Shownotes Transcript
Hello! Welcome to Sleek Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios. I'm here with Elizabeth Spires of New York Times. Hello. I'm here with Emily Peck of Axios. Hi, hi. Shall we talk about my native country this week? The United Kingdom. We did a trade deal with you, Yanks. So, let's talk about that. We shall talk about Bill Gates, who is speeding up his...
philanthropy and wants to die with nothing. We are going to talk about open AI and the degree to which it is actually a non-profit or not. We have a Slate Plus on movies, tariffs, Hollywood, and spoilers about Thunderbolts. It's exciting. It's all coming up on Slate Money. Slate Money is brought to you by Charles Schwab.
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And Donald Trump's astonishing success in agreeing to a trade deal with Keir Starmer, the Prime Minister of Great Britain, or I should say of the United Kingdom. I should be precise here on Slate Money. And it's a very interesting deal because the American tariffs on Britain didn't really come down, but the British tariffs on America did come down.
And Kia's like, yeah, we can do this. But the American tariffs on Britain did come down in one particular respect in particular. There was a couple, but the main one is cars because there was this like across the board tariff of 10% that Trump is putting on everyone. And that seems to be non-negotiable and no one can lower that. And Britain was always at 10% from the beginning. So it had very little down room below that to go.
But there was also a 25% tariff on cars. And Britain exports a non-negligible number of cars. And those cars, it now turns out,
It's cheaper for Britain to export cars to America now than it is for like US companies to assemble cars in Canada and ship them across the Canadian border. So that's interesting. It doesn't really make a huge difference to America because number one, Britain is like the 11th largest exporter to the United States of goods. It's just not a huge player. And number two, these cars are not
everyday cars. They're like Rolls Royces and Bentleys and McLarens and Jaguars and stuff like that. But it's an interesting...
sort of indication of the weirdness that we are going to be in as Trump does more and more of these trade deals. It really does seem like this just isn't that much of a deal. People are excited because it's the first one and the markets liked it because it's okay. They can make deals. This will relax now. But like you said, doesn't change the 10% tariff, which...
six months ago would have been considered insane and high. It's a deal with our closest ally. As everyone said a million times when this was announced Thursday, we have a special relationship with the UK. This was the easiest deal to get done. So I don't know that it tells us. I mean, it tells us a lot. It tells us that
the administration isn't looking to compromise on that 10% flat tariff. It's going to make a whole big to-do about nothing. I don't know what else it tells us. It tells us that Rolls Royces are going to be okay. Great. I think it's just indicative of the fact that the entire world has Stockholm syndrome with regard to Trump's trade policies. If he does across-the-board tariffs and we all sort of get used to it and decide that this is the new normal...
Any advancement away from that feels like a win, even if it's something that's incredibly stupid and never should have happened in the first place.
Yeah, he changed the way we look at everything in like, put it in his own frame so that he could have these wins, which wouldn't in normal times be wins. They would be extreme. Catastrophic problems. Yeah. The thing that he's really done is he's set this effective 10% baseline. And then the negotiations are what,
kind of tariffs is the United States going to levy over and above the 10% baseline on things like cars or just everything from a certain country. Like he's saying, maybe we'll bring China down from 145% to 80% or whatever, but it's all about how far can we bring it down above 10%. And I think that's really important because
Once the world has internalized a 10% tariff, universal global tariff on everything, it actually becomes pretty difficult for any future US administration to bring that 10% back down to like, you know, zero, which is where it was before. There was no universal tariff on everything before 2008.
Trump too. So let's play this out. Is Trump a mastermind negotiator? Because he didn't, he could have just come out and said, I'm going to put a 10% tariff on every country in the world and people would have flipped out. But instead he said, I'm going to do a 10% tariff plus all these other crazy higher tariffs. And then the markets flip out. Countries are still scared, running to the administration, trying to make deals. But
He's reset the baseline, just like you're saying, so that they're like, well, 10% would be okay. Just get rid of all those higher things. I don't know, Emily, because I remember on April 2nd when there was the press call on Liberation Day where they did this sort of embargo press call where they were explaining what the tariffs were going to be. And these press calls were always kind of very leaky. And what happened was they said, we're going to have this universal across-the-board tariff
of 10%. And the general reaction to that was, oh my God, this is so much better than we thought it could be. Like this is, this is like, this is great news. And if he'd just come out and said universal across the board, 10%, I think probably you would have seen the stock market just jump sharply the following day. It was only when he then came out and said, and then on top of that, we're going to do reciprocal ad tariffs and bring, you know, Vietnam up to 46% or whatever that everyone went, oh,
OK, this is insane. Well, I'm not sure. Tariffs have never been popular with voters, even when Trump was sort of saying, OK, we're going to do limited tariffs on China. And I found that the only people who really liked that story were people who were already solidly in his base and they did not understand how tariffs work.
But now that they've been implemented and people are feeling the effects, they're deeply unpopular. So I think it would be easy for a candidate to roll them back in another administration. Let me ask you, let me ask you since you're the politics person, if it's true that tariffs aren't popular with voters,
Why did Biden keep all of the tariffs? I think because they were very narrow in scope. They weren't, you know, this broad tariff everything kind of thing. And I don't think that most people... I mean, maybe not by today's standards. Most voters were not aware that Biden kept those tariffs because they weren't seeing the, you know, the everyday price increases on stuff that they were actually buying. Yeah.
