DeepSeek Fallout, Meta Settles with Trump, and Guest Host Reid Hoffman
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January 31, 2025
TLDR: Kara and Scott interview Reid Hoffman about his new book on AI future, discuss DeepSeek hype and fears, explain why investing in AI is beneficial. Other topics include Meta's settlement with Trump, White House offering buyouts to federal employees, RFK Jr. hearings, and potential podcaster seat for Kara at White House briefings.

In this episode of Pivot, hosts Kara Swisher and Scott Galloway welcome special guest Reid Hoffman, co-founder of LinkedIn and author of Superagency: What Could Possibly Go Right with Our AI Future. They engage in a thought-provoking discussion about the latest developments in AI, the implications of Meta's settlement with Donald Trump, and other pressing topics such as the DeepSeek phenomenon and the political climate surrounding Robert F. Kennedy Jr.'s hearings.
Key Topics Discussed
1. AI Advancements: A Positive Outlook
Reid Hoffman shares his optimistic perspective on the future of AI, emphasizing its potential to solve significant challenges in healthcare and education. Key takeaways include:
- AI as a tool: The emergence of AI-driven applications like medical assistants and educational tutors has the potential to elevate productivity and accessibility for everyone.
- Navigating Risks: Hoffman aligns himself with a more balanced viewpoint compared to the extremes of pessimism and unfettered optimism in discussions about AI's future. While he acknowledges the numerous risks associated with AI development, he believes the positive applications vastly outweigh them.
2. The DeepSeek Frenzy
The discussion shifts to the recent excitement surrounding DeepSeek, an AI model that has stirred the tech community. Some insights include:
- Market Impact: DeepSeek's introduction caused a stir in tech markets, raising questions of whether it represents a shift in AI development paradigms and whether it can offer lower-cost solutions without compromising quality.
- Competitiveness: Hoffman notes that AI is likely to have a multitude of winners rather than one dominant player, suggesting a landscape similar to how the internet transformed the software industry.
3. Meta’s Settlement with Trump
A significant segment of the episode is devoted to Meta's $25 million settlement with Donald Trump. Key discussion points include:
- Implications of the Settlement: This deal, coming after Trump's accounts were shut down post-January 6, raises concerns about accountability and the integrity of online platforms.
- Political and Ethical Concerns: Host Scott Galloway expresses concerns about the precedent set by companies that may inadvertently normalize political intimidation to shape corporate behavior.
4. RFK Jr. Hearings
The podcast tackles the contentious confirmation hearings for Robert F. Kennedy Jr. as the Health and Human Services (HHS) Secretary nominee, highlighting:
- Health Policy Risks: There is serious concern about Kennedy’s anti-vaccine stance and his potential influence on public health policy, especially regarding life-saving vaccines.
- Family Backlash: Kennedy faces criticism from his own family, further complicating his public image and spot in government.
5. The Government's Buyout Offer to Employees
In what Scott describes as a calculated move reminiscent of Elon Musk's approaches, the Trump administration offers buyouts to federal employees as a means to streamline the workforce. Highlights include:
- Job Security Concerns: There are fears that the best talents may leave the departments, leading to a degradation of quality in governmental workforce.
- Potential Backlash: Critics raise issues about the stability and efficiency that may result from such sweeping changes in federal employment.
Practical Applications and Takeaways
- Investment in AI: Businesses and individuals in the tech space should consider the vast potentials AI holds for advancements in various sectors, particularly health and education.
- Corporate Ethics: Companies should be wary of bending to political pressures that could undermine their mission and ethical foundations.
- Political Engagement: Staying informed about political changes, especially regarding public health, is crucial as it can significantly impact societal well-being and access to medical advancements.
Conclusion
This episode of Pivot provided an engaging mix of technology, politics, and business insights through the lens of experienced guests and hosts. With the rapid evolution of AI technologies on one end, and heated political debates on the other, the conversation serves as a crucial reminder of the interconnections between tech innovation and societal values.
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Hey, it's Andy Roddick, and I'm not just a former tennis player. I am a tennis fan, a tennis nerd. I just can't stop watching it. I can't stop analyzing it. I can't stop talking about it to anyone that will listen, which is why I started my podcast served with the Andy Roddick, now a part of the Vox Media Podcast Network. On the show, we talk about everything from new up-and-coming players to the champions dominating the narrative to whatever's on my mind.
This January is the Australian Open, and you know I've got some thoughts. So tune in for our Australian Open coverage by and serve wherever you get your podcast or on our YouTube channel. Let me just say, Amanda loves your hold this whole jam, Scott. She was like, Scott's on fire. I love it. She was vaguely attracted to you, I think. Vaguely is doing a lot of work there.
Hi, everyone. This is Pivot from New York Magazine and the Box Media Podcast Network. I'm Cara Swisher. And I'm Scott Galloway. Scott, we've got a very special guest today. Someone I like very much in Silicon Valley, which is an unusual thing. Joining us today is Reed Hoffman. Good morning.
So we're doing a new thing on Pivot. We're going to make people stay the whole show. And Reed is our very first guest to do this. We're having a really good friend of Pivot. It's not just a friend of Pivot. It's an extremely special friend of Pivot. Reed is the co-founder of LinkedIn, obviously, the host of podcasts, Masters of Scale and Possible. He's also the author of a new book, Super Agency. What could possibly go right with our AI future? I feel like he's positive about the future. Not on everything. Welcome, Reed, again.
It's great to be here. I love being on this podcast with you guys. Good. So we're going to talk about a lot of stuff. And last time we talked was at your event right before the election, which you had participated in. We're going to talk a little bit about that. Before we start, we have to acknowledge this tragic crash at Reagan Airport in DC on Wednesday night, the worst air disaster in over 15 years. An American Airlines regional plane with 64 people on board collided in mid-air with a Black Hawk helicopter with three soldiers aboard.
Recording this on Thursday morning as the recovery operation is underway in the Potomac. There was a press conference a little while ago. Authorities confirmed there are no survivors. 28 bodies have been recovered so far. It was a flight coming in from Wichita and the Black Hawk. They don't know. I'm not going to speak about it because I don't know anything about this. I don't have any extra information. It's tragic and very, very sad, but the authorities here seem to be doing their best.
figure out what happened and moving on and we're not going to politicize it we're not going to do everything there has had that is already broken out online any reaction from either of you don't have to have any whatsoever but Scott. What will look these things obviously it's a tragedy the only thing there's such a spectacle that they attract a lot of media and I believe about.
