candidate. It, but a private equity firm can give $700,000 to Senator Sinema and say, "Just be the holdout for the infrastructure bill," and ask that they strip out the carried interest loophole. And that costs $20 or $30 billion, which is the most ridiculous loophole in history. See above, $2.2 trillion spent on loopholes where private equity owners get their commission on investment gains in the form of long-term capital gains. It's totally indefensible. So that's bad. The silver lining, the dotted silver lining on this out-of-control spend is that what we're finding is it's gone past its utility. And that is, it used to be 20 years ago, like 97% of the time who raised the most money won. Yeah, it's no longer happening. Like Tom Steyer spent a quarter of a billion dollars and didn't win. Right. It's almost like the full local news station employment act.

The amount of money they're spending, on the whole, it's really bad. But what you are seeing is it's no longer the key fulcrum for who, or the key lever for who wins. The thing that upset me the most, that was just so frightening that we was even this close, was birthright citizenship. I mean, this is the Constitution, just straightforward. The Constitution says if you're born here, you're a citizen. Fourth Amendment, it's right there. And I'll, I'm gonna give you a couple anchor babies. Balogun, who got a red card unfairly, the attack, the premier striker for the World Cup team. His parents were here. I forget, she couldn't go home. He was born here. She was too pregnant. She was too pregnant.

Couldn't get on the plane.

I think the airline said you're too— Yeah. Good for us, right? And also it's a fairly small number. It's only 7%. It's a fairly small number of babies.

It is. The whole word anchor baby is so fucking ridiculous.

Not only that, but to a certain extent, this is what we don't like to talk about. Immigration is not only the secret sauce, it's the most, illegal immigration is probably the most profitable form of immigration 'cause they're risk takers and they generally fold back across the border when the crops are picked or there's not enough demand for 'em and they pay taxes and they usually don't stick around to collect Social Security and they usually don't call the fire. They commit crimes at a lower rate than citizens. The reality is we didn't just wake up and find, oops, there's 15 million undocumented workers here. Republicans and Democrats have looked at each other and gone, wink wink, it's nice having cheap housing being built in Phoenix, Arizona. Right.

Or our grapes picked for cheap or whatever.

And how are we gonna get all these people to wipe grandma's ass for $11 an hour? I mean—

Asian immigrants are the biggest nurses, nurses' aides.

I mean, so it's not, this has been an economic decision. Has it gone too far? Absolutely. But be clear, folks, we didn't just wake up and let this happen. So, Baligan is one anchor baby. You know who else is an anchor baby, Kara? Melania. No.

Trump.

Barron Trump? You could say she's a mail-order bride. She's not an anchor baby. She wasn't born here.

That's true. Sorry. Who? Your co-host, Kara. Oh, right. You're an anchor baby.

My parents, at the ages of 19 and 24, got on steamships from Glasgow and London, respectively, and they landed in Canada, where my mom was a stenographer, And my dad was a candle salesman. They met at a dance. They fell in love. They had sex there.

So the conception was Canada. In Toronto.

They claim they got married and had me. I'm not sure if that's true. I'm not gonna argue it. I don't care. But they decided they could not. Bastard also. I'm a bastard. That was my dad said. Bastard ankle baby. My dad said, "A few inches wee short to the blanket," whatever that means. And by the way, he was a bastard. He was born in Australia. To an unwed woman who was a nanny at the McVigar family.

My entire family is really—

Yeah, literally, we're bastards all the way through. I am the Jon Snow of Jon Snows. And anyways, my father, basically my father's mother freaked out, said to her boyfriend, "We gotta get outta here. I've already sold the baby to this wealthy family." And they literally went to the dock and got a ship to Glasgow, Scotland. Anyway, my parents, my mom's 7 and a half months pregnant. They said that we cannot endure another winter here in Toronto. And they read an article in the Toronto Globe and Mail saying that the best weather in North America was in this town called San Diego. San Diego. So they loaded up my mom's Austin Mini Metro, which is basically a lawnmower with doors. Like if you've ever seen Mr. Bean, that's the car. And 7 and a half months pregnant. No idea. You— my mom and my dad drove to San Diego and something like 37 days later, I was born at La Jolla County Hospital. They were not citizens.

They were just visiting.

Oh, no.

And let me make a flex. I'm a U.S. citizen.

Why didn't I know this about you?