I think actually to push back only slightly on Elizabeth, because you're mostly right. There are a lot of narrow groups in certain industries that like tariffs. I spoke to the Teamsters person a few weeks ago who was like, this is great for us. Yeah, the UAW is basically pro-tariff. UAW is pro-tariff. Don't sleep on the shrimp people. They are insanely excited because most of the shrimp in our country comes from Asia and
But if you tariff that to 100% or whatever it is, they can actually sell their products again with much higher prices. So they like them. There's that well-known research paper that farmers like tariffs even though they recognize that they haven't helped them.
They just like sticking it to China. So there are these narrow groups that do like them. Well, that's true. And I wasn't suggesting otherwise. But I think you look at Trump's approvals, they're the lowest of any president since approval ratings have been tracked in the first 100 days. I mean, that's an incredible fall, even if we all think that he won by a slim margin to begin with. And when you ask voters why they're turning against him, it's entirely the economic chaos.
They don't like it. And they're starting to see it, you know, really filter into their daily lives. I think the stock market plays a really big role there, maybe more than tariffs, because for all we've talked about tariffs, like...
Like so far, correct me if I'm wrong, they haven't really impacted. When I go to the store, I'm still paying the same. I was going to push back on that as well because Elizabeth, I want to ask you about this because you're saying people are seeing this. I'm not. I think that's because you're not close. A lot of people I know from where I grew up in Alabama run small businesses and a lot of fashion-oriented things. And they were importing a lot of stuff from China very cheaply.
And now they can't. I feel like in terms of the percentage of the electorate, the number of people who import things from China...
is small. Like on a day-to-day level, like we aren't seeing, we haven't seen this yet in inflation and in like final price goods inflation. We will, but we haven't seen it yet. Here's what I'm saying. Like, I don't, I'm not saying that, you know, everybody who is impacted is, is by definition a small business owner, but it touches so many industries. You know, my, my uncle owns a auto body shop and they import
So it's people making small observations about things getting more expensive that they are relying on to do their jobs and to run their business or run their household. Yeah, that makes a lot of sense. Small business owners are not thrilled on the whole, though there are, again, a few that are.
glad about this, but the ones I've also spoken to are not happy. In general, they don't like it. But then, yeah, and then as Emily says, the other side of this is the stock market, which we should probably talk about because there really was this feeling in the first week after the tariffs were announced that
the stock market was falling out of bed and that Donald Trump was single-handedly responsible for, you know, trillions of dollars worth of wealth going up in smoke. And now the stocks are back to where they were before the tariffs were announced. I guess, Emily, I have a question for you, which is,
Does this mean that people don't feel that way anymore because the stocks have come back? Or is it really the headlines that do the work of worrying people? And there were many more headlines about stocks going down than there have been about stocks going up. And so people kind of still think that they've lost money in the stock market, even if they haven't. I do think it might be the latter. Plus, losing the money is...
worse and more jarring or quote unquote losing the money if you didn't do anything with your 401k like most people is worse and more jarring I think than the gradual return to baseline you know that doesn't feel loss aversion yes exactly it doesn't feel the same and I was just going to mention I looked
at like morning consult polling and maybe some other polling on consumer sentiment. And you can really see, cause they'll break it out by income. So you can see like those earning more than a hundred thousand dollars post liberation day, their sentiment just like dropping fast. And it's all the stock market. It's just all a feeling because you look at your,
holdings or whatever and you see them go down and you're like god damn it everything's terrible you know but I don't know it'll take like a real rise beyond that liberation day baseline I think to change that dynamic it's all very tentative at the moment and I think
the stock market is pricing in a relatively rapid series of trade deals, including something with China. Scott Besson is in Switzerland talking to the Chinese. It looks like a significant reduction in tariffs on China is going to happen pretty damn soon. Now, we don't know how big it's going to be. It might be down to 80%. It might be down to 60%. It might be down to 50%. And one of the things that I genuinely don't know
is whether that makes any difference. Like when you have a 50% tariff, that's already so enormous that it kind of brings imports like down to zero. The difference between 50% and 145% doesn't seem huge to me, but maybe it makes a difference. I mean, it is a difference.
It is still really high. It does, but... Maybe it's like big companies can work with that and the smaller businesses who are already upset probably can't. Like I spoke to a guy this week who owns like this little company that they make these cool cosmetic bags that you can lay them flat and then you pick them up and the drawstring closes.
their whole business is getting these bags made really cheap in China and then importing them and selling them in the US really cheap. And like, they can't stay in business. And they used to be able to do deals with
and your, you know, whoever, retailers to sell on the shelves. But the retailers won't let the price of the good come up too much. So you can't sell there anymore. But the retailers, what I'm saying, are okay. It's just that this small, little small business that like lives off of China can't operate anymore. So maybe that's kind of an effect. That reminds me of this thing that Chris Wallace said about 10% tariffs. 10% tariffs are...
absorbable. Basically, you know, on a stylized level, the importer like eats about 3% of that. And then the retailer eats about 3% of that. And then the final price goes up by about 3%. And everyone has like 3% of wiggle room, and you get 3% inflation. But all of this is within the realm of we can live with that, you know, and that's where we are right now, to be clear, because
Trump paused all of the reciprocal tariffs over 10%. So right now, everyone's in the 10% range except for China. And so everything is kind of working. And then the big question is like, what happens at the end of Trump's 90-day pause? I have to say, I think the market expectation and kind of my expectation too, is that the 90-day pause on tariffs is going to be a bit like the 90-day pause on like enforcing the TikTok ban. You know, it's just going to keep on getting kicked down the road.