1000 people a week in the US are about 800 people a week dying automobile accidents but they're not nearly as dramatic or as much as a spectacle and. You know what I hear this it's a tragedy but at the same time when I look at the data it's just sort of incredible.
that it doesn't have more often. I mean, what you said at the very top of this, it's the worst disaster in over 15 years because it doesn't happen very often. Yeah. So I'm not saying it doesn't warrant scrutiny. I'm not saying it's not a tragedy. I do think it's just a miracle, though, that this form of transportation is as safe as it is. So anyways, I look at it almost as a glass half bowl, if you will. Yeah, except for the people who died, of course, 100%.
Well, plus one, Scott's comments, obviously, hearts go out to the families and all the people. It's a huge tragedy and loss. On the other hand, there's this tendency to try to blame the FAA. And you look at the fact is that it's much safer to be flying than it is to be driving. And so there's a credit to how the whole aeronautics and air transport system works. And then there's going to be, I think, overly much of a
which hunt on the FAA camp where, actually, in fact, I think, you know, the system should also be acknowledged. I heard the air traffic controller was a lesbian. Your thoughts, Cara.
Oh, anyway, I'm sure it was DEI. If they start with that, I'm not going to have any of it. It's ridiculous. There aren't enough air traffic controllers. And obviously, there's been a lot of uncertainty around the federal workforce right now, but it has nothing to do with this particular tragedy. But that said, it's a wonderful system that we have. And at the same time,
Just just for anyone I live in DC, flying into DCA is terrifying. I find it terrifying. There's so much air traffic going on. You see helicopters. There's a weird twist that you have to do because of all the federal buildings, including the Washington Monument and the White House. And so when you're ever you're coming in, I find it.
I've always, it makes me nervous to come in because it's such a highly trafficked area with military and everyone else. But we'll see what happened here because you're right, it never happens. But let's move on and we're so sorry for the families of all the people that were killed.
We're going to talk all about the deep sea craziness in a sec. But first, I want you to start this. Why are you so positive about our AI future? I know you've talked about things that could go wrong and stuff. Your position on A is somewhere between doomers, gloomers, and zoomers. You call yourself a bloomer, accelerating toward a bright future, but managing risk. Can you just explain yourself so we can put you in the where we put you on the map here?
Well, I think in both creating immense value for humanity and also navigating risks, I think our future will have a much stronger toolset. So in the positive category, thinking about the fact that you can have a medical assistant that's better than today's average GP,
on every smartphone running for under $5 an hour for anyone who has access to a smartphone for doing that, a tutor on every subject for every age group. And then, of course, the fact that it's kind of the cognitive industrial revolution of increasing productivity in a lot of different vectors. And I think all of that is extremely positive. Now, that doesn't mean there aren't risks to navigate and some questions to navigate in kind of good ways. But
That's why I think I'm, you know, fundamentally an optimist and fundamentally also an accelerationist in this direction. But one of the things that a lot of people are talking about is cost to zero for lots of things. I mean, Mark Andreessen, I've heard it from the note, this idea that everything will cost pennies. Sometimes you all go over the top. So that's why people question your not credibility for you, but some people's credibility.
Well, that's the difference between bloomers and zoomers, right? The whole notion of everything created with technology is gonna create an abundant Star Trek universe immediately. You know, freely across this is kind of an exponential, an exponentialism hysteria that I think actually doesn't have particularly good thinking. I think the question about saying though, that we can create so much better of a future with technology
and with AI is very important and just kind of drive, navigate intelligently.
So Reed, I'm genuinely at this question because I think you're one of the brightest blue flame thinkers in the world of technology. I've sort of blown away by deep-seek. And I want to, I want to posit a hypothesis with you and see if there's any merit. And that is, we were just talking about the airline disaster, the air crash. And I was thinking about the airline industry. I was thinking about PCs.
We can skirt along the surface of the atmosphere, point A, the speed of sound. It's added remarkable valuable to the economy and to consumers, air travel, jet air travel. PCs have revolutionized the world.
Yet neither of those industries were able to capture or any specific companies were able to capture a great deal of shareholder value. It was consumers and the general public that got captured most of the value. And I'm wondering if DeepSeek is in fact a signal that in fact AI may be one of those industries where there's not a small number of companies that are worth a couple trillion dollars.
But there's so much competition and the barriers are so low that it might have unbelievable winners, but those winners will be further dispersed into the general public and the economy. And we might not have a small number of winners as we did in social or search that the big winners similar to the airline or the PC industry might be the public, but a lack of really big winners in tech, your thoughts.
Interesting thesis. I would tend to think it'll be more like kind of software, you know, internet dynamics, but actually don't think that's necessarily because there's only one or two. I mean, I think one of the things that the internet brought about with it is, you know, previously when it was kind of like hardware dynamics and PCs were dominant was part of the thing where everyone was like Microsoft's going to be competing with Disney and with airlines and everything else because it's the primary software OS and the internet.
open it up to allow Google and Amazon and so forth. I think there's going to be multiple, and I think we're more, call it seven big tech companies heading to 15, but I think that the same kind of dynamics where you have a network effect for a social network or a LinkedIn or a
enterprise integration or the way that they add words and buying the search traffic works for Google, I think those dynamics probably will still be present in AI. But that doesn't mean that venture capitalist investor, great luck. I invested a number of different startups and I think there will be
I like, I just literally a field of interesting companies. And I think that the public will benefit a lot from that, just kind of like the way they benefit a lot from, you know, Wikipedia, the internet, you know, free communications and a bunch of other things. But I don't think it's necessarily kind of, you know, kind of completely broadly dispersed.
You're not going to see it. So why don't you just go in? Because some of our listeners are like, we didn't say enough about deep-seak. Well, honestly, we don't know. Scott and I don't know, like you, for example. So it caused a frenzy in tech and markets. So we brought read-in to explain listeners because we're idiots. Fine. So deep-seak caused this frenzy in tech in the markets. I'd love your
take on what we're seeing and what excites you about it and what worries you. I will note that OpenAI, where you were an early investor, you're no longer on the board and Microsoft, where you are on the board now, are investigating whether OpenAI's data was stolen to build deep-seeks model. They were also relying on open-source stuff like llama from meta, etc. Talk a little bit about give your take on this and make it a hot take because that's who the person you are.