I am a U.S. citizen. I've had to pay U.S. taxes. Yeah. Me and my companies have paid well over $100 million in taxes over the last 30 years. It seems like it's worked out for everybody. Oh my God. And I just want to notify the IRS and the Trump administration, my mother, I am an illegal anchor baby. I think my citizenship should be revoked. And by the way, when I sell my next company, I'm going to be in Dubai and I'm not going to be subject to U.S. taxes. I am down for you to revoke my U.S. citizenship and also abdicate, absolve me of all, and refund me of all the tax payments I have made because my parents decided to come to the U.S. and, you know, drop a 9-pound stone called Scott. Cat in San Diego instead of Toronto. Wow. Anyway, I would imagine that there is more of, uh, Balagan and Galloway than there are people eating cats and dogs that were born in the U.S., right? Or just showing—

or running across the border to be pregnant. This— the screed from Stephen Miller, who I cannot wait till he gets his reckoning, is astonishing. So hateful and like ridiculous and full of lies that It's so full of love. This whole— their whole— and let's not use the term anchor baby because it's so gross. It's such a gross way of, and hateful way of looking at it. I had no— Scott, you could have been sent back wherever. Where would you— Canada? Where would you have been sent to?

Did you hear that fucking weirdo talking about eugenics? That people should be sterilized before they get here?

Yes, I know. Right. Or they're not allowed in if they're pregnant.

Vox, 1939 Germany's calling and wants you back. I know.

Wait a second. Where would you go? What country would you go to? —Now? That's the other thing. Where do we send them back to? Right? Because would you go to Canada? If this passed, like, you would— Send them?

People are leaving. Last year was the first time since World War II we had negative immigration in the US.

If this lost at the Supreme Court, which it could have, right? Where would they send Scott Galloway back to? Was it Canada? Or is it England? Or is it Scotland? Like, what country are you from? That's not true. What country are you from?

Well, my parents—

You're stateless.

My dad is, or was, a Scottish or British citizen. My mom became a citizen of the US, but I guess back to the UK. I don't know.

I don't know. I don't know. God, that's interesting, Scott. Well, wow. God, I had no idea. Well, okay. Well, I'm glad you're safe.

I'm opening a bar in St. Barts, so I'm a French citizen. Okay. But then I have to root for Team France, and I just can't do that. Oh yeah.

I just can't do that. All right. Well, this is some news I didn't know.

Something to think about. After seeing Team Japan, has there ever been a product that's been better for the Umbrella brand than Team Japan? Did you see what they did? No. After they lost in a heartbreaking loss to Brazil, they all walked over to the Japanese side and they bowed to apologize to their fans. Oh, they did. Oh. These, I think I'd like, I wanna move to Japan anyways. Yeah. I would love to spend more time in Japan.

I lived there for a couple of months. I loved it. All right, other Supreme Court news. Wow, Scott, this, I just, I, I'm, I need to calculate the situation.

You need to get me kicked out.

You're like, calling Stephen Miller. I'm going to ask everyone for their ID when they come and be a guest host. Um, in other Supreme Court news, by the way, NPR retracted an article saying that Samuel Alito, another piece of shit, sorry Samuel, but you are, had retired. Uh, reporter Nina Totenberg has said she heard retirement announcements were coming and mistakenly assumed it was Alito, prompting her team to publish a pre-written story. Uh, that seemed like odd. It seemed like that. I think he's probably leaving, right? He's gonna have to. They're gonna have to. He's got 2 years left to put in, you know, younger versions of Alito and Thomas, I guess. Correct?

Why would you think these people are any less narcissistic than Ruth Bader Ginsburg? They all think they're gonna live forever.

Oh, they may not leave. Oh, interesting. You don't think they'll do it for the take one for the team kind of thing?

Well, that's what Souter did. I think it depends on the individual, and I just don't know him well enough. RBG, I mean, RBG and Senator Feinstein, both lovely, important women who've really— Forged paths. Screwed, who really put an unfortunate punctuation mark at the end of the sentence of their career by not believing they would ever die.

Yeah. Oh, you think Alito will just stick around 'cause he loves to hear himself talk?

I have no idea what he's like.

All his nicest things. And by the way, in Thomas's whatever, his anti-whatever. He, he like mentioned Dred Scott an awful lot. He's like, which of course was a terrible thing. 14th Amendment is here to protect all of us. So it's great it's there. They're going to try to— they're going to try to take it out, but they're going to be successful.

Protect podcasting and erectile dysfunction drug sales. Exactly.

Anyway, let's go on a quick break. When we come back, we'll talk about SpaceX donating to Trump accounts.

1, 2, 3!