Mm hmm. That sounds right, because it would just be too extreme to do those reciprocal tariffs. I mean, it just seems like out of the realm of possibility, even for this White House, even though they suggested it. Yeah. And I think all of the way that everyone was laughing at the way that they were calculated, everyone's like, they're not going to bring back that insane formula that made no sense.
Yeah, that sounds right. But they're still talking about 80% tariffs on China, which is that absorbable, I guess, is the question we don't quite know the answer to yet. No, I think that's not absorbable. In that case, you wind up moving a lot of your imports from somewhere else. We've already seen Apple saying they're going to import all of their iPhones into the US from India rather than China. You wind up reconfiguring supply chains enormously, and probably you wind up with
various forms of leakage where China exports to countries that have a 10% tariff rate and then US imports from them. As it had been, because the tariff, even before Trump started monkeying around, was, I think, 25% or 20%, right? It was a normal tariff regime, which was like incredibly complicated and all done on, you know,
long numerical codes and all depended on which code you fell under and there were country of origin rules and yeah like tariffs are very fucking complicated which is why it takes a decade to create a new WTO agreement you know or more and this is why you know free trade agreements and whatnot or even bilateral trade agreements take years and years years to negotiate right because there's
you know, devil's in the details. There's a lot of fine print that go on for thousands of pages. Yeah. It's not something you can just like announce in the Rose garden one morning and then suddenly it's universal, except for that now seems to be the world we're in.
It does seem, and we've talked about this on the pod in the past, that that is actually illegal. There's lots of very good legal arguments saying like, no, you can't do that. But how long it takes the legal cases to bubble up from the International Trade Court to the Federal Court of Appeals to the Supreme Court and what happens to the Supreme Court, like I have no idea how to handicap that.
Right. And the plaintiffs filing suits are so far basically just small businesses. It's not like power players who can like move things faster through the courts. You know, it's not like the Chamber of Commerce. I'm not even sure power players can move things faster through the courts. Like the courts just move at the speed of the courts. So
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Bill Gates, big announcement. Elizabeth, what do we think? Well, so Gates has decided that he's winding down his foundation and the last day of operation will be December 31st, 2045. I think this makes sense given the current situation of USAID to other countries, which the Gates Foundation is so heavily involved in, especially around the issues of public health. There was an interview with Gates recently where he was talking about this and
And he seems kind of low-key outraged. I don't think he's low-key. This is like the most outraged that I've ever seen him. Yeah. I guess that's fair. But I think billionaire, you know, tech guy outrage looks a little bit differently than, you know. I mean, this is Bill Gates with his hair on fire and specifically targeting Elon Musk.
And saying like, here's me, Bill Gates. I used to be the richest man in the world. I decided that I was going to help the planet and save millions of lives. And I did. And like, that's just what it behooves the ultra rich to do that. And then Elon Musk supplants me as the richest man in the world. And instead of saving millions of lives, he's actually killing millions of children by, you know, slashing USAID and what the actual fuck. The world's richest man responsible for
really for the deaths of the poorest children in the world. It's mind-blowing. And this is the man who worries about that we're not having enough babies. It's like letting children die unnecessarily by cutting off very basic aid is just, it's evil. And Bill Gates is coming out very angry. And just to be clear about this,
He's not just saying we're going to accelerate the speed at which we give away the money in the foundation so that it ends in 2045. He's also doubling the money in the foundation. He's taking all of his personal net worth, which is on the order of $100 billion, over and above the money that's already in the foundation. And he's saying, I'm giving all of that to the foundation as well.
And so he's doubling the amount of money in the foundation and he's speeding up the amount of money that the foundation gives per year, which winds up really front loading the amount of money that the foundation can spend, which makes a huge amount of sense. Because basically what he's saying is, no, obviously the Gates Foundation cannot.
replace the amount of money that US is cutting from foreign aid, or that the UK is cutting from foreign aid, or that France is cutting from foreign aid. Like, these are much, much larger sums and private philanthropy cannot and should not try and step in to fill that gap. But what he is saying is that as the US and UK and France and everyone else do start pulling away in the foreign aid game,
What that does is it increases the bang for your buck that you get as a private philanthropy. He was saying like, you know, over the past few years, we've been saving lives at a cost of like two to $3,000 per life. And that amount of money is going to come down because like now there's like lower hanging fruit that we can come and adjust.
address, because there's this big vacuum and we can come in and save lives at a lower cost now because the governments aren't pouring money into the field anymore. So I was looking at the Bloomberg Billionaires Index as one does. And, you know, Bill Gates year to date increased his wealth by nine and a half billion dollars.