Yeah, happy to do it. By the way, one of the benefits of me being able to speculate is I have no internal information from either Microsoft or OpenAI, so I can speak entirely as an outside commentator just looking at this. So, DeepSeek released a highly competent model
from China. Part of the reason why I took the market by storm is the thesis was that it was created for a lot less money and a lot less compute. What I think is there's certainly some parts of the story that are incorrect. The thing that we're trying to figure out is which parts of it are incorrect.
And I would speculate with some vigor that they actually had some version of access to larger models and helping training because this is actually something we all knew already last year, year before, is that large models will help train small models. And so that means when you train a small model effectively,
But you need a large model in order to do it. That's actually not disproving the need for these scale systems because when you have the better and better large scale models, you'll be able to train also really, really good. So they were writing off of your rails, in other words. Exactly. Right.
And so I would hazard strongly that there's something like that in the background. Now, it could be that they had, you know, some kind of access to chat GBT. Certainly some of the data and evidence suggests that in terms of the way that it answers and does certain things.
It could be that they actually had access to a compute cluster of size, because the so-called training run really makes sense. And I cross-check this across multiple groups, outside groups saying, hey, what makes sense here? And they're like, yeah, for the final training run on a serious compute cluster, that could be the dollars that was spent on this in order to make it happen, doesn't include talent, doesn't include all these other things.
Right, the stuff that was so as they were saying, it was five to six million. No one thinks that because again, the talent that they hired, they put in place. It was a lot of younger people. Correct. That's their story that wasn't highly paid. Yeah. Exactly. And I think that the
I think it's nearly certain that it's dependent upon the large scale compute, the larger models in some way. The only question is we don't know in what ways and how. And I think that's one of the things that everyone's investigating. And so I think the kind of market frenzy on, oh my God, AI can be here without large scale compute. And of course, by the way, AI can be here. We invest in startups that train small models and so forth.
But the large models still bring certain critical elements to the table in terms of ability to change small models, ability to get to performance. Like if you say, well, hey, moving from 10,000 GPUs to 100,000 GPUs, we only get a 20% better coder, medical assistant, legal assistant tutor that, well, in a wide variety of those areas,
That really matters. That actually, that increase in cost, when you amortize it across people accessing it across the entire unit, the billions of people that could use it, that's actually completely worth it and makes total economic sense. So the cheapness of it. So what excites you about it and why did it have such a market impact from your perspective? You saw Nvidia got crashed, it came back up, but this was the idea is because the economic underpinnings of this
which everyone's worried about this amount of money, $50 billion, $80 billion, et cetera. Microsoft is 80, I think. Yeah, by the way, I think that all of these questions are in the classic kind of short-termism versus long-termism. Because if you're saying, hey, I'm spending, I'm building this kind of CapEx thing of $50 to $80 billion.
A, I can train much better intelligence, but B, I'm also these are data centers in terms of serving intelligence through various apps to the world. You could say, well, the payoff is longer than I'd like as a public market. I think the payoff to be three years and maybe it'll be five years or seven years.
That's the kind of range you're talking about. I find that the general discussion on the X tens of billions of dollars to be short-sighted. Me as a private citizen, me as a venture investor, obviously making zero comment as a Microsoft board member.
But the, and so I think that it's extremely important area to be investing in, and I'm actually glad that we as a industry are doing this. I mean, one of the things that I've kind of thought about over December was that I want artificial intelligence, not just to be amplification intelligence, I want it to be American intelligence. The China thing, they're always bringing the Xi and Xi are me kind of argument.
Go ahead. Yeah, and I think, by the way, part of the criticism I used to get last year and the year before, when I was saying, hey, look, we aren't game on with China, was like, oh, you're just trying to get the excuse that we shouldn't be interfering with you and slowing you down. And so I was like, no, no, I see the competition coming. And one of, I think, the huge virtues of deep-seek is kind of like, yes, there it is, right? That is serious and real competition.
I think that's the world we're in. Who would have thought that China would engage in IP theft to create a cheaper product? I love that AI is taking the job of AI. Another thesis, most consumer markets, if you think of this, is not only B2B but B2C.
They bifurcate. It becomes Walmart or Tiffany. It becomes Android, which is essentially free, and it's ad supported, or it's iOS. Isn't this potentially just the first sort of shot across the bow where this market is going to become similar to every other consumer market, where we're going to have Walmart and Tiffany. And this is kind of the first entry into the Walmart 80%.
Kind of old Navy, old Navy is 80% of gap for 50% of the price. And that hits a large market, but a lot of people want gap or banana republic that there's a market for both of these, if you will, both respected positionings.
I think yes. And actually, in fact, when we kind of talk about what is our agenda future, most people tend to think, you know, there's going to be like, like, you know, be Lord of the Rings. There's one agent to rule them all. And actually, in fact, I think there's going to be, you know, in a sense, more agents than people, because every person is going to have multiple agents. Now, there may be a limited number of code bases, call it
you know, a thousand, you know, kind of powering all the kind of different agents could be 10,000. But I think we're going to actually live in a very rich Asian environment. And that's going to have all, it's not just going to be the kind of the Walmart or Tiffany's, I think it's going to be.
You know, this agent's actually particularly good at travel. This agent's particularly good at, you know, kind of interpersonal discussion. This agent's particularly good for, you know, people like Scott and, and, and this other agents, particularly good for people like Cara. Right. So an agent that writes better dick jokes. Go ahead.
Good. Yes, exactly. No, no, but this is precisely the point is like, you know, this one will be sorry about sardonic and a little sarcastic and Scott's like, yeah, that's that's my agent. And this agent is going to be fiery and say, no, we got to hold you to a higher standard and that'll be the care agent. And then, you know, then you'll have the nuanced agent of the one for Reed saying, well, on one hand, on the other hand. Yeah, yeah, that would be your agent. Wouldn't it be?