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As America reaches its 250th anniversary, how should Americans assess their country's strength relative to the rest of the world? We're moving into a genuinely multipolar world. And that's a world in which every nation is basically for itself because nations can no longer rely on the United States to protect them. I'm John Feiner. And I'm Jake Sullivan., and we're the hosts of The Long Game, a weekly national security podcast. This week we sat down with historian and foreign policy expert Bob Kagan to assess America's role in the world at 250 and the future of American power. The episode's out now. Search for and follow The Long Game wherever you get your podcasts.

Scott, we're back with more news. The Trump administration has talked with SpaceX about donating stock to the administration's Trump Accounts Child Savings Program. It's unclear whether Elon Musk has agreed to that or how it would be structured. Trump accounts are set to launch on July 4th with over 6 million children enrolled. Other big donors include billionaire Michael Dell and his wife, and companies like BlackRock and Bank of America, which have agreed to match donations made by employees. Uh, also apparently OpenAI is reportedly also discussing giving Trump administration a 5% stake in the company, uh, proposal that reportedly involved other U.S., uh, AI companies also giving government similar stakes. Uh, this is, this is a— to me it was really interesting. Paul Graham had a really interesting point. The reason that OpenAI was doing that is because they don't get asked for 10%. Like, I thought that was true. This all feels like a shakedown, or you get something in return for doing this kind of stuff. I don't hate the idea of accounts. I don't want— I wish we will— hope we will be renaming them from Trump accounts to something else, USA accounts. Um, but it seems a little, uh, socialist to me.

I don't know, what do you think?

Again, it's where the far right and the far left meet, that with just different objectives and different claims. OpenAI offering the government a 5% equity stake is essentially to buy protection, neutralize regulation, lock in a government anchor client. It's not patriotism, it's protection money. It's a moat. And you don't think they're gonna be the first to get government contracts versus other AI startups? It's also the beginning of what I think is gonna be the one of the biggest bailouts in recent history. And that is we're starting to see cracks. Oh, AI. Cracks in the wall where there's fewer people, fewer companies have actually figured out a way to create demand. There's only two now, OpenAI and Anthropic consistently. And their spend and CapEx commitments are so outta control that I think Sam Altman says, "I like the idea of the full faith and backing and maybe even government-backed debt." Right, yeah. So bailout. From the president. Bailout. And here's the bottom line, the government should not The government should not be taking equity stakes in companies. They just shouldn't. I mean, there are some exceptions occasionally when I do think you can make an argument in the Great Financial Recession that it made sense for the government to bail out the automobile industry 'cause it was a huge employer, but they didn't start saying you can only buy Fords or occasionally it happened.

Yeah, it saved Tesla's ass back when it needed it.

These companies have gotten trillions of dollars in market cap. Let them run. I mean, this is just straight up cronyism. Privatize the gains, socialize the losses.

Can I ask you a question? One of the things, Al Karp seems insane every time he opens his mouth and hopped up on something, but he was going on sort of— Very cogent.

I thought he was very cogent. I do too.

And I had to listen for a second because he's so nuts. He always throws in some nutball thing on the side and his manner. But what he was saying is something that Mark Cuban had said to me previously is this token maxing is gonna come back to bite people. And that when people find people are cheaper than the tokens, it's gonna sort of collapse. Mark Cuban said this absolutely first to me months and months and months ago. And Karp was articulating this idea of these open systems mostly from China, as you predicted, Scott, taking the place of, you know, with regular corporations. And two things he was saying is one, keeping your data yours and not giving him to OpenAI's and Anthropic's. And secondly, the cost of these tokens is really untenable. And I, as nutty as he is, and he took a number of like slaps at competitors because he can't help himself. He made a lot of sense. I can't believe I'm saying this too, but he did. As I was listening, I had to listen to it twice and I was trying to think if I could put it in someone else's voice.

Um, cause I, every time I hear him, he says nutty things, but this is the kind of thing I was like, I was like, we're gonna, this is gonna collapse. And a bunch of economists, all of these world economists are all worried about these cracks that you've talked about. So talk a little bit about this, 'cause this idea, you had the idea of China, these open systems from China replacing and sort of knocking the stuffing. You have these economists saying this, you have Karp saying this. Again, I wanna give credit to Mark Cuban for being the first to mention it to me. Talk a little bit about this, 'cause all this like government intervention seems really problematic going forward.