And we all know famously Mackenzie Scott, Jeff Bezos' ex-wife. You know, she's trying to give away money really fast, but she keeps making more money. Really hard problem. The Nona's spaghetti pot problem or whatever.
Bill Gates is saying he wants to spend all this more money, put more money into his foundation, spend it all before, you know, over the next 25 years. How much money is Bill Gates going to die with? He says he's going to die with zero. That's his plan or very close to like Chuck Feeney did it. He's like, Chuck Feeney is my hero. I want to pull a Chuck Feeney.
How do you do that, though? Because you're super old. You need to live somewhere. You need people to take care of you. You probably still have dependents or adult children who are still asking you for money all the time. Really? Really? You die with nothing? Or is nothing, quote-unquote, $5 million? I think he means beyond living expenses. Yeah, he will die with $5 million. He will have kids who look after him. He's going to be just fine.
But really, won't he just keep running into this problem of his wealth making more money for him? And even if he tries to give it all away, he's still going to wind up in the year he dies with his holdings earning whatever million, billion dollars? Because he's not giving away his dividend income, Emily. He's giving away his principal. Okay. That's the whole point. So if you give away your principal, if you give away the actual Microsoft stock or whatever... Oh, then you can't make money off of it. Then you can't make money off of it. Sure. There's a...
popular discourse in various bits of the philanthropy world, which is basically saying like, if Bill Gates hadn't been giving away so much money over the past 20 or 30 years, he would be worth $500 billion right now. And he would be the richest man in the world. And look how much it's cost him to give away that money. And he's like,
fuck you. No, like this is, this is the dumbest fucking, like watching a number go up is the stupidest thing you can possibly do. Yeah. Well, I want to go back to Elon because Gates had the most withering quote. He said, uh, he, he put USA idea into wood chipper because he didn't go to a party that weekend.
which is totally plausible, by the way. I think Elon went to plenty of parties that weekend and Elon just likes putting USAID in. We're chipper and Elon has a whole chip on his shoulder about the whole concept of foreign aid in general and aid to Africa in particular as an African. You know, he comes from a very, very weird place when it comes to aid. And I do agree with Gates that the enormous cuts to USAID really can be laid at the feet of Musk more than any other individual.
Because that is the thing where Musk really, that was the first place Musk turned to. It was the first place he turned off the money. He was very aggressive about that with max cruelty, max, you know, chainsaw. And as Gates said, like, historically speaking, he's had quite a lot of
support from Congress for things like PEPFAR and the Global Fund and all the rest of it. It's a case that he can and has made many times. And the only way that USAID gets cut so drastically is when Elon does this massive end run around Congress and says, I'm just going to kill it unilaterally and there's nothing you can do to stop me.
Right. And that was like the first thing he did and probably the most successful thing he did before people started sort of waking up and suing and putting a stop to some of the chainsaw mechanisms. And one of the things that Gates is saying as well, which I think is smart, is that, you know, nothing is forever.
He's like, right now, there is this massive hole in funding because it's not just the U.S. You see this, you know, in other countries, too. There's a massive decrease in foreign aid. And we need to sort of get through the right now as quickly as we can. But in the long term, you know, people are good. And he has, like, faith in humanity over the next decade.
you know, 50 years or whatever. And so he's like, let's just try and spend as much money as we can to make things, to try and improve things as much as possible, at least stop things getting worse as much as possible in the next sort of five to 10 years.
And then trust in like tomorrow's billionaires and tomorrow's governments to pick up the baton once the Gates money runs out. I don't know. He also seemed negative about this. You know, when he was talking about aid being squeezed everywhere in the UK, aid budget was 0.7% of GDP, then 0.5%. And now 0.3% as part of like just talking to Trump makes countries like lower their foreign aid, apparently. Trump forces them to spend more on defense because he's pulling out of NATO. Yes.
And he also makes this point, your pension and health costs are going up in aging societies. So with willingness to raise taxes modest, you're kind of headed toward this big problem where you have to turn inward to deal with, you know, fiscal issues at home as people get older and you need to care for them and blah, blah, blah, blah, blah, like.
The idea of looking outward to help people is going to be long-term, perhaps, less appealing for these rich countries. He also pointed to a kind of longer systemic problem with debt in Africa.
that he's sort of suggested that you need a kind of collaborative effort to fix with, you know, other countries. And if they're already pulling back on aid spending, then how is that possibly going to happen? And the U S aid and debt forgiveness are two different things. Um, what he's saying is like in, in 2000, we, we had the HIPAA initiative, which he was a big fan of, and I'm a big fan of, and it worked really well. It stands for heavily indebted, poor countries and a,
a bunch of poor countries did see their debts wiped out at the beginning of the century, and it did do a huge amount of good. And Gates is saying, like, we need something like that again. And there's no political appetite for that right now. And he's right, there's no political appetite for that right now. And he's also understating the difficulty of doing it again, because the makeup of the debt is very different now from where it was, you know, there was a lot, especially for the poor countries, it was a lot of
IMF and World Bank debt. It was a lot of bilateral debt. So you could get a couple of big rich countries like the US, push this thing
take the lead in forgiving debts and it would happen. Now there's more private sector debt and most importantly, there's more China debt. China has sort of taken the lead in lending to these countries. And so it's much, much harder for a country like the US or anyone except for China, frankly, to take the lead on sort of big across the board sovereign debt reduction program.