So let me, speaking of that, what he was talking about, you just raised $24, $25 million in funding for AI drug discovery startup, focusing on cancer research and disease. This is something that, you know, Sam did this at the White House event, for example, and your book is called Superagency. So this is, this is drug discovery. Superagency is what you're writing about. Of these many things, where do you think
The quicker is and the more important for the economy. And explain what super agency is what you were just saying, correct? Yes. Well, super agency is what happens. And we've seen this from everything from the fire and agriculture to the printing press to the car and electricity is what happens when millions of people all get access to the superpowers of increasing their agency at the same time. And we collectively
get super agency. For example, when I get a car, I don't just get a place to be able to get a broader geographic mobility. My friends can come visit me. A doctor can come do a home visit. Things can be delivered into a local neighborhood. That's the super agency and the thesis is just like everything else with
you know, kind of, you know, the internet and the mobile phone that we will all get super agency through AI because the cognitive superpowers that you get, that I get, that Scott gets will actually be, we will get even more superpowers because we're all getting them at the same time.
And that, as I think, one William Gibson line, the future is already here, but unevenly distributed, that's already present. There's already a whole bunch of different things you can do with AI that most people don't realize is a huge amplifier in both how they navigate their personal life and how they navigate their future life.
Manus is kind of my thinking about what are the things that these AI things can greatly do to massively improve the kind of human life and human condition that are kind of in a different direction that most people are heading. So Manus, for example, is not building an agent. It's kind of saying, actually, in fact, the biology of our human bodies is a complex language.
And part of what's going on with cancer is kind of misfires in that language. And we can take these great amplification that you get with AI and take the best of AI and take it with the best of science. And then you can tackle a problem that five-year-olds get cancer sometimes. It's not just it's the entire everybody in the human race.
at all ages, our system is naturally trying to regulate cancer and all of us are at risk for it. And it's something that we can potentially solve with AI. Right. But that's not agency that this is the other things that's going to do like climate and everything else. That's your focus. And so you're sort of
Where is most of your money going? Agents? These agents that you just spoke of? Or is it these other things? Or is it just like electricity? We don't know where it's going to be applied. It can be applied to everything from light bulbs to electrocuting people. You just don't know what the application is.
Well, I think there's a broad range and as an investor and as a kind of a theorist and thinker, it's anything that could make a massive difference for the human condition. So I'm both very pro agent, agent universe, but I'm also pro all the other applications, whether it's, you know, kind of climate change, cancer. And I think that's part of the reason why this technology, like, for example, electricity does an entire range of things. It's not just powering light bulbs.
you know, you're heating and now, you know, cars and, and you know, the whole range like we can't live in anything like even approximately close to our modernization without electricity. So I, and I think that's the, the, the kind of technology that we're the comparative, the comparison. Yeah. So any amount of money spent is good money spent from your perspective.
Well, yes, it doesn't mean that some of it won't be seriously wasted by a bad approach. And whether that's classic, as you know, for the venture industry. So there will be, you know, hundreds of foolish investments. But the overall industry will create a massively good surplus for humanity and society. In any case, we got a lot to get to today. We're going to take a quick break. Then we'll talk through some of this week's big headlines with Reed.
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Scott and Reid, we're back. We've got a lot to get to today. Let's get into some headlines now. Meta will pay Trump $25 million settlement for shutting down his accounts after January 6. Most of the payment will go towards Trump's presidential library again, much as a Disney's payment of $15 million is going to do that. X, who also kicked Trump off the platform after January 6, says it's negotiating its own settlement with Trump. Apparently, the Trump people said Mark wasn't going to get into the tent unless he did this.
I just, you don't seem to be paying anybody millions of dollars to get in the tent. So what do you think, Reed? So obviously I think it's- That was a long slide that you just had there. Well, look, I always think that the notion of
of this sort of payoff is, I think, is to put it charitably suboptimal. And I think that the question of the fact is when people are removed from services, for violations of terms of service, they're removed from violations of terms of service. And I think that's a perfectly good thing. And I myself am a massive advocate for the rule of law.
and how these contracts work, but I understand expediency in navigation.
Okay, what does that mean? That means what does that mean? It's a big it feels like a big to me. That's my sounds like a mob move to me. Yeah. You know, I don't want wouldn't want a nice company you got there wouldn't want anything to happen to it. Yeah. Well, let's hope that we see very little of that in the coming years, although obviously we have deep worries in the other direction. Couldn't he keep doing this suing people and getting these things?
Well, I guess the question will be is, it's kind of like, how much do people kind of respond to this sort of excess pressure on these kinds of things? And I think that that, frankly, you know,
We shouldn't want it as a society and I think probably there will at some point be a bridge too far on it and seeing what that bridge looks like. I think is still something where
You know, we're looking for that bridge too far is. Well, there's two dimensions to this. The first is from a pure shareholder standpoint. It probably makes sense when the president's coming after you to say, and you make, you know, $20 billion a year in operating profit to say, yeah, just make it go away. Just give them $25 million for the presidential library and make it go away. The problem is, and I wouldn't expect based on pattern behavior, Mark Zuckerberg to think anything about this, is that this has real societal implications.
And that is, despite the fact Bob Iger made $45 million last year, I would argue he's becoming more and more impoverished in terms of his citizenship. And that is when a media company says things that are a fraction of the misinformation, slander, disparaging statements that the president has made himself, that happens every day online,
and they agree to set precedent by bending a knee and bowing to this intimidation. It sends a chill across the entire fucking nation. I'm on morning Joe, and I call the president, an insurrectionist and a rapist, and Mika stops the show to clarify he was found guilty of sexual abuse.
Excuse me, sexual libel. He was found liable of sexual abuse. Is that the right term in order? Yes, I'm just kidding. I'm, I'm, I'm, I'm calling me make a bersinski, but go ahead. But look at what we're doing. All right. And by the way, the judge then went on in his sentencing to say that street term for that is rape. So what do you have? You have a group of people. This is straight out of the fascist handbook.
intimidate anyone who says anything negative about you. And if these companies, in my opinion, have more fidelity to American values and the very important role media plays in checking power, they wouldn't be bending the fucking knee like this. So is it a practical thing to do? Yes, you can't argue with that. Has it sent a chill
across the entire country in what is an incredible double standard that the critics of President Trump are now feel that they're being held to. Look at the shit he has said about people that's been incorrect. Bob and Mark, I expected this from Mark. I was disappointed to see it from Bob. Where are the men? Where are the Americans who are going to stand up and say, no,
If you're not guilty, if we're not, if the entire ecosystem has never been held liable for things much more slanderous or disparaging than these statements, I'll see you in court. In this case, it wasn't statements. He broke the rules of Facebook and they kicked him off. That's all. It was not, as Reid was no case. Who's there allowed to do? Yeah, exactly. When we talked to October, I asked if you were concerned about Trump and retribution and your own well-being, and you said yes.
about now, how are you feeling? Because obviously you were one of the more prominent supporters of Kamala Harris, obviously a big Democratic donor. You do give to Republicans also, for which for some reason you get endless shit. I'm not sure why. I think that's probably fine to do that. How do you feel now? Do you feel in that crosshairs that we had discussed?