The government intervention is bailout cosplaying growth. And Karp is right, cheap models are eating the expensive ones. The token consumption of Chinese models has surpassed the token consumption of frontier models in the US. Because all of a sudden the CFO of Uber goes, our entire AI budget was burned through in 8 weeks, and I don't see any consumer talking about the improvement in ride-hailing service. I don't—

Or it's not improving it. It's not improving it.

Well, it's sort of like experimentation is over. This can no longer be a magic trick. You either have to incorporate this into the plumbing and show me ROI or we're gonna reduce our budgets here. And AI is following kind of the same curve as cloud computing, and that is margins compress. There's, this reminded me of '99, and tell me if you think this analogy is apt. Okay. Okay. So the internet comes and we think everyone's gonna buy their dog food and their cars and Pepsi's gonna buy their sugar online on the internet. And we're all gonna buy not just CDs and books, but we're gonna buy everything online. And there's the front layer. So everyone invests in Amazon and eToys and, you know, pets.com. And it ends up that they're just not nearly creating enough demand and not enough commerce is going through e-commerce to justify buy anything resembling the valuations these companies are getting. So they go, oh wait, we're not sure which part of the application layer, which LLM, if you will, is gonna win. So let's all invest in the infrastructure layer. And everyone invested safely in like, I can't pick the winner, so I'm gonna invest in Cisco or in telco infrastructure.

And Cisco hit an all-time high, lost 93% of its value from '99 to 2001. And I see kind of the same thing here where everyone's saying, All right, let's invest in the demand side. You know, XAI, Llama, Groq, Claude, ChatGPT. And all of a sudden it looks like the demand may not be as exponential as we thought. Or it's too costly. Or it's too expensive. Yeah. Which lowers demand. And some of the players who thought they were going to need infrastructure for their own demand, specifically Meta Meta and XAI have said, we overestimated the demand of our own LLMs, so we're renting out our infrastructure. Right. Interesting. In a matter of 30 days, it looks like we've gone from a supply crisis to a demand crisis. And what you'll see, I think, is just as in '99, the first companies to crash were the B2C, then it went to B2B. Oh wait, not pets.com. Let's go to, remember, Internet Capital Group? Oh, they're selling— Oh my God. Sugar in between— I forgot about that. You know, from farmers, right?

I totally forgot about, I wrote so many stories about that.

It had a valuation greater than General Electric. And then everyone figured out no one was buying fucking anything. And it was easier to fax your orders than it was to go on the Internet Capital Group website. And then everyone went to, it went B2C, then B2B. B2C gets creamed, B2B then gets creamed. And then the infrastructure guys got creamed. I think we're sort of going through a similar cycle right now. Overbuilding. —And we're starting to see the beginning of the cracks at the application layer saying people are questioning the amount of money they're spending on Anthropic and OpenAI. What's evidence of that? OpenAI and Anthropic are considering delaying their IPOs.

Yeah, I agree. And I do think one of the things I think will recover would be computing demand, 'cause there's only gonna be more computing demand eventually. And I think that's what happened with all those internet companies. Like, look, there were a million, like, I forgot about ICG. Oh my God. You just brought me back. Remember them? You know, everyone remembers Pets.com, but, you know, eventually there'll be a Google, right? Eventually there'll be a Facebook. The technology will survive.

Right. These companies will survive.

And so I would bet computing is an area you would wanna eventually, like, once it crashes, buying it up would be a smart thing, right? Computing apps would be an important thing, like understanding where it's going. But you're right, a lot of these companies aren't ready to buy these things and prices have to come down and then that'll have knock-on effects of Oracle and all the others who have, you know, a lot of other companies will be affected in the, in the blast radius of this. I agree. I think these economists— I was reading the report from this thing, and usually I don't pay that much attention to like predictions, but I was like, this makes perfect sense of where it's going. And it does have a feel, you're absolutely right, of 1999.

Amazon's an amazing company from '99 to 2001, and I lost 92% of its value. Um, Meta is an amazing company. 4 years ago in 2022, it lost 72% of its value. These companies, the natural curve of these companies is very volatile, and the technology and these companies will survive and they will be great companies. Or can they go down 90% in value? The answer is yes. Yeah, I agree. This feels— it just feels so '99 to me. It's like I was—

the government meddling makes it of course, the government.

Oh yeah, propping them up because Trump is like, my entire administration is— America is a giant bet, whether it's the GDP growth, CapEx spending, earnings growth in the S&P, it's all a big bet on AI. His political money. If these guys go down, it's gonna be really rough for me. I'm telling you, a bailout is coming. Yeah, one would assume.