But I do agree that optimism, I mean, optimism feels like the only choice here for someone like Bill Gates, you know? And he makes a really good point. And when I say a really good point is what he's doing is saying something that I've said many, many times on this show in other places over the past, which is there will be future billionaires. This idea that we had for many years when people would set up foundations that like, I need to set up my foundation as a perpetuity because I need this
group of people that i want to help to be helped forever and when my money runs out then they won't be helped anymore is a deep fallacy the total amount of philanthropic capital in the world only ever goes up there will be new billionaires who replace and they will step into his shoes and help people and it behooves him to spend the money now and like trust in the future rich to do
do good things in the future because the future world is going to be Richard and the rest of the rich, the number of poor people in the future is going to be lowered. And number of poor people today, the urgency, like if we could go back in time a hundred years and address poverty a hundred years ago, like our money today would go much further than it does right now. Money always becomes less effective over time. So you always have this incentive to spend it now rather than tomorrow.
What happens though if our future billionaires are all more like Elon Musk and less like Bill Gates? That's a good question. They always are. The overwhelming majority of billionaires basically do little, if any, philanthropy. I'm saying what if it gets worse? What if there are no Bill Gates?
Okay, you can be this like extremist corner solution. What if everything goes terribly? Yeah, of course. But like, if you just look at human history, if you look at the history of capitalism over the past 200 years, this has never happened. You've never had a series where like the number of generous billionaires has gone to zero. The number of generous billionaires does not need to be big. Like if you look at the number of billionaires who are really active in global health, it's really one.
You know, it's Bill Gates. And to a certain extent, Warren Buffett, who like, you know, really helped him for many, many years. You can probably make a case for Dustin Moskowitz, but like there aren't that many. You don't need that many.
Who will be the billionaire, the next billionaire to save the world? There will be a next billionaire to save the world. And that billionaire probably won't even be American. You know, there will be an African billionaire. Wait, Mackenzie Bezos. She, but she's not focused on the globe. Is she? I mean, she's giving some, but like, she's not, she's not single-handedly focused. She's not trying to be the change agent. She has a very different philosophy. And we've talked about her in previous podcasts. She's much more like distributed in her giving away rather than like having a
singular goal and trying to prosecute it individually. You say singular, and I think Bill Gates is pretty singular. Yeah. The idea that there's going to be another Bill Gates, like you're probably right, Felix. There's always like one billionaire guy who does good philanthropy stuff. I'm sorry to generalize and say it just that glibly, but-
but he's pretty singular and targeted in the work he did. And I feel like you see a lot of other billionaires try to do good philanthropy stuff and sort of fumble around like Mark Zuckerberg for a while. I feel like was trying to do a Gates thing. Yeah, Mark Zuckerberg has been fumbling. He will get somewhere eventually, but he's definitely fumbled so far. The one I have the most hope for, I think, is Vitalik Buterin. He seems to be quite...
focused on global health, global development. He's very global. He cares about the plight of the poor. And he has absolutely enormous amounts of money. This is the guy who founded Ethereum. And I think that someone like Vitalik could easily become the next Bill Gates. It's not impossible at all.
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Talking of nonprofits, there was a big announcement from OpenAI this week, which basically said, yeah, we're still going to remain a nonprofit. And I think this is a big deal because, you know, go back a few months ago, they made this big announcement that it just didn't work. They couldn't make it work as a nonprofit. So they were going to spin off the for-profit subsidiary into its own public benefit corporation. And they were going to give the nonprofit shares in the
for-profit, but there were going to be two separate organizations and the nonprofit was just going to own shares and try and do good in the world with the wealth that it had from the shares, but it wouldn't really have any control over the for-profit. They have now completely backtracked on that and said, no, no, the nonprofit will continue to control the for-profit. It will have majority voting control and it will appoint all of the directors of the for-profit. And this seems to me to be a big deal.
It's probably good, but I don't think it's a principled move. I think their originally Byzantine capital structure was really inhibiting fundraising. Microsoft didn't like it. Other potential investors didn't like it. This simplifies it and reduces that objection that some of the people who wanted to put money into OpenAI had. Yeah, yeah. That was the stated reason why they wanted to make the change in the first place, because no one liked the cap.
profit model where, you know, your profits were capped at 100x what you put in or whatever. And so they were like, we're just going to spin it out and make it much more something that funders are used to funding. That was why they wanted to do this.
So are they keeping the capped model? No, they're getting rid of the capped profit model. And the for-profit is becoming a PBC, Public Benefit Corporation, which is the same as like Anthropic and Perplexity and, you know, the standard way of setting up an AI company. But importantly, the board of the for-profit is entirely nominated by the non-profit. It's not just, you know, people trying to maximize the amount of money they make. But...
Reading between the lines on the piece you wrote, it seemed like kind of a question mark whether or not just this ability for the nonprofit board to appoint the for-profit board was meaningful or not. I didn't get the sense that it necessarily de facto was. It's sort of the only thing the nonprofit does, which is kind of odd for a charity. It's almost like you have the optics of the kind of oversight that you would have with a nonprofit. But aside from appointing board members, it's not clear what the nonprofit really
really does. It doesn't really have programs. Well, the nonprofit has no revenues, right? So like you can't go out and, you know, give money for anti-malarial bed nets in the world if you don't have any money to pay for bed nets. And OpenAI loses money. It doesn't make money. So the nonprofit doesn't have any money to spend. So there's not much it can do except for just provide oversight of the for-profit.