Well, it's unclear. I'm hopeful that a bunch of my friends who are around the administration say, look, that's just kind of all rhetoric and, you know, isn't actually going to be part of what's. Yeah.
Yes, that's what they say to me. And so that obviously is hopeful. But obviously it's one of the things that I think both me personally and we as Americans need to watch carefully because we do want to continue to be the home of the brave and land of the free. And I think that that's very important to be resolutely
against, you know, kind of abuses of state power for individual interests. And so, you know, like I said, I went and talked to a whole bunch of people who are, you know, kind of in, you know, and around the current administration said, look, you know, I have this worry. They said, look, we've talked to a bunch of people. They say, this is not something we're going to do. Is that okay? Then, you know, let's, let's wait and see.
Are these the same people that said he wasn't going to let out everybody at January 6th? He wasn't going to let out the criminals, but then he did. It wasn't the same people as those. He's done that several times. He's done that several times. There's worries. For example, letting out the people who assaulted police officers.
as per what Scott was saying earlier, is a terrible signal. It's basically saying, hey, if you're doing violence in a cause that I am supportive of, I have this thing of a presidential pardon, and that's obviously, frankly, terrifying concerning. Right, but you didn't want a presidential pardon, correct?
No, no, of course not. Yeah, you didn't do anything. But here's the problem. If I'm a thoughtful guy who's high profile with a lot of business interests with a family, I would be inclined. I'm not going to speak for you, Reed. I'd be inclined to keep a very low profile over the next 12 months.
Whereas the people on the right are emboldened to be aggressive and pollute and flood the zone with misinformation and bullshit and attacks and the people on the other side of the aisle.
feel like, well, maybe I should just keep quiet for a while, because they are removing security details of people, which is nothing but repackage violence. When you took out the head of the Iranian security forces and you ordered that strike as a general and the president for whatever reason doesn't like you, is removing your security detail, that is repackage violence against that person. So what we have is a group, this is the road to fascism.
Keep them quiet. Put a chill across people. I'm going to keep a low profile. I'm maybe I'm just not going to be quite as aggressive. Let me be clear. One of the roads to fascism, and I want you both to respond to this, is littered with calls or accusations that people are overreacting. Call me overreacting.
Mm hmm. Let me just say Amanda loves your whole this whole jam Scott. She was like Scott's on fire. I love it. She was vaguely attracted to you. I think vaguely is doing a lot of work there vaguely is doing a lot of what she was. She wanted me to tell you. I think you're right, but that's
I think it's, you know, people that are very high profile like Reed certainly aren't backing down. It don't seem to be disappearance right here, right? And he's talking about it. So I think the question is, when Mark does these deals, when he just doesn't have to, and it doesn't help them from a shareholder point of view, I really, that's nonsense. It's really, but again, we expected Mark to do this, sorry. I know Reed, you were, Reed was early at Facebook for, and has been, had been a mentor to
to Mark, I don't think he's listening to someone like you anymore, but that said, you and Bill Gates had been, and probably are no longer, I would guess, but I don't know.
I think that the American people should pay a lot of attention to the removing the security detail from a person who spent their entire life serving the American people, putting himself in harm's way, helping secure the safety of America, both locally and Americans abroad.
and saying, hey, for petty reasons, I am putting that person directly in the harm's way of violence. And I think that is an unpatriotic personal thing that I think is extremely important that everyone should pay attention to. And I think it's exactly that, is I think that, as Scott's saying, on the things that are like, that is the kind of thing that is deeply un-American,
Like, I think people need to speak up about. And so, you know, 100%. So another thing that people are talking about a lot here in Washington, at least the Trump administration is offering two million government employees the option to resign by February 6, if they're not willing to return to the office full time. And what's being called a deferred resignation employees that resign will continue to pay and get benefits for eight months. This move has Elon Musk fingerprints all over it down the subject line of the email sent to those employees of fork in the road, which he
It was an email Elon sent to Twitter staff in 2022. I have been stopped by so many government employees saying, what should I do? I said, do not leave because they won't pay you because Elon still has severance issues with those people that were supposed to be paid at Twitter. It's one of these employees to get people out the door.
There's also federal employees have more, private employees have rights in California and New York especially, but here they have more. What do you need to make of this plan? It's unclear whether Trump can even offer this bio package without budget authorization if he has the money for it. They're hoping that 5% to 10% of federal employees accept the offer, which could mean to hundreds of thousands of people.
You've been involved in companies that do things like this, and obviously you end up paying them, but Elon did it Twitter. It looks like he went around everybody. It looks like he went around everybody. This plan was sort of foisted.
upon people without even Trump officials knowing it was happening. That was a story in the Washington Post today, so thoughts. Yeah, so it is a technique that when deployed with honor is actually, in fact, something that has some strength in the private ecosystem because it's kind of in the private ecosystem. The way it works is if you're not committed to the future of this, then now is a good time to exit because
And it works in the private ecosystem in part because part of it is not only am I committed to the mission of this, but there's also an economic reason to be keeping going. You believe in the stock options, the bonus plan, all these kind of things for that. Now, I worry in the public circumstance that applied here that a lot of the folks who go, OK, I could get jobs in 10 different places.
I'm going to go do one of those and do this. And this will be depriving the American people of some really great talent. So the good people will leave in other words, which is always a worry when you're doing this, right? When you're doing one of these broad layoffs. Yeah. And that's, I think, unlike the, in the private ecosystem where you actually have a, and we have a rich incentive plan for staying to, right, here, it's like, you know, here's an incentive plan for leaving versus an incentive plan for staying.
So the best people leave, and in the case of private companies, they try to retain, or they specifically target certain employees, correct? This is too broad in that regard. So the best people will go with the experience and the worst people will stay, correct? Or the less good people will stay. Yeah, there's a worry about a selection effect. Right. Did you notice the echoes of what Elon had done here? Yeah, of course. Yeah. And? Well, I mean, look, I think
I think we will see many things that are the parallel to how Elon thinks an organization should be turned around from Twitter to the federal government. The fact that you're looking now, what was the leaked emails like, wait, we're not doing very well, is whatever X years on it is for Twitter.