Yeah, 'cause they're the future of America. Yeah, you're right, 100%. All right, Scott, one more quick break. We'll be back for predictions.

Mm. A lot of us probably grew up with mountains of video game stuff. Cartridges, consoles, discs, other discs, broken discs, more discs, everything. And now it seems like those discs are gone. This week on The Vergecast, we're talking about why the gaming industry is going all digital and what it means that that's going away. Plus whether Rivian can take on Tesla, whether any of us can figure out how to vibe code and much more on The Vergecast, wherever you get podcasts.

Okay, Scott, before we get into this week's predictions, I want to play a prediction you made last week at Cannes.

My prediction is the biggest IPO in terms of first day pop is going to be a European, the Berkshire Hathaway of forgotten internet brands, and that's this company called Bending Spoons that I had not heard of until 2 weeks ago. I'm kind of fascinated with it.

Well, Scott, take a victory lap. Bending Spoons surged 40% after the company's IPO this week. What's next?

Before you get to your prediction. Well, it's the first off, the company was up. So SpaceX was up, I think 22 or 23%. We predicted it'd be up 20. Bending Spoons was up close up, I think 42% yesterday. Yeah, 42%. Yeah. They're gonna have to show that they can scale a model of buying stuff at, you know, X EBITDA and then— Orphans. These orphans and then substantially reducing costs, which is Latin for hire younger people and replace the expensive 40-year-olds. And to their credit, they have some of the highest revenue per employee of any digital company right now, any internet company. But they're gonna have to show that they can consistently make these accretive acquisitions. What this really is, is like Martin Sorrell kind of pioneered this model. He went and bought all the big agencies. I don't even remember them now. Ogilvy Mather. He could go in and buy these companies at 7 times EBITDA or 8, and they'd immediately, he'd take their earnings and the market reward him, would reward him with 12 times. They're gonna have to show that they can, that this model, this private equity-like model of acquiring companies, they don't get them cheap, they get them for a good price.

You would argue that their ability to reduce costs continue to see growth, add some growth organic, and then the market will give them a markup. They're gonna have to show they can continue to do that.

Yeah, it's slightly down right now today. They're going down today.

Well, to be clear, the valuation last year was, it was about $7 billion. It came out at $19 billion. It's trading at about $23 now. The stock's not expensive, but you would argue that they're going to have to show sooner rather than later their ability to continue to scale these types of accretive acquisitions. So, but I thought when I talked to, when I looked around and I said, okay, all of the oxygen had been sucked outta the air for SpaceX. And when these guys came out at 7 or 8 times earnings and all of those brands and the fact they were only raising $1.5 billion, I thought this thing's gonna get, I mean, this is the sad part about IPOs. This is what I believe JP Morgan and Goldman Sachs are doing. And that is they use AI AI and their incredible market insight and their incredible marketing machine, they are the new engineers. They engineer a 20-plus percent pop on day one because the reality is that is the ultimate branding event. Everywhere in the news today is that bending— Italian company Bending Spoons is up, is up 20%. And personally, I wanted to see the company go up.

And the reason I brought some sunlight to it was because I am so sick of talking about American AI companies. I love the idea of a European company that's not AI.

And also cleanup, a cleanup company. You know what's interesting is that I'm just looking at the Meta thing. They're at 20, the P/E ratio is 20, which seems healthy. And that SpaceX is valued at $500 billion more than them is insane. That makes no sense. I don't care how good they are at robots. It's just nutty. What he'll do is he'll fold Tesla into this. But as I've said many times— Which is another anchor, two anchors.

2 anchors. Yeah. 2 anchors going into each other.

Calm down. But it is, there are some real values here, right? Like Meta seems to be, I mean, I don't usually make some—

Meta on a price earnings basis, I don't think has ever been this cheap. And the cheapest of them all, and was my big tech stock pick for '26 though, Amazon has never had a price earnings ratio this low. Yeah, what is theirs?

Well, you know, Google, Alphabet is 27, Meta's 21, Amazon, you're right, is low, 29.