So I don't understand. So the people who do the research to update JetGPT every few months and everyone gets excited about it, who do they work for? The for-profit. And so what is the, yeah, I guess I'm asking the same question as Elizabeth. What does the nonprofit do?
Yeah, not having revenues is a choice. Ostensibly, the nonprofit is designed to constrain the for-profit if it wants to do things that are bad for humanity. And there are a lot of organizations who have lobbied for this structure because they are also interested in providing oversight of AI development so that nothing bad happens. So the idea that the nonprofit can't do anything, it's, yeah, it can. It can
raise money and, you know, actually do things that fulfill that mission besides... Wait, wait, wait, Elizabeth, what are you suggesting that the OpenAI nonprofit do? And how are you suggesting that it raise money? Well, its mission is that it's supposed to make sure that OpenAI's efforts do things that are fundamentally good for society and not destructive.
Yes. So there are plenty of other models for that. There are plenty of organizations that work on that, and they have programs that are specifically directed toward oversight. Right now, the OpenAI nonprofit, literally the only thing it's doing is picking board members and trying to make sure that they stay in line with the organizational mission. How do they do that? Just literally try and make sure the board...
board members are in line with the organizational mission. They're not themselves like producing data reports or like looking at how open AI is being used and whether or not it's, you know, equitable or blah, blah, blah. I think this is, I think this is entirely reasonable, right? As Elizabeth says, there's no shortage of
high-minded foundations and nonprofits who are putting out white papers and think pieces about how to develop AI safely. Does the world need another one of those? Probably not. Yes, if the open AI nonprofit would have presumably access to real data coming from open AI that those other organizations wouldn't have.
right? Like they would actually be able to do deep analysis into the products that open AI is putting out, right? If they had a true partnership and a oversight role. And they can, they can definitely ask for that, but the, yeah, I did. I,
I think this is the optics of oversight without real teeth. I got this idea from reading your story, Felix. So, okay, I mean, it is certainly possible that open AI has no teeth. I mean, it's unlikely given the fact that it has actually bared its teeth once in the past.
right? And it fired Sam Altman. So like these people do have power and they have used it in the past. The new board is much less likely to do something drastic like that than the old board was because last time they tried it, it didn't work out very well. Oh, but the fact that the old board was a casualty of that is kind of indicative of the fact that Altman does have power there. And we, you know, he had this quote that said, opening eyes, not a normal company and never will be, which if I were an investor, it would
give me pause, but... But I mean, as Matt Levine pointed out, every single tech founder has said that, right? You know, the Google people said that, Mark Zuckerberg said that. That's a very normal thing for a founder to say. And there's absolutely no doubt that in the real world, Sam Altman has a huge amount of power.
he has a huge amount of control over OpenAI, the for-profit and frankly, over the nonprofit board as well. There is a very large chance that the for-profit board will be the nonprofit board, at least in the first instance, the nonprofit board will just nominate themselves to be the for-profit board. And that creates a weird tension in terms of incentives. And between that
incentives tension and the fact that Altman personally just has de facto massive amounts of power. Yeah. Can we trust that OpenAI's nonprofit mission? It's nonsense. No, this is what I'm saying. Like, is it certainly going to constrain OpenAI, the for-profit in everything it does? No, there's no certainty here.
But equally, are we certain that it won't and it's going to be totally OTOs and just a sort of like little feather on the cap of the cap structure that does nothing and everyone can ignore? Like probably we don't know anything for sure. Like nothing is certain. And the fact that
the company is actually governed by a nonprofit is going to possibly make some kind of a difference going forward. It's like there are pharmaceutical companies in the UK and Switzerland who are broadly governed by nonprofits rather than for-profits, and they wind up behaving in sort of interestingly different ways. There's a lot of
research into the way that for-profit hospitals compared to non-profit hospitals and non-profit hospitals do behave in different ways. I think you can dial up the cynicism very quickly and you can decide, I believe it's going to do nothing and that this thing is going to just behave like a for-profit company and the non-profit structure is going to do nothing. But I think what we've learned, if you look at the difference between for-profit universities and non-profit universities and so on and so forth. Huge difference there. Good point.
There is a real world difference. And I think that we don't know exactly what that difference is going to look like, but it's going to be not nothing. Well, I hope so. But I think nonprofits oversight is only as good as the board members and the people want it to be. And so I think the top level nonprofit organization will have basically as much power as Altman wants it to.
And it really does boil down to what he wants. Maybe. I mean, I feel like the people on the nonprofit board, while they are certainly less idealistic than the ones who fired Altman, are also not exactly pushovers. God knows I'm not the world's biggest fan of Larry Summers, but I don't think he's just going to do whatever Sam wants him to do.
to do. How much do you make if you're on the nonprofit board of OpenAI? What's that going for? Nothing. It is very, very rare for a nonprofit board member to make money. What is interesting, of course, is if they nominate themselves to be on the board of the for-profit, then they can make money as board members of the for-profit, even if they're not making money as board members of the nonprofit.