You know, it's like, well, you know, should be learning from that. And that's within the standard understood commercial ecosystem. Yeah, just today. You're not going to talk about financial results, but Tesla's results were terrible, even though the stock is going up because they aren't selling as many cars. In any case, Scott,
You guys have said it. I don't like buyouts because the people, the most options, the most talented people, the ones that exercise them, I don't think there's anything wrong with the thesis that there's too many federal employees and we need to trim it and they should be subject to the same standards and insecurities and anxieties.
you know, work week that private employees are subject to. I don't have a problem with that. I think it should be based on what departments are least efficient or performance. But these, you're most talented people leave. The people with the most options leave. It is a degradation, I think, in the quality of the workforce. It's not the way to go about this.
Is there a good way to do this? Elon's using all his playbook, right? What is the playbook that would work here to do what Scott was talking about if you were to think of it off the top of your head? Well, I mean, the parallel on the commercial side is that you actually also have incentives for keeping the good people to stay.
whether there's stock bonuses, other kinds of things, as ways of doing it. It's not just the stick, it's the carrot for going long in your long-term commitment to the organization and its mission. This would probably be harder and maybe not within the
you know, kind of presidential remit, but, you know, bonuses, like you could imagine, like, you know, the kind of thing you'd say is, hey, if you figure out how to cut 10% of your budget, we'll give you a 1% bonus on these kinds of things would be the kind of thing that I would, you know, potentially look at. But I think it's all, of course, very tricky and difficult.
and difficult in a public environment versus a private one. Because what is results? Because sometimes results people being less poor. It's not a stock. You can see it in the stock market versus something else. Exactly. Which is difficult. Is the concept of cutting people a good idea from your perspective? Fundamentally, yes. Just because it's part of what makes
What are the things we should learn from a bunch of things that we learned from the commercial side? Part of it is refactoring organizations is essential for keeping them healthy. That refactoring is extremely important. I'm quite certain if one looked through
the kind of the federal government, one would find like, and I'm using this as a hypothetical example, it's like, you know, you've got, maybe still a weather balloon department, you know, and it's like, well, we have one of those got satellites, a bunch of other stuff. I'm not sure we need one of those.
That kind of thing, and so I think that refactoring is good, and I think getting to that refactoring, figuring out how to do it in a good, intelligent ways is one of the things that I think we could be hopeful for. Maybe some good will come of this. A blunt force to it is a way to get it started.
Look, I think one of the things we're going to have to pay attention to is I think the default will be massively increase the deficit. And I think the problem should be is we should not be. We should try to reduce the deficit. I mean, if you look at the actual budget and you want to get a lot of money out of what we're spending, we're spending on debt service is one of the massive line items. And so increasing that is just, you know, mortgaging
our children's future more. I mean, it's already somewhat mortgaged. Let's try to pay off the mortgage versus add to it.
Right, doing and doing this. Well, we'll see what happens. Anyway, one of the other things that besides doing this, Elon's doing is, and this is an area you obviously came together with PayPal when he had X.com, but they're partnering with Visa to allow real-time payments through its upcoming X money service. CEO Lindy Yakur, announced the deal saying it would enable instant funding to an X wallet via Visa Direct. We'll also allow users to make peer-to-peer payments.
Look, they were going to do this, they announced this, but I'm just curious where you would, where this is going, these ideas of the everything app and, you know, this was a concept that, and not just X has, it's been going around forever. I mean, everyone talks about this. But where is the payment space right now? Away from this, I would never
Trust any anything, Linda Yacarino's working on with my money, but that's different. Where is it right now, the payment space? It seems like Apple dominates this whole space right now and PayPal.
Well, payments is an area that at least has scale effect, if not sometimes network effects. And so, and one of the things is you have to get to a certain scale before you even have a viable payments network. And so getting that scale really matters. I think that we want to see a bunch of good innovation on this. It is a very kind of common pattern to kind of go, oh, the way I'm going to more verticalize and extend my service is by adding in.
kind of payments and banking and we'll see it in a number of different contexts. I mean, Google has one. There's a stack of these. And, you know, having my own background, you know, kind of doing the kind of payment space, it's actually one of the areas that I kind of look at because
it adds to the flexibility. One of the things I really loved about what we did at PayPal was trying to make every individual able to be a merchant. Now, that's now much more true in the whole world, which wasn't true before, which allows individual entrepreneurship inside. I think it's a good area to improve. Lots and lots of people are doing it.
Yeah, a platform built on rage, porn, and crypto scams handling your money. What could go wrong? Look, the FDIC or banks have the FDIC. Twitter has dog memes. Our financial institution is based on trust. You hit a button.
that they have figured out a way to get it there safely, that along the way it doesn't get sequestered, that money does not know your customer. There's all sorts of things, FDIC insurance. I mean, there are so many protocols and Twitter to me does not wreak of security or safety when it comes to people's money. It might actually be the underlying technology and its ubiquity. It might be a good use case for it.
But the entire financial system is a case study in trust. And I don't feel this organization has created a great deal of trust. All right. So where is the most innovative thing you're seeing in funding right now? I mean, obviously, again, I don't think I've dealt with money for a year now. I found a 20 in my wallet. And I was like, oh, look at that. I use Apple almost entirely for all payments everywhere I go, obviously, because I have an iPhone.
What is the most innovative thing you're seeing in this area? Well, I haven't since I'm in so focused on AI stuff. I haven't actually been looking at this particular area closely. Obviously, there's a whole bunch of things that are being developed within the crypto arena to try to have ledgers and identity and all the rest of that. And the promise of that is to try to create
something that has to elaborate on. I think Scott's excellent comments is, how do we have trustless trust, which is a trust in the system that doesn't require trust and a centralized authority whose ability to hold that trust may be limited? And so I think that's one area that I think continues to burble on. None of it has any
Of the indepth traction that you know, apple or other, you know, because because you know the key thing with payments tends to be ease of use and integration in your environment. And so, you know, I think that part of what stripes doing.
that I think great is making it very easy to incorporate kind of Delaware corporations from anywhere or from many layers in the world and then provide a kind of a economic powering structure underneath that to power entrepreneurship is I think like a really good thing. But like I said, I've been so focused at AI that in this area, someone may call me after this and say, this is really good. And I go, oh yeah, that's the thing I should have said, but I just didn't know it at the time.