Yeah, and it's usually, its average over the last 20 years has been 55. And anyways, industrialized robots all gone forever. But so my prediction is that essentially, and I said this, we're starting to see cracks in the wall around evidence. And I think it's nuanced, not definitive. It's not cracking because AI doesn't work. It's cracking because investors are starting to ask much more pointed questions specifically can we actually earn a return on the trillions of dollars being spent here? And the evidence, the, there's evidence that the narrative around AI is changing, and that is CapEx is outrunning monetization. The largest cloud companies are on pace to spend $600 to $700 billion on AI infrastructure just this year. Yet many enterprise customers are struggling to demonstrate measurable ROI.. And that is the narratives move from can it, can AI work to can AI pay? And it, it used to be spend more money, this is the future, infinite demand. And it's like, whoa, hold on. CFOs are starting to tap the brakes here. And the market is splitting. JP Morgan noted the divergence. AI infrastructure suppliers continue to outperform and the companies writing the biggest AI checks, the hyperscalers, have begun to lag.

And that's reminiscent again of late-stage infrastructure booms where the suppliers prosper before the customers earn adequate returns. And also Wall Street, as it does, eventually focuses on ROI. And the debate has shifted from 12 months ago, the debate was who can build the biggest model? Now it's who can make money? Right, yeah. And one of my role models here are this fantastic chief economist who I, by the way, has, I think, a much better sense of humor than certain chief economists. Investment officers at other big banks, Apollo's Torsten Slok.

Does he like a dick joke?

I think Torsten loves a good dick joke, but I'm not gonna speak for him. I'm not gonna speak for him. But he puts out these fantastic emails every day with a chart. And he argues that the markets may be pricing in productivity gains that will take years, not quarters, to materialize. We're starting to see central bankers issue warnings.

Yeah, they are. They're all over the place.

And here's the thing, Kara, if the AI trade unwinds, the most vulnerable names are generally the ones whose valuations depend most valuable on continued AI infrastructure spending. The number, the tier 1 risk level is NVIDIA, Astera Labs, and Marvel Technology. These companies are extraordinary businesses, don't get me wrong, but they're the most exposed to a slowdown in GPU and networking demand.

Yeah, they're the Cisco.

NVIDIA's the Cisco. And then the tier 2, Vertiv, Supermicrocomputer, CoreWeave, these are effectively picks and shovels for the AI gold rush. And then you go to the third level, the Microsofts, the Alphabets, the Amazons, the Meta. There will be nowhere, there would be nowhere to hide here. And that is the technology story's intact. It's just that the valuation story is beginning to get stress tested. And I don't think it's gonna survive that stress test. So what's the prediction? All 8 or 10 of those companies, a basket of them, down 20 to 40% in the next 12 months. And by the way, still great companies. The technology will survive. I believe that the better AI players are gonna be juggernauts in 5 to 10 years. But we are entering, these guys are just way out in front of their skis.

Yep, I would agree. I'm gonna make a short prediction too. The thing that we'd started beginning with the Trumps, I just noticed I just read this New York Post on Trump family corruption, which was interesting. I think it's not Trump that's going to pay for this because I think he's going to die before we can get to him. But I think his children and the children of the Lutniks and the rest are going to get it.

I do think they're going to get it. You mean be prosecuted?

Yes. Here's why. This is the New York Post. The Trump sons, meanwhile, are part owners or investors in companies neck deep in key defense contracts to mine tungsten reserves in Central Asia. It stinks to high heaven. If the president's family making bank from obscure resource companies in the former Soviet Union sound familiar, maybe because Hunter Biden's lucrative connection, Burisma, Ukrainian gas company, was a major scandal in the 2020 election and beyond. Republicans, including Donald Trump, were justifiably outraged at the obvious influence peddling. These kids are gonna pay a price. That's my prediction.

Years from now, you don't think they'll get pardons?

I think he'll try, but I think there's state— there's all manner of ways to get to them. I just think they're in for a— I think they're infer a lot. That's my prediction anyway. But I think it's all part of the same thing, like you're talking about, that we cannot save these internet companies. We cannot keep intervening for friends of Donald Trump or family members. Anyway, it's gross. It's socialism is really what it is. Communism, really. Anyway, we want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to ny mag.com/pivot to submit a question for the show or call 855-51-PIVOT. Okay, that's the show. Thanks for listening to Pivot.

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And please beg the head chief investment officer of that bank to forgive Scott so he can start telling dick jokes again. We'll be back next week.

Release the dick jokes. Today's show was produced by Lara Namensoy, Marcus Taylor Griffin, and Todd Wiseman. Additional assistance from Kate Gallagher and Brad Sylvester. Ernie Nottage engineered this episode. Thanks also to Drew Brose, Mia Severian, and Dan Shalon. Nishat Kuruwa is Vox Media's executive producer of podcasts. Make sure to follow Pivot on your favorite podcast platform. Thank you for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business.