That's one of the conflicts I was talking about. That would seem so shady. But also, if you are, you know, Larry Summers or Brett Taylor, probably the kind of money that you'll pay yourself to be a board member of the for-profit is not going to be life-changing money. For those people. Yeah. Slate Money is sponsored this week by ExpressVPN.
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Oh, you want to know what it is? I would love to know what it is. All right, I'm going to tell you. My number is 70,000. Oh, no, that was my number. I'm sorry. That is the number of Dum Dums, lollipops, that were mailed to the home of a Lexington, Kentucky mom named Holly LaFavers. Her eight-year-old son, Liam, went a little wild on Amazon, and he ordered 30 boxes of the Dum Dums.
She used to let her son browse Amazon under her... Honestly, this was a mistake. I can't believe a parent would do this. Elizabeth can chime in in a second. But she would let her child, who is eight, look around on Amazon and put stuff in her shopping cart on her account. And she was just like, don't buy anything. How...
Easy is it to mess that up? Even an adult, you just click one button. Amazon made this famous. Buy it now. Bing bong. It's bought. Don't do this. Don't let your children just browse Amazon for fun. Like bad idea. Anyway, the lollipops, they start showing up all these boxes at the lady's house. She says, Amazon, I didn't mean to order all these dum-dums. Please take them back.
Amazon's like, sorry, it's food. We won't take it back. She sees her bank account is down over $4,000 in the red now because of the lollipops. Again, do not have your child play around on Amazon if your account is attached to literally your bank account. Like, what are you doing? Anyway, she goes on Facebook to the neighborhood and says, will anyone buy my lollipops, my dum-dums?
And it goes viral. And then Amazon, guess what? Lets her get her refund. And even, I think, keep the lollipops. It was a little unclear. After a little bit of public pressure, though, because they argued that lollipops are food and you can't return food to Amazon. I mean, they're not wrong. They're dum-dums. They're just dum-dums. They're wrapped lollipops.
in a box? We all know who the dum-dum is in this story. They last forever. Everyone makes mistakes. She says in the story that he no longer has the access to the Amazon account. Oh, you think? But then there's all these other stories of parents who are like, my son bought this, my daughter bought this online. I'm like, people, what are you doing? You know, and
Amazon had those buttons you could order where you just press the button and it reorders whatever. My husband was like, well, maybe we should get one of those for like paper towels or something. And at the time, my kid was three and loved pressing buttons. And so I just thought, no, because we'll end up with 100,000 rolls of paper towels. Bad idea. Although you'll wind up using that.
Paper towels are handy. Like dum-dums, I don't know how you get, you're not going to consume 70,000 dum-dums like in your lifetime. I always thought that one of the better business ideas out there on the internet were these apps where you would take a photograph of the wine that you're drinking with your meal at a restaurant because you really like it. And then you'd be able to look it up and say, these are the wines I drank and this is what I like and I should try and buy it again.
But then if you're a smart app, like the minute you take a photograph of the wine, the app then comes back to you and goes, you know, you can buy this. This bottle of wine that you just spent $100 for in the restaurant, you can buy this for like 27 bucks. Do you want to buy a case? And because you're drunk and in a restaurant, you're like, yeah, that sounds like a great idea. And you just maximize the amount of drunk shopping. This is your version of the Amazon button. Exactly. Are you going to start up this company?
There was a company that tried this. I don't think it actually did very well because there's just too many bottles of wine out there. But I think in principle, it's a good idea. Elizabeth, what's your number? Well, now I have a new number. It's two.
And that's because in two hours, I'm going to get my real ID after putting it off for however long they've been telling us to do this. And it took me like a month to get an appointment. I have your back here, Elizabeth. So this is one of these things that like astonishes me. And it's one of these things where I kind of out myself as being a foreigner, even though I've lived in this country for well over half my life.
Like I was looking at the data, right? So something like 48% of Americans have passports, something like 44% of Americans take at least one flight per year. And so you're like, okay, those aren't completely overlapping, but you would kind of imagine that the vast majority of people who take at least one flight per year have a valid passport. And so they don't have a problem. They don't need a real ID. They can just use their passports.
On top of that, the passports with Real ID have been available since 2011. It's been around a long time. So a lot of people have Real IDs already. And so I'm like, how many people can this really affect? People who A, are taking flights, B,
over the past decade haven't managed to upgrade their driver's license to a real ID, and C, don't have a passport. Like, that can't be that many people. I think that's actually probably half the country. For one thing, I think it's unusual, at least in America, for people to use passports on domestic flights.
Right, that's because they normally use their driver's license, but if you aren't allowed to, you still have a passport, right? I think the way people think about it is you don't want to lose a passport. It's much more of a pain in the ass to replace, whereas with an ID, you can just, at least in New York State, just do it online and they'll send you a new one. People just...
Americans aren't in the habit of like passport culture, I think. We have a really big country and you can travel all over it and you don't need a passport as opposed to Europeans who live in tiny countries and are much more like globally minded, internationally minded because they're hopping all around. No? I mean...