All right, Scott and Reed, let's go on a quick break. When we come back, we'll talk about RFK Junior's contentious confirmation hearing.
Secretary nominee Robert Floride Kennedy Jr. went before the Senate today in fiery confirmation hearings. Did you say Lyme disease is a highly likely, militarily engineered bio-weapon? I probably did say that. Kennedy makes two big arguments about our health, and the first is deeply divisive. He is skeptical of vaccines. Well, I do believe that autism does come from vaccines.
science disagrees. The second argument is something that a lot of Americans, regardless of their politics, have concluded. He says our food system is serving us garbage and that garbage is making us sick. Coming up on today explained a confidant of Kennedy's. In fact, the man who helped facilitate his introduction to Donald Trump on what the Make America Healthy Again movement wants. Today explain weekdays wherever you get your podcasts.
This week on Prof G Markets, we speak with Robert Armstrong, the US financial commentator for the Financial Times. We discuss Trump's comments on interest rates and who might emerge as the biggest winners from the deep-seep trade. In the world we lived in last Friday, having a great AI model behind your applications either involved building your own.
or going to ask open AI, can I run my application on top of your brilliantly good AI model? Now maybe this is great for Google, right? Maybe this is great for Microsoft who were shoveling money on the assumption that they had to build it themselves at great expense. You can find that conversation and many others exclusively on the ProfG Markets podcast.
Scott and Reid, we're back. As we tape this, HHS Secretary nominee Robert F. Kennedy Jr. is in the hot seat for the second day of his confirmation hearing. Things got a little heated on day one with Kennedy rejecting claims that he's anti-vaccine, addressing abortion flip flops and struggling with the question about Medicare and Medicaid. He has also asked some of his previous controversial comments. Let's listen to exchange with Democratic Senator Michael Bennett, who's a favorite of Scott's and mine.
Did you say that COVID-19 was a genetically engineered bio-weapon that targets black and white people, but spared Ashkenazi Jews and Chinese people? I didn't say it was deliberately targeted. I just quoted an NIH funded an NIH
I published study. Did you say that it targets black and white people, but spared? I quoted a study or honor. I quoted an NIH study that showed that. I'll take that as you ask. I have to move on. I have to move on. Kennedy's own family is also expressing concerns. JFK's daughter, Carolyn Kennedy, sent a letter to senators ahead of the hearing. She called her cousin a predator and accused him of exploiting their family's tragic history. Let's listen. Bobby continues to grandstand off my father's assassination.
and that of his own father. It's incomprehensible to me that someone who is willing to exploit their own painful family tragedies for publicity would be put in charge of America's life and death situations. Unlike Bobby, I try not to speak for my father, but I am certain that he and my Uncle Bobby who gave their lives in public service to our country
And my uncle Teddy, who devoted his long center career to the cause of improving healthcare, would be disgusted. Okay, that was the nice part, just so you know, for everybody, which wasn't very nice. You know, all these, all these things seem to be going through Pete Hegsetz and everybody else. Any, any of them you'd like to comment, the Kennedy one is particularly, it looks like he will probably get through the same thing with Tulsi Gabbard and et cetera, et cetera, on down the line. What is happening here?
I do believe a president should have pretty wide berth in terms of bringing in their own people. And for all of the weirdness and incompetence parade of some of these nominees, I think this is the most dangerous.
You know, you have an individual here who is not only anti-vaccine, if you were to list the greatest innovations in history, I think most thoughtful scientists from both sides of the political spectrum, vaccines would be near the top of the list.
And the fact that we have now politicized it and have an individual with no science background spewing this information who seems to be committed to reducing or creating skepticism around vaccines and then something that came out yesterday from Senator Warren was that he is being paid.
to find people to sue Gardasil, an HPV vaccine that so far has shown to reduce cervical cancer in women by 90%. I don't know if either of you know anyone with cervical cancer I have. My God, we have something
We have something that can prevent nine out of 10 times this vicious awful disease. And we have the head of HHS being paid to try and discourage and financially damage that miracle. This guy has no business.
At HHS, he is probably the most dangerous of the nominees in terms of what it could mean long term without attribution, where in 10 years we wake up and go, oh, cervical cancer is back and reverse engineer it to this individual who is blatantly repeatedly anti-vaccine. I think this is awful.
I made my sons get it immediately when it happened. Reed, how are you looking at these? Obviously, you're making these AI investments and cancer research. This guy will be right there at the head of all these organizations that are very related to some of these things. Look, I think the unfortunate prediction for RFK is probable confirmation is it will probably be measured in thousands of American lives lost.
I think that the question around the fact he's saying, I'm just following science, no, he's not. It's not only the anti-vaccine in many, many statements over decades.
Like, he is essentially anti-science. Like, I've heard of meetings where he is meeting with scientists where the scientists try to tell them he's like, no, no, you're supposed to listen to me. It's like, no, no, the whole point is to listen to good scientists. And I think this will be, you know, if this confirmation goes through,
I think the senators who vote on it should track how many thousands of American lives they're willing to spend in this calculus. Because if he implements any of the things that he has articulated and talked about, I think the cost is going to be measured in lives.
Have you been surprised by how many tech people have been attracted to him? I'm not going to leave out Nicole Shanahan. She was not a tech person. She's a rich person who married a tech person and got money that way. Have you been surprised by that? Because there is a whole strain of people who really back him in the tech firm, in the tech area, even as they make these big investments in AI and cancer and where he will have an impact.
Um, that one of the, you know, the strengths and weaknesses tend to go together and a lot of tech people tend to think they go, well, I've met him and it was a perfectly reasonable conversation. And so therefore, you know, like, Oh, that's just all media stuff. It's like, it's media stuff that he said that he did in other rooms that you weren't in.
Right? But there tends to be this really strong, you know, kind of like, no, no, I met him and I got him. Yeah, I got the cut of his job. Actually Gates did this the other day with Trump, which was disappointing. Yeah. And I think one of the things that's very important is to have a little bit of like, look, just how a person talks to you is not necessarily how they actually, in fact, operate in the world. And you have to apply that. And so I've had a number of tech people try to say, okay, he's great. I'm like, just, well,
Look, for example, in an alternative hiring context, I prefer references to interviewing. I prefer to have both. But reference checking is much better. And it's like, I've seen the references on RFK. That's part of the reason why it's like, OK, this appointment will be measured in thousands of American lives lost. Well, let's leave it at that then. All right, Scott and Reid, one more quick break. We'll be back for predictions.