It's true that when Americans travel, they're much less likely to need their passport than when Europeans travel. But that doesn't mean you can't pick it out your drawer and travel with it if you need to. Plus, you said half the country doesn't have a passport. More than half. You said 48% have. Right, but more than half the country doesn't ever get on a plane. That's not true. I don't know a single person who's never gotten on a plane, even if they did it late in life. No, not never, but in any given year, the number of Americans who get on a plane is smaller than the number of Americans who have a passport.
I think also just this deadline, a lot of people just didn't know. I didn't even know about it until this week. Then I had a panic attack. Then I looked at my driver's license and it said it was enhanced. Then I Googled it and it was like, that's the same thing as Real ID. And then I said, okay, forget it. So I didn't. But like I'm saying, people aren't paying that much attention. Yeah, Elizabeth, maybe you have an enhanced ID and you don't even need a Real ID.
I don't. I checked. Sadly for me, it's too bad. And now all these women are having problems. The women who change their names when they got married are having problems getting real IDs. The receptionist at the doctor's office told me about this. She was like, married women, they're not getting those real IDs. And then she gave me this really meaningful look in my eyes. And I was like, is this the beginning of The Handmaid's Tale? Like they're taking away the women's IDs or something? So that disturbed me. Yeah, don't change your name when you get married, man. That's...
All manner of bad things happen when you do that. I think it's nice. As Emily Friedlander will. My mom is still annoyed that I didn't change my name when I got married because she changed hers. And now I have a good practical reason to be like, well, I made a rational decision. I can get my real ID. I would have had trouble getting my real ID.
It's just annoying, all those hurdles to proving your identity. And I think it's becoming more and more of an issue as we have these more conservative-leaning people in office who want more proof of ID for various things and who are also cracking down on immigrants. And we're moving into this show-us-your-papers kind of country.
And that is stressful for a lot of people. People don't always have all their birth certificate, their marriage certificate, their this, their that. Like people don't know where they are necessarily. It's not so easy. But Sam Altman has a solution for that, Emily. Oh, God. Scan your eyeball.
You know, he doesn't just run OpenAI. He also runs this thing called WorldCoin, where they scan your iris and they give you a crypto something, and then that's your proof of your ID. It's not a bad idea, is it? To be fair, because I sign up for all of these things, because I've given up on having any privacy for years at this point.
Getting onto planes now, getting through immigration, JFK, is so easy. I just look at a camera and they're like, yep, come on through. I don't even take my passport out. That's incredible. Wait, because of your eyeballs? Because of my, yeah, it's some kind of biometric something. It's just, yeah. That is kind of amazing. You never have to worry, did I forget my eyes? You know, you never have to check like wallet keys, eyes. You're good. I guess I should have a number two. I'm going to go for...
for 100, which is the percentage difference that a lawsuit claims that the amount of meat in a Burger King burger looks in the ad versus what it is in reality. And they're suing Burger King and they're saying you have this ad with a very large burger, but then in reality, and this is the bit that really gets me in reality, the burger is very much smaller. And so that's misleading advertising. And so you have to pay us lots of money.
But this is what they say in the complaint. I love this so much. They're like, the burger in the picture is 35% larger, which means it has 100% more meat. And I'm like, what? If it's 35% larger, that means it has 35% more meat. If it has 100% more meat, then that means it's 100% larger. You have to just pick one metric and go with it, people. That's really confusing. I don't think this suit's going to go anywhere, Felix.
I agree with you that this is going to go now a bit because it's innumerate. But obviously they're trying to do some kind of weird thing that like the surface area is like or the diameter is 35% larger or the area of the, I don't know, the whole thing. They need to work on their dimensions. They need to work out. Are they working in one dimension or two dimensions or three dimensions and then just stick with it?
Remember the footlong? I mean, sometimes people get really hyped about this stuff. Oh my God, do you remember the guys who were weighing Chipotle bowls? Yeah, the weighing of the Chipotle bowls. There was the measuring of the $5 footlong only to discover, lo and behold, was not a footlong. It was not a footlong. And people freak out about that stuff. Even though the fast food in advertisements looks nothing like what you get when you actually get the food. Nothing. It's always misleading. It's always misleading. Why are we nitpicking?
Because sometimes what the world needs, Emily, is a hero who will stand up against something that we all know is bad and we all know is wrong. And instead of just saying, well, I guess it's always misleading, we will take them to court and we will change the world. We need a litigious burger-loving fast food connoisseur. Yeah.
I think that's all we have time for this week. Thanks so much for listening to Slate Money. Thanks very much to Merritt Jacob and Jessamyn Mollie and Shana Roth for producing. Thanks for being a Slate Plus member, if you're a Slate Plus member, and we will talk about more Hollywood tariffs in Slate Plus. Other than that, we will be back next week with more Slate Money. I'm Leon Nafok, and I'm the host of Slow Burn Watergate.
Before I started working on this show, everything I knew about Watergate came from the movie All the President's Men. Do you remember how it ends? Woodward and Bernstein are sitting at their typewriters, clacking away. And then there's this rapid montage of newspaper stories, about campaign aides and White House officials getting convicted of crimes, about audio tapes coming out that prove Nixon's involvement in the cover-up. The last story we see is Nixon resigns. It takes a little over a minute in the movie. In real life, it took about two years.
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