Okay, Scott and Reed, let's hear a prediction. I'm gonna go first, actually. I'll be at the White House.
soon with Tracy Flick, the new press secretary. The White House is welcoming podcasters to the briefing room. Carolyn is running it right now. She has decided that new media, which I agree with, including independent journalists, podcasters and influencers will be able to question, ask questions of briefings. I welcome this. The Biden administration should have done it. Should have had different and not just the traditional people. So I'm super excited to go to the White House and I will be there this year. That's my prediction that Carolyn is going to let me in, Tracy.
slash whatever the heck she is. Thank you. Any comment? I love that prediction. And by the way, I think it's a good thing to begin to broaden the kind of set of different folks in the briefing room. I just think it's critical if you think.
Like I am, this is the office of the president for all Americans to have a, uh, a diversity of, of access to it. I mean, so for example, you have a, you know, kind of a, uh, uh, you know, kind of a democratic president. You still have Fox news. Obviously in the room, you need to have that, that, that breadth of perspective to be representative to the American people. So I love that prediction. Yeah. I know she wants me there. She wants me on that wall.
Well, first off, I'm on your prediction. I immediately read that and I sent Jim Acosta an email saying, I need you to start a podcast. I want you back at those press, those press free things. Yeah, this is the CNN person for people who don't know who left when they tried to put him on at midnight.
He started his own. He has started a bunch of stuff on his own, which and he's a great guy. I was a great journalist. So I'm fascinated by what I think is a kind of a tech conic shift with deep seeker, just the notion that there might be a reasonable fact. Similarly, the best AI models at a much slower price. I think that
This, regardless of what we find out, it was probably exaggerated. There is now, I think, a much greater likelihood we might be able to see cheap and cheerful kind of old Navy-like models. So my prediction is there's an entire layer of companies and pharmaceuticals in the consumer sector that had allocated $100, $200, $500 million for CapEx for the cost or OPEX, for the cost of AI that they were going to have to spend to rent these models to develop new drugs.
come up with a better itinerary for your Airbnb stay that all of a sudden are going to say, wow, we're going to be able to get all of the great taste of AI with a lot less calories, a lot less objects. You're going to see a bunch of companies that were setting aside a ton of reserves because they thought this was going to be a lot more expensive than it's going to be.
recognize, take those reserves back and it'll juice their bottom line. So I'm in the midst of trying to identify this. I don't know if it's Airbnb. I don't know if it's Johnson & Johnson or GlaxoSmithKline, but I think there's an entire layer of companies that just got great news that their CapEx on AI could be 30, 50, 80% less than they didn't originally anticipated.
Well, I think that actually we will see a variety of those. I don't think it's necessarily because of the deep-sea canoes. I think that we were actually already heading towards that. I think that the part of the agentic future, this is commenting on Scott's, part of the agentic future will be actually in fact compositions of smaller models that deliver really effective services across a wide range.
for individuals, for organizations, and so I agree with his prediction, but not necessarily just as a deep-seak response.
Okay, Ray, your prediction. So I was thinking about this a little bit and I think that one thing that would be an interesting thing that people wouldn't expect out of this is I think that the AI agents will trend towards creating agents that will be actually massively positive for human mental health.
And I think that the natural market dynamics will reach in that direction because as people interact with these agents, and I think I've already seen this from what my startup inflection did with Pi, that has helped a bunch of other agents following
this to be high EQ, kindness, and other kinds of things. And I think those will actually, in fact, help people feel more heard, more seen, a dynamic of interaction that is more who we aspire to be, and will actually help naturally through people just choosing the agents they want to interact with to an increase in kind of mental health and well-being.
Well, unless, you know, as you know, I interviewed the mother of the character AI. There's the lawsuit there. They can take that turn where they shouldn't be around young people, for example, or they shouldn't. You're talking about adults here, correct? I'm talking about adults, although I think we also can, and I think we should be much more careful about how we engage with children in various ways. That's saying it's one of the important things for the technology industry to get much better at.
But I tend to think that the natural dynamics of we will prefer the agents that have this characteristic. Now I think part of the thing that it can be is having even agents that are trained to be very good in mental health will also be good.
so that they will, so that there are good agents. My only issue is the potential for abuse is so massive and you're seeing it. The lack of care, you know what I mean? Like why didn't that kid, why didn't that company alert it when the kids said suicide? Like for stuff like that, like where was, why was that never there? And that's the problem and their argument is now that it's free speech. It was gonna be section 230, but now it's these agents, like in that case, should bots have free speech?
That's the kind of stuff we're going to have to deal with as a society. Is it free speech when it's bot generated? I think at the moment, it's definitely not free speech when it's bot generated. Yeah. Well, that's one of the issues we're going to talk about because it will be just off the fly. I prefer kind agents to mean ones, but I suspect this is why I love Reid. He's such a sunny character, but I expect really mean agents because people like that, like abusive agents and that kind of stuff.
It may be that they prefer agents to be abusive of other people, but I think most people prefer them to be kind to them. I don't know. I'm going to, as usual, take a darker turn on the thing. We'll see which our future brings us. Elsewhere in the Scott and Kerry universe, this week on PropG Market, Scott spoke with Robert Armstrong, US financial commentator for the Financial Times. Let's listen.
in the world we lived in last Friday. Having a great AI model behind your applications either involved building your own or going to ask open AI, can I run my application on top of your brilliantly good AI model? Now maybe this is great for Google, right? Maybe this is great for Microsoft who were shoveling money on the assumption that they had to build it themselves at great expense.
Interesting, interesting. Okay, Scott and Reed, that's the show. Thank you for joining us. Reed, and again, your new book is super agency, what could possibly go right with our AI future. Thank you, Reed, again. Scott, read us out.
Today's show is produced by Lara Naaman, Zoe Marcus, and Taylor Griffin. Ernie and her Todd engineer this episode. Thanks all Soto, Drew Burroughs, Ms. Vario, and Dan Shalan. Nishat Kerwa is Fox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Fox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back next week for another breakdown of all things tech and business. Have a great weekend.
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